EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
NATIONAL HEALTH ACT 1953
DETERMINATION MADE PURSUANT TO SUBSECTION 84BA(2)
Authority
This determination is made under subsection 84BA (2) of the National Health Act 1953 (the Act).
Background
The Act provides for the supply of drugs and medicinal preparations that are declared to be pharmaceutical benefits under Part VII of the Act. Division 1A of Part VII of the Act provides for a “safety net scheme” in relation to pharmaceutical benefits. The safety net scheme is designed to provide financial protection for those patients and their families who require a large number of pharmaceutical benefits.
Subsection 84BA(1) of the Act provides that the purpose of section 84BA is to make provision so that account may be taken of payments made by a person to a public hospital authority for supplies of out-patient medication, when it is being ascertained, for the purpose of the Part VII of the Act, whether the person is eligible to be issued with a concession card or an entitlement card.
Subsection 84BA (2) of the Act provides that prior to the commencement of the relevant entitlement period (a calendar year), the Minister must determine in writing the amounts that will be taken to have been paid to a public hospital for supplies of out-patient medication made by a hospital during the relevant entitlement period.
Subsection 84BA(3) of the Act provides that, in making a determination, the Minister may determine:
a) different amounts in respect of a supply of out-patient medication, having regard to the State or Territory in which the hospital supplying the medication is situated; and
b) different amounts in respect of supplies made to
- concessional beneficiaries and their dependants,
- holders of a concession card; and
- general patients (other than holders of a concession card).
Purpose
This instrument determines amounts for the purposes of subsection 84BA (2) of the Act. The amounts set out in paragraphs 5 and 6 of this determination apply to out-patients at public hospitals throughout Australia, with the exception of public hospitals in Queensland and public hospitals that are participating in arrangements under Pharmaceutical Reform Arrangements within the meaning of the National Healthcare Agreement. The amounts for
out-patient medication at public hospitals in Queensland and public hospitals participating in arrangements under Pharmaceutical Reform Arrangements within the meaning of the
National Healthcare Agreement are determined in accordance with paragraphs 7 and 8 of this determination.
The National Healthcare Agreement commenced on 1 July 2009. The National Healthcare Agreement is a schedule to the Intergovernmental Agreement on Federal Financial Relations (IGA) which took effect on 1 January 2009. The Federal Financial Relations Act 2009, which refers to the IGA, implements the Australian government’s reforms to modernise federal financial relations in accordance with the new financial framework agreed by the Council of Australian Governments (COAG) in the Intergovernmental Agreement on Federal Financial Relations.
A copy of the IGA and National Healthcare Agreement, which is a schedule to the IGA, can be obtained from the COAG website on: http://www.coag.gov.au/intergov_agreements/federal_financial_relations/index.cfm
Consultation
The Department of Health and Ageing has consulted with the State and Territory Health Departments through the Highly Specialised Drugs Working Party (HSDWP). The HSDWP is a working party of the Australian Health Ministers’ Advisory Council and is made up of representatives from each State and Territory Health Department and the Australian Government. It has the responsibility to review the hospital safety net arrangements on an annual basis including the calculation of the general patient average co-payment. The State and Territory Health Departments have agreed to the value of out-patient medication for 2010.
Details of the Determination are set out in the Attachment.
This Determination commences on 1 January 2010.
This Determination is a legislative instrument for the purpose of the Legislative Instrument Act 2003.
Signed
PHARMACEUTICAL BENEFITS DIVISION
DEPARTMENT OF HEALTH AND AGEING
8 December 2009
ATTACHMENT
DETAILS OF THE DETERMINATION UNDER SUBSECTION 84BA(2)
1. Commencement
Paragraph 1 provides that this Determination commences on 1 January 2010.
2. Repeal
Paragraph 2 repeals the Determination made on 19 June 2009 under subsection 84BA(2) of the National Health Act 1953.
3. Interpretation
Paragraph 3 provides for the meaning of certain words and phrases appearing in the determination, and also states that unless the contrary intention appears, a word or expression that is defined in the Act shall be taken to have the same meaning as in the Act.
