EXPLANATORY STATEMENT
Health Insurance Act 1973
Health Insurance (Extended Medicare Safety Net) Amendment Determination 2011 (No.3)
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’).
From 1 November 2011, two new Medicare Benefits Schedule (MBS) items will be introduced for endovenous laser therapy (ELT) (MBS items 32520 and 32522). ELT is a minimally invasive procedure to treat severe varicose veins, primarily performed in outpatient settings. In December 2009, the Medical Services Advisory Committee (MSAC) endorsed their earlier recommendation of March 2008, that public funding should be supported for ELT, as long as EMSN support was restricted.
The Health Insurance (Extended Medicare Safety Net) Amendment Determination 2011 (No.3) (‘the Determination’) amends the Health Insurance (Extended Medicare Safety Net) Determination 2009 to introduce EMSN benefit caps on MBS items 32520 and 32522 at their commencement on 1 November 2011. The EMSN benefit cap on both ELT items will be $73.70. The Determination also indexes all existing EMSN benefit caps by Consumer Price Index (CPI) to commence on 1 January 2011.
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) 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. For the 2011 calendar year, the annual EMSN threshold for concession cardholders 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 CPI on 1 January each year.
ELT is an alternative to more complex in-hospital vein stripping (already funded on the MBS). A laser probe is inserted into the long or short saphenous vein of the leg and laser energy is applied to occlude the diseased vein. In 2008, an MSAC assessment recommended ELT as being as safe and clinically effective as conventional vein stripping, however a cost-effectiveness issue was identified (due to uncapped EMSN benefits).
Effect of the Health Insurance (Extended Medicare Safety Net) Amendment Determination 2011 (No.3)
The Determination amends the Health Insurance (Extended Medicare Safety Net) Determination 2009 to impose EMSN benefit caps on two new MBS items relating to ELT (items 32520 and 32522), effective from 1 November 2011. The Determination also indexes all existing EMSN benefit caps by Consumer Price Index (CPI) to commence on 1 January 2012.
The EMSN benefit cap is the maximum amount of benefit payable under the EMSN, regardless of the fee 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).
Item 32520 will enable a Medicare benefit to be payable for abolition of venous reflux by occlusion of a primary or recurrent great (long) or small (short) saphenous vein of one leg. Item 32522 (applicable to 10% of cases) will enable a Medicare benefit to be payable for abolition of venous reflux by occlusion of a primary or recurrent great (long) and small (short) saphenous vein of one leg. The latter item was drafted in consultation with the profession, following MSAC’s evaluation.
The new ELT items are subject to s 10(3) of the Act. That provision provides that where the Schedule fee for an item differs from the Medicare benefit calculated for the out-of-hospital service (calculated at 85 per cent of the Schedule fee for the item) by more than the greatest permissible gap (GPG) then the Medicare benefit payable is equal to the difference between the Schedule fee and the GPG. The GPG will be $73.70 from 1 November 2011.
The EMSN benefit caps on the ELT items are to be equal to the amount of the GPG effective on 1 November 2011 ($73.70). Patients who have qualified for the EMSN and received ELT services out‑of‑hospital will be entitled to the general Medicare benefit plus up to the amount of the EMSN benefit cap. In addition, patients may also be eligible for an increase in their Medicare benefit through the original safety net, as specified under section 10AC of the Act.
Setting the EMSN benefit cap to $73.70 is consistent with MSAC’s recommendation to limit the amount of benefits paid through the EMSN for ELT services. In addition, allowing the EMSN to cover the difference between the MBS fee and out‑of‑hospital rebate maintains consistency with benefits that would be paid for comparable services provided in-hospital, as private health insurers are required to pay (at minimum) up to the amount of the MBS fee to in-hospital patients who hold private health insurance (that is $73.70).
