National Health (Supplies of out-patient medication) Determination 2016 (PB 107 of 2016)

Administered by Department of Health, Disability and Ageing

Legislation au F2016L01952 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

NATIONAL HEALTH ACT 1953

 

NATIONAL HEALTH (SUPPLIES OF OUT-PATIENT MEDICATION) DETERMINATION 2016

 

PB 107 of 2016

 

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 $30.60 to $31.00. 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 2017.

 

This instrument is a legislative instrument for the purpose of the Legislation 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 2016

 

1 Name of Instrument  

 

This section provides that the name of this Determination is the National Health (Supplies of out-patient medication) Determination 2016 and that it can also be cited as PB 107 of 2016.

 

2 Commencement

 

This section provides that this Determination commences on 1 January 2017.

 

3  Revocation

 

This section revokes the previous determination made under subsection 84BA(2), being the National Health (Supplies of out-patient medication) Determination 2015 (PB 125 of 2015).

 

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 $6.30 when this instrument commences on 1 January 2017. 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 $31.00

 

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 $38.80 when this instrument commences on 1 January 2017. 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 2016 was enacted in 2016 to address the need for a clear determination of the amounts taken to have been paid to public hospitals for supplies of out-patient medication, thereby facilitating the assessment of eligibility for safety net concession cards under the National Health Act 1953. The Act, enacted by the Australian Parliament, provides the legislative framework for ensuring that Australians have reliable, timely, and affordable access to a wide range of medicines. The specific purpose of this determination is to establish the maximum values for out-patient medication, thereby ensuring that payments made by individuals to public hospitals are accurately accounted for when determining their eligibility for the safety net scheme, which offers financial protection for patients requiring significant pharmaceutical benefits. The policy objective is to align these values with the broader pharmaceutical benefits scheme and to adjust for variations based on the location and participation status of the hospitals involved.

Scope and Application

The National Health (Supplies of out-patient medication) Determination 2016 applies to the supply of out-patient medication by public hospitals in Australia and is made under the authority of the National Health Act 1953. The determination specifies the amounts that are considered to have been paid to public hospitals for out-patient medication, which is crucial for determining eligibility for the safety net scheme under the Act. The scheme provides financial protection for patients who require a substantial number of pharmaceutical benefits. The determination applies to the Commonwealth, states, and territories, though it excludes supplies made by public hospitals in Queensland or those participating in Pharmaceutical Reform Arrangements. The Minister determines these amounts annually, considering the State or Territory of the supplying hospital and the patient's status as a concessional beneficiary, a dependent of a concessional beneficiary, a concession card holder, or a general patient. The maximum value for out-patient medication for general patients not holding a concession card has been adjusted from $30.60 to $31.00 for the 2017 entitlement period. This determination commenced on 1 January 2017, superseding the 2015 determination, and is subject to periodic adjustments in line with the National Health Reform Agreement.

Key Provisions

The National Health (Supplies of Out-Patient Medication) Determination 2016 (subsection 84BA(2)) sets out the amounts that will be considered as paid to public hospitals for out-patient medication supplies during the calendar year. This instrument is a legislative instrument under the Legislation Act 2003 and comes into effect on 1 January 2017, replacing the previous determination from 2015 (subsection 84BA(2)). The primary sections of this determination outline the maximum values for out-patient medication supplies to concessional beneficiaries, concession card holders, and general patients who are not concession card holders (sections 6, 7, 8, and 9). The determination requires public hospitals to charge a maximum value for out-patient medication supplies, which is the lesser of the maximum value specified or the actual amount charged. For concessional beneficiaries, dependents of concessional beneficiaries, and holders of a concession card, the maximum value is equivalent to the amount for the supply of a pharmaceutical benefit by an approved pharmacist or approved medical practitioner (section 6). For general patients who are not concession card holders, the maximum value is set at $31.00, except for supplies by public hospitals in Queensland or those participating in Pharmaceutical Reform Arrangements, which have different maximum values (section 7). For Queensland public hospitals, the maximum value is determined based on the Commonwealth price for the pharmaceutical benefit or the hospital cost if it is not a pharmaceutical benefit (section 8). For public hospitals participating in Pharmaceutical Reform Arrangements, the maximum value is determined similarly to the general patient maximum value, with specific provisions for pharmaceutical benefits and non-pharmaceutical drugs or preparations (section 9). Entities governed by this Act, including public hospitals and State and Territory Health Departments, must adhere to the specified maximum values for out-patient medication supplies. Public hospitals must charge no more than the determined maximum values and ensure compliance with the differentiated values based on patient status and hospital location or participation in Pharmaceutical Reform Arrangements. State and Territory Health Departments must ensure that public hospitals within their jurisdictions follow these provisions and adjust their charging practices accordingly. Failure to comply with the specified maximum values for out-patient medication supplies may result in financial discrepancies and potential legal consequences. While the Act does not explicitly state penalties for non-compliance, entities that fail to adhere to the maximum values may face scrutiny from regulatory bodies and could be liable for reimbursement or compensation to affected patients. Additionally, public hospitals may face reputational damage and loss of trust from the community if they are found to be charging beyond the determined maximum values.

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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.