Private Health Insurance (Benefit Requirements) Amendment Rules 2014 (No. 4)

Administered by Department of Health, Disability and Ageing

Legislation au F2014L01235 Rules Not in force Legislative Instrument

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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. 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 2014 (No. 4) (the Amendment Rules) amends the schedule 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

Schedule A of the Amendment Rules amends Schedule 4 of the Principal Rules.  The purpose of the amendments to Schedule 4 of the Principal Rules is to change the minimum benefits payable by private health insurers per night for nursing-home type patients (NHTP) at public hospitals in some states and territories and at private hospitals nationally.

 

Schedule B of the Amendment Rules

The purpose of the amendments to Schedule 5 of the Principal Rules is to update the reference to the new Second Tier Advisory Committee (the Committee) approved list of facilities that are eligible for second-tier default benefits.

 

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 benefits 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 items 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 NHTP 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 (Pension and Rental Assistance Rates).  The latest indexation of these rates takes effect on 20 September 2014.

 

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 25 August 2014, States and Territories were asked whether they would be increasing the NHTP contribution and accommodation rates in their jurisdiction in line with increases in the Pension and Rental Assistance Rates.  New South Wales, South Australia, Queensland, Tasmania, Victoria and Northern Territory advised that they will increase the NHTP accommodation rates in their public hospitals from 20 September 2014.  The Australian Capital Territory advised that it is not increasing its NHTP contribution and accommodation rates at this time.

 

No specific consultation was undertaken in relation to Schedule A, item 2 of the Amendment Rules regarding private hospitals because the change was machinery in nature and linked to the twice annual Pension and Rental Assistance Rates increase.  The change does not substantially alter existing arrangements.

 

Schedule B of the Amendment Rules 

Consultation for changes to Schedule 5 occurred with industry through 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 20 September 2014 or, if registered after 20 September 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

SEPTEMBER 2014

 


ATTACHMENT

 

DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2014 (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 2014 (No. 4) (the Amendment Rules).

 

Section 2 Commencement

 

Section 2 provides that the Amendment Rules are to commence on 20 September 2014 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 and B  to 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 4, Clause 6 Minimum benefit, Table 1

 

Item 1 of the schedule 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 $109.00 to $113.00;
  •     Tasmania $133.90 to $135.60; and
  •     Victoria $118.00 to $122.60.

 

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

 

Item 4 of the schedule 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 $55.30 to $54.60.

 

Schedule B – Amendments

 

Item 1 – Schedule 5, Clause 4 Facilities, subclause (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/.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overview

The Private Health Insurance (Benefit Requirements) Amendment Rules 2014 (No. 4) were enacted to amend the Private Health Insurance (Benefit Requirements) Rules 2011, which commenced on 1 November 2011, and to address the need for periodic updates to the minimum benefits payable by private health insurers. These rules were introduced under the authority of Section 333-20 of the Private Health Insurance Act 2007, allowing the Minister for Health to make rules that are necessary to carry out or give effect to the Act. The Amendment Rules aim to adjust the minimum benefits for nursing-home type patients (NHTP) in public hospitals in various states and territories, as well as update the list of facilities eligible for second-tier default benefits. This adjustment aligns with the twice-annual indexation applied to the Pension and Rental Assistance Rates, ensuring that the benefits remain current and reflective of changes in these rates. The rules also aim to streamline the process of adding facilities to the list for second-tier default benefits, enhancing the efficiency and fairness of the private health insurance system. These amendments were developed following consultations with states and territories regarding increases in NHTP accommodation rates in line with the latest indexation of Pension and Rental Assistance Rates. Notably, New South Wales, South Australia, Queensland, Tasmania, Victoria, and the Northern Territory agreed to increase their NHTP rates effective 20 September 2014. The Australian Capital Territory, however, decided not to increase its rates at that time. The changes to the list of facilities eligible for second-tier default benefits were consulted through the Second Tier Advisory Committee, which includes representatives from both the private hospital and private health insurance sectors. The Amendment Rules are set to commence on 20 September 2014 or, if registered after that date, the day after registration. These rules serve to uphold the integrity of the private health insurance benefit structure by ensuring it is periodically reviewed and updated in line with relevant indices and stakeholder consultations.

Scope and Application

The Private Health Insurance (Benefit Requirements) Amendment Rules 2014 (No. 4) applies to private health insurers across Australia, governing the minimum benefits that these insurers must provide for specific hospital treatments under the Private Health Insurance Act 2007. These rules particularly affect the minimum benefits payable for nursing-home type patients (NHTP) in both public and private hospitals and update the list of facilities eligible for second-tier default benefits. The amendment is targeted at ensuring that the benefits provided align with the indexation applied to the Adult Pension Basic Rate and Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates), reflecting adjustments that take effect on 20 September 2014. For public hospitals, the minimum benefits payable per night for NHTP are increased in certain states, while for private hospitals, there is a slight decrease in the same. Additionally, the amendment updates the list of facilities eligible for second-tier default benefits, reflecting the latest decisions of the Second Tier Advisory Committee. These rules apply nationally and are instrumental in ensuring consistency and fairness in the provision of private health insurance benefits across the country.

Key Provisions

The Private Health Insurance (Benefit Requirements) Amendment Rules 2014 (No. 4) primarily amend the existing benefit requirements set out in the Private Health Insurance (Benefit Requirements) Rules 2011. Specifically, Schedule A of these Amendment Rules updates the minimum benefit payable per night for nursing-home type patients (NHTP) in public hospitals in certain states, while Schedule B updates the reference to the latest Second Tier Advisory Committee-approved list of facilities eligible for second-tier default benefits. Section 2 of the Amendment Rules specifies that they are to commence on 20 September 2014 or, if registered later, the day after registration. These Amendment Rules impose several obligations on private health insurers. Firstly, they must increase the minimum benefit payable per night for NHTP in public hospitals in Queensland, Tasmania, and Victoria, as detailed in Schedule A, Item 1 of the Amendment Rules. Conversely, they must decrease the minimum benefit for NHTP in private hospitals, as specified in Schedule A, Item 2. Secondly, insurers must adhere to the updated list of facilities eligible for second-tier default benefits, as referenced in Schedule B, Item 1. This ensures that they pay the appropriate minimum level of benefits for hospital treatment provided in private hospital facilities when no negotiated agreement is in place. Breach of the obligations imposed by these Amendment Rules may result in legal consequences for private health insurers. While specific penalties are not detailed in the Amendment Rules, non-compliance with the Private Health Insurance Act 2007 may lead to enforcement actions by the Australian Prudential Regulation Authority (APRA) or the Australian Competition and Consumer Commission (ACCC). These actions could include fines, corrective orders, or other civil or criminal penalties as deemed necessary by the relevant authorities. It is crucial for insurers to comply with the Amendment Rules to avoid such consequences and maintain their regulatory standing.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.