National Health Act 1953 - Determination under Schedule 1, paragraph (1)(bj) (HIB 16/2006)

Administered by Department of Health, Disability and Ageing

Legislation au F2006L01292 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Issued by Authority of the Minister for Health and Ageing

 

National Health Act 1953

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

(HIB 16/2006)

 

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

 

This determination repeals and replaces the determination made on 18 April 2006 (HIB 14/2006).  Rather than registering the principal determination and registering 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.  Namely, benefits for overnight accommodation (Schedules 1 and 2), same day accommodation (Schedule 3), nursing-home type patients (Schedule 4), second tier benefits (Schedule 5), care plans and case conferencing (Schedule 6) and outreach services (Schedule 7).

 

Schedules 1, 3 and 6

 

Schedule 1 sets default benefits for overnight accommodation in certain situations by specifying the default benefits that payable in relation to Medicare Benefits Schedule (MBS) item numbers.  Schedule 1 categorises MBS item numbers into patient classifications (e.g. Advanced Surgical, Surgical/Obstetric or Other Patient).

 

The new Schedule 1 has been amended by adding and deleting MBS item numbers to reflect equivalent changes made to the 1 November 2005 MBS effective on and from 1 May 2006.

 

Schedule 1 has been amended to specify that advanced surgical patients are those defined as undergoing a procedure with an MBS fee greater than $738.22 and surgical patients are those defined as undergoing a procedure with an MBS fee within the range of $219.81 to $738.22.  This amendment ensures that new MBS surgical procedures are correctly located in either the advanced surgical or surgical classifications. 

 

Minor amendments were made to remove four sleep apnoea non-surgical MBS items which were inadvertently placed in the surgical obstetric classification.

 

Schedule 3 sets the default benefits payable for same day accommodation in hospitals and day hospital facilities in all States and Territories by specifying the default benefits that are payable in relation to MBS item numbers.  Schedule 3 also specifies procedures that do not normally require admission to hospital or a day hospital facility and therefore no default benefits are payable. 

 

The amendments to Schedule 3 specifies new MBS items that do not normally require admission to hospital or a day hospital facility.  The amendment also deletes MBS items that have been removed from the MBS.

 

Schedule 6 sets out the level of benefits payable for Care Plans and Case Conferencing in hospitals and day hospital facilities in all States and Territories.  Schedule 6 has been amended to include new MBS care plans and case conferencing to be undertaken in hospitals and day hospital facilities.

 

 

 

 

These changes were necessary because Schedules 1, 3 and 6 link the default benefits that are payable to the types of professional services rendered to admitted hospital patients.  The types of professional services rendered are identified by reference to MBS item numbers and fees.

 

Consultation

 

The changes to the MBS resulted from reviews by the Medicare Consultative Committee (MBCC). The MBCC is an informal consultative forum with representation drawn from the Department of Health and Ageing, Medicare Australia, the Australian Medical Association and relevant professional groups of the medical profession. The reviews conducted by the MBCC are designed to ensure that the MBS reflects current medical practice and encourages best practice.

The changes to Schedules 1, 3 and 6 were necessary to ensure that health funds, at a minimum, pay the ‘default benefit’ for their members where members receive hospital treatment corresponding to one of the new MBS item numbers, in a hospital where that health fund does not have a contractual arrangement with that hospital. These amendments to Schedules 1, 3 and 6 are of a machinery nature and do not substantially alter existing arrangements.
 

This determination commences on 1 May 2006.  This 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

MAY 2006

Overview

The National Health Act 1953, enacted by the Commonwealth Parliament, addresses the issue of ensuring equitable health coverage by setting minimum levels of benefits for hospital treatment that registered health benefits organisations must provide. This legislation was introduced to establish a baseline standard of care that must be met by private health insurers, thereby protecting consumers by guaranteeing a minimum level of benefits when they receive treatment in hospitals outside their insurer's network. The Minister for Health and Ageing has the authority under the Act to determine these "default benefits", which are designed to provide a safety net for patients who receive treatment in hospitals with which their insurer does not have a contract. This determination, which consolidates and updates previous regulations, aims to align the minimum benefit levels with current medical practices and the updated Medicare Benefits Schedule, ensuring that health funds remain accountable and transparent in their coverage obligations.

Scope and Application

The National Health Act 1953, as amended by the determination under Schedule 1, paragraph (1)(bj)(HIB 16/2006), governs the minimum levels of benefits that registered health benefits organisations (RHBOs) must provide for hospital treatment in facilities without which the RHBO has no hospital purchaser-provider agreement. These benefits, referred to as "default benefits," apply to contributors receiving hospital treatment, excluding emergency cases, in facilities outside the scope of an HPPA. The determination impacts all states and territories, ensuring a consistent application of minimum benefit levels for hospital treatments categorised by Medicare Benefits Schedule (MBS) item numbers. It is applicable to RHBOs, which are entities that provide private health insurance, and indirectly to their members who receive hospital treatment in facilities not covered by an HPPA. The determination consists of seven schedules detailing various hospital treatments, including overnight and same-day accommodation, care plans, and case conferencing. It is essential for practitioners to understand these provisions to advise clients on their entitlements and obligations under the Act.

Key Provisions

The determination under Schedule 1, paragraph (1)(bj) of the National Health Act 1953 (the Act) (Section 1) sets out the minimum levels of benefits that must be paid by registered health benefits organisations (RHBOs) for hospital treatment provided to contributors, excluding emergencies, in hospitals or day hospitals with which the RHBO does not have a hospital purchaser-provider agreement (HPPA) (Section 1(bj)). These minimum benefits are referred to as "default benefits". This determination replaces an earlier one from 18 April 2006 (HIB 14/2006) and is consolidated to reflect all amendments in one document, rather than registering each amendment separately as required by the Legislative Instruments Act 2003 (Section 1). The determination consists of seven schedules detailing minimum benefit levels for various hospital treatments, including overnight and same day accommodation, nursing-home type patients, second tier benefits, care plans and case conferencing, and outreach services. The obligations imposed by the Act on the RHBOs are to ensure that they provide the specified minimum levels of benefits for the listed hospital treatments. This includes setting the default benefits for overnight accommodation, as specified in Schedule 1, and same day accommodation, as outlined in Schedule 3. Schedule 1 categorises Medicare Benefits Schedule (MBS) item numbers into patient classifications, such as Advanced Surgical, Surgical/Obstetric, or Other Patient, to ensure the correct level of benefits is paid based on the type of procedure performed. Schedule 3 details the benefits payable for same day accommodation and identifies procedures that do not require hospital admission. Additionally, Schedule 6 specifies the benefits payable for care plans and case conferencing in hospitals and day hospitals. Failure to comply with the requirements set out in the determination could result in legal consequences for the RHBOs. The Act does not explicitly state the penalties for non-compliance, but the failure to adhere to the specified minimum benefit levels could lead to legal action being taken against the RHBOs by affected contributors or regulatory authorities. The consequences could include fines, compensation payments to affected contributors, or other civil or criminal penalties as deemed appropriate by the relevant authorities. The exact penalties would depend on the specific circumstances of non-compliance and the applicable laws.

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default benefits

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.