EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
National Health Act 1953
Determination under Schedule 1, paragraph (bj)
(HIB 12/2005)
Schedule 1, paragraph (bj) to 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, 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 24 June 2005 (HIB11/2005) 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 24 June 2005 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.
Schedule 5 is then amended as necessary. This determination substitutes the Schedule 5 of February 2005 for a Schedule that incorporates the changes required as a result of the applications assessed for August 2005.
The new Schedule 5 modifies the previous Schedule by:
- adding a number of new items;
- changing some existing items including: amending the descriptions of items already on the Schedule to correct errors or to add new sizes or models, allocating new billing codes in respect of new sizes or models of products, compressing billing codes to cover a range of items offered at the same cost, changing supplier names to reflect new supplier arrangements; and
Some products listed in Part A – Prostheses, have been 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, four CAGS have reviewed and grouped existing and new products on the Schedule in the following categories:
- cardiac pacemakers and leads;
- implantable cardioverter defibrillators and leads;
- cardiac stents;
- intraocular lenses;
- hip prostheses; and
- knee prostheses.
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 available.
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 and applications for changes to existing listings and made recommendations.
The determination takes effect on 14 September 2005. The determination and this explanatory statement have been lodged for registration on the Federal Register of Legislative Instruments.
Overview
The National Health Act 1953, enacted by the Australian Parliament, addresses the issue of ensuring that Registered Health Benefits Organizations (RHBOs) provide a minimum level of benefits for hospital treatment provided in facilities with which they do not have an agreement. This is particularly relevant for emergency cases where immediate care is necessary. To operationalise this, the Minister for Health and Ageing is empowered under the Act to determine these "default benefits". The determination, HIB 12/2005, made on 24 June 2005 and effective from 14 September 2005, amends the previous determination by updating the benefits payable for prostheses and human tissues, incorporating new items and modifications based on assessments by the Department of Health and Ageing. These changes were recommended by the Prostheses and Devices Committee, which includes representatives from various stakeholder groups, ensuring a balanced approach to the listing and categorisation of prostheses and human tissues for clinical and comparative purposes.
Scope and Application
The National Health Act 1953, under the authority of the Minister for Health and Ageing, allows the Minister to set the minimum levels of benefits that must be paid by Registered Health Benefits Organisations (RHBO) for hospital treatment provided in facilities with which the RHBO does not have a hospital purchaser-provider agreement, known as "default benefits". This determination, HIB 12/2005, amends the previous determination (HIB 11/2005) by updating the Schedule 5, which lists the prostheses and human tissues that RHBOs must fully fund for their members. The Department of Health and Ageing assesses applications for inclusion in Schedule 5 twice a year, in February and August, incorporating changes based on these assessments into the Schedule as necessary. This specific determination replaces the February 2005 Schedule 5 with that of August 2005, making amendments such as adding new items, modifying existing ones, and deleting others. The grouping of prostheses according to clinical effectiveness or product type is intended to assist in determining the benefits payable and to aid in clinical choice. The Prostheses and Devices Committee, an advisory body comprising representatives from major stakeholder groups, has provided advice on applications for new product listings and changes to existing listings, which the Minister has considered in making this determination.
Key Provisions
The key provisions of this Determination under Schedule 1, paragraph (bj) of the National Health Act 1953 (the Act) (F2005L02433) primarily concern the minimum levels of benefit payable by Registered Health Benefits Organisations (RHBOs) for prostheses and human tissues provided in hospitals or day hospitals without a hospital purchaser-provider agreement. Specifically, Schedule 5 (Benefits Payable in Respect of Prostheses and Human Tissues) has been amended to update the items covered by the default benefits scheme. This includes adding new items, modifying descriptions and billing codes of existing items, and removing some items. The amendments are a result of applications assessed by the Department of Health and Ageing in February and August 2005.
Registered Health Benefits Organisations are required to fully fund the prostheses and human tissues listed in Schedule 5 for their members. For prostheses, the benefit payable is the charge negotiated between the RHBO and the manufacturer, supplier, or hospital. For human tissues, the benefit is set by the Minister based on applications from suppliers. These obligations ensure that members of RHBOs receive the necessary medical devices at a specified cost, enhancing the effectiveness and fairness of the healthcare system.
Failure to comply with the provisions of this Determination can result in civil or criminal consequences. While specific penalties are not detailed in the text, breaches of the National Health Act 1953 can generally lead to substantial fines, corrective actions, or other regulatory sanctions. The severity of these consequences depends on the nature and extent of the non-compliance, and may be subject to review by relevant authorities. The determination aims to ensure that RHBOs adhere to the prescribed minimum benefits to protect the interests of policyholders and maintain the integrity of the healthcare funding system.