4. Amount taken to have been paid to a public hospital for the supply of out-patient medication
Paragraph 4 provides that the amount, for the purposes of Part VII of the Act, taken to have been paid to a public hospital for the supply of out-patient medication shall be the lesser of either:
the maximum value of the supply of out-patient medication; or
the amount charged.
Out-patient medication is defined in section 84 of the Act to mean a drug or medicinal preparation supplied through the out-patient department of a public hospital.
5. Maximum value of the supply of out-patient medication to a concessional beneficiary, their dependent or a holder of a concession card
Paragraph 5 provides that the maximum value of the supply of out-patient medication to a concessional beneficiary, a dependant of a concessional beneficiary or the holder of a concession card shall be the amount referred to in paragraph 87(2)(a) of the Act.
The terms concessional beneficiary, dependant and concession card are defined under section 84 of the Act.
The relevant charge under paragraph 87(2)(a) of the Act is currently $5.40. These charges are periodically adjusted under section 99G of the Act.
6. Maximum value of the supply of out-patient medication to a general patient who is not a holder of a concession card
Paragraph 6 provides that except in the case of a public hospital situated in Queensland or a public hospital that is participating in arrangements under Pharmaceutical Reform Arrangements within the meaning of the National Healthcare Agreement, the maximum value of the supply of out-patient medication to a general patient who is not the holder of a concession card shall be $26.60.
The amount of $26.60 is determined in relation to general patients and represents an average of the range of co-payments patients would pay if they received their medication from approved pharmacists approved under section 90 of the Act to supply pharmaceutical benefits from particular premises.
7. Maximum value of the supply of out-patient medication by a Queensland public hospital to a general patient who is not the holder of a concession card
Paragraph 7 provides for the maximum value of a supply of out-patient medication to general patients who are not holders of a concession card in the case of public hospitals situated in Queensland.
Paragraph 7(a) specifies that where the medication is a pharmaceutical benefit and the Commonwealth price for that pharmaceutical benefit exceeds the amount referred to in paragraph 87(2)(e) of the Act, the maximum value is the amount referred to in paragraph 87(2)(e) of the Act.
The relevant amount under paragraph 87(2)(e) is currently $33.30. These charges are periodically adjusted under section 99G of the Act.
Paragraph 7(b) specifies that where the medication is a pharmaceutical benefit and the Commonwealth price for that pharmaceutical benefit does not exceed the amount referred to in paragraph 87(2)(e) of the Act, the maximum value is the price for that pharmaceutical benefit ascertained in accordance with the determination made under subsection 84C(7) as in force from time to time.
Paragraph 7(c) specifies that where the medication is a drug or medicinal preparation that is not a pharmaceutical benefit, the maximum value is the amount arrived at by taking as a basis the cost to the hospital of that drug or medicinal preparation and applying, as if that cost were the approved price to pharmacists, the determination under subsection 84C(7) of the Act as in force from time to time.
8. Maximum value of the supply of out-patient medication by a participating public hospital to a general patient who is not a holder of a concession card
Paragraph 8 provides for the maximum value of a supply of out-patient medication to general patients who are not holders of a concession card in the case of public hospitals that are participating in arrangements under Pharmaceutical Reform Arrangements within the meaning of the National Healthcare Agreement.
Paragraph 8(a) specifies that where the medication is a pharmaceutical benefit, the maximum value of the pharmaceutical benefit shall be the maximum value of the
pharmaceutical benefit ascertained in accordance with subregulation 9A(5) of the National Health (Pharmaceutical Benefits) Regulations 1960.
Paragraph 8(b) specifies that where the medication is a drug or medicinal preparation that is not a pharmaceutical benefit, the maximum value is the amount arrived at by taking as a basis the cost to the hospital of that drug or medicinal preparation and applying, as if that cost were the approved price to pharmacists, the determination under subsection 84C(7) of the Act as in force from time to time.