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. 6)
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.
Purpose
The purpose of the Private Health Insurance (Benefit Requirements) Amendment Rules 2018 (No. 6) (the Amendment Rules) is to amend the Private Health Insurance (Benefit Requirements) Rules 2011 (the Principal Rules) as a consequence of amendments implemented by specified instruments, including those made under the Health Insurance Act 1973 as discussed below.
The Amendment Rules amend Schedules 1 and 3 of the Principal Rules by removing 30 redundant Medicare Benefits Schedule (MBS) item numbers.
The Amendment Rules also amend Schedule 3 of the Principal Rules by adding two new MBS item numbers (72814 and 73344). These two items were included in the following Determinations which, respectively, took effect from 1 November 2018 and will take effect from 1 January 2019:
- Health Insurance (Section 3C Co-Dependent Pathology Services) Amendment Determination (No. 2) 2018; and
- Health Insurance (Section 3C Co-Dependent Pathology Services) Amendment Determination (No. 3) 2018.
These Amendment Rules are the first opportunity to add MBS item 72814 to the Principal Rules as the relevant Section 3C Determination was made after the Private Health Insurance (Benefit Requirements) Amendment Rules 2018 (No. 5) was registered on the Federal Register of Legislation.
The Amendment Rules also amend to Schedule 5 of the Principal Rules 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. This will ensure that it becomes the effective list on 1 January 2019 under the transitional arrangements in the Private Health Insurance (Reforms) Amendment Rules 2018.
Details of the Amendment Rules are set out in the Attachment.
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 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 (NHTP) (Schedule 4) and second tier default benefits (Schedule 5).
Schedule 1 of the Principal Rules 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 item numbers 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.
Schedule 5 of the Principal Rules requires a 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 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.
Consultation
No consultation was specifically undertaken for the purpose of making the Amendment Rules because the amendments are largely administrative in nature. The Amendment Rules implement changes to reflect updates made to the MBS by the instruments outlined in the Purpose section.
The above instruments listed in the Purpose section implement decisions agreed by Government following recommendations of the Medical Services Advisory Committee (MSAC). The changes in the determinations were released for public comment prior to finalisation of the recommendations to Government as below.
As part of the MSAC process, consultation was undertaken with professional bodies, consumer groups, the public and clinical experts for applications put forward for consideration by the Committee.
The Department notified the private health insurance sector about these MBS item changes prior to the implementation date of 1 January 2019.
The Department received advice from the insurance industry regarding redundant MBS items in the Principal Rules. After a review of the Principal Rules, 30 MBS item numbers have been removed as they are no longer listed on the MBS.
The Amendment Rules commence on the day after registration.
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. 6)
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. 6) (the Amendment Rules).
Section 2 Commencement
Section 2 provides that the Amendment Rules are to commence on the day after registration.
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 Amendment of Private Health Insurance (Benefit Requirements) Rules 2011
Section 4 provides that the Schedule of the Amendment Rules amend the Private Health Insurance (Benefit Requirements) Rules 2011 (the Principal Rules).
Schedule 1 – Amendments
Items 1 to 13 - Schedule 1, subclause 6(3)
Items 1 to 13 omit 13 Medicare Benefit Schedule (MBS) items (30493, 31260, 31270, 31275, 31295, 31300, 31305, 31310, 31315, 31320, 31325, 31330, 31335) from subclause 6(3) of Schedule 1 to the Principal Rules.
Items 14 to 15 - Schedule 3, subclause 5(1)
Items 14 to 15 omit MBS items 35687 and 41819 from subclause 5(1) of Schedule 3 to the Principal Rules.
Items 16 to 17 - Schedule 3, clause 8 (paragraphs under the heading “Category 1 – Attendances”)
Items 16 to 17 omit five MBS items (2630, 5906, 5908, 5910, 5912) from paragraphs under the heading “Category 1 – Attendances” of clause 8 of Schedule 3 to Principal Rules.
Items 18 to 26 - Schedule 3, clause 8 (paragraphs under the heading “Category 5 – Diagnostic Imaging Services”)
Items 18 to 26 omit nine MBS items (61544, 61556, 61568, 63525, 63526, 63527, 63528, 63529, 63530) from paragraphs under the heading “Category 5 – Diagnostic Imaging Services” of clause 8 of Schedule 3 to the Principal Rules.
Items 27 to 29 - Schedule 3, clause 8 (paragraphs under the heading “Category 6 – Pathology services”)
Items 27 to 29 omit one MBS item (73330) from and insert two new MBS items (72814, 73344) to paragraphs under the heading “Category 6 – Pathology services” of clause 8 of Schedule 1 to the Principal Rules.
MBS item 72814 was added to the MBS by the Health Insurance (Section 3C Co-Dependent Pathology Services) Amendment Determination (No. 2) 2018, which commenced on 1 November 2018.
MBS item 73344 was added to the MBS by the Health Insurance (Section 3C Co-Dependent Pathology Services) Amendment Determination (No. 3) 2018, which commences on 1 January 2019.
Item 30 – Schedule 5 - Second-tier default benefits, Clause 4 Facilities, subclause (1)
Item 30 amends the Principal Rules by updating 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-privatehealth-providers-circulars.htm.