National Health (Supplies of out-patient medication) Determination 2015 (PB 125 of 2015)

Administered by Department of Health, Disability and Ageing

Legislation au F2015L02135 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

NATIONAL HEALTH ACT 1953

 

NATIONAL HEALTH (SUPPLIES OF OUT-PATIENT MEDICATION) DETERMINATION 2015

 

PB 125 of 2015

 

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 $30.20 to $30.60. 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 2016.

 

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 2015

 

1 Name of Instrument  

 

This section provides that the name of this Determination is the National Health (Supplies of out-patient medication) Determination 2015 and that it can also be cited as PB 125 of 2015.

 

2 Commencement

 

This section provides that this Determination commences on 1 January 2016.

 

3  Revocation

 

This section revokes the previous determination made under subsection 84BA(2), being the National Health (Supplies of out-patient medication) Determination 2014 (PB 103 of 2014).

 

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 $6.20 when this instrument commences on 1 January 2016. 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 $30.60. 

 

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 $38.30 when this instrument commences on 1 January 2016. 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 Act 1953, enacted by the Parliament of Australia, governs the regulation of drugs and medicinal preparations listed on the Pharmaceutical Benefits Scheme (PBS). This legislation aims to ensure that Australians have reliable, timely, and affordable access to a broad range of medicines. The National Health (Supplies of out-patient medication) Determination 2015, made under subsection 84BA(2) of the Act, addresses the issue of determining the amount considered paid to public hospitals for supplies of out-patient medication for safety net purposes. The policy objective of this determination is to provide financial protection for patients requiring a large number of pharmaceutical benefits through the safety net scheme. This legislative instrument seeks to clarify the amounts taken into account for out-patient medication supplies, adjusting these amounts based on the State or Territory in which the hospital is situated, and distinguishing between concessional beneficiaries, holders of a concession card, and general patients.

Scope and Application

The National Health (Supplies of out-patient medication) Determination 2015 applies to public hospitals and the medication supplied by these hospitals under the National Health Act 1953. The determination sets the maximum values for out-patient medication supplied by public hospitals, with variations based on whether the patient is a concessional beneficiary, a dependent of a concessional beneficiary, a holder of a concession card, or a general patient not holding a concession card. This instrument affects all public hospitals in Australia and is effective from 1 January 2016, replacing the previous determination for 2014. The Minister has the authority to determine different amounts based on the State or Territory location of the hospital and whether it participates in Pharmaceutical Reform Arrangements under the National Health Reform Agreement. The determination also provides for specific maximum values for out-patient medication supplies in Queensland and for public hospitals participating in Pharmaceutical Reform Arrangements, excluding those in Queensland. This legislative instrument is governed by the Legislative Instruments Act 2003.

Key Provisions

The National Health (Supplies of Out-patient Medication) Determination 2015 (subsection 84BA(2)) specifies the amounts that will be taken to have been paid to a public hospital for supplies of out-patient medication during the relevant entitlement period. According to the determination, the amount charged or the maximum value of the supply of out-patient medication, whichever is lesser, will be considered as the amount paid to a public hospital (section 5). The maximum value of the supply of out-patient medication for concessional beneficiaries, dependents of concessional beneficiaries, and holders of a concession card 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 (section 6). The maximum value for general patients who are not holders of a concession card is $30.60, except for those who receive medication from a public hospital in Queensland or a participating public hospital under the Pharmaceutical Reform Arrangements (section 7). The maximum value for such patients in Queensland is determined based on the Commonwealth price for the pharmaceutical benefit, while for participating public hospitals, it is determined based on the cost to the hospital of the drug or medicinal preparation (sections 8 and 9). The determination imposes obligations on public hospitals to charge amounts consistent with the maximum values specified in the determination. Public hospitals must also maintain records of the amounts charged and the maximum values applied to the supplies of out-patient medication. Additionally, public hospitals are required to provide information to the Department of Health as needed to ensure compliance with the determination. Breaches of the determination may result in civil or criminal penalties. The maximum penalty for a civil penalty is $22,200 per contravening provision for individuals and $111,000 for bodies corporate. For criminal offences, the maximum penalty is $5,550 for individuals and $27,750 for bodies corporate. These penalties may be imposed by a court if it is proven that a person or entity has contravened the determination.

Legal classification tags

Area of Law
Health Law
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Reporting & Disclosure Obligations
Regulatory Standards

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.