Private Health Insurance (Benefit Requirements) Amendment Rules 2017 (No. 2)

Administered by Department of Health, Disability and Ageing

Legislation au F2017L00242 Rules Not in force Legislative Instrument

Legislation content

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. 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 2017 (No. 2) (the Amendment Rules) amends schedules 4 and 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 amendment 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 at private hospitals nationally.

 

Schedule B of the Amendment Rules

Schedule B of the Amendment Rules amends Schedule 5 of the Principal Rules. 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 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 (Pension and Rental Assistance Rates).  The latest indexation of these rates takes effect on 20 March 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.

 

Consultation

Schedule A of the Amendment Rules - Items 1 and 2

On 2 March 2017, 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 and Tasmania have advised that they will increase the NHTP accommodation rates in their public hospitals from 20 March 2017. The Australian Capital Territory, the Northern Territory, Western Australia, Victoria, Queensland, and South Australia have advised that they are not increasing their 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 March 2017.

 

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. 2)

 

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. 2) (the Amendment Rules).

 

Section 2 Commencement

 

Section 2 provides that the Amendment Rules are to commence on 20 March 2017.

 

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 Schedule A 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:

 

  •     Tasmania $139.30 to $141.10
  •     New South Wales $119.65 to $121.80

 

 

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

 

Item 2 of Schedule A 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 $53.05 to $52.30.

 

Schedule B – Amendments

 

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

 

Item 1 of Schedule B 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 2017 (No. 2) were introduced to address the need for adjustments in the minimum benefits payable by private health insurers for nursing-home type patients (NHTP) in both public and private hospitals, as well as to update the list of facilities eligible for second-tier default benefits. Enacted under Section 333-20 of the Private Health Insurance Act 2007, these amendment rules were formulated to ensure that the benefits align with the latest indexation of the Pension and Rental Assistance Rates. The rules aim to maintain equitable and updated coverage standards for hospital treatments, reflecting changes in economic conditions and healthcare costs. The Second Tier Advisory Committee was consulted for updates to the list of facilities, ensuring the continued relevance and fairness of second-tier benefits. These rules, which commenced on 20 March 2017, are designed to uphold the policy objective of providing a balanced and responsive private health insurance framework in Australia.

Scope and Application

The Private Health Insurance (Benefit Requirements) Amendment Rules 2017 (No. 2) are a legislative instrument made under Section 333-20 of the Private Health Insurance Act 2007, which empowers the Minister to establish rules concerning matters required or permitted by Part 3-3 of the Act. The Amendment Rules, which commenced on 20 March 2017, modify the Private Health Insurance (Benefit Requirements) Rules 2011, which established minimum benefit requirements for psychiatric, rehabilitation, palliative care, and other hospital treatments. Specifically, the Amendment Rules adjust the minimum benefits payable by private health insurers for nursing-home type patients (NHTP) in both public and private hospitals. In public hospitals, the changes affect the rates for Tasmania and New South Wales, while in private hospitals, the rate is decreased nationally. Additionally, the Amendment Rules update the list of facilities eligible for second-tier default benefits, reflecting the latest recommendations from the Second Tier Advisory Committee. These amendments are designed to ensure that the benefit requirements remain aligned with current indexation rates and committee approvals.

Key Provisions

The Private Health Insurance (Benefit Requirements) Amendment Rules 2017 (No. 2) primarily amend Schedules 4 and 5 of the Private Health Insurance (Benefit Requirements) Rules 2011. Schedule A of the Amendment Rules modifies Schedule 4, specifically altering the minimum benefits payable per night for nursing-home type patients (NHTP) at public hospitals in certain states and at private hospitals nationally. For example, in Tasmania, the minimum benefit per night for NHTPs in public hospitals increased from $139.30 to $141.10, while in New South Wales, it increased from $119.65 to $121.80. Conversely, the minimum benefit for NHTPs in private hospitals nationally decreased from $53.05 to $52.30. Schedule B amends Schedule 5, updating the reference to the Second Tier Advisory Committee-approved list of facilities eligible for second-tier default benefits. The Amendment Rules impose specific obligations on private health insurers. For instance, insurers must now pay the updated minimum benefits per night for NHTPs in public hospitals as specified in Schedule 4. Similarly, they must adhere to the reduced minimum benefits for NHTPs in private hospitals. Additionally, insurers must ensure compliance with the updated list of facilities eligible for second-tier default benefits, as detailed in Schedule 5. These obligations are essential for maintaining the integrity of the private health insurance system and ensuring that insured patients receive the mandated level of care. There are no explicit offences, penalties, or civil/criminal consequences outlined in the Amendment Rules themselves. However, failure to comply with the updated minimum benefit requirements and the Second Tier Advisory Committee-approved list may result in regulatory scrutiny or enforcement actions by the relevant authorities under the overarching Private Health Insurance Act 2007. Penalties for non-compliance with the Act can include fines and other sanctions, as stipulated in the Act. Ensuring adherence to these amendments is crucial for private health insurers to avoid potential legal repercussions.

Legal classification tags

Area of Law
Health Law
Insurance Law
Instrument
Regulation
Concepts
Definitions & Interpretation
Reporting & Disclosure Obligations
Compliance Obligations
Repeal & Amendment
Catchwords
Minimum benefit requirements

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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.