EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
Private Health Insurance Act 2007
Private Health Insurance (Benefit Requirements) Rules 2009 (No.1)
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 in order to carry out or give effect to Part 3-3 of the Act.
The Private Health Insurance (Benefit Requirements) Rules 2008 (No.2) (as amended) provide for the minimum benefit requirements for psychiatric, rehabilitation and palliative care and other hospital treatment. Schedules 1 to 5 to the 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).
The Private Health Insurance (Benefit Requirements) Rules 2009 (No.1) (the Rules) revoke and remake the Private Health Insurance (Benefit Requirements) Rules 2008 (No.2) (as amended), and commence on 1 July 2009 or, if registered after 1 July 2009, on the day after registration.
The Rules make changes to Schedule 1, 2, 3 and 4.
Schedule 1 sets out minimum benefit levels in regard to overnight accommodation at private hospitals in all States and Territories, and overnight shared accommodation at public hospitals in Victoria and Tasmania. Schedule 2 sets out minimum benefit levels in regard to overnight shared accommodation at public hospitals in the remaining States and Territories. Schedule 3 sets out minimum benefit levels in regard to same day accommodation for private hospitals and public hospitals in all States and Territories. These accommodation components are subject to annual review and are amended with reference to Consumer Price Index (CPI) movements from March to March each year (with the exception of Queensland public hospitals). The Queensland public hospital increase is based on the December to December Brisbane CPI.
In the year from March 2008 to March 2009, there was an increase of 2.5% in the CPI. For the December 2007 to December 2008 Brisbane CPI, there was an increase of 4.3%. The Rules make changes to the minimum benefit levels in Schedule 1, 2 and 3 to reflect these increases in the CPI.
Additional changes to Schedule 3 are made to insert seven new Medicare Benefits Schedule (MBS) item numbers in Part 3 - Type C Procedures. Type C procedures are those procedures for which hospital treatment is not normally required. Minimum benefits for either overnight accommodation or day-only accommodation are payable for patients receiving certified Type C procedures where the certification requirements in the Rules have been satisfied.
Schedule 4 sets out the minimum benefit payable for patients who are classified as nursing-home type patients (NHTP) receiving hospital treatment at a hospital.
Schedule 4 is changed by increasing the minimum benefit for hospital treatment for NHTP patients at public hospitals in Australian Capital Territory from $93.15 to $96.40. This change reflects the bi-annual pension increase that commenced on 20 March 2009.
Schedule 5 requires a private health insurer to pay second-tier default benefits for most episodes of hospital treatment provided at 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 benefit level (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 Rules.
Details of the changes are set out in the Attachment.
Consultation
Changes to the MBS resulted from reviews by the Medicare Benefit Consultative Committee (“MBCC”) and the Medicare Services Advisory Committee (“MSAC”). The MBCC is an advisory committee established by agreement between the Minister for Health and Ageing and the Australian Medical Association. MBCC’s major function is to review particular services or groups of services in the MBS, including medical services and under what circumstances public funding, including listing on the MBS, should be supported.
Changes made to Schedules 1, 2, and 3 of the Rules reflect the increase in minimum benefits due to the CPI change from March 2008 to March 2009. The increases to the minimum benefits in public hospitals were made with the agreement of the relevant State/Territory health authority. Queensland advised its increase is 4.3% due to the Brisbane CPI change from December 2007 to December 2008, on which its rates have been based.
The change made to Schedule 4 is related to minimum benefits for NHTPs in public hospitals in ACT. This increase to the minimum benefit was made with the agreement of the ACT Department of Health.
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT OF HEALTH AND AGEING
JUNE 2009
3
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) RULES 2009 (No.1)
Part 1 Preliminary
- Name of Rules
Rule 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Rules 2009 (No.1) (the Rules).
2. Commencement and Revocation
Rule 2 provides that the Rules are to commence on 1 July 2009 or, if registered on a later date, the day after registration.
