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. 4)
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, 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 2011 (No. 4) (the Amendment Rules) consists of an amendment to Schedule 5 of the Principal Rules.
The purpose of the amendment is to update the table at Clause 4 of Schedule 5 of the Principal Rules by adding a facility that is eligible for second tier default benefits that was inadvertently deleted, due to an administration error, in the Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 3) from the table at Clause 4 of Schedule 5.
This change has increased the table of listed facilities from 345 to 346.
Details of the Amendment Rules are set out in the Attachment.
Consultation
Schedule 5
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
JUNE 2011
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2011 (No. 4)
1. Name of Rules
Rule 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 4) (the Amendment Rules).
2. Commencement
Rule 2 provides that the Amendment Rules are to commence on 1 July 2011 or, if registered on a later date, 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 Principal Rules which commenced on 29 January 2010.
Schedule – Amendments
Item 1 – Schedule 5, Clause 4 Facilities, Table
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 1 provides that the table in Schedule 5, Clause 4 of the Principal Rules is amended to insert the following facility:
Name | Address |
Mater Private Hospital | Raymond Terrace, SOUTH BRISBANE QLD 4101 |
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT OF HEALTH AND AGEING
JUNE 2011
Overview
The Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 4) were enacted to amend the Private Health Insurance (Benefit Requirements) Rules 2010, addressing an administrative oversight that inadvertently removed a facility from eligibility for second tier default benefits. The Private Health Insurance Act 2007 enables the Minister to establish rules for minimum benefit requirements in private health insurance, with the aim of ensuring that certain healthcare services are adequately covered. The 2011 amendment was designed to correct this oversight by reinstating the Mater Private Hospital in South Brisbane as eligible for these benefits, thereby restoring the intended number of facilities covered in Schedule 5 from 345 back to 346. This amendment was made following consultations with the Second Tier Advisory Committee, which includes representatives from both the private hospital and private health insurance sectors, ensuring a balanced approach to the eligibility criteria for these benefits.
Scope and Application
The Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 4) amend the Private Health Insurance (Benefit Requirements) Rules 2010 to correct an administrative error by re-including a facility that was inadvertently omitted from the list of facilities eligible for second tier default benefits. These Rules apply to private health insurers operating in Australia, affecting their obligations under the Private Health Insurance Act 2007. The amendment increases the number of facilities eligible for second tier default benefits from 345 to 346 by reinstating Mater Private Hospital in South Brisbane, Queensland, into the relevant schedule. This change ensures that health insurers comply with the minimum benefit requirements for hospital treatment, particularly for overnight and day-only treatment in specified facilities. The Rules came into effect on 1 July 2011 or the day after registration if later, and they extend the application of the Principal Rules by updating the list of eligible facilities, thereby ensuring that the intended scope of the benefit requirements is accurately reflected.
Key Provisions
The main operative sections of the Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 4) (the Amendment Rules) pertain to the amendment of Schedule 5 of the Private Health Insurance (Benefit Requirements) Rules 2010 (the Principal Rules) (Section 3). Specifically, the Amendment Rules aim to correct an administrative oversight by reintroducing a facility that was erroneously omitted from the table in Clause 4 of Schedule 5 in a previous amendment (Rule 3). The facility in question, Mater Private Hospital located at Raymond Terrace, South Brisbane, QLD 4101, is now eligible for second tier default benefits as outlined in Schedule 5 of the Principal Rules (Item 1).
The Amendment Rules impose obligations on health insurers to pay second tier default benefits for most episodes of hospital treatment provided in the specified facilities listed in Schedule 5, provided that the health insurer does not have a negotiated agreement with the hospital (Principal Rules, Schedule 5). This requirement ensures that patients receive a higher minimum level of benefit for overnight and day-only treatments in specified facilities, as set out in the Principal Rules.
Failure to comply with the obligations outlined in the Amendment Rules may result in civil or criminal consequences. Although specific penalties are not detailed in the Explanatory Statement, breaches of provisions under the Private Health Insurance Act 2007 can lead to substantial penalties under the Act. For example, health insurers found to be in breach of benefit requirements may face fines, corrective orders, or other enforcement actions by the Australian Health Insurance Commission. Additionally, individuals or entities found guilty of serious or repeated breaches may face criminal penalties, including imprisonment.