EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
National Health Act 1953
Determination under subsection 84BA(2)
- Part VII of the National Health Act 1953 (the Act) regulates the Pharmaceutical Benefits Scheme (PBS), which provides for the supply of listed drugs and medicinal preparations as pharmaceutical benefits.
- 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 PBS medicines.
- Subsection 84BA (1) of the Act makes provision for account to 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 PBS safety net scheme, whether the person is eligible to be issued with a concession card or an entitlement card.
- Subsection 84BA (2) of the Act provides that, before the beginning of the relevant entitlement period, the Minister must determine in writing the amounts that, for the purposes of Part VII of the Act, will be taken to have been paid to a public hospital for supplies of out-patient medication made, against payment, by the hospital during the relevant entitlement period.
- Subsection 84BA (3) of the Act provides that, in making a determination, the Minister may determine: 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 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).
6. This Determination sets out amounts for the purposes of subsection 84BA (2) of the Act. The amount of $23.60 represents an average of the range of patient co-payments patients would pay if they received their medication from the PBS and is determined in relation to general patients. This applies to out-patients at public hospitals throughout Australia, with the exception of public hospitals in Queensland and public hospitals which are participating in the arrangements specified in clause 21 of the Australian Health Care Agreements (‘the pharmaceutical reforms’). These hospitals have the capacity to individually price medication and therefore apply the pricing structure as the PBS for co-payments below the general patient co-payment of $29.50 (for 2006).
7. 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 Departments and the Australian Government. If 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 2006.
8. This Determination was made on 16 December 2005 and commences on 1 January 2006.
9. This Determination shall cease to have effect at the end of 31 December 2006.
10. This Determination is a legislative instrument for the purpose of the Legislative Instrument Act 2003.
PHARMACEUTICAL ACCESS AND QUALITY BRANCH
DEPARTMENT OF HEALTH AND AGEING
DECEMBER 2005
Overview
The National Health Act 1953, as supplemented by the 2005 Determination under subsection 84BA(2), addresses the financial burden on patients requiring significant pharmaceutical benefits through the Pharmaceutical Benefits Scheme (PBS) safety net. This legislative instrument was enacted by the Parliament of Australia and aims to ensure that patients who need extensive medication under the PBS do not face prohibitive out-of-pocket expenses. The determination specifically sets out the amounts to be considered for out-patient medication payments made by public hospitals, ensuring these amounts are factored into the eligibility assessments for concession cards and entitlement cards under the PBS safety net scheme. This process provides a systematic approach to calculating and applying co-payments for general patients, concessional beneficiaries, and their dependants, thereby facilitating equitable access to necessary medications.
Scope and Application
The National Health Act 1953, through its Part VII and Division 1A, governs the Pharmaceutical Benefits Scheme (PBS) which includes the safety net scheme to provide financial protection for patients requiring a substantial amount of PBS medicines. This scheme particularly considers payments made to public hospital authorities for outpatient medication to ascertain eligibility for concession cards or entitlement cards. Under this framework, the Minister for Health and Ageing must determine, before the relevant entitlement period begins, the amounts that will be taken into account for out-patient medication payments made to public hospitals. This Determination specifies that the average amount of $23.60 will represent the co-payment for general patients receiving medication from PBS, applying to outpatients at public hospitals across Australia, except those in Queensland and those participating in the pharmaceutical reforms under the Australian Health Care Agreements. The Department of Health and Ageing, in consultation with State and Territory Health Departments through the Highly Specialised Drugs Working Party, annually reviews these hospital safety net arrangements, including the calculation of the general patient average co-payment. This Determination, effective from 1 January 2006 and expiring on 31 December 2006, is a legislative instrument under the Legislative Instruments Act 2003.
Key Provisions
The National Health Act 1953, specifically Part VII, establishes the Pharmaceutical Benefits Scheme (PBS) which facilitates the supply of listed drugs and medicinal preparations as pharmaceutical benefits. Within this framework, Division 1A of Part VII details a “safety net scheme” designed to offer financial protection for patients who require a significant number of PBS medicines. The provisions in this scheme, particularly subsection 84BA(1), allow for payments made by a person to a public hospital authority for out-patient medication to be taken into account when determining their eligibility for a concession card or an entitlement card under the PBS safety net. The key determination, outlined in subsection 84BA(2), mandates that the Minister must, before the relevant entitlement period begins, determine the amounts to be recognised as payments made to public hospitals for out-patient medication. This determination can vary based on the state or territory where the hospital is located, and also differentiate between concessional beneficiaries, holders of a concession card, and general patients, as per subsection 84BA(3).
Under the Act, the obligations imposed on public hospitals and patients are clear. Public hospitals are required to provide out-patient medication and ensure that the costs associated with these supplies are accurately recorded. Patients, on the other hand, must be aware of their eligibility for concession cards or entitlement cards and ensure they are appropriately documented to avail themselves of the financial protections offered by the safety net scheme. The Minister’s role is pivotal as they must make informed determinations regarding the amounts to be recognised for out-patient medication expenses, ensuring these amounts reflect the average co-payments under the PBS.
Failure to comply with the provisions of the Act can result in significant consequences. The Act does not explicitly detail offences or penalties, but non-compliance could potentially lead to disputes over the validity of payments considered for the PBS safety net, which might affect a patient's eligibility and the financial protection they receive. The absence of explicit penalties suggests that any breaches might be addressed through administrative reviews or disputes, potentially leading to adjustments in the amounts recognised for the safety net purposes, rather than through formal legal penalties. However, the implications of such non-compliance can still be substantial, affecting the financial relief intended for patients under the PBS safety net.