Private Health Insurance (Benefit Requirements) Amendment Rules 2012 (No. 4)

EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Health

Private Health Insurance Act 2007

Private Health Insurance (Benefit Requirements) Amendment Rules 2012 (No. 4)

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 2012 (No. 4) (the Amendment Rules) consist of four Schedules (A, B C and D), which amend Schedules 1-5 of the Private Health Insurance (Benefit Requirements) Rules 2011 (the Principal Rules) which commenced on 1 November 2011.

Purpose

Schedule A of the Amendment Rules

The purpose of Schedule A to the Amendment Rules is to make changes to the minimum benefits for hospital accommodation in Schedule 1, 2 and 3 of the Principal Rules to reflect increases in the Consumer Price Index (CPI) from March 2011 to March 2012.  The accommodation components in Schedule 1, 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 2011 to March 2012, there was an increase of 1.6% in the Australian CPI. 

The increase in minimum benefits for hospital accommodation in Queensland differ.  These benefits are indexed based on the Brisbane March 2011 to March 2012 CPI.  In the year from March 2011 to March 2012, there was an increase of 1.3% in the Brisbane CPI.

Schedule B of the Amendment Rules

The purpose of Schedule B to the Amendment Rules is to make amendments to Schedule 4 of the Principal Rules.  The amendments reflect the changes in the minimum benefits for hospital treatment for patients who are classified as “nursing-home type patients” (NHTPs) at public hospitals in South Australia, the Australian Capital Territory and Western Australia.

Schedule C of the Amendment Rules

The purpose of the amendments provided in Schedule C is to update the table at Clause 4 of Schedule 5 of the Principal Rules which specify ‘Second tier facilities’ to:

•    update the addresses and/or names of 13 facilities;
•    remove 15 facilities; and
•    add 11 additional facilities that are eligible for second tier default benefits.

These changes have reduced the number of Second tier facilities from 380 to 376.

Schedule D of the Amendments Rules

The purpose of Schedule D to the Amendment Rules is to amend Schedules 1 and 3 of the Principal Rules to update the listing of Medicare Benefits Schedule (MBS) item numbers to reflect the changes made by the Health Insurance (Pathology Services Table) Amendment Regulations 2012 (No. 1) which commenced 1 May 2012 and the changes to the MBS which take effect from 1 July 2012.  

Background

The Principal Rules, which commenced on 1 November 2011, 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).

Schedule 1 categorises MBS item numbers into overnight patient classifications comprising ‘Advanced surgical patient’, ‘Obstetric patient’, ‘Surgical patient’, ‘Psychiatric patient’, ‘Rehabilitation patient’ and ‘Other patients’.  Schedule 3 sets out MBS item numbers for the same day hospital accommodation benefits which are payable for privately insured patients in all states and territories.

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 March 2012.

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

The increases to the minimum benefits in public hospitals were made with the agreement of the relevant State/Territory health authorities.  On 3 May 2012, the Australian Government Department of Health and Ageing advised States and Territories of its intention to increase minimum private health insurance benefits for private hospital accommodation as a consequence of CPI movements for the period March 2011- March 2012.  All States and Territories responded to the Department confirming the new rates that would apply in their jurisdictions in respect of public shared ward accommodation for private patients from 1 July 2012.

Schedule B of the Amendment Rules

On 28 February 2012, the Department consulted with States and Territories and invited them to advise of their intention to adjust NHTP default benefits in line with twice annual changes to the Adult Basic Pension Rate and Maximum Daily Rate of Rental Assistance.  New South Wales, the Northern Territory, Queensland, South Australia and Tasmania provided responses to the Department in March 2012 and the NHTP minimum benefits in those jurisdictions were increased effective from 21 March 2012.  On 7 May 2012, 16 May 2012 and 17 May 2012, Western Australia, the ACT and South Australia respectively provided responses to the Department in relation to the NHTP minimum benefits and the increases in these jurisdictions will be effective from 1 July 2012.

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 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.

Schedule D of the Amendment Rules

In accordance with changes to the MBS, five MBS item numbers have been added.  One MBS item number that was erroneously included in Schedule 1 has been removed from Schedule 1, but remains in Schedule 3.  Medical advice was sought from within the Department regarding these amendments.  No further consultation was undertaken because the amendments are minor in nature and do not significantly effect existing arrangements.

The Amendment Rules commence on 1 July 2012 or, if registered after 1 July 2012, 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 2012 (No. 4)

Section 1 Name of Rules

Section 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2012 (No. 4) (the Amendment Rules).

Section 2 Commencement

Section 2 provides that the Amendment Rules are to commence on 1 July 2012 or, if registered on a later date, the day after registration.

Section 3 Amendment of Private Health Insurance (Benefit Requirements) Rules 2011

Section 3 provides that Schedules A, B, C and D to the Amendment Rules amends the Rules which commenced on 1 November 2011.

Schedule A – Amendments

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

Schedule 1 of the Rules sets out the minimum benefit payable per night for patients in private hospitals in all States/Territories and shared ward accommodation at public hospitals in Victoria and Tasmania, providing that the patient is not classified as a nursing-home type patient.

