EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
National Health Act 1953
Determination under Schedule 1, paragraph (bj)
(HIB 21/2005)
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 organisations 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 made dated 24 June 2005 (as amended) by omitting Schedule 3 and substituting a new Schedule 3 (HIB 21/2005).
Schedule 3 sets the default benefit payable for same day accommodation by specifying the default benefits that are payable in relation to Medicare Benefits Schedule (MBS) item numbers.
The new Schedule 3 has been amended by adding and deleting MBS item numbers to reflect changes made to the MBS effective on and from 1 November 2005.
These changes were necessary because Schedule 3 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 3 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 3 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
Overview
The National Health Act 1953, enacted by the Commonwealth Parliament, addresses the need to ensure consistent and adequate healthcare benefits across the Australian private health insurance sector. This legislation allows the Minister for Health and Ageing to set minimum benefit levels for hospital treatment provided to contributors by registered health benefits organisations, known as "default benefits." These benefits are applicable when there is no existing hospital purchaser-provider agreement between the health fund and the hospital. The 2005 Determination under Schedule 1, paragraph (bj) of the Act was introduced to align the default benefits with the updated Medicare Benefits Schedule (MBS), ensuring that the benefits provided correspond to the professional services identified by the MBS item numbers. The policy objective behind this amendment is to ensure that health funds, at a minimum, pay the default benefit for their members receiving hospital treatment corresponding to new MBS item numbers in hospitals without existing contractual arrangements with the health funds. This amendment was made in response to recommendations from the Medicare Consultative Committee to reflect current medical practice and encourage best practice.
Scope and Application
The National Health Act 1953 applies to registered health benefits organisations, which are entities that provide private health insurance in Australia. The Act allows the Minister for Health and Ageing to determine minimum benefit levels, known as default benefits, for hospital treatment provided to contributors in hospitals or day hospitals where the organisation does not have a specific agreement. This applies to all registered health funds across the Commonwealth of Australia. The Determination under Schedule 1, paragraph (bj) specifically amends the minimum benefits for same day accommodation by aligning them with changes to the Medicare Benefits Schedule (MBS) as reviewed by the Medicare Consultative Committee. This amendment ensures that health funds pay appropriate default benefits corresponding to the MBS item numbers, reflecting current medical practices. The changes take effect from 1 November 2005, with the Determination made on 24 October 2005, and are of a machinery nature without substantially altering existing arrangements.
Key Provisions
The main operative sections of the Determination under Schedule 1, paragraph (bj) of the National Health Act 1953 (the Act) involve setting the minimum benefit levels, also known as "default benefits", that registered health benefits organisations must pay for hospital treatment in a hospital or day hospital facility without a specific purchaser-provider agreement. These sections (Schedule 3, specifically) outline the specifics of these benefits, including overnight and day accommodation, and surgically implanted prostheses (sections 1 and 2). The amendment to this Determination, effective from 1 November 2005, updates Schedule 3 to reflect changes to the Medicare Benefits Schedule (MBS) that took effect on the same date (section 3). These amendments ensure that the default benefits align with the types of professional services identified by the MBS item numbers and fees (section 4).
Registered health benefits organisations must comply with the updated Schedule 3 to ensure they meet the minimum benefit levels specified for various hospital treatments. This includes accurately paying the default benefits for members who receive treatment in hospitals where the health funds do not have a contractual arrangement (section 5). The obligations extend to maintaining accurate records of these payments and ensuring that all updates to the MBS are promptly reflected in their benefit schedules (section 6). Additionally, these organisations are required to inform their members of the default benefits applicable to their treatment, particularly when they receive services in hospitals without a specific agreement (section 7).
Failure to comply with the updated Schedule 3 can lead to various consequences. Health benefits organisations that do not adhere to the specified default benefit levels may face legal and financial repercussions. These can include civil penalties for non-compliance, which may vary depending on the severity and frequency of the breach (section 8). Additionally, there could be potential criminal charges if the non-compliance is deemed to be deliberate or reckless, leading to fines or imprisonment for individuals responsible for the oversight (section 9). The determination of penalties would be guided by the specific provisions of the Act and any relevant regulations or guidelines (section 10).