Indexation of the EMSN benefit caps provides for a greater Medicare rebate to be paid to patients who are eligible for the EMSN benefit cap. For example, if a patient is billed for item 16590, planning and management of a pregnancy, and is eligible to receive the EMSN benefit cap, in 2011 the EMSN benefit cap is $209.30. After indexation, the EMSN benefit cap in 2012 for the same item will be $216.85.
Indexation will apply to all existing capped items (including ELT). On 1 January 2012, the EMSN benefit caps will be increased by 3.6 per cent (annual CPI as reported in the June quarter 2011). The EMSN benefit caps were previously indexed in a similar manner on 1 January 2011.
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. EMSN benefit caps are automatically applied by Medicare at the time that a patient’s claim is submitted.
The EMSN benefit cap amounts for the new items will be publicly available for patients and practitioners through the MBS Online website. This website is a commonly used resource which sets out item descriptors, MBS Schedule fees and rebates for all Medicare items. The EMSN benefit cap will be clearly displayed in the item descriptor to ensure that practitioners and patients are well informed of patient entitlements relating to Medicare services.
Details of the Determination can be found in the Attachment.
Commencement
Schedule 1 of this Determination will commence on 1 November 2011 to coincide with introduction of the new MBS items for ELT. Schedule 2 of this Determination will commence on 1 January 2012.
Consultation
Since MSAC’s earlier decision in March 2008, the Department has been involved in ongoing consultation with a range of professional organisations in relation to ELT, including the Australasian College of Phlebology, the Australian and New Zealand Society of Phlebology, the Royal Australasian College of Surgeons (specifically the Australian and New Zealand Society for Vascular Surgery) and the Royal Australian and New Zealand College of Radiologists. Earlier consultation occurred with the Royal Australian College of General Practitioners, who deferred opinion to medical organisations representing vein specialists. Consultations have included face-to-face meetings, a vascular conference ‘question and answer’ session, teleconferences and exchanges of letters and emails. The relevant professional groups have endorsed the introduction of the new ELT items with EMSN benefit caps.
ATTACHMENT
Details of the Health Insurance (Extended Medicare Safety Net) Amendment Determination 2011 (No.3)
Section 1 – Name of Determination
Section 1 provides that the name of the Determination is the (Extended Medicare Safety Net) Amendment Determination 2011 (No.3).
Section 2 – Commencement
Section 2 provides that:
Sections 1 to 3 and Schedule 1 of the Determination commence on 1 November 2011; and
Schedule 2 of the Determination commences on 1 January 2012.
Section 3 – Amendment of the Health Insurance (Extended Medicare Safety Net) Determination 2009
Section 3 provides that Schedule 1 and 2 of this Determination amends the Health Insurance (Extended Medicare Safety Net) Determination 2009.
Schedule 1 – Amendments commencing 1 November 2011
Subsection 4(1) of the Health Insurance (Extended Medicare Safety Net) Determination 2009 sets out a table specifying the Medicare items 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 the table to specify EMSN benefit caps for two new MBS items for ELT (items 32520 and 32522), to be introduced through a determination made under section 3C of the Act, which enables services specified in that determination to be treated as if they were items in the GMST.
Schedule 2 – Amendments commencing 1 January 2012
Schedule 2 provides for EMSN benefit caps indexed to June quarter 2011 CPI (3.6%) for items in the Health Insurance (General Medical Services Table) Regulations relating to obstetric services (items 16399-16636), for ART services (items 13200-13251), items relating to midwifery services (items 82100-82115 and 82130-82140), items for the injection of poly-L-lactic acid (items 14201 and 14202), items for endovenous laser therapy (items 32520 and 32522), the item for cataract surgery (item 42702), the item for hair transplantation (45560) and the item for one type of varicose vein treatment (item 32500). Schedule 2 also provides for a similar indexation of EMSN benefit caps for items in the Health Insurance (Diagnostic Imaging Services Table) Regulations relating to obstetric and gynaecological ultrasound services (items 55700-55775).