EXPLANATORY STATEMENT

Issued by Authority of the Minister for Health and Ageing

National Health Act 1953

Determination under Schedule 1, paragraph (1)(bj)

(HIB 06/2006)

Schedule 1, paragraph (1)(bj) of the National Health Act 1953 (the Act) provides that the Minister may determine the minimum levels of benefit payable by a registered health benefits organization for an episode of hospital treatment provided to contributors, other than in emergencies, in a hospital or day hospital facility with which the organization does not have a hospital purchaser-provider agreement which covers such treatment.  These benefits are known in the industry as “default benefits”.

This determination repeals and replaces the determination made on 24 June 2005 (as amended). Rather than registering the principal determination and all subsequent amendments to the principal determination on the Federal Register of Legislative Instruments as required under the Legislative Instruments Act 2003, I have pursued the alternative option allowed under the Legislative Instruments Act 2003 of repealing and remaking the determination in a consolidated form.   This determination is comprised of seven Schedules setting out the minimum levels of benefit which are payable for a range of hospital treatment. 

This determination also incorporates some substantive amendments which are explained below.

Amendments to Schedule 4

This determination makes amendments to Schedule 4 (Nursing Home Type Patient Accommodation).  Schedule 4 sets out benefit levels payable for overnight accommodation to the Nursing Home Type Patients (NHTPs) in private and recognized (public) hospitals.  The charge for providing hospital treatment to NHTPs in private hospitals has been capped at $111.10 per day.  The default benefit for NHTPs in private hospitals is set by subtracting the amount of the patient contribution from the capped amount.  The patient contribution, which is not insurable, is calculated by reference to pension rates and set by the Minister’s Determination under subsection 3(1) of the Health Insurance Act 1973. The default benefit payable to NHTPs in private hospitals is modified each time that a change to the pension rate leads to a change to the amount of the patient contribution.

This determination adjusts the default benefit payable to NHTP’s in recognized public hospitals within New South Wales and Tasmania to take into account a recent change to the amount of the patient contribution.

This determination does not change the default benefit payable to NHTP’s in private hospitals in all States/Territories and in public hospitals in the Northern Territory, the Australian Capital Territory, Victoria, South Australia, Western Australia and Queensland. 

Amendment to Schedule 5

Schedule 5 of the Determination made on 24 June 2005 (HIB 11/2005) (as amended) set out the level of benefits payable for surgically implanted prostheses, in hospitals and day hospital facilities in all States and Territories. The National Health Amendment (Prostheses) Act 2005 introduced new arrangements for listing and paying benefits for prostheses and human tissues. This Act received Royal Assent on 21 March 2005. The effect of the amendments was that Schedule 5 of Schedule 1, paragraph (1)(bj) to the Act has been replaced, in its entirety, by a new determination made under subsections 73AAG(6) and (7) of the Act.   

Amendments to Schedules 5, 6, 7 and 8

Schedules 5,6,7 and 8 have been re-numbered to reflect the omission of Schedule 5 from the determination made under Schedule 1, paragraph (1)(bj) to the Act on 24 June 2005 (as amended).

This determination sets out the second tier level of benefits payable for accommodation in private hospitals and day hospital facilities in Schedule 5.

This determination sets out the level of benefits payable for Care Plans and Case Conferencing in hospitals and day hospital facilities in all States and Territories in Schedule 6.

This determination sets out the level of benefits payable for Outreach Services provided to a patient by, or on behalf of, a hospital or day hospital facility in all States and Territories in Schedule 7

The previous Schedule 8 has been omitted.

Consultation

The amendments to Schedule 4 in relation to default benefits for NHTPs in public hospitals in all States and Territories are set in accordance with the daily bed rate for NHTPs calculated by each State and Territory minus the patient contribution as set by the Minister’s Determination under subsection 3(1) of the Health Insurance Act 1973.  All States and Territories decide whether to adjust the daily bed rate for NHTPs each time there is a change to the standard pension rate.  The Minister amends the default benefit payable for NHTPs in each State and Territory every time a particular State or Territory notifies the Commonwealth that it has modified its daily bed rate for NHTPs.

This determination commences on 20 March 2006. 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

MARCH 2006