Private Health Insurance (Benefit Requirements) Amendment Rules 2010 (No. 5)

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. 5)

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 Rules), 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 Rules set out the minimum levels of benefit, which are payable for hospital treatment. These are 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. 5) (the Amendment Rules) amend Schedules 2, 3 and 4 of the Rules in relation to Queensland and Western Australia.  The Amendment Rules also amend Schedule 3 of the Rules to reflect changes in Medical Benefits Schedule (MBS) item numbers, which commenced on

1 May 2010.

Schedule 2 sets out minimum benefit levels in regard to overnight shared accommodation at public hospitals in the Australian Capital Territory, New South Wales, the Northern Territory, Queensland, South Australia and Western Australia.  Schedule 3 sets out minimum benefit levels in regard to same day accommodation for private hospitals and public hospitals in all States and Territories.  These accommodation components are subject to annual review and are amended with reference to Consumer Price Index (CPI) movements from March to March each year (with the exception of Queensland public hospitals).  The Queensland public hospital increase is based on the December to December Brisbane CPI.

In the year from March 2009 to March 2010, there was an increase of 2.9 per cent in the CPI.  For the December 2008 to December 2009 Brisbane CPI, there was in increase of 2.5 per cent.  The Amendment Rules make changes to the minimum benefit levels (in Queensland and Western Australia) in Schedules 2 and 3 to reflect these increases in the CPI.

The purpose of the amendment to Schedule 4 of the Rules is to reflect the change in the minimum benefit for hospital treatment for patients who are classified as “nursing-home type patients” at public hospitals in Western Australia to reflect the indexation applied to Adult Pension Basic Rate and the maximum daily rate of rental assistance that came into effect on 20 March 2010.

The purposes of the amendments to Schedule 3 are to delete MBS items that are no longer in use and also to include new MBS item numbers in Part 3 - Type C procedures.  Type C procedures are procedures for which hospital treatment is not normally required. Minimum benefits for either overnight accommodation or day-only accommodation are payable for patients receiving certified Type C procedures where the certification requirements in the Rules have been satisfied.

The purpose of the amendment to Schedule 5 is to change the name of the ‘Kingaroy Private Hospital’ to the ‘South Burnett Private Hospital’.

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

Consultation

Changes made to Schedules 2 and 3 of the Rules reflect the increase in minimum benefits due to the CPI changes in relation to Queensland and Western Australia.  The increases to the minimum benefits in public hospitals were made with the agreement of Queensland and Western Australia.

The Department of Health (Western Australia) was consulted with respect to increasing the minimum benefit for its jurisdiction in the circumstances described in Schedule 4 of the Rules.  No objections were made.

The changes to the MBS resulted from reviews by the Medicare Benefit Consultative Committee (MBCC) and the Medicare Services Advisory Committee (MSAC).  The MBCC is an advisory committee established by agreement between the Minister for Health and Ageing and the Australian Medical Association.  MBCC’s major function is to review particular services or groups of services in the MBS, including consideration of appropriate

fee levels.  MSAC advises the Minister of new and emerging medical services and under what circumstances public funding, including listing on the MBS, should be supported.

The subsequent changes to Schedule 3 are necessary to ensure that private health insurers, at a minimum, pay the ‘minimum benefit’ for persons they insure where insured persons receive hospital treatment corresponding to one of the new MBS item numbers, in a hospital where that private health insurer does not have a contractual arrangement with that hospital. These amendments to Schedules 3 are machinery in nature and do not substantially alter existing arrangements.

PRIVATE HEALTH INSURANCE BRANCH

DEPARTMENT OF HEALTH AND AGEING

AUGUST 2010

ATTACHMENT

DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2010 (No. 5)

1. Name of Rules

Rule 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2010 (No. 5) (the Amendment Rules).

2. Commencement

Rule 2 provides that the Amendment Rules are to 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 Rules which commenced on 29 January 2010.

