Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 5)

Administered by Department of Health, Disability and Ageing

Legislation au F2011L01475 Rules Not in force Legislative Instrument

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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:

 

 

Name

Address

Charlestown Private Hospital

Level 3, 250 Pacific Highway, CHARLESTOWN  NSW  2290

Kingsgrove Day Hospital

Level 1, 322 Kingsgrove Road, KINGSGROVE  NSW  2208

Sydney IVF Northwest

Level 1, Suite 101, 10 Norbrik Drive, BELLA VISTA  NSW  2153

 

 

PRIVATE HEALTH INSURANCE BRANCH

DEPARTMENT OF HEALTH AND AGEING

JULY 2011

Overview

The Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No.5), enacted to amend the Private Health Insurance (Benefit Requirements) Rules 2010, were introduced to address the need for regular updates to minimum benefits for hospital treatment to reflect economic changes and administrative corrections. These amendments were made under the authority of the Minister for Health and Ageing and aimed to ensure that the benefits provided by private health insurers remain aligned with the economic environment and to correct any administrative errors. The rules specifically adjusted the minimum benefits for hospital accommodation in the Australian Capital Territory and Queensland to reflect the Consumer Price Index (CPI) increase from March 2010 to March 2011, and corrected an administrative error in the ACT's Band 2 same-day accommodation fee. Additionally, the rules updated the table of facilities eligible for second tier default benefits to include three new facilities, thereby increasing the total from 346 to 349 facilities. The Private Health Insurance Act 2007 established the legislative framework for ensuring that private health insurance in Australia provides adequate and consistent benefits. The Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No.5) were developed in consultation with relevant state and territory health authorities, as well as industry stakeholders, to ensure that the amendments are practical and reflect current economic conditions. The policy objective was to maintain a fair and consistent standard of care across different jurisdictions while keeping up with inflation and administrative corrections, thereby supporting the ongoing effectiveness of the private health insurance system in Australia.

Scope and Application

The Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No.5) apply to health insurers and hospitals across Australia, specifically targeting the minimum benefits for hospital accommodation and treatment as outlined in the Private Health Insurance Act 2007. The Act primarily governs the private health insurance industry, ensuring that health insurers comply with the minimum benefit requirements for hospital treatment and accommodation. The Amendment Rules were designed to adjust the minimum benefits for overnight and same-day accommodation in public hospitals in the ACT and Queensland, reflecting the Consumer Price Index (CPI) increase from March 2010 to March 2011. Furthermore, the Amendment Rules update the list of facilities eligible for second tier default benefits by adding three new facilities, thereby expanding the scope of facilities covered under the Act. These amendments are part of a broader regulatory framework aimed at ensuring equitable and fair private health insurance coverage across different regions and facilities in Australia.

Key Provisions

The Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No.5) introduce amendments to the Private Health Insurance (Benefit Requirements) Rules 2010, specifically affecting Schedules 2, 3, and 5. Schedule 2 pertains to 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. These amendments are primarily driven by increases in the Consumer Price Index (CPI) from March 2010 to March 2011, with a 3.3% rise in the CPI over this period. For instance, the minimum benefit per night for shared ward accommodation at Queensland public hospitals is adjusted from $309 to $320 (Schedule 2, Item 1). Similarly, the minimum benefits for each band of treatment for Queensland in Schedule 3, pertaining to same-day accommodation, are updated to reflect the same CPI increase. Moreover, there is a correction in the minimum benefit for same-day accommodation for Band 2 treatment at ACT public hospitals, which is decreased from $254 to $253 to rectify an administrative error (Schedule 3, Item 2). The obligations imposed by these Amendment Rules on health insurers include ensuring compliance with the updated minimum benefit requirements for hospital accommodation and same-day accommodation as specified in the amended Schedules. Health insurers must adjust their benefit offerings to align with these new figures, which reflect changes in hospital accommodation charges and corrections in administrative errors. For facilities listed in Schedule 5, which provide second-tier default benefits, insurers must continue to pay these higher minimum benefits for overnight and day-only treatments if they do not have a negotiated agreement with the hospital. This is crucial for maintaining compliance and providing adequate coverage to insured individuals. The Amendment Rules also introduce civil and administrative consequences for non-compliance. Health insurers that fail to adhere to the updated minimum benefit requirements risk penalties under the Private Health Insurance Act 2007. The Act provides for a range of enforcement actions, including fines and corrective notices, to ensure that insurers meet their obligations. While the Amendment Rules do not explicitly detail the penalties, the overarching Act outlines significant financial penalties for non-compliance, underscoring the importance of adherence to these benefit requirements. This enforcement mechanism ensures that insured individuals receive the minimum benefits as mandated by the legislation, thereby maintaining the integrity of the private health insurance system.

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