Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (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 2011 (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 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.5) (the Amendment Rules) amends Schedules 2, 3 and 5 of the Principal Rules.

The purpose of the amendments to Schedule 2 and 3 is to make changes to the minimum benefits for hospital accommodation in Schedule 2 and 3 of the Principal Rules for the Australian Capital Territory (ACT) and Queensland reflecting increases in the Consumer Price Index (CPI) from March 2010 to March 2011.  The accommodation components in Schedules 2 and 3 are subject to annual review and are amended with reference to the CPI movements from March to March each year. In the year from March 2010 to March 2011, there was an increase of 3.3% in the Australian CPI.  Minimum accommodation benefits for the other States were made in the Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No.3) which took effect on 1 July 2011.  However, Queensland provided late confirmation of changes to its hospital accommodation charges on 30 June 2011, as changes required Queensland Government gazettal.

The minimum benefit for same-day accommodation for Band 2 treatment at ACT public hospitals has been changed from $254.00 to $253.00 to correct an ACT administrative error.

The purpose of the amendment to Schedule 5 is to update the table at Clause 4 to add three additional facilities that are eligible for second tier default benefits.  These changes have increased the table of listed facilities from 346 to 349.

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

Consultation

On 4 May 2011, the Department advised States and Territories of its intention to increase minimum private health insurance benefits for private and public hospital accommodation to reflect increases in the CPI from March 2010 to March 2011.  New South Wales, Victoria, Western Australia, South Australia, Tasmania, and the ACT responded to the Department confirming the new rates that would apply in their jurisdictions from 1 July 2011. 

On 19 May 2011, Queensland Health advised the Department that it intended to increase its hospital accommodation charges in line with the CPI increase.  However, as the new charges require Queensland Government gazettal, Queensland Health could not provide the exact date that the charges would take effect.  On 30 June 2011, Queensland Health advised the Department that the new charges had been gazetted and would take effect from 1 July 2011. 

On 6 May 2011, ACT Health advised the Department that it intended to increase its Band 2 same-day accommodation fee to $254.00.  However, on 29 June 2011, ACT Health advised they had made an administrative error and that the correct fee for Band 2 same-day accommodation is $253.00

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

JULY 2011

ATTACHMENT

DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2011 (No.5)

1. Name of Rules

Rule 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No.5) (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 Principal Rules which commenced on 29 January 2010.

Schedule – Amendments

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

Schedule 2 of the Rules set 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 increases the minimum benefit per night for shared ward accommodation at Queensland public hospitals from $309 to $320.

Item 2 – Schedule 3, 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:

-          hospital treatment is classified as a type B procedure; and

-          the patient is not classified as a nursing-home type patient.

Item 2 decreases the minimum benefit for same-day accommodation at ACT public hospitals from $254 to $253.  Item 2 also increases the minimum benefits for each band of treatment for Queensland in accordance with the March to March CPI increase of 3.3%.  This is in accordance with the increase in the minimum benefits for the other States made on 1 July 2011.

Item 3 – 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 3 provides that the table in Schedule 5, Clause 4 of the Principal Rules is amended to insert the following three new facilities:

PRIVATE HEALTH INSURANCE BRANCH

DEPARTMENT OF HEALTH AND AGEING

JULY 2011