EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
National Health Act 1953
Determination under Schedule 1, paragraph (bj)
(HIB 10/2005)
Schedule 1, paragraph (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 (RHBO) for an episode of 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 which covers such treatment. These benefits are known in the industry as “default benefits”.
The current Determination made on 30 June 1999 comprises eight schedules setting out the minimum levels of benefit which are payable for a range of hospital treatment. These include benefits for overnight accommodation, day accommodation, prostheses and second tier default benefits.
Schedule 5 (Benefits Payable in Respect of Prostheses and Human Tissues) of the current Determination has two parts:
- Part A – Prostheses; and
- Part B – Human Tissues.
Schedule 5 prescribes the prostheses and human tissues that RHBOs must fully fund for their members who have taken out a policy under which benefits are payable for the items.
For prostheses the benefit payable is the charge for the item negotiated between the RHBO and one only of the manufacturer, supplier or hospital (or their agent).
For human tissues the benefit payable is set by the Minister with reference to applications from suppliers.
This determination amends the determination made on 30 June 1999 by omitting Schedule 5 (Benefits Payable in Respect of Prostheses and Human Tissues) and substituting a new Schedule 5.
The Department of Health and Ageing assesses applications from manufacturers and suppliers to include items in Schedule 5 in February and August of each year.
In assessing the applications for listing on the Schedule in February 2005, some errors were made in entering information about products, and some products were inadvertently omitted from the Schedule.
This determination substitutes the Schedule 5 of February 2004 for a Schedule that incorporates the correction of these errors and omissions.
The new Schedule 5 modifies the previous Schedule by:
- adding a number of new items; and
- amending the details of items already on the Schedule to correct errors.
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 the applications for listing of new products that were omitted from the determination made in February 2005.
Corrections to details of products already listed have been made in consultation with the suppliers of the products.
The determination takes effect on 27 May 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
MAY 2005
Overview
The National Health Act 1953, enacted by the Australian Parliament, provides a framework for ensuring that Registered Health Benefits Organizations (RHBO) offer a minimum level of benefits to contributors for hospital treatment. This legislation addresses the gap by establishing the criteria for these "default benefits" when a hospital or day hospital facility does not have an agreement with the RHBO. In May 2005, the Department of Health and Ageing, under the authority of the Minister for Health and Ageing, issued a determination under Schedule 1, paragraph (bj) of the Act to correct errors and omissions in the benefits payable for prostheses and human tissues, as outlined in Schedule 5 of the determination made in June 1999. This determination aims to ensure accurate and comprehensive coverage of necessary medical items by incorporating corrections and new additions based on applications assessed by the Prostheses and Devices Committee, thereby maintaining the integrity and effectiveness of the health benefits provided.
Scope and Application
The National Health Act 1953, as amended by the Determination under Schedule 1, paragraph (bj)(HIB 10/2005), outlines the framework for minimum levels of hospital benefits that must be paid by Registered Health Benefits Organizations (RHBOs) for treatments provided in hospitals or day hospitals without a specific hospital purchaser-provider agreement, known as "default benefits". These benefits apply to episodes of hospital treatment for contributors, excluding emergency situations. The Act applies to RHBOs and their members across the Commonwealth of Australia, ensuring a baseline of hospital treatment coverage regardless of specific agreements between RHBOs and healthcare providers. This determination specifically revises Schedule 5 of the 1999 determination, correcting errors and omissions made in the February 2005 assessment of prostheses and human tissues, incorporating new items and amendments based on applications from manufacturers and suppliers. This amendment was made in consultation with relevant stakeholders through the Prostheses and Devices Committee, ensuring the inclusion of necessary products while correcting previously recorded errors. The new Schedule 5, which took effect on 27 May 2005, reflects these changes, thereby maintaining the integrity and effectiveness of the health benefits provided under the Act.
Key Provisions
The main operative sections of the Determination under Schedule 1, paragraph (bj) of the National Health Act 1953 (the Act) concern the amendment of the existing schedules that set out the minimum levels of benefit payable by Registered Health Benefits Organizations (RHBO) for certain hospital treatments, specifically prostheses and human tissues (Schedule 5). The Determination corrects previous errors and omissions in the February 2005 determination by adding new items and amending the details of existing items on the Schedule (para 4). This new Schedule incorporates these changes to ensure that the benefits provided are accurate and comprehensive.
The obligations imposed by this Determination on RHBOs include ensuring that they fully fund the prostheses and human tissues listed in the corrected Schedule 5 for their members who have taken out a policy under which benefits are payable for these items (para 5). For prostheses, the benefit payable is the charge negotiated between the RHBO and the manufacturer, supplier, or hospital (or their agent). For human tissues, the benefit payable is determined by the Minister, with reference to applications from suppliers. These obligations necessitate that RHBOs review their current schedules to incorporate the new items and correct any existing errors, thereby aligning their benefits with the requirements of the Determination.
Failure to comply with the provisions of this Determination could result in RHBOs not providing the mandated benefits, potentially leading to legal consequences or complaints from members who are not receiving the correct level of coverage. While the Determination itself does not explicitly state specific penalties for non-compliance, the overarching National Health Act 1953 and related regulations may impose penalties for non-compliance with health benefit provisions. These could include fines, corrective actions, or other measures to ensure compliance. The exact penalties would be in accordance with the broader legislative framework governing health benefits in Australia.