National Health Act 1953 - Determination under subsection 84BA(2) (08/12/2009)

Administered by Department of Health, Disability and Ageing

Legislation au F2009L04611 Not in force Legislative Instrument

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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

  1. concessional beneficiaries and their dependants,
  2. holders of a concession card; and
  3. 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.

 

Overview

The National Health Act 1953, enacted by the Parliament of Australia, addresses the need for a structured system to supply drugs and medicinal preparations that are declared as pharmaceutical benefits. This Act particularly focuses on the "safety net scheme" outlined in Division 1A of Part VII, which aims to offer financial protection for patients and their families who require a significant number of pharmaceutical benefits. The legislation was introduced to ensure that patients receive necessary medications without facing excessive financial burdens. The problem it addresses is the potential for patients to incur high out-of-pocket expenses for medications, especially when they require frequent medical treatments. This determination, made under subsection 84BA(2) of the Act, sets specific amounts that are considered as payments made to public hospitals for out-patient medication, which is integral to assessing patient eligibility for concession or entitlement cards. The policy objective is to provide a transparent and consistent method for calculating these amounts to ensure fairness and clarity in the healthcare system.

Scope and Application

The National Health Act 1953 applies to the supply of drugs and medicinal preparations that are declared to be pharmaceutical benefits under Part VII of the Act, including the operation of the safety net scheme designed to provide financial protection for patients requiring a large number of pharmaceutical benefits. The Act applies to individuals, entities, and entities supplying out-patient medication in public hospitals across Australia. The Minister for Health and Ageing, pursuant to subsection 84BA(2) of the Act, determines 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. This determination applies to out-patients at public hospitals throughout Australia, except for public hospitals in Queensland and those participating in Pharmaceutical Reform Arrangements as per the National Healthcare Agreement. The amounts are differentiated for concessional beneficiaries, their dependants, holders of a concession card, and general patients. This Determination is a legislative instrument under the Legislative Instruments Act 2003 and commenced on 1 January 2010.

Key Provisions

The National Health Act 1953 governs the supply of drugs and medicinal preparations that are declared to be pharmaceutical benefits. Section 84BA of the Act specifically addresses the safety net scheme, designed to protect patients and their families who need a significant number of pharmaceutical benefits by providing financial relief. Under subsection 84BA(2), the Minister for Health and Ageing must determine the amounts that will be considered as paid to public hospitals for out-patient medication before the relevant entitlement period. The determination provides different amounts for supplies of out-patient medication based on the state or territory of the hospital and the type of patient, including concessional beneficiaries, dependants, concession card holders, and general patients. The Act imposes specific obligations on public hospitals and the Minister. Public hospitals must supply out-patient medication in line with the determined amounts set out in the Act. The Minister, on the other hand, is responsible for determining these amounts, considering the location of the hospital and the type of patient. This ensures that the safety net scheme operates effectively and equitably across different jurisdictions and patient categories. The Act also outlines penalties for non-compliance. If a public hospital fails to adhere to the determined amounts, it may face civil consequences, including financial penalties. The Act does not specify maximum penalties in this regard, but breaches of the Act can lead to legal actions to enforce compliance. Additionally, the Minister has the authority to take corrective measures to ensure that the safety net scheme operates as intended, protecting patients who require substantial pharmaceutical benefits.

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