Private Health Insurance (Benefit Requirements) Amendment Rules 2015 (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 2015 (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 2015 (No. 2) (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 2014 to March 2015. 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 2014 to March 2015, there was an increase of 1.30% in the Australian CPI. 

The increase in minimum benefits for hospital accommodation in Queensland differ. These benefits are indexed based on the Brisbane March 2014 to March 2015 CPI. In the year from March 2014 to March 2015, there was an increase of 1.40% 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), the Australian Capital Territory (ACT) and Western Australia (WA).

Schedule C of the Amendment Rules

The purpose of Schedule C to the Amendment Rules is to amend Schedule 3 of the Principal Rules to insert four Medicare Benefits Schedule (MBS) item numbers and remove four MBS item numbers. The updates reflect the changes made by the transfer of items listed in the Health Insurance (IncobotulinumtoxinA) Determination 2015 into the Health Insurance (General Medical Services Table) Regulations (GMST) from 1 July 2015.  

Schedule D of the Amendment Rules

The purpose of the amendments provided in Schedule D 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 29 April 2015, 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 2014-March 2015. 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 2015.

Schedule B of the Amendment Rules

On 4 March 2015, 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, and Tasmania provided responses to the Department in March 2015 requesting increases to the NHTP minimum benefits in those jurisdictions effective from 20 March 2015. SA, the ACT and WA did not increases their minimum benefit rates in March 2015. Subsequently SA, the ACT and WA wrote to the Department in May 2015 seeking an increase to their NHTP minimum benefits for effect from 1 July 2015.

Schedule C of the Amendment Rules

In accordance with changes to the GMST, four MBS item numbers have been added and four 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 2015.

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 2015

ATTACHMENT

DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2015 (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 2015 (No. 2) (the Amendment Rules).

Section 2 Commencement

Section 2 provides that the Amendment Rules are to commence on 1 July 2015.

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: $405 to $410

- over 14 days  From: $281 to $285

Surgical patient or obstetric patient

- first 14 days  From: $376 to $381

- over 14 days  From: $281 to $285

Psychiatric patient

- first 42 days  From: $376 to $381

- 43 – 65 days  From: $326 to $330

- over 65 days  From: $281 to $285

Rehabilitation patient

- first 49 days  From: $376 to $381

- 50 – 65 days  From: $326 to $330

- over 65 days  From: $281 to $285

Other patients

- first 14 days  From: $326 to $330

- over 14 days  From: $281 to $285

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: $405 to $410

- over 14 days  From: $281 to $285

Surgical patient or obstetric patient

- first 14 days  From: $376 to $381

- over 14 days  From: $281 to $285

Psychiatric patient

- first 42 days  From: $376 to $381

- 43 – 65 days  From: $326 to $330

- over 65 days  From: $281 to $285

Rehabilitation patient

- first 49 days  From: $376 to $381

- 50 – 65 days  From: $326 to $330

- over 65 days  From: $281 to $285

Other patients

- first 14 days  From: $326 to $330

- over 14 days  From: $281 to $285

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: $405 to $410

- over 14 days  From: $281 to $285

Surgical patient or obstetric patient

- first 14 days  From: $376 to $381

- over 14 days  From: $281 to $285

Psychiatric patient

- first 42 days  From: $376 to $381

- 43 – 65 days  From: $326 to $330

- over 65 days  From: $281 to $285

Rehabilitation patient

- first 49 days  From: $376 to $381

- 50 – 65 days  From: $326 to $330

- over 65 days  From: $281 to $285

Other patients

- first 14 days  From: $326 to $330

- over 14 days  From: $281 to $285

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: $335 to $339;
• NSW   From: $335 to $339;
• Northern Territory From: $335 to $339;
• Queensland  From: $341 to $346;
• South Australia  From: $335 to $339; and
• Western Australia From: $335 to $339.

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 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:

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 $114.00 to $115.00
• ACT   From $111.20 to $117.65
• WA    From: $133.20 to $138.10

Schedule C – Amendments

Item 1 - Schedule 3, Part 3 Type C procedures, Clause 9 Interpretation, Category 3 Therapeutic Procedures, T11

Item 1 amends Schedule 3, Part 3 Type C procedures, Clause 9 Interpretation, Category 3 Therapeutic Procedures, T11 of the Principal Rules by deleting four MBS item numbers (18352, 18364, 18371 and 18373) and inserting four new MBS item numbers (18353, 18365, 18369 and 18374) into Type C procedures, Clause 9 Interpretation, Category 3 Therapeutic Procedures, T11. The introduction of the new items has resulted in the redundancy and subsequent deletion of items 18352, 18364, 18371 and 18373.

The four new items were listed in the in the Health Insurance (IncobotulinumtoxinA) Determination 2015 in April 2015 and are being transferred into the GMST from 1 July 2015.

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/