Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 1)

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 2011 (No.1)

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 2011 (No. 1) (the Amendment Rules) amend Schedules 1, 4 and 5 of the Principal Rules to:

• update the list of Medical Benefits Schedule (MBS) item numbers used to define patient classifications;
• establish the minimum benefit payable for privately insured nursing-home type patients (NHTPs) receiving treatment in public hospitals in the Northern Territory;
• add three additional facilities that are eligible for second tier default benefits; and
• update the name of a facility in the table which has had a change of name.

Schedule 1 of the Principal Rules categorises MBS item numbers into patient classifications, comprising ‘Advanced surgical patient’, ‘Obstetric patient’, ‘Psychiatric patient’, ‘Rehabilitation patient’ and ‘Other patient’.  The purpose of the amendments to Schedule 1 of the Principal Rules is to re-classify two MBS items from ‘Advanced surgical patient’ to ‘Surgical patient’, as the MBS fee for these items is below the specified amount of $820.64 for advanced surgical patients.  This amendment will ensure that a minimum benefit will still be payable where a patient receives hospital treatment with respect to these MBS items.  An additional seven MBS item numbers which are no longer in operation have been deleted.

Schedule 4, Clause 6, Table 1 of the Principal Rules provides for the minimum benefit payable per night for privately insured NHTPs in public and private hospitals.  The purpose of the amendments to Schedule 4 of the Principal Rules is to reflect changes in the minimum benefits payable for privately insured NHTPs receiving treatment at public hospitals in the Northern Territory.  These changes reflect the indexation applied to the Adult Pension Basic Rate and the maximum daily rate of rental assistance that commenced on 20 September 2010.

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.  The purpose of the amendments to Schedule 5 is to ensure that three additional facilities are eligible for second tier default benefits and to update the name of a facility in the table which has had a change of name. These changes have increased the table of listed facilities from 348 to 351.

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

Consultation

The Northern Territory Department of Health and Families was consulted with regard to increasing the NHTP charges in that jurisdiction.  No objections were made.

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.

The Amendment Rules commence on the day after registration.

The Amendment Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Authority:  Section 333-20 of the

Private Health Insurance Act 2007

ATTACHMENT

DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2011 (No.1)

1. Name of Rules

Rule 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No.1) (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 Private Health Insurance (Benefit Requirements) Rules 2010 (the Principal Rules), which commenced on 29 January 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 purposes of Schedule 1, Part 2, clause 4 of the Principle 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, being $820.64.

Item 1 of the Schedule of the Amendment Rules amends Schedule 1, Part 2, subclause 4(3) of the Principal Rules by deleting MBS item numbers 38228 and 38234 because the fees for these items are below the specified amount.

Item 2 – 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 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, being $244.37 - $820.64.

Item 2 of the Schedule of the Amendment Rules amends Schedule 1, Part 2, subclause 6(3) of the Principal Rules by inserting MBS item numbers 38228 and 38234, as the fee for these items fall within the specified range.

Item 3 – 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 clause 6 of the Principal Rules.

Item 3 of the Schedule of the Amendment Rules amends Schedule 1, Part 2, subclause 6(3) of the Principal Rules by deleting MBS items 45903, 45906, 45912, 45915, 45918, 45921 and 45924, as these items are no longer in operation.

Item 4 – Schedule 4, Clause 6, Table 1

Table 1 of Schedule 4, Clause 6 of the Principal Rules provides the minimum benefits for privately insured NHTPs at public hospitals.

Item 4 of the Schedule of the Amendment Rules amends Table 1, Clause 6 of Schedule 4 of the Principal Rules by increasing the minimum benefit for privately insured NHTPs at public hospitals in the Northern Territory from $70.47 to $71.76.  This increase has been applied following an increase in the corresponding charge applicable for private NHTPs in the Northern Territory, which commenced on 27 October 2010.

Item 5 – 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 5 provides that the table in Schedule 5, Clause 4 of the Principal Rules is amended to insert the following three new facilities:

Item 1 also includes an amendment to the table in Clause 4, Schedule 5 of the Principal Rules to reflect a change of name of the following facility:

PRIVATE HEALTH INSURANCE BRANCH

DEPARTMENT OF HEALTH AND AGEING

JANUARY 2011