EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
National Health Act 1953
Determination under Schedule 1, Paragraph (bj)
(HIB 15/2005)
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 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”.
The current determination dated 24 June 2005 (as amended) and is comprised of eight schedules setting out the minimum levels of benefit which are payable for a range of hospital treatment. These include benefits for overnight accommodation and day accommodation.
This determination amends the determination dated 24 June 2005 (as amended) by omitting Schedule 4 (Nursing Home Type Patient Accommodation) and substituting a new Schedule 4. The new schedule reflects changes in benefits payable for overnight accommodation to the Nursing Home Type Patients (NHTPs) in private and 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.
Consultation
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 adjusts the default benefit payable to NHTPs in private hospitals in all States/Territories and public hospitals within Queensland and Tasmania to take into account a recent change to the amount of the patient contribution.
This determination does not affect the default benefit payable in public hospitals in New South Wales, Victoria, South Australia, Western Australia, Australian Capital Territory and Northern Territory.
This determination commences on 20 September 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
September 2005
Overview
The National Health Act 1953, enacted by the Australian Parliament, addresses the need for minimum levels of benefits to be provided by registered health benefits organisations in the event of hospital treatment in facilities without a hospital purchaser-provider agreement. The Act empowers the Minister for Health and Ageing to determine these default benefits. An amendment to the existing determination, dated 24 June 2005, was issued on 20 September 2005 to adjust the benefits payable for overnight accommodation to Nursing Home Type Patients (NHTPs) in both private and public hospitals. This adjustment reflects changes in the patient contribution, which is calculated by reference to pension rates and is set by the Minister’s Determination under the Health Insurance Act 1973. The policy objective of these amendments is to ensure that the default benefits for NHTPs in private and public hospitals are accurately reflected, taking into account recent changes to the patient contribution rates.
Scope and Application
The determination under Schedule 1, paragraph (bj) of the National Health Act 1953 applies to registered health benefits organisations that provide hospital treatment benefits to contributors in hospitals or day hospitals where there is no existing hospital purchaser-provider agreement covering such treatment. These organisations are required to adhere to the minimum levels of benefit, known as "default benefits," specified in the determination for a range of hospital treatments, including overnight and day accommodation. The current amendment, effective from 20 September 2005, revises the benefits payable for Nursing Home Type Patients (NHTPs) in both private and public hospitals. For private hospitals, the daily benefit cap for NHTPs is set at $111.10, with the default benefit calculated by subtracting the patient contribution from this cap. Conversely, for public hospitals, the default benefit for NHTPs is based on the daily bed rate calculated by each state or territory, minus the patient contribution. This determination specifically adjusts the default benefits for NHTPs in private hospitals across all states and territories, and in public hospitals in Queensland and Tasmania, reflecting recent changes in the patient contribution rates.
Key Provisions
The main operative sections of this determination (Schedule 1, paragraph (bj)) under the National Health Act 1953 require that the Minister establish minimum levels of benefits for hospital treatment provided to contributors in facilities without a hospital purchaser-provider agreement. Specifically, this determination (F2005L02731) amends the previous determination by updating the benefits for Nursing Home Type Patients (NHTPs) in private and public hospitals, setting a cap on the charge for NHTPs in private hospitals and adjusting the default benefit to reflect changes in the patient contribution. The updated Schedule 4 details these new benefits.
The obligations imposed by this Act on registered health benefits organisations include ensuring they adhere to the newly set default benefits for NHTPs in private and public hospitals as outlined in the amended Schedule 4. Private hospitals must cap their charges at $111.10 per day for NHTPs, while the default benefit is calculated by subtracting the patient contribution from this capped amount. Public hospitals must align their benefits with the daily bed rate for NHTPs minus the patient contribution, as determined by each State and Territory.
Breach of these obligations can lead to civil and criminal consequences. Although the Act does not explicitly detail the penalties for non-compliance, it is important to note that failure to adhere to the mandated benefits could result in legal action against the health benefits organisation. Additionally, the Minister's Determination under the Health Insurance Act 1973, which sets the patient contribution, carries its own enforcement mechanisms. The specific penalties for breaching these provisions would be detailed in related legislation and could include fines or other sanctions as determined by the relevant authorities.
This determination is effective from 20 September 2005, and both the determination and the explanatory statement have been registered on the Federal Register of Legislative Instruments, ensuring transparency and accessibility of the legal changes to all stakeholders. The amendments reflect the latest adjustments to the patient contribution, ensuring that NHTPs receive the appropriate level of support from health benefits organisations.