Private Health Insurance (Benefit Requirements) Amendment Rules 2017 (No. 5)

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. 5)

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. 5)
(the Amendment Rules) consist of amendments which amend Schedules 1 to 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 2016 to March 2017. 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 2016 to March 2017, there was an increase of 2.1% in the Australian CPI. 

Schedule B of the Amendments Rules

The purpose of Schedule B to the Amendment Rules is to amend Schedule 1 and 3 of the Principal Rules to add one new MBS number (44376) and amend the category of one existing MBS number (35730).

Schedule C of the Amendment Rules

The purpose of Schedule C 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 Australian Capital Territory.  

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 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 categorises MBS item numbers for day admission comprising ‘Band 1’, ‘non-band specific’, and requirements for Band 2,
Band 3, and Band 4 benefits.

Details

Details of the Amendment Rules are set out in the Attachment.

Consultation

Schedule A of the Amendment Rules

On 11 May 2017, 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 2016 to March 2017. All states and territories responded to the Department confirming the rates that would apply in their jurisdictions in respect of public shared ward accommodation for private patients from 1 July 2017.

Schedule B of the Amendment Rules

MBS items 35730 and 44376 have been recommended by the Department’s medical advisors for inclusion into the Principal Rules. No further consultation was undertaken because the amendments are minor in nature and do not affect existing arrangements.

Schedule C of the Amendment Rules

On 3 March 2017, the Department consulted with states and territories and invited them to advise of their intention to adjust NHTP contribution and accommodation rates in their jurisdiction in line with twice annual increases in the Pension and Rental Assistance Rates to the Adult Basic Pension Rate and Maximum Daily Rate of Rental Assistance. New South Wales and Tasmania increased the NHTP contribution rates in their public hospitals from 20 March 2017. The ACT elected to update their rates on 1 July 2017. The ACT did not increase their minimum benefit rates in March 2017. Subsequently the ACT wrote to the Department on 17 May 2017 seeking an increase to their NHTP minimum benefits for effect from 1 July 2017.

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 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.5)

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. 5) (the Amendment Rules).

Section 2 Commencement

Section 2 provides that the Amendment Rules are to commence on 1 July 2017.

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. 

Schedule – Amendments

The Schedule – Amendments 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, Part 1 – General, 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: $415 to $424

- over 14 days  From: $289 to $295

Surgical patient or obstetric patient

- first 14 days  From: $386 to $394

- over 14 days  From: $289 to $295

Psychiatric patient

- first 42 days  From: $386 to $394

- 43 – 65 days  From: $334 to $341

- over 65 days  From: $289 to $295

Rehabilitation patient

- first 49 days  From: $386 to $394

- 50 – 65 days  From: $334 to $341

- over 65 days  From: $289 to $295

Other patients

- first 14 days  From: $334 to $341

- over 14 days  From: $289 to $295

Item 2 – Schedule 1, Part 1 – General, 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: $415 to $424

- over 14 days  From: $289 to $295

Surgical patient or obstetric patient

- first 14 days  From: $386 to $394

- over 14 days  From: $289 to $295

Psychiatric patient

- first 42 days  From: $386 to $394

- 43 – 65 days  From: $334 to $341

- over 65 days  From: $289 to $295

Rehabilitation patient

- first 49 days  From: $386 to $394

- 50 – 65 days  From: $334 to $341

- over 65 days  From: $289 to $295

Other patients

- first 14 days  From: $334 to $341

- over 14 days  From: $289 to $295

Item 3 – Schedule 1, Part 1 – General, 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: $415 to $424

- over 14 days  From: $289 to $295

Surgical patient or obstetric patient

- first 14 days  From: $386 to $394

- over 14 days  From: $289 to $295

Psychiatric patient

- first 42 days  From: $386 to $394

- 43 – 65 days  From: $334 to $341

- over 65 days  From: $289 to $295

Rehabilitation patient

- first 49 days  From: $386 to $394

- 50 – 65 days  From: $334 to $341

- over 65 days  From: $289 to $295

Other patients

- first 14 days  From: $334 to $341

- over 14 days  From: $289 to $295

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: $343 to $350;
• NSW    From: $343 to $350;
• Northern Territory From: $339 to $350;
• Queensland   From: $352 to $359;
• South Australia  From: $343 to $350; and
• Western Australia From: $343 to $350.

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 1, Part 2 Type A procedures, Clause 6 Surgical patient, Subclause (3)

Item 1 amends Schedule 1, Part 2 Type A procedures, Clause 6 Surgical patient, Subclause (3) of the Principal Rules by deleting one MBS item number (35730).

Item 2 - Schedule 3, Part 2 – Type B Procedures, Clause 5 Non-band specific Type B day procedures, Subclause (1)

Item 2 amends Schedule 3, Part 2 – Type B Procedures, Clause 5 Non-band specific Type B day procedures, (1) of the Principal Rules by inserting two MBS item numbers (35730 and 44376).

Schedule C – 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:

• Australian Capital Territory   From $119.55 to $121.95

Schedule D – Amendments

Item 1 – Schedule 5, Clause 4 Facilities, Paragraph (1)

Item 1 of Schedule D 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 www.health.gov.au