Private Health Insurance (Benefit Requirements) Amendment Rules 2010 (No. 2)

EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Health and Ageing

Private Health Insurance Act 2007

Private Health Insurance (Benefit Requirements) Amendment Rules 2010 (No.2)

Section 333-20 of the Private Health Insurance Act 2007 (the Act) provides that the Minister may make Private Health Insurance (Benefit Requirements) Rules providing for matters required or permitted by Part 3-3 of the Act, or necessary or convenient to be provided in order to carry out or give effect to Part 3-3 of the Act.

The Private Health Insurance (Benefit Requirements) Rules 2010 (the Principal Rules) (as amended), which commenced on 29 January 2010, provide for the minimum benefit requirements for psychiatric, rehabilitation and palliative care and other hospital treatment.  Schedules 1 to 5 of the Principal Rules set out the minimum levels of benefit which are payable for hospital treatment.  Namely, benefits for overnight accommodation (Schedules 1 and 2), same day accommodation (Schedule 3), nursing-home type patients (Schedule 4), and second tier default benefits (Schedule 5).

The Private Health Insurance (Benefit Requirements) Amendment Rules 2010 (No.2) (the Amendment Rules) amend Schedules 1 and 5 of the Principal Rules.  

The purpose of the amendment to Schedule 1 is to remove an obsolete reference to MBS Item 42718 in Part 2, clause 4 of the Principal Rules, and to reinstate MBS Item 42701 to Part 2, clause 6, which was inadvertently omitted from the Principal Rules.

The purpose of the amendments to Schedule 5 are:

• to ensure that 13 additional facilities are eligible for second tier default benefits;
• to update the names of 5 hospitals;
• to update the name and address of a facility; and
• to remove 2 facilities which have closed

These changes have increased the table from 326 to 337 facilities.

Details of the Amendment Rules are set out in the Attachment.

Consultation

No specific consultation was undertaken in relation to the amendment to Schedule 1 of the  Principal Rules because the changes were machinery in nature and did not substantially alter existing arrangements.  The amendment to Schedule 1 is part of the ongoing management of the Private Health Insurance (Benefit Requirements) Rules.

Consultation for changes to Schedule 5 occurred with industry through the Second Tier Advisory Committee (STAC), which includes equal representation from both the private

hospital and private health insurance sectors.  Facilities wishing to be considered for inclusion in Schedule 5 are individually assessed by the STAC which then makes a recommendation to the Minister as to whether or not the hospital meets the eligibility criteria.  This arrangement was negotiated with the private health industry and has been in place since 2004.

PRIVATE HEALTH INSURANCE BRANCH

DEPARTMENT OF HEALTH AND AGEING

APRIL 2010

ATTACHMENT

DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2010 (No.2)

1. Name of Rules

Rule 1 provides that the title of these Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2010 (No.2) (the Amendment Rules).

2. Commencement

Rule 2 provides that the Amendment Rules commence on the day after registration.

3.              Amendment of Private Health Insurance (Benefit Requirements) Rules 2010

Rule 3 provides that the Schedule to the Amendment Rules amends the Private Health Insurance (Benefit Requirements) Rules 2010 (the Principal Rules), which commenced on 29 January 2010 and were amended on 20 March 2010.

Schedule – Amendments

Item 1 – Schedule 1, Part 2, Subclause 4(3)

Schedule 1, Part 2, subclause 4(3) of the Principal Rules provides the item numbers in the Medicare Benefits Schedule (“MBS”), for the purpose of clause 4 of the Principal Rules, but indicates that a listing in subclause 4(3) only applies where an item has a fee in the MBS which is greater than $806.13.

Item 1 of the Schedule to the Amendment Rules amends Schedule 1, Part 2, subclause 4(3) of the Principal Rules to remove the reference to former MBS item number 42718 which, since the commencement of the Health Insurance (Cataract Surgery) Determination 2010, is no longer an MBS item.  Consequently, the reference to item 42718 in the Principal Rules is obsolete.

Item 2 – Schedule 1, Part 2, Subclause 6(3)

Schedule 1, Part 2, subclause 6(3) of the Principal Rules provides the item numbers in the MBS for the purpose of clause 6 of the Principal Rules, but indicates that a listing in subclause 6(3) only applies where an item has a fee in the MBS within the range of $240.05 to $806.13.

Item 2 of the Schedule to the Amendment Rules amends Schedule 1, Part 2, subclause 6(3) of the Principal Rules to reinsert MBS item number 42701, which was inadvertently omitted from the Principal Rules.

Item 3 – Schedule 5, Clause 4

Schedule 5 of the Principal Rules requires a health insurer to pay second tier default benefits for most episodes of hospital treatment provided in private hospital facilities that are specified in Schedule 5 if the health insurer does not have a negotiated agreement with the

hospital.  Schedule 5 sets a higher minimum level of benefit (for overnight treatment and day only treatment provided in specified facilities) than the minimum benefit set for such treatment by Schedules 1, 2 and 3 of the Principal Rules.

Item 3 provides that the table in clause 4, Schedule 5 of the Principal Rules is amended to insert 13 new facilities.  The new facilities are:

Item 3 provides that the table in clause 4, Schedule 5 of the Principal Rules is amended to change the names of 5 facilities.  The changes are:

Item 3 provides that the table in clause 4, Schedule 5 of the Principal Rules amends the name and address for 1 facility as follows:

Item 3 provides that the table in Schedule 5, clause 4 of the Principal Rules deletes the following 2 hospitals as they have closed:

PRIVATE HEALTH INSURANCE BRANCH

DEPARTMENT OF HEALTH AND AGEING

APRIL 2010