Rules 2 further provides that the Rules revoke the Private Health Insurance (Benefit Requirements) Rules 2008 (No.2) (as amended).
3. Definitions
Rule 3 defines specific terms used in the Rules.
Part 2 Minimum benefit requirements
4. Psychiatric care, rehabilitation and palliative care
Subrule 4(1) provides that the benefit payable under a policy for any part of hospital treatment that is psychiatric care, rehabilitation or palliative care provided in a hospital with no medicare benefit payable for that part of the treatment, must be at least the amount set out, or worked out using the method set out, in Schedules 1, 2, 3, or 5 for that type of treatment.
Subrule 4(2) provides that despite subrule (1), the minimum benefit for the treatment may be reduced by the amount of any co-payment or excess that is required to be paid under the insured person’s policy in respect of that treatment.
5. Other hospital treatments
Subrule 5(1) provides that if a policy covers any type of hospital treatment provided in a hospital, other than treatment referred to in rule 4, being treatment specified in either of Schedules 1, 2, 3, 4, or 5, it must provide at least the minimum benefit set out, or worked out using the method set out, in Schedules 1, 2, 3, 4, or 5 for that type of hospital treatment.
Subrule 5(2) provides that despite subrule (1), the minimum benefit for the treatment may be reduced by the amount of any co-payment or excess that is required to be paid under the insured person’s policy in respect of that treatment.
Schedule 1 – Overnight accommodation: private hospitals in all States/Territories and shared ward accommodation at public hospitals in Victoria and Tasmania
Part 1 - General
1. Circumstances
Clause 1 provides that Schedule 1 applies, where a policy covers a type of hospital treatment, and the treatment is provided to a patient who is not a nursing-home type patient, and the treatment:
- is provided to a patient at a private hospital or as shared ward accommodation at a public hospital in Victoria or Tasmania; and
- is provided for the purpose of permitting the provision to the patient of hospital treatment that is:
(i) a Type A procedure; and
(ii) for a period that includes part of an overnight stay.
Type A procedures are procedures specified in clauses 3 to 9, Part 2, Schedule 1 of the Rules. A Type A procedure also includes a certified Type B procedure or a certified overnight Type C procedure: definition of ‘Type A procedure’ in Rule 3 of Part 1 of the Rules.
2. Minimum benefit
Clause 2(1) provides that the minimum benefit for hospital treatment provided in the circumstances specified in this Schedule is the amount set out in Table 1, 2, or 3 in Schedule 1 for that hospital treatment (as applicable).
Clause 2(2) provides that days forming part of a continuous period of hospitalisation are to be counted when counting the days referred to in the tables in Schedule 1. Tables 1, 2, and 3 in Schedule 1 all refer to numbers of days as part of the method of working out the minimum benefit payable per night.
The Rules increase the Schedule 1 minimum benefit for hospital treatment to reflect March 2008 to March 2009 CPI movement, as specified in Table 1- Accommodation at private hospitals in all States/Territories; Table 2- Victoria: shared ward accommodation at a public hospital; and Table 3- Tasmania: shared ward accommodation at a public hospital.
Part 2 Type A procedures
3. Interpretation
Clause 3 provides that a Type A procedure is a procedure specified in clauses 3 to 9, of this Part 2, Schedule 1 of the Rules, provided to a patient in one of the categories of patients in clauses 4 to 9, Part 2, Schedule 1 of the Rules.
4. Advanced surgical patient
Clause 4(1) provides that in Schedule 1 the term advanced surgical patient has the meaning given by clause 4.
Clause 4(2) provides the situations when a patient is to be taken to be an advanced surgical patient upon admission to a hospital.
Clause 4(3) provides the item numbers in the MBS for the purpose of clause 4, but indicates that a listing in clause 4(3) only applies where an item has a fee in the MBS greater than $788.01.
5. Obstetric patient
Clause 5(1) provides that in Schedule 1 the term obstetric patient has the meaning given by clause 5.
