National Health (Supplies of out-patient medication) Determination 2012 (No. PB 95 of 2013)

Administered by Department of Health, Disability and Ageing

Legislation au F2013L02133 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

NATIONAL HEALTH ACT 1953

 

NATIONAL HEALTH (SUPPLIES OF OUT-PATIENT MEDICATION) DETERMINATION 2013

 

PB 95 of 2013

 

Authority

 

Subsection 84BA(2) of the National Health Act 1953 (the Act) provides that the Minister must determine the amount that will be taken to have been paid to a public hospital for supplies of out-patient medication for the purposes of safety net.

 

Purpose

 

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 $28.90 to $29.50. 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 Health Reform Agreement.

 

The Federal Financial Relations Act 2009 refers to the National Health Reform Agreement as agreed to by the Council of Australian Governments on 2 August 2011 as amended from time to time. A copy of the National Health Reform Agreement can be obtained at the Council of Australian Governments (“COAG”) website at http://www.coag.gov.au.

 

Details of this instrument are set out in the Attachment.

 

This instrument commences on 1 January 2014.

 

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

 

Consultation

 

Historically, the Department of Health has consulted with the State and Territory Health Departments through the Highly Specialised Drugs Working Party (HSDWP).  The HSDWP was a working party of the Australian Health Ministers’ Advisory Council (AHMAC) and was made up of representatives from each State and Territory Health Department and the Australian Government.  This Working Party has now been discontinued as a second tier committee of the Hospitals Principal Committee on recommendations endorsed by AHMAC.

 

Through the HSDWP the State and Territory Health Departments agreed to the value of

out-patient medication being 80% of the general co-payment each year.

 

 

 

 


ATTACHMENT

Details of the National Health (Supplies of out-patient medication) Determination 2012

 

1 Name of Instrument  

 

This section provides that the name of this Determination is the National Health (Supplies of out-patient medication) Determination 2013 and that it can also be cited as PB 95 of 2013.

 

2 Commencement

 

This section provides that this Determination commences on 1 January 2014.

 

3  Revocation

 

This section revokes the previous determination made under subsection 84BA(2), being the National Health (Supplies of out-patient medication) Determination 2012 (PB 105 of 2012).

 

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 $6.00 when this instrument commences on 1 January 2014. 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 $29.50. 

 

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 the National Health Reform Agreement. The National Health Reform 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 $36.90 when this instrument commences on 1 January 2014. 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 ex-manufacturer price or proportional ex-manufacturer price, 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 Health Reform 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 ex-manufacturer price or proportional ex-manufacturer price, 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 2013, issued under the authority of subsection 84BA(2) of the National Health Act 1953, addresses the need for determining the amounts that will be considered as payments made to public hospitals for supplies of out-patient medication when assessing eligibility for the safety net scheme. This instrument, enacted by the Parliament, aims to ensure that the Commonwealth provides reliable, timely, and affordable access to medicines by taking into account payments made for out-patient medication. The policy objective is to facilitate the administration of the safety net scheme, which offers financial protection to patients requiring a large number of pharmaceutical benefits. The determination adjusts the maximum values for out-patient medication supplies, reflecting changes in the pharmaceutical landscape and the National Health Reform Agreement. This determination, effective from 1 January 2014, revises the previous determination made for the 2012 entitlement period by altering the maximum value for out-patient medication supplies to general patients who are not concession card holders, from $28.90 to $29.50. It also differentiates between various categories of patients and public hospitals participating in Pharmaceutical Reform Arrangements. The Department of Health historically consulted with State and Territory Health Departments through the Highly Specialised Drugs Working Party, although this body has since been discontinued. The revised determination ensures that the maximum values for out-patient medication are aligned with the current legislative framework and the National Health Reform Agreement.

Scope and Application

The National Health (Supplies of Outpatient Medication) Determination 2013, made under the authority of the National Health Act 1953, applies to public hospitals in Australia that provide out-patient medication, which is defined as a drug or medicinal preparation supplied through the out-patient department of a public hospital. The determination sets the maximum values for out-patient medication supplies, which are used to determine eligibility for safety net benefits under the Pharmaceutical Benefits Scheme (PBS). These values vary depending on the type of patient—concessional beneficiaries, dependants, and concession card holders on one hand, and general patients who are not concession card holders on the other. Furthermore, the maximum value also differs based on whether the public hospital is participating in Pharmaceutical Reform Arrangements under the National Health Reform Agreement and the location of the hospital, with specific provisions for hospitals in Queensland. The values set in this determination are effective from 1 January 2014, and they replace the previous determination from 2012. This legislative instrument provides clarity and consistency in the application of the Act, ensuring that the financial burden on patients is appropriately considered within the safety net scheme.

Key Provisions

The National Health (Supplies of Out-patient Medication) Determination 2013 (the Determination) under the National Health Act 1953 (the Act) sets out the maximum amounts that will be taken to have been paid to a public hospital for the supply of out-patient medication for the purposes of safety net (sections 5 and 7). The Determination also provides for different maximum values based on the location of the hospital and whether the hospital is participating in Pharmaceutical Reform Arrangements (sections 7, 8 and 9). It is important to note that these maximum values are subject to change as they are periodically adjusted (section 99G of the Act). The Determination imposes obligations on public hospitals to charge patients for out-patient medication up to the maximum values specified in the Determination (section 5). Public hospitals must also ensure that the amount charged does not exceed the lesser of either the maximum value or the actual amount charged (section 5). The Determination also requires that the amount charged to concessional beneficiaries, dependents of concessional beneficiaries, and holders of a concession card should be equivalent to the amount referred to in paragraph 87(2)(a) of the Act (section 6). The Determination does not explicitly outline specific offences or penalties for non-compliance with its provisions. However, non-compliance with the Act and its regulations may lead to civil or criminal consequences depending on the nature and severity of the breach. The penalties for offences under the Act can include fines and imprisonment, with the specific penalties varying depending on the offence committed. It is important for public hospitals to comply with the Determination to avoid any potential legal consequences. The Determination specifies 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 $29.50, unless the patient is receiving medication from a Queensland public hospital or a public hospital participating in Pharmaceutical Reform Arrangements (section 7). The Determination also provides for different maximum values for concessional beneficiaries, dependents of concessional beneficiaries, and holders of a concession card (section 6). The Determination aims to provide financial protection for patients who require a large number of pharmaceutical benefits by ensuring that the amount charged for out-patient medication is reasonable and within the specified limits.

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