Schedule – Amendments

Item 1 – Schedule 2, Clause 2 Minimum benefit, Table

Schedule 2 of the Rules sets out the minimum benefit payable per night for patients in shared ward accommodation at public hospitals in the ACT, NSW, Northern Territory, Queensland, South Australia and Western Australia, providing that the patient is not classified as a nursing-home type patient.

Item 1 of the Schedule to the Amendment Rules increases the minimum benefits per night for shared ward accommodation in Queensland and Western Australian public hospitals in clause 2, Table:

• Queensland  From $301.50 to $309  .
• Western Australia From: $294 to $303

Item 2 – Schedule 3, Part 1, Subclause 2(2) Minimum benefit, Table 1

Schedule 3 of the Rules set out the minimum benefit payable for same-day accommodation patients in all the State/Territory hospitals, providing that:

1. hospital treatment is classified as a type B procedure; and
2. the patient is not classified as a nursing-home type patient.

Item 2 of the Schedule to the Amendment Rules increases the minimum benefit for same-day accommodation in public hospitals in Western Australia in subclause 2(2), Table 1:

Item 3 to 9 Schedule 3, Part 3, Clause (8)

Item 3 to 9 updates Schedule 3, Part 3, Clause 8 of the Rules with deletion of MBS item numbers in the General Medical Services Table (the GMST) that are no longer in use and reflects the MBS item numbers in the summary of deletions undertaken since 1 January 2010 of the Medicare Benefits Schedule effective 1 May 2010.

Item 10 – Schedule 3, Part 3, Clause 8, Category 3

Subclause 6(3) of the Rules provides the item numbers in the Medical Benefits Schedule (MBS) for the purpose of clause 6 of the Rules, but indicates that a listing in subclause 6(3) only applies where an item has a fee in the MBS greater than the specified amount.

Item 10 of the Schedule of the Amending Rules amends clause 8, Part 3, Schedule 3 of the Rules to insert MBS item number 15710 at T2, category 3 – Therapeutic procedures.  This insertion reflects the MBS item numbers in the GMST which commenced on 1 May 2010.

Item 11 – Schedule 3, Part 3, Clause 8, Category 3

Subclause 6(3) of the Rules provides the item numbers in the MBS for the purpose of clause 6 of the Rules, but indicates that a listing in subclause 6(3) only applies where an item has a fee in the MBS within the specified range.

Item 11 of the Schedule of the Amending Rules amends clause 8, Part 3, Schedule 3 of the Rules to insert item numbers 36663, 36664, 36665, 36666, 36667 and 36668 at T8, category 3.  This insertion reflects MBS item numbers in the GMST which commenced on 1 May 2010.

Item 12 – Schedule 3, Part 3, Clause 8, Category 8

Item 12 deletes category 8- Services provided by nurses, allied and dental health professionals.  These MBS items under category 8 do not belong to Type C Procedures.

Item 13 – Schedule 3, Part 3, Clause 8 Interpretation, Items in the pathology services table

Clause 8 provides that a Type C procedure is a procedure specified in clause 8 by reference to

MBS items.

Item 13 of the Schedule of the Amending Rules amends clause 8, Part 3, Schedule 3 of the Rules to insert new MBS item numbers 73290, 73291, 73292, 73293 and 73294 at P7, ‘Items in the pathology services table’.  This insertion reflects the inclusion of MBS item numbers in the Medicare Benefits Schedule effective 1 May 2010.

Item 14 – Schedule 4, Clause 6 Minimum benefit, Table 1

Schedule 4 of the Rules sets out the minimum benefit payable per night for patients that are classified as nursing-home type patients in hospitals. 

Item 14 of the Schedule to the Amendment Rules increases the minimum benefit per night for public hospitals in Western Australia in clause 6, Table 1:

• Western Australia From $101.65 to $102.65

Item 15 – Schedule 5, Clause 4 Facilities, Table

Item 15 provides that the table in clause 4, Schedule 5 of the Principal Rules is amended to change the name of the following facility, as follows:

PRIVATE HEALTH INSURANCE BRANCH

DEPARTMENT OF HEALTH AND AGEING

AUGUST 2010