Clause 5(2) provides the situations when a patient is taken to be an obstetric patient during an admission to a hospital.
Clause 5(3) provides that the item numbers specified in clause 5 are the item numbers in the general medical services table.
6. Surgical patient
Clause 6(1) provides that in Schedule 1 the term surgical patient has the meaning given by clause 6.
Clause 6(2) provides the situations when a patient is taken to be a surgical patient during an admission to a hospital.
Clause 6(3) provides the item numbers in the MBS for the purpose of clause 6, but indicates that a listing in clause 6(3) only applies where an item has a fee in the MBS within the range of $234.65 to $788.01.
7. Psychiatric patient
Clause 7 provides that in Schedule 1 the term psychiatric patient is deemed to be a patient admitted to a hospital for the purpose of undertaking a specific psychiatric treatment program, subject to approval by the insurer.
The Note to this clause provides that if a patient is receiving psychiatric treatment that is not under a specific psychiatric treatment program, the patient is taken to be in the category of ‘other patient’.
8. Rehabilitation patient
Clause 8 provides that in Schedule 1 the term rehabilitation patient is deemed to be a patient admitted to a hospital for the purpose of undertaking a specific rehabilitation treatment program, subject to approval by the insurer.
The Note to this clause provides that if a patient is receiving rehabilitation treatment that is not under a specific rehabilitation treatment program, the patient is taken to be in the category of ‘other patient’.
9. Other patient
Clause 9 provides that in Schedule 1 the term other patient is deemed to be a patient at a hospital who is receiving any treatment that involves part of an overnight stay at a hospital, who is not an advanced surgical patient, surgical patient, obstetric patient, psychiatric patient, or rehabilitation patient.
The Note to this clause provides that a patient receiving hospital treatment that is palliative care as described in item 1 of the table in subsection 72-1(2) of the Act is deemed to be in the category of ‘other patient’.
Part 3 Certified Type B procedures and certified overnight Type C procedures
10. Certified Type B procedures
Clause 10(1) provides that minimum benefits for overnight accommodation provided for in Schedule 1 are payable for patients receiving a Type B procedure only if certification under clause 10(2) is provided.
Clause 10(2) provides the requirements which must be satisfied in order for a Type B procedure to receive certification for hospital treatment for a period that includes part of an overnight stay at a hospital.
Type B procedures are procedures specified in clauses 3 to 7 of Schedule 3.
11. Certified overnight Type C procedures
Clause 11(1) provides that minimum benefits for overnight accommodation provided for in Schedule 1 are payable for patients receiving a certified Type C procedure only if certification under clause 11(2) is also provided.
Clause 11(2) provides the requirements which must be satisfied for a certified Type C procedure to receive certification for hospital treatment for a period that includes part of an overnight stay at a hospital.
Type C procedures are procedures specified in clause 8 of Schedule 3. Certified Type C procedures are Type C procedures certified in accordance with clause 7 of Schedule 3.
Schedule 2 – Overnight accommodation: shared ward accommodation at public hospitals in the ACT, NSW, Northern Territory, Queensland, South Australia and Western Australia.
1. Circumstances
Clause 1 provides that Schedule 2 applies, where a policy covers a type of hospital treatment, and the treatment:
- is provided to a patient as shared ward accommodation at a public hospital in the ACT, NSW, Northern Territory, Queensland, South Australia, or Western Australia; and
- is provided to a patient who is not a nursing-home type patient; and
- is provided for the purpose of permitting the provision to the patient of hospital treatment that is:
(i) a Type A procedure; and
(ii) for a period that includes part of an overnight stay at a hospital.
Type A procedures are procedures specified in clauses 3 to 9, Part 2, Schedule 1 of the Rules. A Type A procedure also includes a certified Type B procedure or a certified overnight Type C procedure: definition of ‘Type A procedure’ in rule 3 of Part 1 of the Rules.
2. