EXPLANATORY STATEMENT
NATIONAL HEALTH ACT 1953
NATIONAL HEALTH (SUPPLIES OF OUT-PATIENT MEDICATION) DETERMINATION 2019
PB 8 of 2019
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 the 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.
The National Health (Supplies of out-patient medication) Determination 2019 (the Determination) sets 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 1 January 2019 – 31 December 2019 entitlement period. These amounts are known as 'applicable amounts'. The Determination also revokes the National Health (Supplies of out-patient medication) 2017 (the Previous Determination).
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 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 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(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
- concessional beneficiaries and their dependants,
- holders of a concession card; and
- general patients (other than holders of a concession card).
The Determination provides that the applicable amount that will be taken to have been paid to a public hospital for the supply of out-patient medication is the lesser of the maximum value of the supply of out-patient medication and the amount charged.
This instrument differs from the Previous Determination because it increases 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, and the supply is made by a public hospital outside Queensland which is not participating in the Pharmaceutical Reform Arrangements (affected supplies). The maximum value for affected supplies has increased from $31.60 to $32.20.
The maximum value of the supply of out-patient medication for other supplies of out-patient medication is the same under the Determination as under the Previous Determination.
This instrument 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 is taken to have commenced on 1 January 2019.
Retrospective commencement
Due to an oversight, a new determination under subsection 84BA(2) of the Act relating to the 2019 entitlement period was not made for 1 January 2019. The Determination commences retrospectively to ensure that all patients who have received a supply of out-patient medication from 1 January 2019 can take advantage of increases to the applicable amount that may be counted towards meeting their safety net threshold.
As mentioned previously, the applicable amount that may be counted towards a patient's safety net is the lesser of the maximum value for the supply of an out-patient medication and the amount the patient is charged.
The Determination and the Previous Determination specify the same method of determining the maximum value for the supply of an out-patient medication for each class of supply of an out-patient medication covered by the Determination, except for affected supplies.
For supplies other than affected supplies, the method of determining the maximum value for the supply of an out-patient medication is based on either the relevant patient co-patient as set in section 87 of the Act, the amount ascertained applying the current determination made under subsection 84C(7) of the Act (made for the purpose of determining when under co-payment supplies may be taken into account for safety net purposes), or the method for calculating the value for safety net for supplies of pharmaceutical benefits in the National Health (Pharmaceutical Benefits) Regulations 2017 as in force from time to time.
The same applicable amount would result under both the Previous Determination and the Determination for all supplies of out-patient medication made on or after 1 January 2019 other than affected supplies. As the maximum value for the supply of out-patient medication for affected supplies has been increased by the Determination, the retrospective commencement will enable a larger amount to be attributed to a patient's safety net for affected supplies made on or after 1 January 2019.
The Determination has no effect on what patients can be charged for their medication, or the amount of subsidy (if any) to which public hospital authorities are entitled for supplies out-patient medication.
A medical practitioner or pharmacist dispensing an out-patient medication is required to include certain particulars on an 'out-patient medication prescription form' where a person who holds such a form presents it at the time of supply. The particulars include the applicable amount calculated under section 84BA. The retrospective commencement of the Determination has the potential for the applicable amount recorded on an out-patient medication prescription form for some supplies made between 1 January 2019 and the registration of the Determination to become incorrect.
While there may be some situations in which these retrospective amendments result in the applicable amount for a supply changing for affected supplies, by virtue of subsection 12(2) of the Legislation Act 2003 the amendments will not apply to the extent they would otherwise result in a pharmacist or medical practitioner failing to comply with the requirement to record the (correct) applicable amount on an out-patient medication prescription form. The Act does not provide for any particular consequence for failing to correctly record the applicable amount on an out-patient medication prescription form, and in particular it is neither an offence nor a does a civil penalty attach.
Public hospitals will be notified of the changes to the Determination by updates to the PBS website and via Departmental email to state and territory health departments. The effect of the retrospective commencement is that patients who have had the previous year’s maximum amount of $31.60 attributed to their safety net will be able to have this increased to the indexed amount of $32.20 (depending on the amount they were actually charged). If required, adjustments can be made to any incorrect Safety Net amounts when processing an application for a Safety Net card.
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 dispensed as non-pharmaceutical benefits in hospitals (excluding hospitals which are in Queensland or participating in the Pharmaceutical Reform Arrangements) being 80% of the general co-payment each year.
ATTACHMENT
Details of the National Health (Supplies of out-patient medication) Determination 2019
1 Name of Instrument
This section provides that the name of this Determination is the National Health (Supplies of out-patient medication) Determination 2019 and that it can also be cited as PB 8 of 2019.
2 Commencement
This section provides that this Determination is taken to have commenced on 1 January 2019.
3 Authority
This section provides that the Determination is made under section 84BA of the National Health Act 1953.
4 Revocation
This section revokes the previous determination made under subsection 84BA(2), being the National Health (Supplies of out-patient medication) Determination 2017 (PB 111 of 2017).
5 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.
6 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. The maximum value of the supply of out-patient medication is the amount specified in section 7, 8, 9 or 10 of the Determination, as appropriate based on the circumstances of supply.
7 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 is $6.50 from 1 January 2019. These charges are periodically adjusted under section 99G of the Act.
8 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 8(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 $32.20. This is an increase from the previous amount of $31.60.
Subsection 8(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 takes its meaning from the Federal Financial Relations Act 2009, which provides it means the Agreement as in force from time to time.
9 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 9(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 is $40.30 from 1 January 2019. These charges are periodically adjusted under section 99G of the Act.
Paragraph 9(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 9(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.
10 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 10(2)(a) specifies that where the medication is a pharmaceutical benefit, the maximum value of the pharmaceutical benefit shall be the value for safety net purposes of the pharmaceutical benefit ascertained in accordance with regulation 17A 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. The Previous Determination referred to subregulation 6(1) of the National Health (Pharmaceutical Benefits) Regulations 2017, which was repealed and replaced by regulation 17A in May 2018 as a result of amendments made to the Act to simplify and streamline the provisions of the Act dealing with the safety net. Regulation 17A of the National Health (Pharmaceutical Benefits) Regulations 2017 has the same effect as repealed subsection 6(1). The reference to the National Health (Pharmaceutical Benefits) Regulations 2017 is to those regulations as in force from time to time.
Paragraph 10(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.