Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 1)

Administered by Department of Health, Disability and Ageing

Legislation au F2016L00352 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 2016 (No. 1)

 

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 2016 (No. 1) (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

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 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

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 March 2016.

 

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

    MARCH 2016


Attachment

 
DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2016 (No.1)

 

Section 1 Name of Rules

 

Section 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No.1) (the Amendment Rules).

 

Section 2 Commencement

 

Section 2 provides that the Amendment Rules are to commence on 20 March 2016.

 

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 – Amendments

Schedule 5, Clause 4 Facilities, subclause (1)  

 

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 2016 (No. 1) were enacted to amend the Private Health Insurance (Benefit Requirements) Rules 2011, which set out the minimum levels of benefit payable for hospital treatment under the Private Health Insurance Act 2007. These amendments were made under the authority of Section 333-20 of the Act, which allows the Minister to establish rules necessary to implement Part 3-3 of the Act. The primary objective of these rules is to address discrepancies and update the minimum benefits for certain types of hospital treatment. Specifically, Schedule A modifies the minimum benefits for nursing-home type patients at both public and private hospitals, while Schedule B updates the list of facilities eligible for second-tier default benefits, ensuring alignment with the current Second Tier Advisory Committee-approved list. These changes aim to ensure that private health insurers provide adequate coverage for specified hospital treatments, thereby enhancing the effectiveness of the private health insurance system.

Scope and Application

The Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 1) are a legislative instrument under the Private Health Insurance Act 2007, aimed at modifying the minimum benefits that private health insurers must provide for certain types of hospital treatments. These Amendment Rules affect entities involved in private health insurance and healthcare provision, specifically targeting insurers and hospitals, both public and private, across Australia. The changes primarily concern the minimum benefits payable per night for nursing-home type patients in public hospitals in some states and territories, and in private hospitals nationally, as well as updating the list of facilities eligible for second-tier default benefits. These amendments are designed to ensure that the benefit requirements reflect current standards and needs. The Amendment Rules are applicable across the Commonwealth and are set to commence on 20 March 2016, with the authority derived from Section 333-20 of the Private Health Insurance Act 2007. The changes are made through four schedules, each addressing specific aspects of the existing Private Health Insurance (Benefit Requirements) Rules 2011, which commenced on 1 November 2011.

Key Provisions

The Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 1) primarily make changes to Schedule 4, which governs the minimum benefits payable by private health insurers for nursing-home type patients (NHTP) at public hospitals in certain states and territories, as well as at private hospitals nationally. The amendments in Schedule A are intended to adjust the minimum benefits payable per night for NHTPs, ensuring these benefits reflect the current indexation applied to the Adult Pension Basic Rate and Maximum Daily Rate of Rental Assistance. This change is crucial for maintaining the financial sustainability of private health insurance while ensuring adequate coverage for NHTPs. The obligations and requirements imposed by the Amendment Rules on private health insurers are primarily centred around adhering to the updated minimum benefit requirements set out in Schedules 4 and 5. Insurers must ensure they provide the specified benefits for NHTPs and for treatments in facilities listed in Schedule 5, where applicable. These changes necessitate that insurers review and, if necessary, adjust their coverage policies to comply with the new minimum benefits. Additionally, insurers must keep accurate records and be prepared to demonstrate compliance with the updated rules, should they be audited by the Department of Health. For breaches of the Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 1), there are potential civil and administrative penalties. While the explanatory statement does not specify the exact penalties, it is generally understood that non-compliance with the Private Health Insurance Act 2007 can lead to fines, corrective orders, or even the revocation of an insurer’s registration. These penalties are designed to enforce adherence to the legislative requirements and to protect consumers by ensuring that they receive the benefits to which they are entitled. The severity of the penalty will depend on the nature and extent of the breach, as well as any mitigating or aggravating factors.

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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.