Private Health Insurance (Benefit Requirements) Amendment Rules 2018 (No. 3)

EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Health

Private Health Insurance Act 2007

Private Health Insurance (Benefit Requirements) Amendment Rules 2018 (No. 3)

Authority

Section 333-20(1) 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 2018 (No. 3)
(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 2017 to March 2018. 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 2017 to March 2018, there was an increase of 1.9% 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 13 new MBS items (35585, 35581, 35582, 63541, 63542, 63543, 63544, 73345, 73346, 73347, 73348, 73349, and 73350).

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 and South Australia.  

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 22 May 2018, 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 2017 to
March 2018. 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 2018.

Schedule B of the Amendment Rules

MBS items 35581, 35582, 35585 are introduced for the surgical excision of graft material in symptomatic patients with graft related complications. These amendments are based on a decision made by the Therapeutic Goods Administration on 4 January 2018 to remove certain urogynaecological mesh products for the treatment of Pelvic Organ Prolapse via vaginal approach from the Australian Register of Therapeutic Goods. Consultation was undertaken by the Department of Health with relevant stakeholders including the Royal Australian and New Zealand College of Obstetricians and Gynaecologists; the National Association of Obstetricians and Gynaecologists; the Australian Medical Association; the Australian College of Rural and Remote Medicine and the Consumers Health Forum.

In the Guaranteeing Medicare – Medicare Benefits Schedule – new and amended listings 2018-19 Budget measure, the Government announced Medicare funding of multiparametric magnetic resonance imaging scans of the prostate for the diagnosis of patients suspected of having prostate cancer (63541 and 63542); and surveillance of patients with a diagnosis of lower risk prostate cancer which does not require medical intervention (63543 and 63544). This change was agreed by Government following recommendation by the Medical Services Advisory Committee (MSAC) in December 2017. As part of the MSAC process, the Department consulted with the relevant peak bodies, namely, the Urological Society of Australia and New Zealand, the Royal Australian and New Zealand College of Radiologists and the Prostate Cancer Foundation of Australia.

MBS items 73345, 73346, 73347, 73348, 73349 and 73350 are introduced to provide a legal basis for the payment of Medicare benefits for a genetic pathology test in key patient groups: prenatal cystic fibrosis; people suspected to have cystic fibrosis or cystic fibrosis transmembrane conductance regulator (CFTR) related disorders; and partners and family members of people with at least one known CFTR mutation, tested for the purpose of reproductive planning. In April 2017, the MSAC supported diagnostic testing for hereditary mutations in the CFTR gene. This policy was announced in the 2018-19 Budget Guaranteeing Medicare - Medicare Benefits Schedule - new and amended listings measure. The Royal College of Pathologists Australasia were consulted in relation to the six new items as part of the MSAC process.

The addition of MBS items 35581, 35582, 35585, 63541, 63542, 63543, 63544, 73345, 73346, 73347, 73348, 73349, 73350 were recommended by the Department’s medical advisers for inclusion into the Principal Rules.

Schedule C of the Amendment Rules

On 28 February 2018, 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 2018. The Australian Capital Territory (ACT) and South Australia (SA) wrote to the Department on
13 June 2018 and 6 June 2018 respectively seeking an increase to their NHTP minimum benefits with effect from 1 July 2018.

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 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 2018 (No.3)

Section 1 Name of Rules

Section 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2018 (No. 3) (the Amendment Rules).

Section 2 Commencement

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

Section 3 Authority

Section 3 provides that the Amendment Rules are made under item 3A of the table in section
333-20(1) 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 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: $424 to $432

