EXPLANATORY STATEMENT

Issued by Authority of the Minister for Health and Ageing

National Health Act 1953

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

(HIB 18/2006)

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”. 

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 (LIA), I have pursued the alternative option allowed under the LIA of repealing and remaking the determination in a consolidated form.

This determination incorporates amendments to four schedules setting out the minimum levels of benefit which are payable for a range of hospital treatment.  Namely, benefits for overnight shared ward accommodation (Schedule 2), same day accommodation (Schedule 3), Second Tier Default Benefits (Schedule 5) and Outreach Services (Schedule 7).

The determination HIB 17/2006 has been repealed and revoked by this determination to incorporate amendments made to Schedules 2, 3, 5 and 7.

Amendments to Schedules 2, 3 and 7.

Schedules 2 and 3 of this determination set out benefit levels in regard to overnight shared ward accommodation and same day accommodation.  These schedules have been amended because the benefits are subject to annual review in accordance with the Consumer Price Index (CPI) from March quarter to March quarter each year with the agreement of the States and Territories.

On 27 April 2006, the Private Health Insurance Branch contacted each State/Territory to receive their proposed minimum hospital fees for payment of “default” health benefits within each state/territory.  New South Wales (NSW), South Australia (SA), Western Australia (WA), Victoria (VIC) and Tasmania (TAS) all responded and advised their level of default benefits.   These increases were approved by the delegate of the Minister for Health and Ageing on the 27 June 2006 and registered on the Federal Register of Instruments (FRLI) on 29 June 2006.

On 08 August 2006 Queensland (QLD) and the Australian Capital Territory (ACT) advised the Commonwealth of an increase of their level of default benefits.

This determination amends schedule 2, the level of benefits payable per night for shard ward accommodation in recognized hospitals in QLD and the ACT.

This determination also amends Schedule 3 to include an increase of the level of benefits payable for same day accommodation for all hospitals or day hospital facilities in QLD and ACT.

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.  Benefits in Schedule 7 have been adjusted for Qld and ACT private hospitals and private day hospital facilities.

Amendment to Schedule 5

Schedule 5 of this determination requires a RHBO to pay second tier default benefits for most episodes of hospital treatment provided in private hospitals and private day hospital facilities that are specified in Schedule 5 with which the RHBO does not have a HPPA.  Schedule 5 sets a higher minimum level of benefit (for overnight treatment and day only treatment provided in specified facilities) than the minimum benefit set for such treatment by Schedules 1, 2, 3 and 7 of this determination.

This determination removes the Avenue Day Surgery from ‘Table B: Specified Private Day Hospital Facilities’ of the Schedule 5 list as the Avenue Day Surgery has been declared a private hospital facility by the Delegate of the Minister for Health and Ageing made under subsection 23EA (1) of the Health Insurance Act 1973 effective  1 January 2006.

Transitional provision for facilities no longer specified in clause 3 of Schedule 5

The Avenue Day Surgery is deemed to remain specified in clause 3 of Schedule 5 only for such period of time and for such purposes as are necessary to allow members of RHBOs to receive the benefit of the second tier default benefit, in relation to episodes of hospital treatment for which those members were admitted patients at the facility or booked for hospital treatment at the facility (as opposed to merely being on the facility’s waiting list) prior to the date the determination removing the facility from clause 3 took effect.

Consultation
 

The amendments made to Schedules 2, 3 and 7 of this determination reflect the increase in default benefits for QLD and the ACT and are in line with the 3% CPI change from the March 2005 to the March 2006 quarter.  Increases to the default benefits were made with the agreement of the relevant State or Territory.

The amendment made to Schedule 5 of this determination reflects the removal of the Avenue Day Surgery from ‘Table B: Specified Private Day Hospital Facilities’ of the Schedule 5.  Consultation was in line with advice received from the Department of Human Services, Victoria.

This determination commences on 22 August 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

AUGUST 2006