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.7A)
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), which commenced on 29 January 2010, provide for the minimum benefit requirements for psychiatric care, 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. The benefits are 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.7A) (the Amendment Rules) amends Schedule 1 and 3 of the Principal Rules to reflect changes in Medical Benefits Schedule (MBS) item numbers, which commence on 1 November 2010.
Preliminary
Part 1, clause 3 provides the definitions for the Principal Rules. The purpose of the amendments to Part 1 is to include a definition of a ‘participating midwife’ in relation to Schedule 1, Part 2, clause 5 of the Amendment Rules.
Schedule 1
Schedule 1 categorises MBS item numbers into patient classifications, comprising ‘Advanced surgical patient’, ‘Obstetric patient’, ‘Surgical Patient’, ‘Psychiatric patient’, ‘Rehabilitation patient’ and ‘Other patient’. The purpose of the amendments to Schedule 1 is to specify that ‘Advanced surgical patients’ are those patients undergoing procedures with a MBS fee greater than $820.64 and that ‘surgical patients’ are classified as those patients undergoing procedures with a MBS fee within the range of $244.37 to $820.64. These amounts reflect a 1.8% increase which has been applied to the MBS fees from 1 November 2010. This amendment will ensure that MBS services that have been classified as surgical will not move up to the advanced surgical classification simply as a result of the MBS fee increase.
Schedule 1, Part 2 of the Principal Rules is also amended to include three new MBS items which relate to obstetric treatment and to create a new category of professional services provided to a patient receiving hospital treatment from a participating midwife. This new category will include two new MBS items. One MBS item has been re-categorised.
Schedule 3
The purpose of the amendment to Schedule 3 is to include a new category with seven new MBS item numbers in Part 3 – ‘Type C procedures’ and delete a further seven MBS items. The deleted seven MBS items comprise the six MBS items that constituted group A15 and one item from group M2. ‘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.
Details of the Amendment Rules are set out in the Attachment.
Consultation
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 the Minister for Health and Ageing pursuant to an agreement with 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 1 and 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 1 and 3 are machinery in nature and do not substantially alter existing arrangements.
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2010 (No.7A)
1. Name of Rules
Rule 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2010 (No.7A) (the Amendment Rules).
2. Commencement
Rule 2 provides that the Amendment Rules are to commence on 1 November 2010, or if registered after 1 November 2010, 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.
Schedule – Amendments
Item 1 – Part 1, Preliminary, clause 3
Part 1, Preliminary, clause 3 of the Principal Rules provides definitions for specific terms used in the Principal Rules.
Item 1 of the Schedule of the Amendment Rules amends Part 1, Preliminary, clause 3 of the Principal Rules by inserting a definition of a participating midwife for the purposes of Schedule 1, Part 2, clause 5. The definition provides that a participating midwife has the same meaning as in subsection 3(1) of the Health Insurance Act 1973.
Item 2 – 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 greater than the specified amount.
Item 2 of the Schedule of the Amendment Rules amends Schedule 1, Part 2, subclause 4(3) of the Principal Rules by increasing the specified amount from greater than $806.13 to greater than $820.64. This increase reflects an increase of 1.8% as a result of indexation on items in the Health Insurance (General Medical Services Table) Regulations 2010 (GMST), which will commence on 1 November 2010.
Item 3 – Schedule 1, Part 2, subclause 4(3):
Schedule 1, Part 2, subclause 4(3) of the Principal Rules sets out the item numbers in the MBS for the purpose of Schedule 1, Part 2, 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 the specified amount.
Item 3 of the Schedule of the Amendment Rules amends Schedule 1, Part 2, subclause 4(3) of the Principal Rules by deleting MBS item number 13218 because the fee for this item ($750.00) is below the specified amount.
Item 4 – Schedule 1, Part 2, subclause 5(2)(a)(iii):
Schedule 1, Part 2, subclause 5(2) of the Principal Rules sets out the circumstances that determine when a patient is considered to be an obstetric patient.
Item 4 of the Schedule amends the subparagraphs contained in subclause 5(2)(a) to be renumbered (i) and (ii) which corrects the previous numbering. Item 4 of the Schedule of the Amendment Rules amends Schedule 1, Part 2, subclause 5(2)(a)(ii) of the Principal Rules by inserting new MBS item numbers 16406, 16527 and 16528. This insertion reflects these new MBS items which will commence on 1 November 2010.
Item 4 also inserts subclause 5(2)(c), which provides that a patient shall be taken to be an obstetric patient where an attendance with the item number 82120 or 82125 is rendered by a participating midwife. This insertion reflects these items codes which commence on 1 November 2010.
Item 5 – Schedule 1, Part 2, subclause 6(3):
Schedule 1, Part 2, subclause 6(3) of the Principal Rules sets out the MBS item numbers for the purposes of this clause 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 specified range.
Item 5 of the Schedule of the Amendment Rules amends Schedule 1, Part 2, subclause 6(3) of the Principal Rules by increasing the specified range from $240.05 to $806.13, to the new range of $244.37 to $820.64. This increase reflects an increase of 1.8% on items in the GMST which will commence on 1 November 2010.
Item 6 – Schedule 1, Part 2, subclause 6(3):
Subclause 6(3) of the Principal Rules sets out the item numbers in the MBS for the purpose of Schedule 1, Part 2, 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 specified range.
Item 6 of the Schedule of the Amendment Rules amends Schedule 1, Part 2, subclause 6(3) of the Principal Rules by inserting MBS item number 13218, as the fee falls within the specified range.
Item 7 – Schedule 3, Part 3, clause 8, Category 1 Attendances
Clause 8 of the Principal Rules provides that a Type C procedure is a procedure specified in clause 8 by reference to MBS items.
Item 7 of the Schedule of the Amendment Rules amends Schedule 3, Part 3, clause 8 of the Principal Rules by deleting the reference to A14, as there are no item numbers currently listed under A14.
Item 8 – Schedule 3, Part 3, clause 8, Category 1 Attendances
Clause 8 of the Principal Rules provides that a Type C procedure is a procedure specified in clause 8 by reference to MBS items.
Item 8 of the Schedule of the Amendment Rules amends Schedule 3, Part 3, clause 8 of the Principal Rules by deleting MBS item numbers 444, 445, 446, 447, 448 and 449 at group A16. These deletions reflect the removal of these items in the MBS effective from 1 November 2010.
Item 9 – Schedule 3, Part 3, clause 8, Category 1 Attendances
Clause 8 of the Principal Rules provides that a Type C procedure is a procedure specified in clause 8 by reference to MBS items.
Item 9 of the Schedule of the Amendment Rules amends Schedule 3, Part 3, clause 8 of the Principal Rules by deleting MBS item number 10997 from group M2 because it is intended that this item will be transferred to group M12 as part of a change to the MBS effective from 1 November 2010. As a result, item 10997 no longer belongs in the Type C procedures list.
Item 10 – Schedule 3, Part 3, clause 8
Clause 8 of the Principal Rules provides that a Type C procedure is a procedure specified in clause 8 by reference to MBS items.
Item 10 of the Schedule of the Amendment Rules amends Schedule 3, Part 3, clause 8 of the Principal Rules by inserting new MBS item numbers 82100, 82105, 82110, 82115, 82130, 82135 and 82140 in a new category ‘Category 8 – Miscellaneous Services’. This insertion reflects the inclusion of MBS item numbers in the MBS effective from 1 November 2010.
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT OF HEALTH AND AGEING
OCTOBER 2010