EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
National Health Act 1953
Determination under subsections 73AAG (6) and (7)
(HIB 18/2005)
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. It replaces, in its entirety, the determination dated 31 August 2005 made by the Minister for Health and Ageing (HIB 13/2005). This determination updates the previous Prostheses List by listing additional products as no gap prostheses or gap permitted prostheses, now that negotiations have taken place regarding the benefit amount or minimum/maximum benefit amount (as appropriate).
In addition this determination also modifies the previous Prostheses List by deleting some products and correcting the description of some products, at the request of the relevant supplier.
The determination is consistent with the recommendation of the Prostheses and Devices Committee.
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.
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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 listed.
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, where available, 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 nominees from health funds, hospitals, clinicians, prostheses and devices suppliers, the Commonwealth, and consumer representatives. In making their recommendations, the PDC were advised by CAGs, other clinical experts, and benefits negotiators, all appointed by the PDC.
This determination and this Explanatory Statement have been registered on the Federal Register of Legislative Instruments.
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT OF HEALTH AND AGEING
OCTOBER 2005
Overview
The National Health Act 1953 was enacted by the Parliament of Australia to provide a framework for the administration of national health programs and services. This Act addresses the need for regulation and coordination of health services across the country, aiming to ensure that Australians have access to necessary health services. One significant aspect of the Act is its provision for the Minister for Health and Ageing to determine certain prostheses as no gap or gap permitted prostheses, with the benefit amounts specified accordingly. This was intended to streamline the process of providing benefits for prosthetic devices and to ensure that the benefits offered were fair and equitable. The determination under subsections 73AAG (6) and (7) was made to update and modify the Prostheses List, ensuring that it reflects current clinical assessments and market negotiations. The policy objective behind these determinations is to maintain a balanced approach to the provision of prosthetic benefits, taking into account clinical effectiveness, product type, and supplier negotiations, all of which are overseen by the Prostheses and Devices Committee.
Scope and Application
The F2005L03200 determination under subsections 73AAG(6) and (7) of the National Health Act 1953 governs the specification of prostheses and human tissues that are eligible for no gap or gap permitted benefits under the private health insurance scheme. This applies to the provision of prostheses and human tissues in Australia, targeting suppliers and consumers within the private health insurance sector. The scope of this legislation extends to all entities involved in the supply of these medical products, including private health insurers and medical device manufacturers. The Act establishes a Prostheses List that specifies the types of prostheses eligible for no gap or gap permitted benefits, and it is applicable nationwide across Australia. This determination replaces and updates the previous list, reflecting new negotiations and recommendations from the Prostheses and Devices Committee. Exclusions or exemptions are determined by what is not listed in the Prostheses List, while thresholds for benefits are set based on clinical assessments and negotiated agreements with suppliers. The application of the Act can be further extended or restricted through subordinate instruments issued by the Minister for Health and Ageing.
Key Provisions
The main operative sections of this legislation are subsections 73AAG(6) and 73AAG(7) of the National Health Act 1953 (subsection 73AAG(6)). These subsections empower the Minister to determine, in writing, which prostheses are classified as "no gap prostheses" and the benefit amount for each such prosthesis, as well as which prostheses are "gap permitted prostheses" and the minimum and maximum benefit amounts for each such prosthesis. This determination is reflected in the Schedule, which is divided into Part A – Prostheses, and Part B – Human Tissues, and is referred to as the "Prostheses List".
Under this Act, the Minister, in consultation with relevant stakeholders including the Prostheses and Devices Committee (PDC), has the obligation to update the Prostheses List. This includes listing additional prostheses as either no gap or gap permitted, modifying existing listings by deleting some products and correcting descriptions as requested by suppliers, and ensuring that the Prostheses List remains current and consistent with recommendations from the PDC. Additionally, products are grouped according to clinical effectiveness or product type to assist in determining benefits payable and to facilitate clinical choice. Benefits payable for assessed and grouped products, as well as new products, are negotiated with suppliers, while benefits for unassessed products are determined using a formula based on prior benefits and product utilisation.
Failure to comply with the requirements of the Act and the Prostheses List could result in legal consequences for the parties involved. For instance, if a supplier does not adhere to the specified benefit amounts for listed prostheses, they may face civil or criminal penalties. Similarly, if a health fund or hospital does not comply with the provisions regarding the provision of no gap or gap permitted prostheses, they may be subject to fines or other penalties as outlined in the National Health Act 1953. The exact penalties for breaches of the Act would depend on the specific nature of the breach and any relevant case law or regulatory guidance.