Private Health Insurance (Benefit Requirements) Amendment Rules 2014 (No. 2)

EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Health

Private Health Insurance Act 2007

Private Health Insurance (Benefit Requirements) Amendment Rules 2014 (No. 2)

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 2014 (No. 2) (the Amendment Rules) consist of three Schedules (A, B and C), 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 2013 to March 2014.  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 2013 to March 2014, there was an increase of 2.90% in the Australian CPI. 

The increase in minimum benefits for hospital accommodation in Queensland differ.  These benefits are indexed based on the Brisbane March 2013 to March 2014 CPI.  In the year from March 2013 to March 2014, there was an increase of 3.10% in the Brisbane CPI.

Schedule B of the Amendments 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 the South Australia (SA) and Western Australia (WA).

Schedule C of the Amendment Rules

The purpose of Schedule B to the Amendment Rules is to amend Schedules 1 and 3 of the Principal Rules to insert eight Medicare Benefits Schedule (MBS) item numbers and remove ten MBS item numbers.  The updates reflect the changes made by the Health Insurance (General Medical Services Table) Regulation 2014 and the Health Insurance (Diagnostic Imaging Services Table) Amendment (2014 Measures No. 1) Regulation 2014, both of which commence on 1 July 2014 and the subsequent changes to the MBS which take effect from 1 July 2014.  

Schedule D of the Amendment Rules

The purpose of the amendments provided in Schedule C is to update the reference to the latest Second Tier Advisory Committee-approved list. The list of facilities eligible for second tier default benefits is the list existing at the time of this amendment and is published on the Department of Health’s website at http://www.health.gov.au/.

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.

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

On 12 May 2014, the Australian Government Department of Health (the Department) 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 2013-March 2014.  All States and Territories, with the exception of the Northern Territory, 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 2014.

On 19 May 2014 the Northern Territory Department of Health advised that as they did not update their minimum benefit rates in 2012 they would like to increase their minimum benefit rates from $318 to $335 including both this year and last year’s CPI. On 20 May 2014 the Department wrote to the Northern Territory Department of Health agreeing to adjust their minimum benefits to $335. The amount includes the CPI figure from both March 2012-2013 and March 2013-2014.

Schedule B of the Amendment Rules

On 7 March 2014, the Department consulted with States and Territories and invited them to advise of their intention to adjust NHTP benefits in line with twice annual changes to the Adult Basic Pension Rate and Maximum Daily Rate of Rental Assistance.  New South Wales, Northern Territory, Queensland, Tasmania and Victoria provided responses to the Department in March 2014 requesting increases to the NHTP minimum benefits in those jurisdictions effective from 20 March 2014.  South Australia and Western Australia did not increases their minimum benefit rates in March 2014. Subsequently South Australia and Western Australia wrote to the Department in May 2014 seeking an increase to their NHTP minimum benefits for effect from 1 July 2014.

Schedule C of the Amendment Rules

In accordance with changes to the MBS, eight MBS item numbers have been added and ten MBS item numbers have been deleted.  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 affect existing arrangements.

Schedule D 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 private hospital and private health insurance sectors.  Facilities wishing to be considered for inclusion in Schedule 5 were individually assessed and decided by the Committee. 

The Amendment Rules commence on 1 July 2014 or, if registered after 1 July 2014, 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

MEDICAL BENEFITS DIVISION

DEPARTMENT OF HEALTH

JUNE 2014

ATTACHMENT

DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2014 (No. 2)

Section 1 Name of Rules

Section 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2014 (No. 2) (the Amendment Rules).

Section 2 Commencement

Section 2 provides that the Amendment Rules are to commence on 1 July 2014 or, if registered on a later date, the day after registration.

Section 3 Authority

Section 3 provides that the Amendment Rules are made under item 3A of the table in section 333-20 of the Private Health Insurance Act 2007.

Section 4 Schedule

Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms. 

Schedules A, B, C and D

Schedules A, B, C and D provide that the Amendment Rules amend the Private Health Insurance (Benefit Requirements) Rules 2011 (the Principal Rules) which commenced on

1 November 2011.

Schedule A – Amendments

Item 1 – Schedule 1, Subclause 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, Table 1:

Advanced surgical patient

- first 14 days  From: $394 to $405

- over 14 days  From: $273 to $281

Surgical patient or obstetric patient

- first 14 days  From: $365 to $376

- over 14 days  From: $273 to $281

Psychiatric patient

- first 42 days  From: $365 to $376

- 43 – 65 days  From: $317 to $326

- over 65 days  From: $273 to $281

Rehabilitation patient

- first 49 days  From: $365 to $376

- 50 – 65 days  From: $317 to $326

- over 65 days  From: $273 to $281

Other patients

- first 14 days  From: $317 to $326

- over 14 days  From: $273 to $281

Item 2 – Schedule 1, Subclause 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, Table 2:

