EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Health Insurance Act 1973
Health Insurance (Extended Medicare Safety Net) Amendment Determination 2011
Section 10B of the Health Insurance Act 1973 (the Act) provides that the Minister for Health and Ageing may, by legislative instrument, determine which items of the tables as defined in section 3 (MBS) subsections 10ACA(7A) and 10ADA(8A) apply and the maximum increase in Medicare benefit payable for those items under the Extended Medicare Safety Net (EMSN). The increase in the Medicare benefit payable under the EMSN is commonly referred to as the ‘EMSN benefit’.
Subsections 10ACA(7A) and 10ADA(8A) of the Act provide that where an MBS item is listed in this Determination, the EMSN benefit must not exceed the amount determined in relation to that item (the EMSN benefit cap).
The Health Insurance (Extended Medicare Safety Net) Amendment Determination 2011 (the Amendment Determination) amends the Health Insurance (Extended Medicare Safety Net) Determination 2009 (the Determination) by including certain items listed in the Health Insurance (Diagnostic Imaging Capital Sensitivity) Determination 2011 (the Capital Sensitivity Determination) for the purposes of the application of the EMSN benefit cap.
Details of the Determination are set out in the Attachment.
Background
On 1 January 2010, under the 2009-10 Budget measure ‘The Sustainable Safety Net’ and following Parliamentary approval of the Health Insurance (Extended Medicare Safety Net) Determination 2009, an EMSN benefit cap was placed on 71 items, including: all obstetrics and pregnancy related ultrasound, Assisted Reproductive Technology (ART) including In-Vitro Fertilisation (IVF), hair transplantation for alopecia, one type of cataract operation and one type of varicose vein treatment. The Budget measure also provides for the indexation of EMSN benefit caps by CPI on 1 January of each calendar year.
The EMSN provides an increased Medicare rebate for Medicare eligible families and singles who incur out-of-pocket costs for Medicare eligible out-of-hospital services and is provided for in sections 10ACA and 10ADA of the Act. Out-of-hospital services include general practitioner and specialist attendances, as well as many pathology and diagnostic imaging services. The out-of-pocket cost is the difference between the fee charged by the doctor and the standard Medicare rebate (including any benefit received through the original Medicare safety net) that the patient receives from Medicare. Once the relevant annual threshold of out-of-pocket costs has been reached, Medicare will pay 80% of any future out-of-pocket costs for Medicare eligible out-of-hospital services for the remainder of the calendar year. However, where an item has an EMSN benefit cap, there is a maximum benefit payable for that item.
The EMSN benefit cap is the maximum amount of benefit payable under the EMSN, regardless of the fee that is charged by the practitioner. The EMSN benefit cap is payable in addition to the standard Medicare rebate (including any benefits received through the original safety net). In calculating a patient’s Medicare benefit where an EMSN benefit cap applies, the EMSN benefit is calculated in the same way as if the patient were claiming an uncapped item, that is, 80% of their out-of-pocket costs for that claim once they have reached the applicable EMSN threshold. However, when the calculated EMSN benefit is greater than the amount of the EMSN benefit cap for that item, the EMSN benefit is limited to the EMSN benefit cap. When the EMSN benefit calculated is less than the EMSN benefit cap, the person will receive the EMSN benefit that is equal to the calculation.
Following the 2009-10 Budget measure ‘Changes to fees for fully depreciated diagnostic imaging equipment’, the Health Insurance (Diagnostic Imaging Capital Sensitivity) Determination 2011 introduces new MBS items from 1 July 2011 with a 50% reduced Schedule Fee for diagnostic imaging services provided on aged equipment. These new items ‘mirror’ existing diagnostic imaging items listed on the Diagnostic Imaging Services Table. They include 22 new 50% reduced Schedule Fee obstetric and gynaecological items for which EMSN benefit caps apply to the corresponding full Schedule Fee items. The Amendment Determination ensures that the 22 new 50% reduced Schedule Fee obstetric and gynaecological items are subject to EMSN capping arrangements from 1 July 2011.
Commencement
This Amendment Determination will commence from 1 July 2011.
Consultation
The Determination implemented the measures, Medicare Benefits Schedule capping Extended Medicare Safety Net benefits for items with excessive fees and capping Extended Medicare Safety Net benefits for items with excessive fees-obstetrics services, announced in the 2009-10 Federal Budget. The Department of Health and Ageing held extensive consultation with the ART profession and ACCESS Australia (ART patient advocacy group) regarding the restructure of the Medicare items for these services.
There has been ongoing consultation with key stakeholders including the diagnostic imaging professions, peak industry representative bodies and manufacturers since the 2009-10 Capital Sensitivity budget measure was announced. These consultations have helped shape the implementation arrangements, including the new effective life period, the five-year extension period for appropriate upgrades, the remote area exemptions and the application of EMSN caps to the new 50% reduced Schedule Fee obstetric and gynaecological items.
The Department will continue to work closely with all stakeholders in the implementation phase.
ATTACHMENT
Details of the Health Insurance (Extended Medicare Safety Net) Amendment Determination 2011
1. Name of Determination
Section 1 provides that the title of the Amendment Determination is the Health Insurance (Extended Medicare Safety Net) Amendment Determination 2011.
2. Commencement
Section 2 provides that the Amendment Determination will commence on 1 July 2011.
3. Amendment of Health Insurance (Extended Safety Net) Determination 2009
Section 3 provides that Schedule 1 of the Amendment Determination amends the Determination.
Schedule 1 Amendment to the Health Insurance (Extended Medicare Safety Net) Determination 2009
Schedule 1 inserts after subsection 4(2) a new subsection 4(3). The new subsection provides that subsections 10ACA(7A) and 10ADA(8A) of the Act apply to items in the Health Insurance (Diagnostic Imaging Capital Sensitivity) Determination 2011 that are listed in column 1 of the table inserted at subparagraph (b) and that the maximum increases for each item listed in column 1 is the amount in column 2 in the row directly next to the row containing an item in column 1.