Private Health Insurance (Benefit Requirements) Amendment Rules 2017 (No. 10)

Administered by Department of Health, Disability and Ageing

Legislation au F2017L01603 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 2017 (No. 10)

 

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 2017 (No. 10) (the Amendment Rules) amends Schedule 5 of the Private Health Insurance (Benefit Requirements) Rules 2011 (the Principal Rules) which commenced on 1 November 2011.

 

Purpose

The purpose of the amendment 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 took effect on 20 September 2017.

 

Schedule 5 of the Principal Rules requires a private 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 private 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.

 

Documents Incorporated by Reference

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/internet/main/publishing.nsf/Content/health-phicirculars2017-index1

 

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 1 January 2018.

 

The Amendment Rules are a legislative instrument for the purposes of the
Legislation Act 2003.


ATTACHMENT

 

DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2017 (No. 10)

 

Section 1 Name of Rules

 

Section 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2017 (No. 10) (the Amendment Rules).

 

Section 2 Commencement

 

Section 2 provides that the Amendment Rules are to commence on 1 January 2018.

 

Section 3 Amendment of Private Health Insurance (Benefit Requirements) Rules 2011

 

Section 3 provides that the Schedule of the Amendment Rules amend the Private Health Insurance (Benefit Requirements) Rules 2011 (the Principal Rules) which commenced on

1 November 2011.

 

Schedule – Amendments

 

Item 1 – Schedule 5 - Second-tier default benefits, Clause 4 Facilities, subclause (1)  

 

Item 1 of Schedule 5 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/internet/main/publishing.nsf/Content/health-phicirculars2017-index1

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overview

The Private Health Insurance (Benefit Requirements) Amendment Rules 2017 (No. 10) were enacted to update the reference to the most recent list of facilities eligible for second-tier default benefits, as approved by the Second Tier Advisory Committee. These rules amend the Private Health Insurance (Benefit Requirements) Rules 2011, which were introduced to establish the minimum benefit requirements for psychiatric, rehabilitation, and palliative care, as well as other hospital treatments. The Minister for Health issued the Amendment Rules under the authority of section 333-20 of the Private Health Insurance Act 2007, with the policy objective of ensuring that the list of facilities for second-tier default benefits remains current and reflective of the latest approvals by the Second Tier Advisory Committee. These amendments aim to maintain the integrity and effectiveness of the benefit requirements in private health insurance. The Amendment Rules came into effect on 1 January 2018.

Scope and Application

The Private Health Insurance (Benefit Requirements) Amendment Rules 2017 (No. 10) amends Schedule 5 of the Private Health Insurance (Benefit Requirements) Rules 2011, which commenced on 1 November 2011, to update the list of facilities eligible for second-tier default benefits. The amendment reflects the latest list approved by the Second Tier Advisory Committee, which includes equal representation from both private hospital and private health insurance sectors. The list of facilities eligible for second-tier default benefits is published on the Department of Health's website and is subject to change based on the committee's assessment. The purpose of this amendment is to ensure that private health insurers comply with the minimum benefit requirements for hospital treatment provided in private hospital facilities that are specified in Schedule 5. The amendment rules commence on 1 January 2018 and are a legislative instrument for the purposes of the Legislation Act 2003.

Key Provisions

The Private Health Insurance (Benefit Requirements) Amendment Rules 2017 (No. 10) primarily amend Schedule 5 of the Private Health Insurance (Benefit Requirements) Rules 2011, which deals with second-tier default benefits (Section 3). This amendment is significant as it updates the list of facilities eligible for these benefits, ensuring that private health insurers are aware of which facilities are covered under the second-tier default benefits scheme. The rules came into effect on 1 January 2018, as stipulated in Section 2. The Amendment Rules impose specific obligations on private health insurers, primarily concerning the payment of second-tier default benefits. Insurers are required to pay these benefits for most episodes of hospital treatment provided in private hospital facilities listed in Schedule 5, unless they have a negotiated agreement with the hospital (Schedule 5, Clause 4). This ensures that insured patients receive a higher minimum level of benefit when treatment is provided in these specified facilities, as outlined in the rules. Breaching the provisions of the Amendment Rules can lead to significant consequences. While the explanatory statement does not explicitly outline specific penalties for non-compliance, it is reasonable to infer that any breach of the Private Health Insurance Act 2007 or its rules could potentially result in civil or criminal penalties. The Act itself may impose fines or other penalties for non-compliance, although the exact penalties would depend on the nature and severity of the breach. It is advisable for private health insurers to adhere strictly to the requirements set forth in these rules to avoid any legal repercussions.

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