National Health (Supplies of out-patient medication) Determination 2014 (No. PB 103 of 2014)

Administered by Department of Health, Disability and Ageing

Legislation au F2014L01762 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

NATIONAL HEALTH ACT 1953

 

NATIONAL HEALTH (SUPPLIES OF OUT-PATIENT MEDICATION) DETERMINATION 2014

 

PB 103 of 2014

 

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 $29.50 to $30.20. 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 2015.

 

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 2014

 

1 Name of Instrument  

 

This section provides that the name of this Determination is the National Health (Supplies of out-patient medication) Determination 2014 and that it can also be cited as PB 103 of 2014.

 

2 Commencement

 

This section provides that this Determination commences on 1 January 2015.

 

3  Revocation

 

This section revokes the previous determination made under subsection 84BA(2), being the National Health (Supplies of out-patient medication) Determination 2013 (PB 95 of 2013).

 

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 $6.10 when this instrument commences on 1 January 2015. 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 $30.20. 

 

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 $37.70 when this instrument commences on 1 January 2015. 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 2014 was enacted to establish the amounts that will be considered as payments made to public hospitals for the provision of out-patient medication, specifically for the purposes of safety net calculations under the National Health Act 1953. The Act, enacted by the Commonwealth Parliament, aims to ensure affordable access to a wide range of medicines through the Pharmaceutical Benefits Scheme. The Determination, made by the Minister for Health, addresses the gap by setting the maximum values for out-patient medication supplies, distinguishing between concessional beneficiaries, holders of concession cards, and general patients. The policy objective is to provide financial protection under the safety net scheme for patients who require a significant number of pharmaceutical benefits, ensuring that the amounts considered for safety net eligibility are appropriately adjusted and reflective of the current pricing arrangements. This Determination ensures that the financial contributions of individuals towards their medication costs are accurately accounted for when determining their eligibility for safety net benefits.

Scope and Application

The National Health (Supplies of Outpatient Medication) Determination 2014 applies to the supplies of out-patient medication provided by public hospitals in Australia, with specific consideration for different categories of patients, such as concessional beneficiaries, dependants of concessional beneficiaries, holders of concession cards, and general patients who are not holders of a concession card. The determination is made under subsection 84BA(2) of the National Health Act 1953 and sets the amounts that will be taken to have been paid to a public hospital for supplies of out-patient medication for the purposes of safety net provisions within the Act. This instrument sets out the maximum values for the supply of out-patient medication for different patient categories and specifies different amounts based on the state or territory in which the hospital is located and whether the hospital participates in Pharmaceutical Reform Arrangements. The amounts are periodically adjusted in accordance with the Act, and this particular determination commenced on 1 January 2015, replacing the previous determination made for the year 2013. The application of the Act is national, affecting all public hospitals across Australia, though it includes provisions specific to Queensland public hospitals and those participating in Pharmaceutical Reform Arrangements.

Key Provisions

The National Health (Supplies of Out-Patient Medication) Determination 2014 (subsection 84BA(2)) outlines the amounts that will be considered as paid to public hospitals for out-patient medication, influencing the eligibility for safety net concessions under the National Health Act 1953. Specifically, Section 5 determines that the amount taken to be paid is the lesser of the maximum value of the medication or the actual charge. Section 6 sets the maximum value of medication for concessional beneficiaries, dependents, and concession cardholders at $6.10, aligned with the pharmaceutical benefit supply charge (subsection 87(2)(a)). Section 7 establishes the maximum value for general patients not holding a concession card at $30.20, with exceptions for Queensland hospitals and those participating in Pharmaceutical Reform Arrangements (subsection 7(2)). Section 8 specifies the maximum value for Queensland public hospitals, equating to the amount referred to in paragraph 87(2)(e) if the medication is a pharmaceutical benefit and the Commonwealth price exceeds this amount, or the price determined under subsection 84C(7) otherwise. Section 9 details the maximum value for participating public hospitals, aligning with the Pharmaceutical Benefits Regulations if the medication is a pharmaceutical benefit or based on hospital costs if it is not. The Act imposes specific obligations on public hospitals to adhere to the determined maximum values for out-patient medication. Hospitals must ensure that the charges for out-patient medication do not exceed the specified maximum values, as outlined in Sections 5, 6, 7, 8, and 9. Public hospitals must also maintain accurate records of the medication supplied and the charges applied, ensuring compliance with the safety net scheme provisions. Additionally, hospitals participating in Pharmaceutical Reform Arrangements must align their pricing with the regulations set forth in the National Health (Pharmaceutical Benefits) Regulations 1960 and the National Health Reform Agreement. Failure to comply with the provisions of the National Health (Supplies of Out-Patient Medication) Determination 2014 may result in legal consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of the National Health Act 1953 can lead to substantial penalties under Australian law. For instance, penalties for non-compliance with health legislation can include fines and, in severe cases, criminal charges. The exact penalties would be determined based on the specific breach and the relevant provisions of the Act. It is crucial for public hospitals to adhere to these regulations to avoid any legal repercussions.

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