National Health (Supplies of out-patient medication) Determination 2017 (PB 111 of 2017)

Administered by Department of Health, Disability and Ageing

Legislation au F2017L01631 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

NATIONAL HEALTH ACT 1953

 

NATIONAL HEALTH (SUPPLIES OF OUT-PATIENT MEDICATION) DETERMINATION 2017

 

PB 111 of 2017

 

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 $31.00 to $31.60. 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 2018.

 

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 2017

 

1 Name of Instrument  

 

This section provides that the name of this Determination is the National Health (Supplies of out-patient medication) Determination 2017 and that it can also be cited as PB 111 of 2017.

 

2 Commencement

 

This section provides that this Determination commences on 1 January 2018.

 

3  Revocation

 

This section revokes the previous determination made under subsection 84BA(2), being the National Health (Supplies of out-patient medication) Determination 2016 (PB 107 of 2016).

 

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 dependant 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 $6.40 when this instrument commences on 1 January 2018. 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 $31.60.

 

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 $39.50 when this instrument commences on 1 January 2018. 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 6(1) of the National Health (Pharmaceutical Benefits) Regulations 2017 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 2017 was enacted to address the problem of ensuring consistent and equitable payment amounts for out-patient medication provided by public hospitals, thereby facilitating the administration of the safety net scheme under the National Health Act 1953. This instrument was introduced by the Minister for Health under the authority of subsection 84BA(2) of the Act, aiming to specify the amounts that will be taken to have been paid for supplies of out-patient medication. The policy objective is to ensure that these payments are accurately accounted for in determining a patient's eligibility for safety net concession cards, thereby providing financial protection to those who require significant pharmaceutical support. The amounts are differentiated based on the type of patient (concessional beneficiaries, holders of a concession card, or general patients) and whether the hospital participates in Pharmaceutical Reform Arrangements, reflecting the broader context of the National Health Reform Agreement.

Scope and Application

The National Health (Supplies of Outpatient Medication) Determination 2017 applies to the determination of amounts that will be taken to have been paid to a public hospital for supplies of outpatient medication, which is defined as a drug or medicinal preparation supplied through the outpatient department of a public hospital, for the purposes of safety net provisions under the National Health Act 1953. The determination applies to the Commonwealth and the states and territories of Australia, with specific provisions for Queensland and hospitals participating in Pharmaceutical Reform Arrangements under the National Health Reform Agreement. The determination sets different maximum values for the supply of outpatient medication based on the status of the patient and the location or participation status of the hospital, with adjustments made periodically in accordance with the Act. The instrument revokes the previous determination and sets out specific amounts for the maximum value of the supply of outpatient medication effective from 1 January 2018, varying depending on whether the patient is a concessional beneficiary, a dependant of a concessional beneficiary, a holder of a concession card, or a general patient not holding a concession card, and whether the hospital is located in Queensland or participating in Pharmaceutical Reform Arrangements.

Key Provisions

The National Health (Supplies of Out-patient Medication) Determination 2017 (sections 5 to 9) establishes the maximum amounts considered to be paid to public hospitals for out-patient medication. This is to determine eligibility for safety net concessions under the National Health Act 1953. Specifically, the amount considered paid for out-patient medication is the lesser of the maximum value or the actual amount charged (section 5). For concessional beneficiaries, dependants of concessional beneficiaries, and concession card holders, the maximum value is equivalent to the supply of a pharmaceutical benefit (section 6). For general patients not holding a concession card, the maximum value is $31.60 (section 7). However, this does not apply to Queensland public hospitals or those participating in Pharmaceutical Reform Arrangements (section 7(2)). For Queensland public hospitals, the maximum value depends on whether the medication is a pharmaceutical benefit and its Commonwealth price (section 8). For participating public hospitals outside Queensland, the maximum value for pharmaceutical benefits is determined by the National Health (Pharmaceutical Benefits) Regulations 2017, while non-pharmaceutical benefits are calculated based on hospital costs (section 9). The Act imposes several obligations on public hospitals and the Minister. Public hospitals must comply with the determined maximum values for out-patient medication to ensure correct assessment of safety net eligibility. The Minister is required to determine the maximum values for out-patient medication prior to the start of each entitlement period (subsection 84BA(2)). This determination must consider differences in amounts based on the state or territory of the hospital and the type of patient (subsection 84BA(3)). Additionally, hospitals participating in Pharmaceutical Reform Arrangements must adhere to the specific maximum values outlined in the Determination. Breach of the provisions in the Determination could lead to civil or administrative consequences. For example, if a public hospital charges a patient an amount exceeding the determined maximum value for out-patient medication, it could result in the patient being incorrectly assessed for safety net eligibility. While the Determination itself does not specify penalties, incorrect assessments could potentially lead to financial implications for both the patient and the hospital under other provisions of the National Health Act 1953. It is important for public hospitals to comply with the determined maximum values to avoid any adverse effects on patients’ eligibility for pharmaceutical benefits.

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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.