National Health (Supplies of out-patient medication) Determination 2010 (No. PB 126 of 2010)

Administered by Department of Health, Disability and Ageing

Legislation au F2010L03307 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

 

NATIONAL HEALTH (SUPPLIES OF OUT-PATIENT MEDICATION) DETERMINATION 2010

 

PB 126 of 2010

 

This legislative instrument is made pursuant to subsection 84BA(2) of the National Health Act 1953 (“the Act”) and determines the amounts that will be taken to have been paid to a public hospital for supplies of out-patient medication.

 

Part VII of the Act regulates when benefits will be paid by the Commonwealth in respect of drugs and medicinal preparations that are listed on the Pharmaceutical Benefits Scheme (“PBS”). As such, it is the legislative basis by which the Commonwealth provides reliable, timely and affordable access to a wide range of medicines to Australians.

 

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 84(1) defines ‘out-patient medication’ as meaning a drug or medicinal preparation that is supplied through the out-patient department of a public hospital. A drug or medicinal preparation that is supplied by a public hospital as out-patient medication may or may not be a pharmaceutical benefit under Part VII of the Act.

 

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 Part VII of the Act, whether the person is eligible to be issued with a safety net concession card or a safety net 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).

 

This instrument differs from the instrument made under subsection 84BA(2) for the previous entitlement period because the maximum value of the supply of out-patient medication to a person who is a general patient and who is not the holder of a concession card has changed from $26.60 to $27.40. This instrument has also been reworded to enhance clarity and align style with that of other legislative instruments recently made under Part VII of the Act.

This instrument, among other things, determines different amounts in respect of the supply of out-patient medication by public hospitals depending on whether the public hospital is participating in Pharmaceutical Reform Arrangements within the meaning of the National Healthcare Agreement.

 

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. 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

 

Details of this instrument are set out in the Attachment.

 

This instrument commences on 1 January 2011.

 

This instrument is a legislative instrument for the purpose of the Legislative Instrument Act 2003.

 

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 2011.

 

 

 

 


ATTACHMENT

Details of the National Health (Supplies of out-patient medication) Determination 2010

 

1. Name of Instrument  

 

This section provides that the name of this Determination is the National Health (Supplies of out-patient medication) Determination 2010 and that it can also be cited as PB 126 of 2010.

 

2. Commencement

 

This section provides that this Determination commences on 1 January 2011.

 

3.  Revocation

 

This section revokes the previous determination made under subsection 84BA(2), being the Determination made pursuant to subsection 84BA(2) of the National Health Act 1953, made on 8 December 2009 and commencing on 1 January 2010.

 

4. Interpretation

 

This section 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.

 

5. Amount taken to have been paid to a public hospital for the supply of out-patient medication

 

This section 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 is the lesser of either:

    the maximum value of the supply of out-patient medication; or

    the amount charged.

 

The term out-patient medication is defined in subsection 84(1) of the Act to mean a drug or medicinal preparation supplied through the out-patient department of a public hospital.

 

6.    Maximum value of the supply of out-patient medication to a person who is a  concessional beneficiary, a dependent of a concessional beneficiary or a holder of a concession card

 

This section provides that the maximum value of the supply of out-patient medication to a person who is a concessional beneficiary, a dependant of a concessional beneficiary or the holder of a concession card is an amount that is equivalent to the amount referred to in paragraph 87(2)(a) of the Act for the supply of a pharmaceutical benefit by an approved pharmacist or approved medical practitioner. 

 

The terms concessional beneficiary, dependant and concession card are defined in subsection 84(1) of the Act.

 

The relevant charge under paragraph 87(2)(a) of the Act will be $5.60 when this instrument commences on 1 January 2011. These charges are periodically adjusted under section 99G of the Act.

 

7.   Maximum value of the supply of out-patient medication to a person who is a general patient and who is not a holder of a concession card

 

Subsection 7(1) provides that the maximum value of the supply of out-patient medication to a person who is a general patient and who is not the holder of a concession card is $27.40. 

 

The amount of $27.40 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.

 

Subsection 7(2) provides that this section does not apply to supplies of out-patient medication made by a public hospital located in Queensland or a public hospital that is participating in Pharmaceutical Reform Arrangements within the meaning of National Healthcare Agreement. The National Healthcare Agreement is defined in section 4 of this Determination.

 

8.  Maximum value of the supply of out-patient medication by a Queensland public hospital to person who is a general patient and who is not the holder of a concession card

 

This section provides for the maximum value of a supply of out-patient medication to a person who is a general patient and who is not the holder of a concession card for supplies of out-patient medication made by public hospitals located in Queensland.

 

Paragraph 8(2)(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 an amount equivalent to the amount referred to in paragraph 87(2)(e) of the Act for the supply of a pharmaceutical benefit by an approved pharmacist or an approved medical practitioner.

 

The relevant amount under paragraph 87(2)(e) of the Act will be $34.20 when this instrument commences on 1 January 2011. These charges are periodically adjusted under section 99G of the Act.

 

Paragraph 8(2)(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) of the Act as in force from time to time.

 

Paragraph 8(2)(c) specifies that where the medication is a drug or medicinal preparation that is not a pharmaceutical benefit, the maximum value is the amount ascertained 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.