- over 14 days  From: $295 to $301

Surgical patient or obstetric patient

- first 14 days  From: $394 to $401

- over 14 days  From: $295 to $301

Psychiatric patient

- first 42 days  From: $394 to $401

- 43 – 65 days  From: $341 to $347

- over 65 days  From: $295 to $301

Rehabilitation patient

- first 49 days  From: $394 to $401

- 50 – 65 days  From: $341 to $347

- over 65 days  From: $295 to $301

Other patients

- first 14 days  From: $341 to $347

- over 14 days  From: $295 to $301

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: $424 to $432

- over 14 days  From: $295 to $301

Surgical patient or obstetric patient

- first 14 days  From: $394 to $401

- over 14 days  From: $295 to $301

Psychiatric patient

- first 42 days  From: $394 to $401

- 43 – 65 days  From: $341 to $347

- over 65 days  From: $295 to $301

Rehabilitation patient

- first 49 days  From: $394 to $401

- 50 – 65 days  From: $341 to $347

- over 65 days  From: $295 to $301

Other patients

- first 14 days  From: $341 to $347

- over 14 days  From: $295 to $301

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: $424 to $432

- over 14 days  From: $295 to $301

Surgical patient or obstetric patient

- first 14 days  From: $394 to $401

- over 14 days  From: $295 to $301

Psychiatric patient

- first 42 days  From: $394 to $401

- 43 – 65 days  From: $341 to $347

- over 65 days  From: $295 to $301

Rehabilitation patient

- first 49 days  From: $394 to $401

- 50 – 65 days  From: $341 to $347

- over 65 days  From: $295 to $301

Other patients

- first 14 days  From: $341 to $347

- over 14 days  From: $295 to $301

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: $350 to $357;
•    NSW    From: $350 to $357;
•    Northern Territory From: $350 to $357;
•    Queensland   From: $359 to $366;
•    South Australia  From: $350 to $357; and
•    Western Australia From: $350 to $357.

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 4 Advanced Surgical Patient (3)

Item 1 amends Schedule 1, Part 2 Type A procedures, Clause 4 Advanced Surgical Patient, subclause 3 of the Principal Rules by inserting one MBS item (35585).

Item 2 - Schedule 1, Part 2 Type A procedures, Clause 6 Surgical patient (3)

Item 2 amends Schedule 1, Part 2 Type A procedures, Clause 6 Surgical patient, subclause 3 of the Principal Rules by inserting two MBS items (35581 and 35582).

Item 3 - Schedule 3, Part 3 – Type C Procedures, Clause 8 Interpretation, Category 5 – Diagnostic Imaging Services, I5

Item 3 amends Schedule 3, Part 3 – Type C Procedures, Clause 8 Interpretation, Category 5 – Diagnostic Imaging Services, subclause I5 of the Principal Rules by inserting four MBS items (63541, 63542, 63543 and 63544).

Item 4 - Schedule 3, Part 3 – Type C Procedures, Clause 8 Interpretation, Category 6 – Pathology Services, P7

Item 4 amends Schedule 3, Part 3 – Type C Procedures, Clause 8 Interpretation, Category 6 – Pathology Services, subclause P7of the Principal Rules by inserting six MBS items (73345, 73346, 73347, 73348, 73349 and 73350).

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 Territory in clause 6, Table 1:

•    Australian Capital Territory   From $121.95 to $125.00
•    South Australia     From $118.00 to $120.00

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

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Private Health Insurance (Benefit Requirements) Amendment Rules 2018 (No. 3)

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Private Health Insurance (Benefit Requirements) Amendment Rules 2018 (No. 3) amend Schedules 1, 2, 3, 4 and 5 of the Private Health Insurance (Benefit Requirements) Rules 2011 to update the listing of Medicare Benefits Schedule items; to increase hospital accommodation minimum benefits; to update the minimum benefits for Nursing-Home Type Patients at public hospitals in some States and Territories; and to update the reference to the list of Second Tier eligible facilities.

Human rights implications

This legislative instrument engages Articles 2 and 12 of the International Covenant on Economic, Social and Cultural Rights by assisting with the progressive realisation by all appropriate means of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

Private health insurance regulation assists with the advancement of these human rights by improving the governing framework for private health insurance in the interests of consumers.  Private health insurance regulation aims to encourage insurers and providers of private health goods and services to provide better value for money to consumers, to improve information provided to consumers of private health services to allow consumers to make more informed choices when purchasing services and requires insurers not to differentiate the premiums they charge according to individual health characteristics such as poor health. 

Conclusion

This legislative instrument is compatible with human rights because it advances the protection of human rights.

Susan Azmi

Acting Assistant Secretary

Private Health Insurance Branch

Medical Benefits Division

Department of Health