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 (No.2)
Purpose and Operation
Section 10B of the Health Insurance Act 1973 (“the Act”) provides that the Minister for Health and Ageing may, by legislative instrument, determine to which Medicare items subsections 10ACA(7A) and 10ADA(8A) of the Act 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 item is listed in a determination made under section 10B of the Act, the EMSN benefit must not exceed the amount determined in relation to that item (“the EMSN benefit cap”).
In the 2011-12 Federal Budget, it was announced that the Government would introduce new Medicare items with effect from 1 July 2011 for the medical procedure to inject poly-L-lactic acid (Sculptra®) for the treatment of severe facial lipoatrophy caused by antiretroviral therapy in HIV positive patients. In doing so, the Government noted concerns expressed by the Medical Services Advisory Committee (MSAC) about the cost effectiveness of the procedure should the Government also subsidise patient out-of-pocket costs flowing from charges above the proposed schedule fees.
Poly-L-lactic acid had been approved by the Pharmaceutical Benefits Advisory Committee (PBAC) in September 2009 for listing on the Pharmaceutical Benefits Scheme (PBS). The PBAC had recommended that listing on the basis of a high, but acceptable, incremental cost effectiveness ratio per quality additional life year (QALY) gained with the cost effectiveness ratio being sensitive to movements in the MBS fee for the product’s administration. In its costing analysis, the PBAC found that variability in the cost of the administration procedure had a considerable effect on cost to government.
The Government accepted the advice of its two expert committees (PBAC and MSAC) and imposed a Medicare Safety Net cap on the two new items. The effect of this decision will be to provide the Government with surety in relation to the financial implication of introducing the two new Medicare items, as expenditure cannot be driven by increases in practitioners’ fees.
Two new Medicare Benefits Schedule (MBS) items will provide for the following services for eligible patients:
- the initiation of a course of treatment, limited to one injection session (item 14201);
- subsequent injection sessions, up to a maximum of four adjustment treatments, followed by one maintenance injection session every two years (item 14202).
Authority is required to prescribe Sculptra under the PBS. Patients must be referred from the HIV physician to an accredited injector.
Background
The EMSN provides an increased Medicare rebate for Australian 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. 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). Once the relevant annual threshold of out-of-pocket costs has been reached, Medicare will pay 80 per cent 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.
For the 2011 calendar year, the annual EMSN threshold for Commonwealth concession card holders, including those with a Pensioner Concession Card, a Health Care Card or a Commonwealth seniors Card, and people who receive Family Tax Benefits (Part A) is $ 578.60. For all other singles and families, the annual threshold is $ 1,157.50. These amounts are indexed by the Consumer Price Index on 1 January each year.
Effect of the Health Insurance (Extended Medicare Safety Net) Determination 2011 (No.2)
The Health Insurance (Extended Medicare Safety Net) Amendment Determination 2011 (No.2) (the Determination) amends the Health Insurance (Extended Medicare Safety Net) Determination 2009 to place EMSN benefit caps on the new Sculptra injection items, effective from 1 July 2011.
Where an EMSN benefit cap is in place, a person’s EMSN benefit is calculated in the same way as if they were claiming an uncapped item, that is, 80 per cent of their out-of-pocket costs for the service once they have reached the applicable EMSN threshold. However, when the calculated EMSN benefit (i.e. 80 per cent of out-of-pocket expenses) is greater than the amount of the EMSN benefit cap then 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.
For example, the Medicare Schedule fee as at 1 July 2011 for the injection of Sculptra at the initial session will be $227.90, the Medicare rebate will be $193.75 (for out-of-hospital treatment) or $170.90 (for in-hospital treatment) and the EMSN benefit cap will be $34.15. Assuming that the patient has already qualified for EMSN benefits, if the treating practitioner charges $230.00 for an out‑of‑hospital service, the patient will receive an EMSN benefit of $29.00 (80 per cent of their out-of -pocket cost) in addition to the $193.75 rebate. This is $222.75 in total.
However, if the patient is charged $300.00, the calculated EMSN benefit is $85. As this amount is above the EMSN benefit cap of $34.15, the EMSN benefit cap amount is paid. Therefore the patient will receive $34.15 in EMSN benefits in addition to the Medicare rebate of $193.75, giving then a total Medicare rebate of $227.90 in total.
The EMSN benefit caps will apply at the item level. This means that where an EMSN benefit cap applies to a service, the cap will apply to every patient who receives that service. Patients will be eligible to receive up to the EMSN benefit cap amount each time that they have a particular service, provided that they have reached the applicable EMSN threshold.
This Determination will not have an impact on small business. The EMSN benefit is a patient benefit. Practitioners will not be required to complete any additional activities to comply with the change. The level of the EMSN benefit cap will be automatically applied by Medicare Australia at the time that the patient’s claim is submitted.
The EMSN benefit caps will be publicly available for patients and practitioners through the MBS Online website. This website is a commonly used resource which sets out the item descriptor and the Medicare Schedule fees and rebates for all Medicare items. The EMSN benefit cap will be clearly displayed in the item descriptor of all the applicable items to ensure that practitioners and patients are well informed of patient entitlements related to Medicare services.
Details of the Determination are set out in the Attachment.
Commencement
This Determination will commence on 1 July 2011 to coincide with the introduction of the two new Sculptra injection items.
Consultation
The Department wrote to the Australian Medical Association and relevant professional and consumer representative stakeholders regarding the Medicare item structure and content for services, seeking their advice or comments in relation to the draft item descriptors and related explanatory notes. The stakeholder groups included the Australasian Society for HIV Medicine, Australian Society of Plastic Surgeons, the Australasian College of Dermatologists and the Royal Australian College of General Practitioners. The letters directed stakeholders to a link to the Medical Services Advisory Committee’s (MSAC) website at which details of the application for funding and MSAC’s Public Summary Document, which articulated MSAC’s recommendations on fees and the EMSN, could be found. All bodies supported the introduction of these items.
ATTACHMENT
Details of the Health Insurance (Extended Medicare Safety Net) Amendment Determination 2011 (No.2)
- Name of Determination
Section 1 provides that the title of the Determination is the Health Insurance (Extended Medicare Safety Net) Amendment Determination 2011 (No.2).
2. Commencement
Section 2 provides that the Determination will commence on 1 July 2011.
3. Amendment of the Health Insurance (Extended Medicare Safety Net) Determination 2009
Section 3 provides that Schedule 1 of the Determination amends the existing Health Insurance (Extended Medicare Safety Net) Determination 2009.
4. Schedule 1 – Amendments Commencing 1 July 2011
Subsection 4(1) of the Health Insurance (Extended Medicare Safety Net) Determination 2009 sets out a table specifying the Medicare items from the Health Insurance (General Medical Services Table) Regulations 2011 (“the GMST”) to which an EMSN benefit cap will apply and the amount of the EMSN benefit cap that will apply to each of those items.
This Determination amends that table to specify EMSN benefit caps for the two new Sculptra facial injection services (items 14201 and 14202).