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. 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.
Purpose
The Private Health Insurance (Benefit Requirements) Amendment Rules 2012 (No. 8) (the Amendment Rules) make an amendment to Schedule 1 of the Principal Rules to insert Medical Benefits Schedule (MBS) item 42731 in Part 2 Type A procedures, Clause 4 Advanced surgical patient, subclause (3).
In the Private Health Insurance (Benefit Requirements) Amendment Rules 2012 (No. 7) which took effect on 1 November 2012, MBS item 42731 was removed from Schedule 1, Part 2. It has subsequently been brought to the Department of Health and Ageing’s attention that this item was inadvertently deleted.
The Amendment Rules have been made to remedy this inadvertent deletion. This amendment ensures that the minimum benefit requirements continue to apply to item 42731 where applicable. The Department has not been advised that anybody has been disadvantaged by the deletion of item 42731. Additionally, the Department does not expect any disadvantage to be suffered by patients due to the very short period of time between deleting item 42731 and the commencement of the Amendment Rules. Furthermore, the vast majority of benefits relating to episodes of private hospital treatment (98.1% in 2010-11) are paid under negotiated contacts between insurers and private hospitals which are outside the minimum benefit requirements under the Principal Rules. It is noted that the inadvertent removal of this item did not prevent insurers from continuing to cover this item under their insurance policies and paying benefits for patient treatment with respect to this item.
Background
The Private Health Insurance (Benefit Requirements) Rules 2011 (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’.
Consultation
No consultation was undertaken with respect to this amendment as it relates only to an inadvertent deletion.
The Amendment Rules commence on 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
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT OF HEALTH AND AGEING
NOVEMBER 2012
Overview
The Private Health Insurance (Benefit Requirements) Amendment Rules 2012 (No. 8), issued under the authority of the Minister for Health, aim to correct an inadvertent omission from the Private Health Insurance (Benefit Requirements) Rules 2011. These amendment rules address a gap caused by the unintentional deletion of Medical Benefits Schedule (MBS) item 42731 from Schedule 1 of the Principal Rules. Enacted by the relevant legislature, these rules seek to ensure that the minimum benefit requirements continue to apply appropriately to the affected medical item. The amendment was necessary to rectify an oversight and maintain the integrity of the benefit requirements set out under the Private Health Insurance Act 2007.
Scope and Application
The Private Health Insurance (Benefit Requirements) Amendment Rules 2012 (No. 8) address an inadvertent deletion of Medical Benefits Schedule (MBS) item 42731 from the Private Health Insurance (Benefit Requirements) Rules 2011, which commenced on 1 November 2011. This amendment restores MBS item 42731 into Part 2 Type A procedures, Clause 4 Advanced surgical patient, subclause (3) of Schedule 1, ensuring the continued application of minimum benefit requirements to this item. The rules apply to entities within the scope of the Private Health Insurance Act 2007, specifically to private health insurers and their insured members, and cover the classification of overnight patient treatments. Geographically, the rules apply across Australia as they are Commonwealth regulations, and there are no exclusions or exemptions specified beyond the inadvertent deletion correction. The Amendment Rules are effective from the day after registration and are intended to remedy the oversight without causing any disadvantage to patients, as the majority of benefits are negotiated outside the minimum benefit requirements.
Key Provisions
The Private Health Insurance (Benefit Requirements) Amendment Rules 2012 (No. 8) (Amendment Rules) amend the Private Health Insurance (Benefit Requirements) Rules 2011 (Principal Rules) by inserting Medical Benefits Schedule (MBS) item 42731 back into Schedule 1, Part 2 Type A procedures, Clause 4 Advanced surgical patient, subclause (3) (section 3). This insertion rectifies an inadvertent deletion of the item in the earlier Amendment Rules 2012 (No. 7), which took effect on 1 November 2012. The aim is to ensure that the minimum benefit requirements continue to apply to item 42731 where applicable, thereby maintaining the integrity of the insurance coverage for this particular medical benefit.
Under these Amendment Rules, private health insurers are required to reinstate MBS item 42731 in their coverage policies to align with the minimum benefit requirements outlined in the Principal Rules. This includes ensuring that any benefits relating to item 42731 are paid in accordance with the stipulated minimum levels for hospital treatment, specifically under the classification of 'Advanced surgical patient'. The reinsertion of item 42731 ensures that the continuity of care for patients requiring such treatments is not disrupted.
Failure to comply with the requirements set out in these Amendment Rules could lead to potential legal and financial repercussions for insurers. Although the Department of Health and Ageing has not received any reports of patient disadvantage due to the deletion of item 42731, insurers must ensure adherence to the rules to avoid any regulatory penalties. The consequences of non-compliance could include fines or other civil penalties, as prescribed under the Private Health Insurance Act 2007. The specific penalties are not detailed in the Amendment Rules but would generally align with the penalties outlined in the Act for breaches of minimum benefit requirements.