Item 1 of the Schedule to the Amendment Rules increases the minimum benefit per night for private hospitals in all States/Territories in subclause 2(2), Table 1:

Advanced surgical patient

- first 14 days  From: $378 to $384

- over 14 days  From: $262 to $266

Surgical patient or obstetric patient

- first 14 days  From: $350 to $356

- over 14 days  From: $262 to $266

Psychiatric patient

- first 42 days  From: $350 to $356

- 43 – 65 days  From: $304 to $309

- over 65 days  From: $262 to $266

Rehabilitation patient

- first 49 days  From: $350 to $356

- 50 – 65 days  From: $304 to $309

- over 65 days  From: $262 to $266

Other patients

- first 14 days  From: $304 to $309

- over 14 days  From: $262 to $266

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

Item 2 of the Schedule to the Amendment Rules increases the minimum benefit per night for shared ward accommodation at Victorian public hospitals in subclause 2(2), Table 2:

Advanced surgical patient

- first 14 days  From: $378 to $384

- over 14 days  From: $262 to $266

Surgical patient or obstetric patient

- first 14 days  From: $350 to $356

- over 14 days  From: $262 to $266

Psychiatric patient

- first 42 days  From: $350 to $356

- 43 – 65 days  From: $304 to $309

- over 65 days  From: $262 to $266

Rehabilitation patient

- first 49 days  From: $350 to $356

- 50 – 65 days  From: $304 to $309

- over 65 days  From: $262 to $266

Other patients

- first 14 days  From: $304 to $309

- over 14 days  From: $262 to $266

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

Item 3 of the Schedule to the Amendment Rules increases the minimum benefit per night for shared ward accommodation at Tasmanian public hospitals in subclause 2(2), Table 3:

Advanced surgical patient

- first 14 days  From: $378 to $384

- over 14 days  From: $262 to $266

Surgical patient or obstetric patient

- first 14 days  From: $350 to $356

- over 14 days  From: $262 to $266

Psychiatric patient

- first 42 days  From: $350 to $356

- 43 – 65 days  From: $304 to $309

- over 65 days  From: $262 to $266

Rehabilitation patient

- first 49 days  From: $350 to $356

- 50 – 65 days  From: $304 to $309

- over 65 days  From: $262 to $266

Other patients

- first 14 days  From: $304 to $309

- over 14 days  From: $262 to $266

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

Schedule 2 of the Rules sets out the minimum benefit payable per night for patients in shared ward accommodation at public hospitals in the Australian Capital Territory (ACT), New South Wales (NSW), Northern Territory, Queensland, South Australia and Western Australia, providing that the patient is not classified as a nursing-home type patient.

Item 4 of the Schedule to the Amendment Rules increases the minimum benefit per night for shared ward accommodation at ACT, NSW, the Northern Territory, Queensland, South Australia and Western Australian public hospitals in clause 2, Table:

• ACT   From: $313 to $318;
• NSW   From: $313 to $318;
• Northern Territory From: $313 to $318;
• Queensland  From: $320 to $324;
• South Australia  From: $313 to $318; and
• Western Australia From: $313 to $318.

Item 5 – Schedule 3, Part 1, 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:

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

Item 5 of the Schedule to the Amendment Rules increases the minimum benefit for same-day accommodation in public hospitals in NSW, ACT, Northern Territory, Queensland, South Australia, Tasmania, Victoria and Western Australia in subclause 2(2), Table 1:

Item 6 – Schedule 3, Part 1, Subclause 2(2) Minimum benefit, Table 2

Item 6 of the Schedule to the Amendment Rules increases the minimum benefit per night for same-day accommodation in all State/Territory private hospitals in subclause 2(2), Table 2:

Schedule B – Amendments

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

Schedule 4 of the Rules sets out the minimum benefit payable per night for patients that are classified as nursing-home type patients in hospitals. 

Item 1 of the Schedule to the Amendment Rules increases the minimum benefit per night for public hospitals in the following State and Territories in clause 6, Table 1:

• South Australia  From: $106.00 to $108.00
• ACT    From: $103.80 to $107.40
• Western Australia From: $106.80 to $116.05

Schedule C – 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 change the addresses and/or names of the following 13 facilities:

Item 1 provides that the table in Schedule 5, Clause 4 of the Principal Rules is amended to remove the following 14 facilities as second tier eligibility for these facilities expired on 30 June 2012.

Item 1 provides that the table in Schedule 5, Clause 4 of the Principal Rules is amended to remove the following facility due to an amalgamation with Calvary Health Care Tasmania – St Luke’s Campus:

Item 1 provides that the table in Schedule 5, Clause 4 of the Principal Rules is amended to insert the following 11 new facilities:

Schedule D – Amendments

Item 1 – Schedule 1, Part 2, Type A procedures, Subclause 6(3) Surgical Patient

Item 1 amends Schedule 1, Part 2, subclause 6(3) of the Principal Rules by deleting MBS item number 37219 so that it is no longer categorised as a Type A procedure unless it is medically certified as requiring an overnight stay.  MBS item number 37219 relates to biopsy of the prostate.  This item is also currently a Type B procedure.  It is a drafting error that item 37219 is both a Type A and Type B procedure.  It has been decided that item 37219 does not normally require an overnight stay in hospital so it is being deleted from the Type A category, but remains listed under Schedule 3, Part 2, subclause 5(1), Type B.

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

Item 3 of Schedule B to the Amendment Rules inserts two MBS item numbers (13318 and 13815) to reflect that they should be categorised as same day accommodation procedures.  These items relate to central vein catheterisation.  It is expected that these items will most likely be performed in association with Type A or Type B procedures.  However, it is recognised that these items may be performed, in rare cases, in isolation in hospital.

Item 3 – Schedule 3, Part 3, Type C procedures, Clause 8, Category 6 – Pathology services

Item 3 inserts three new pathology MBS item numbers (73328, 73330 and 73332) into Type C, Category 6 – Pathology services, P7.

PRIVATE HEALTH INSURANCE BRANCH

DEPARTMENT OF HEALTH AND AGEING

JUNE 2012