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. 4)
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 2018 (No. 4) (the Amendment Rules) amends Schedules 4 and 5 of the Private Health Insurance (Benefit Requirements) Rules 2011 (the Principal Rules).
Purpose
Amendments to Schedule 4 of the Principal Rules
The purpose of the amendment to Schedule 4 of the Principal Rules is to update 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. The changes reflect the indexation applied to Adult Pension Basic Rate and Maximum Daily Rate of Rental Assistance.
Amendments to 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 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 September 2018.
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.
Details of the Amendment Rules are set out in the Attachment.
Consultation
Amendments to Schedule 4 of the Principal Rules
On 23 August 2018, States and Territories were asked whether they would increase the NHTP contribution and accommodation rates in their jurisdiction in line with increases in the Pension and Rental Assistance Rates which take effect on 20 September 2018. New South Wales, Queensland, Tasmania and Victoria have advised that they will increase the NHTP accommodation rates in their public hospitals from 20 September 2018. The Australian Capital Territory, the Northern Territory, South Australia and Western Australia have advised they are not increasing their accommodation rates at this time.
No specific consultation was undertaken in relation to Schedule 1, item 2 of the Amendment Rules regarding private hospitals because the change is machinery in nature and linked to the twice annual Pension and Rental Assistance Rates increase. The change does not substantially alter existing arrangements.
Amendments to Schedule 5 of the Principal 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 September 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. 4)
Section 1 Name
Section 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2018 (No.4) (the Amendment Rules).
Section 2 Commencement
Section 2 provides that the Amendment Rules are to commence on 20 September 2018.
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 Schedules
Section 4 provides that each instrument that is specified in a Schedule to the instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the instrument has effect according to its terms.
Schedule 1 – Amendments
Item 1 – Schedule 4, section 6, table 1
Item 1 of Schedule 1 provides that the Private Health Insurance (Benefit Requirements) Rules 2011(the Principal Rules) are amended by updating the minimum benefit payable per night for nursing-home type patients in public hospitals in the certain States as follows:
- New South Wales $124.50 to $127.10
- Queensland $125.00 to $129.50
- Tasmania $144.10 to $145.55
- Victoria $134.00 to $137.00
Item 2 – Schedule 4, section 6, table 2
Item 2 of Schedule 1 provides that the Principal Rules are amended by updating the minimum benefit payable per night from $51.05 to $50.45 for nursing-home type patients in private hospitals.
Item 3 – Schedule 5, subsection 4(1)
Item 3 of Schedule 1 provides that the Principal Rules are amended by referencing 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/.