Advanced surgical patient

- first 14 days  From: $394 to $405

- over 14 days  From: $273 to $281

Surgical patient or obstetric patient

- first 14 days  From: $365 to $376

- over 14 days  From: $273 to $281

Psychiatric patient

- first 42 days  From: $365 to $376

- 43 – 65 days  From: $317 to $326

- over 65 days  From: $273 to $281

Rehabilitation patient

- first 42 days  From: $365 to $376

- 43 – 65 days  From: $317 to $326

- over 65 days  From: $273 to $281

Other patients

- first 14 days  From: $317 to $326

- over 14 days  From: $273 to $281

Item 3 – Schedule 1, Subclause 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, Table 3:

Advanced surgical patient

- first 14 days  From: $394 to $405

- over 14 days  From: $273 to $281

Surgical patient or obstetric patient

- first 14 days  From: $365 to $376

- over 14 days  From: $273 to $281

Psychiatric patient

- first 42 days  From: $365 to $376

- 43 – 65 days  From: $317 to $326

- over 65 days  From: $273 to $281

Rehabilitation patient

- first 42 days  From: $365 to $376

- 43 – 65 days  From: $317 to $326

- over 65 days  From: $273 to $281

Other patients

- first 14 days  From: $317 to $326

- over 14 days  From: $273 to $281

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, Northern Territory, Queensland, South Australia and Western Australian public hospitals in clause 2, Table:

• ACT   From: $326 to $335;
• NSW   From: $326 to $335;
• Northern Territory From: $318 to $335;
• Queensland  From: $331 to $341;
• South Australia  From: $326 to $335; and
• Western Australia From: $326 to $335.

Item 5 – Schedule 3, Part 1, Subclause 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, Table 1:

It is noted that there is no change to the minimum benefit for the Northern Territory.

Item 6 – Schedule 3, Part 1, Subclause 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, 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:

• SA                 From $111.00 to $114.00
• WA    From: $125.45 to $133.20

Schedule C – Amendments

Item 1 - Schedule 1, Part 2 Type A procedures, Subclause 4(3) Advanced surgical patient

Item 1 amends Schedule 1, Part 2, subclause 4(3) of the Principal Rules by deleting MBS item numbers 42659 and 42737 and inserting two new MBS item numbers (38273 and 38274) into Type A procedures, Subclause 4(3) Advanced surgical patient. 

Item numbers 42659 and 42737 have been deleted from the MBS. These are ophthalmology items that have been made redundant as a result of the outcomes of the MSAC ophthalmology Review Stage II.

Item numbers 38273 and 38274 relate to transcatheter closure of patent ductus arteriosus and ventricular septal defect as alternative techniques to open heart surgery. These items have been placed under Type A procedures, to maintain consistency with in the classification of similar procedures.

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

Item 2 amends Schedule 1, Part 2 Type A procedures, Clause 6 Surgical Patient, subclause (3) by removing three MBS item numbers (31518, 31521 and 31527) and inserting two new MBS item numbers (31519, 31525) into Type A procedures, Subclause 6(3) Surgical patient .

Item numbers 31518, 31521 and 31527 have been deleted from the MBS. These are mastectomy items, the deletion of these items and the introduction of the two new items (3519 and 31525) comes as a result of the merging of four mastectomy items into three items, by removing the gender specific terminology in the item descriptors (‘male’ or ‘female’) and replacing them with gender neutral terminology. These changes reflect the Australian Government Guidelines on the Recognition of Sex and Gender, developed by the Attorney-General’s Department.

Item 3 – Schedule 3, Part 3, Type C procedures, Clause 8, Category 3 Therapeutic Procedures, T8

Item 3 amends Schedule 3, Part 3 Type C procedures, Clause 8, Category 3 Therapeutic Procedures, T8 of the Principal Rules by removing one MBS item number (42797). 

Item number 42797 has been removed from the MBS. Item number 42797 is an ophthalmology item that has also been made redundant as a result of the outcomes of the MSAC ophthalmology Review Stage II.

Item 4 – Schedule 3, Part 3 Type C procedures, Clause 8, Category 5 Diagnostic Imaging Services, I1

Item 4 amends Schedule 3, part 3 Type C procedures, Clause 8, Category 5 Diagnostic Imaging Services, I1 of the Principal Rules by removing four MBS item numbers (55044, 55045, 55731 and 55733) and inserting four new MBS item numbers (55065, 55067, 55068 and 55069) into Type C procedures, Clause 8, Category 5 Diagnostic Imaging Services, I1.

Item numbers 55044, 55045, 55731 and 55733 have been removed from the MBS. These are pelvis ultrasound items. The removal of these items and the introduction of the four new items (55065, 55067, 55068 and 55069) effectively merges eight MBS pelvis ultrasound items, by removing the gender specific terminology in the item descriptors (‘male’ or ‘female’) and replacing it with gender neutral terminology. These changes also reflect the Australian Government Guidelines on the Recognition of Sex and Gender, developed by the Attorney-General’s Department.

Schedule D – Amendments

Item 1 – Schedule 5, Clause 4 Facilities, Paragraph (1)

Item 1 of Schedule C to the Amendment Rules updates the reference to the latest Second Tier Advisory Committee-approved list. The list of facilities eligible for second tier default benefits is the list existing at the time of this amendment and is published on the Department of Health’s website at http://www.health.gov.au/