EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
National Health Act 1953
Determination under Schedule 1, paragraph (bj)
(HIB 20/2005)
Schedule 1, paragraph (bj) of the National Health Act 1953 (“the Act”) provides that the Minister may determine the minimum benefit levels payable by registered health benefits organisation for hospital treatment provided to contributors, other than in emergencies, in a hospital or day hospital facility with which the organisation does not have a hospital purchaser-provider agreement covering such treatment. These benefits are known in the industry as “default benefits”.
The current Determination dated 24 June 2005 (HIB 11/2005) (as amended) is comprised of eight schedules setting out the minimum benefit levels payable for a range of hospital treatment. These include benefits for overnight accommodation, day accommodation and surgically implanted prostheses, including human tissue items.
This Determination amends the Determination dated 24 June 2005 (as amended) by omitting Schedule 1 and substituting new Schedule 1 (HIB 20/2005). Schedule 1 sets default benefits for overnight accommodation in certain situations by specifying the default benefits that are 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 MBS effective on and from 1 November 2005.
Schedule 1 has been amended to specify that advanced surgical patients are those undergoing a procedure with an MBS fee greater than $738.22 and surgical patients are those undergoing a procedure with an MBS fee within the range of $219.81 to $738.22. These new amounts reflect a 2.0% fee increase which has been applied to MBS fees from 1 November 2005. This amendment will ensure that MBS services that have been classified as surgical will not move up to the advanced surgical classification simply as a result of the MBS fee increase.
These changes were necessary because Schedule 1 links 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, the Health Insurance Commission, 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 subsequent changes to Schedule 1 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. This amendment to Schedule 1 is of a machinery nature and does not substantially alter existing arrangements.
The Determination was made on 24 October 2005 and takes effect on 1 November 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
NOVEMBER 2005