 

 

 

 

9.  Maximum value of the supply of out-patient medication by a participating public hospital to a person who is a general patient and who is not a holder of a concession card

 

This section provides for the maximum value of a supply of out-patient medication to a person who is a general patient and who is not the holder of a concession card for supplies of out-patient medication made by public hospitals that are participating in Pharmaceutical Reform Arrangements within the meaning of the National Healthcare Agreement, except if the public hospital is located in the State of Queensland.

 

Paragraph 9(2)(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 as if the pharmaceutical benefit had been supplied by an approved pharmacist or an approved medical practitioner.

 

Paragraph 9(2)(b) specifies that where the medication is a drug or medicinal preparation that is not a pharmaceutical benefit, the maximum value is the amount ascertained 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 (Supplies of out-patient medication) Determination 2010, issued by authority of the Minister for Health and Ageing, is a legislative instrument made under the National Health Act 1953. This instrument addresses the need to regulate the amounts deemed to be paid to public hospitals for supplies of out-patient medication, which is essential for determining patient eligibility for safety net concessions under the Pharmaceutical Benefits Scheme. The enactment of this determination ensures that the Commonwealth can provide reliable, timely, and affordable access to medicines through the PBS. The Minister for Health and Ageing is responsible for determining these amounts annually, taking into account factors such as the state or territory in which the hospital is situated and the type of patient (concessional beneficiaries, holders of a concession card, or general patients). The policy objective is to align with the National Healthcare Agreement and provide clarity in the calculation of out-patient medication values. This legislative instrument was developed following consultations with State and Territory Health Departments through the Highly Specialised Drugs Working Party, ensuring that the values reflect agreed-upon standards. The instrument revokes the previous determination and sets new values for the supply of out-patient medication, effective from 1 January 2011. The objective is to maintain consistent and transparent criteria for determining out-patient medication amounts, thereby supporting the equitable distribution of pharmaceutical benefits across Australia.

Scope and Application

The National Health (Supplies of Out-Patient Medication) Determination 2010 applies to public hospitals in Australia and sets the maximum amounts that will be taken to have been paid to a public hospital for supplies of out-patient medication. This determination is made under subsection 84BA(2) of the National Health Act 1953 and applies to the Commonwealth jurisdiction. It outlines the amounts that will be considered as payments made to a public hospital for the supply of out-patient medication, which is defined as a drug or medicinal preparation supplied through the out-patient department of a public hospital. The amounts vary depending on whether the patient is a concessional beneficiary, a dependent of a concessional beneficiary, a holder of a concession card, or a general patient who is not a holder of a concession card. This instrument also differentiates between public hospitals in Queensland and those participating in Pharmaceutical Reform Arrangements under the National Healthcare Agreement. The amounts specified in the determination are subject to change and are periodically adjusted. The determination commenced on 1 January 2011 and revoked the previous determination made on 8 December 2009.

Key Provisions

The National Health (Supplies of Out-patient Medication) Determination 2010 (section 1) is a legislative instrument made under subsection 84BA(2) of the National Health Act 1953. This determination sets out the amounts that will be considered as paid to a public hospital for out-patient medication supplies. It specifies these amounts based on different categories of patients, such as concessional beneficiaries, holders of concession cards, and general patients. The amounts vary depending on whether the hospital is participating in Pharmaceutical Reform Arrangements and whether it is located in Queensland (sections 6, 7, 8, 9). The purpose of this determination is to ensure that when eligibility for safety net concession cards or safety net entitlement cards is being assessed under Part VII of the Act, the payments made by patients for out-patient medication are taken into account (subsection 84BA(1)). The Act imposes obligations on the Minister for Health and Ageing to determine these amounts in writing before the start of each entitlement period, which is typically a calendar year. The Minister must consider different amounts for supplies made in various states or territories, and for different categories of patients, such as concessional beneficiaries, holders of concession cards, and general patients (subsection 84BA(2), (3)). This determination must also be aligned with the National Healthcare Agreement and involve consultation with the State and Territory Health Departments through the Highly Specialised Drugs Working Party (HSDWP). The HSDWP reviews hospital safety net arrangements annually, including the calculation of the general patient average co-payment (subsection 84BA(2), (3); Attachment, section 4). The determination outlines specific maximum values for out-patient medication supplies. For instance, for concessional beneficiaries, holders of concession cards, and dependents of concessional beneficiaries, the maximum value is equivalent to the amount charged for a pharmaceutical benefit supplied by an approved pharmacist or approved medical practitioner (section 6). For general patients who are not holders of a concession card, the maximum value is $27.40, except for those in Queensland or patients of participating hospitals, where different maximum values apply (sections 7, 8, 9). The determination also specifies that the amount taken to be paid for out-patient medication is the lesser of the maximum value or the actual amount charged (section 5). Failure to comply with the provisions of the National Health Act 1953 and the associated determination could lead to civil or criminal penalties. For example, incorrect calculation or reporting of out-patient medication amounts could be considered non-compliance with statutory requirements, potentially leading to penalties under the relevant legislation. However, the specific penalties are not detailed in the determination itself but would be governed by the general provisions of the National Health Act and other related laws. It is crucial for public hospitals to adhere to these determinations to ensure they receive the correct benefits and to avoid any legal repercussions.

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