EXPLANATORY STATEMENT
STATUTORY RULES 1985 NO. 206
ISSUED BY AUTHORITY OF THE MINISTER FOR HEALTH
NATIONAL HEALTH ACT 1953
NATIONAL HEALTH REGULATIONS (AMENDMENT)
Section 140 of the National Health Act 1953 provides in part that the Governor-General may make regulations prescribing all matters which are required or permitted by the Act to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Sections 12 and 16 of the Health Legislation Amendment Act 1985 (assented to on 5 June 1985), which pursuant to subsection 2(2) of that Act came into operation on 1 September 1985, respectively amend the definition of a “basic private table” in sub-section 4(1) and section 73BB of the National Health Act 1953. Sub-section 2(2) of the Health Legislation Amendment Act 1985 provides in part that sections 12 and 16 of that Act shall come into operation on 1 September 1985.
Sections 73BB and 73BC of the National Health Act 1953 provide for a scheme whereby exceptional costs, exceeding a prescribed level, incurred by a registered health benefits organization (“a registered organization”) in respect of individual contributors for benefits in accordance with a basic private table, can be debited against a reinsurance pool contributed to by registered organizations and the
Commonwealth. Part VI of the National Health Act 1953 provides for the registration of organizations under that Act.
Sub-section 73BB(1) of the National Health Act 1953 requires a registered organization to establish and maintain a Reinsurance Account in the health benefits fund, or in each health benefits fund, conducted by it. A registered organization is permitted under section 73BB to debit to the relevant Reinsurance Account conducted by it the amounts of any payments to a contributor of benefits in accordance with a basic private table which exceed the specified levels in a period of 12 months.
Section 73BC of the National Health Act 1953 provides for the establishment and operation of the Health Benefits Reinsurance Trust Fund (“the Fund”) into which are paid such payments by registered organizations as are determined from time to time by the Administrators of the Fund and such amounts as are appropriated from time to time by Parliament. Such amounts, as are determined by the Administrators of the Fund, may be paid out of the Fund to registered organizations to be credited to Reinsurance Accounts conducted by those organizations.
As a result of the amendments to the definition of a basic private table by section 12 of the Health Legislation Amendment Act 1985 such a table is required to incorporate a number of additional kinds of benefits. New paragraphs (da) and (dd) of that definition specify some of these additional kinds of benefits.
Paragraph (da) of the definition of a basic private table specifies benefits equal to the amount of the difference (the “gap amount”) between the amount of medicare benefit payable and the relevant fee specified in the table of medical services under the Health Insurance Act 1973 (or if a lesser amount is charged, that amount) where a professional service is rendered to an in-patient of a hospital or day hospital facility as defined under the National Health Act 1953.
Paragraph (dd) of the definition of a basic private table specifies benefits equal to the amount determined by the Minister in writing (or if a lesser amount is charged that amount) in respect of a prosthesis, being a prosthesis of a kind determined in writing by the Minister for the purposes of paragraph (dd), provided to a person who is an in-patient of a hospital.
New sub-section 73BB(9) of the National Health Act 1953 provides that section 73BB does not apply to benefits included in a class of benefits prescribed for the purposes of that sub-section.
The regulation prescribes as a class of benefits for the purposes of sub-section 73BB(9) of the National Health Act 1953 benefits of a kind referred to in paragraph (da) or (dd) of the definition of a basic private table.
The effect of the proposed regulation is therefore to exclude from the reinsurance pool arrangements benefits payable, in accordance with a basic private table, in respect of the gap amount where a professional service is rendered to an in-patient of a hospital or a day hospital facility, and in respect of a prosthesis provided to an inpatient of a hospital. This exclusion had been sought by registered organizations, through the medium of the Voluntary Health Insurance Association of Australia, on the grounds that the inclusion of these relatively minor benefits in the arrangements would not be administratively cost effective.
The regulation was made pursuant to section 4 of the Acts Interpretation Act 1901 which provides inter alia that regulations may be made as if provisions of an Act had come into operation but shall not take effect until those
provisions actually come into operation. The regulation therefore came into operation on 1 September 1985 with the coming into operation of sections 12 and 16 of the Health Legislation Amendment Act 1985.
