Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 8)

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. 8)

Authority

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) Amendment Rules 2011 (No. 8) (the Amendment Rules) consist of three Schedules (A, B and C), which amend Schedules 1, 2, 3, 4 and 5 of the Private Health Insurance (Benefit Requirements) Rules 2010 (the Principal Rules).

Purpose

Schedule A of the Amendments Rules

Schedule A of the Amendment Rules amends Schedules 2, 3 and 4 of the Principal Rules. The purpose of the amendments to Schedules 2 and 3 of the Principal Rules is to make changes to the minimum benefits for public hospital accommodation in the Northern Territory consistent with changes already made in respect of other States and Territories.  The purpose of the amendments to Schedule 4 of the Principal Rules is to change the minimum benefits payable per night for nursing-home type patients (NHTPs) at public hospitals in some States and at private hospitals nationally.

Schedule B of the Amendment Rules

Schedule B of the Amendment Rules amends Schedules 1 and 3 of the Principal Rules. The purpose of the amendments to Schedules 1 and 3 of the Principal Rules is to reclassify the listing of two MBS item numbers (36650 and 39133) from overnight to same day accommodation procedures.

Schedule C of the Amendment Rules

The purpose of the amendments to Schedule 5 of the Principal Rules is to add three additional facilities that are eligible for second tier default benefits and to change the name of one facility. These changes have increased the table of listed facilities from 361 to 364.

Background

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 Principal Rules set out the minimum levels of benefit which are payable for hospital treatment.  Namely, 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 accommodation components in Schedules 1, 2 and 3 of the Principal Rules are subject to annual review and are amended with reference to the CPI movements from March to March

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each year. In the year from March 2010 to March 2011, there was an increase of 3.3% in the Australian CPI.  These increases have already been made in respect of other States and Territories.  However, the Northern Territory did not advise of its increased hospital charges until 18 July 2011.

The minimum benefits payable per night for hospital treatment provided to NHTPs in Schedule 4 of the Principal Rules is subject to review and change twice annually, to reflect the indexation applied to the Adult Pension Basic Rate and maximum daily rate of rental assistance.  The latest indexation of these rates becomes effective on 20 September 2011.

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.

Details

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

Consultation

Schedule A of the Amendment Rules - Items 1 and 2

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 a 3.3% increase 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.  The new rates for these States and the ACT were incorporated in the Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 3).  Queensland provided confirmation of the increase to its hospital accommodation charges in line with the CPI increase on 30 June 2011 and the new rates were incorporated in the Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 5) which took effect on 13 July 2011. On 18 July 2011, Northern Territory Health advised the Department that the new Northern Territory charges had been gazetted and had been in effect from 6 July 2011.

Schedule A of the Amendment Rules - Items 3 and 4

On 30 August 2011, States and Territories were advised of the pension increase and were

asked whether they would be increasing the NHTP contribution and accommodation rates in their jurisdiction. Queensland, South Australia and Tasmania advised that they will increase the NHTP accommodation rates in their public hospitals. New South Wales and the Australian Capital Territory advised that they will not increase their NHTP accommodation rates at this time. Western Australia, Victoria and the Northern Territory advised of their intention to increase their NHTP contribution and accommodation rates at a later date yet to be determined.

Schedule B of the Amendment Rules

The incorrect classification of two MBS item numbers as overnight accommodation procedures was raised by a private health insurer.  The Department has considered this issue

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and in response, is making the current amendments to reclassify the MBS item numbers as same day accommodation procedures.  Medical advice was sought from within the Department about the reclassification.  No further consultation was undertaken because the amendments are minor in nature.

Schedule C of the Amendment Rules

Consultation for changes to Schedule 5 occurred with industry through the Second Tier Advisory Committee (the Committee), 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 Committee 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 20 September 2011 or, if registered after 20 September 2011, 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

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ATTACHMENT

DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2011 (No. 8)

1. Name of Rules

Rule 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2011 (No. 8) (the Amendment Rules).

2. Commencement

Rule 2 provides that the Amendment Rules are to commence on 20 September 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 Schedules A, B and C to the Amendment Rules amend the Private Health Insurance (Benefit Requirements) Rules 2010 (the Principal Rules) which commenced on 29 January 2010.

Schedule A – Amendments

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

Schedule 2 of the Principal Rules sets 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 of Schedule A to the Amendment Rules increases the minimum benefit per night for shared ward accommodation at Northern Territory hospitals in clause 2, Table :

• Northern Territory  From $303 to $313.

Item 2 – Schedule 3, Subclause 2(2) Minimum benefit, Table 1

Schedule 3 of the Principal Rules set out the minimum benefit payable for same-day accommodation patients in all the State/Territory hospitals, providing that:

1. hospital treatment is classified as a type B procedure; and
2. the patient is not classified as a nursing-home type patient.

Item 2 of Schedule A to the Amendment Rules increases the minimum benefit for same-day accommodation in public hospitals in the Northern Territory in subclause 2(2), Table 1:

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Item 3 – Schedule 4, Clause 6 Minimum benefit, Table 1

Item 3 of Schedule A to the Amendment Rules increases the minimum benefit payable per night for nursing-home type patients in public hospitals in the following States in clause 6, Table 1:

• Queensland from $98.50 to $102.00;
• South Australia from $103.00 to $106.00;
• Tasmania from $118.05 to $121.30.

Item 4 – Schedule 4, Clause 6 Minimum benefit, Table 2

Item 4 of Schedule A to the Amendment Rules decreases the minimum benefit payable per night for nursing-home type patients in private hospitals in clause 6, Table 2:

• Private hospitals from $61.90 to $60.55

Schedule B – Amendments

Item 1 - Schedule 1, Part 2, Subclause 6(3)  Surgical Patient

Patients are taken to be surgical type overnight patients if they meet the criteria of Schedule 1, Part 2, subclause 6(2) and are receiving the items listed in subclause 6(3), within the fee range of $244.37 to $820.64. 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 1 of Schedule B to the Amendment Rules removes two MBS item numbers (36650 and 39133) from Schedule 1 of the Principal Rules to reflect that their MBS fees are less than $244.37 and that they should not be categorised as overnight surgical patient accommodation procedures.

Item 2 – Schedule 3, Part 2, Subclause 5(1)  Non-band specific Type B day procedures

Subclause 5(1) provides that hospital treatment that involves a professional service of the type identified by the MBS item number specified in clause 5 is a non-band specific Type B day procedure.

Item 2 of Schedule B to the Amendment Rules inserts two MBS item numbers (36650 and 39133) to reflect that they should be categorised as same day accommodation procedures.

Schedule C- Amendments

Item 1 – Schedule 5, Clause 4 Facilities, Table

Item 1 of Schedule C to the Amendment Rules provides that the table in Schedule 5, Clause 4 of the Principal Rules is amended to insert the following three new facilities:

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Item 1 provides that the table in Schedule 5, Clause 4 of the Principal Rules is amended to change the name of the following facility:

PRIVATE HEALTH INSURANCE BRANCH

DEPARTMENT OF HEALTH AND AGEING

SEPTEMBER 2011