EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
National Health Act 1953
Determination under subsections 73AAG (6) and (7)
(HIB13/2005)
Subsection 73AAG(6) of the National Health Act 1953 (the Act) provides that the Minister may determine in writing the prostheses that are no gap prostheses and the benefit amount for each no gap prosthesis.
Subsection 73AAG(7) provides that the Minister may determine in writing the prostheses that are gap permitted prostheses, and the minimum and maximum benefit amounts for each gap permitted prosthesis.
The Schedule to this determination has two parts:
- Part A – Prostheses; and
- Part B – Human Tissues.
The Schedule to this determination is known as the “Prostheses List”.
This determination commences on 31 October 2005. Schedule 5 (Benefits Payable in Respect of Prostheses and Human Tissues) will be removed from the determination made under Schedule 1, paragraph (bj) of the Act on 24 June 2005 (as amended) with effect on 31 October 2005.
The Department of Health and Ageing will receive applications from suppliers and/or manufacturers of prostheses and human tissues to include products on the Prostheses List in February and August of each year. The Prostheses List is then amended as necessary.
In Part A of the Prostheses List, some products are grouped according to their clinical effectiveness, as assessed by Clinical Advisory Groups (CAGs). The purpose of the groupings is to identify products of similar clinical effectiveness or clinical design, in order to assist in determining the benefits payable for the products and to assist with clinical choice. To date, CAGS have assessed and grouped products for the Prostheses List in the following categories:
- cardiac pacemakers and leads;
- implantable cardioverter defibrillators and leads;
- cardiac stents;
- intraocular lenses;
- hip prostheses; and
- knee prostheses.
Other products have been grouped according to their product type, as determined by the Emergency Care Research Institute (ECRI) or Global Medical Devices Nomenclature System (GMDNS) descriptor allocated by the Therapeutic Goods Administration. This is to allow for greater ease of comparison of products available.
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Benefits payable in respect of the products that have been assessed and grouped by CAGS, and new products, have been negotiated with the suppliers. Benefits payable in respect of products that have not yet been assessed and grouped by CAGS have been determined by application of a formula taking into account the benefits payable in respect of each product as at 1 October 2004, and the utilisation of each product.
CONSULTATION
This Determination has been made having regard to advice provided by the Prostheses and Devices Committee (PDC), a ministerially appointed committee comprised of members from the major stakeholder groups – the Australian Health Insurance Association, the Australian Private Hospitals Association, Catholic Health Australia, the Australian Medical Association, the Consumers’ Health Forum, the Medical Industry Association of Australia, and the Commonwealth Department of Veterans’ Affairs. The PDC considered applications for listing of new products, applications for changes to products already listed in Schedule 5, and the benefits payable for all products, and made recommendations. In making their recommendations, the PDC were advised by CAGs, other clinical experts, and benefits negotiators, all appointed by the PDC.
The time between the making of the determination and its commencement on 31 October 2005 is to enable health funds and hospitals to establish new systems to support the new arrangements. It is also to allow time for patients to be appropriately informed by doctors, hospitals and health funds of the health fund benefit they can expect for their prostheses, on and after 31 October 2005.
The Determination and this explanatory statement have been lodged for registration on the Federal Register of Legislative Instruments.
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT OF HEALTH AND AGEING
AUGUST 2005
Overview
The National Health Act 1953, as amended, introduced the concept of no gap prostheses and gap permitted prostheses under subsections 73AAG (6) and (7). This legislation was enacted to address the issue of ensuring appropriate and equitable benefits for patients receiving prostheses under private health insurance. The determination, HIB13/2005, was issued by the Minister for Health and Ageing and aims to regulate the types of prostheses eligible for no gap benefits and the associated benefit amounts. The determination also establishes the list of gap permitted prostheses with specified minimum and maximum benefits. The Prostheses List, which includes both prostheses and human tissues, is reviewed and updated biannually based on applications from suppliers and manufacturers. The policy objective is to facilitate the provision of equitable benefits, assist clinical choice, and ensure that the benefits are determined based on clinical effectiveness and product type. The decision-making process involved consultation with the Prostheses and Devices Committee, which comprised representatives from major stakeholder groups, ensuring a balanced approach to the listing and benefit negotiation of prostheses.
Scope and Application
This determination, made under the National Health Act 1953, provides a framework for determining which prostheses and human tissues are eligible for specific benefits, referred to as "no gap" or "gap permitted" prostheses, with corresponding benefit amounts. The Act applies to entities and individuals involved in the supply or manufacture of prostheses and human tissues, as well as to health funds and hospitals that provide benefits to patients requiring such items. The geographic and jurisdictional reach of the Act is national, given it is a Commonwealth Act. The Act operates by establishing a Prostheses List that specifies the prostheses eligible for benefits, and it is intended to provide clarity and consistency in the benefits provided to patients. The list is updated twice a year, in February and August, following applications from suppliers and manufacturers. The benefits for listed products are either negotiated with suppliers or determined through a formula based on previous benefits and product utilisation. The determination has been made in consultation with the Prostheses and Devices Committee, which includes representatives from key stakeholder groups, and has been designed to allow sufficient time for health funds and hospitals to implement the new arrangements before the determination's commencement on 31 October 2005.
Key Provisions
The National Health Act 1953, as amended by the determination under subsections 73AAG (6) and (7), establishes specific provisions regarding prostheses and human tissue benefits. Section 73AAG(6) allows the Minister to determine which prostheses are to be considered "no gap" prostheses and to set the benefit amount for each of these. Similarly, section 73AAG(7) empowers the Minister to determine which prostheses are "gap permitted" prostheses and to specify the minimum and maximum benefit amounts for these. These determinations are outlined in a Schedule known as the "Prostheses List," which is divided into Part A, concerning prostheses, and Part B, concerning human tissues.
This Act imposes certain obligations on the parties and entities it governs. Suppliers and manufacturers of prostheses and human tissues are required to submit applications to the Department of Health and Ageing in February and August each year for inclusion of products on the Prostheses List. The Department, in consultation with relevant clinical advisory groups and other stakeholders, reviews these applications and amends the Prostheses List as necessary. The benefits payable for listed prostheses are negotiated with suppliers or determined using a specified formula based on historical data and product utilisation.
Failure to comply with the provisions of the Act may result in various consequences. While the legislation does not explicitly outline specific offences, penalties, or civil/criminal consequences, breaches of the Act may lead to disputes over benefits payable, potential financial penalties for suppliers or manufacturers who do not adhere to the established benefit amounts, and possible litigation between patients, health funds, and suppliers over discrepancies in benefits. The severity and nature of penalties would be determined on a case-by-case basis in the context of the breach and the resultant impact on the involved parties.