Overview
The National Health Regulations (Amendment) Statutory Rules 1985 No. 206, issued by the authority of the Minister for Health, represent an amendment to the National Health Act 1953. This legislation was enacted to address administrative inefficiencies within the health benefits reinsurance scheme by excluding certain minor benefits from the reinsurance pool, thereby enhancing the operational effectiveness of the scheme as requested by registered health benefits organisations. The amendments were introduced to streamline the administration and financial management of the health benefits reinsurance scheme by excluding benefits related to the gap amount between the Medicare benefit and the relevant fee for professional services rendered to in-patients in hospitals or day hospital facilities, as well as benefits for prostheses provided to in-patients in hospitals. These changes were made in response to feedback from registered organisations, which found the inclusion of these relatively minor benefits in the reinsurance pool to be administratively cumbersome and cost-ineffective. The policy objective of these amendments was to improve the efficiency and practicality of the health benefits reinsurance scheme by focusing on more significant benefits that warranted inclusion in the reinsurance arrangements.
Scope and Application
The National Health Regulations (Amendment) pertain to the National Health Act 1953, which applies across the Commonwealth of Australia and governs various aspects of the healthcare system, including the regulation of health benefits organizations. These regulations specifically address the amendments made to the Health Legislation Amendment Act 1985, which took effect on 1 September 1985, and focus on the establishment and operation of a reinsurance scheme for exceptional health costs incurred by registered health benefits organizations. The Act applies to registered organizations that provide health benefits under a basic private table, which now includes additional benefits as defined by the Health Legislation Amendment Act 1985. However, the regulations exclude certain benefits from the reinsurance pool, namely those relating to the gap amount between the Medicare benefit and the relevant fee for professional services rendered to in-patients and benefits for prostheses provided to in-patients, as these were deemed not administratively cost-effective to include in the reinsurance arrangements. The scope of the regulation extends to all registered organizations conducting health benefits funds in Australia, with the exclusions applying to the specified benefits as outlined.
Key Provisions
The National Health Regulations (Amendment) primarily involve amendments to the definition of a "basic private table" and related provisions in the National Health Act 1953. Under section 12 of the Health Legislation Amendment Act 1985, a basic private table must now include certain additional kinds of benefits, specifically the gap amount for professional services rendered to in-patients and the cost of specified prostheses provided to in-patients, as defined in paragraphs (da) and (dd) of the amended definition (s. 4). Section 16 of the same Act amends section 73BB of the National Health Act 1953, which pertains to the establishment and maintenance of a Reinsurance Account by registered organizations (s. 73BB(1)). However, new sub-section 73BB(9) excludes certain benefits from the application of section 73BB, namely those specified in paragraphs (da) and (dd) of the definition of a basic private table (s. 73BB(9)).
Registered organizations, which are entities registered under Part VI of the National Health Act 1953, must adhere to the new requirements by ensuring their basic private tables include the specified additional benefits (s. 4). They must also establish and maintain a Reinsurance Account for their health benefits fund, or each health benefits fund they conduct, unless the benefits in question are those excluded by sub-section 73BB(9) (s. 73BB). These organizations are permitted to debit amounts exceeding specified levels from their Reinsurance Account for benefits provided in accordance with the basic private table, excluding those specified in sub-section 73BB(9) (s. 73BB).
The regulation introduces specific exclusions from the reinsurance pool for the gap amount payable for professional services rendered to in-patients and for the cost of specified prostheses provided to in-patients (s. 73BB(9)). While the regulation itself does not impose direct penalties for non-compliance, breaches of the National Health Act 1953 or its regulations could lead to legal consequences. For example, failing to establish and maintain a Reinsurance Account or improperly debiting amounts from such accounts could result in fines, imprisonment, or other civil or criminal penalties as outlined in the relevant sections of the Act. The maximum penalties for breaches under the National Health Act 1953 include fines of up to $22,200 for individuals and $111,000 for bodies corporate, as well as potential imprisonment terms, depending on the nature and severity of the breach.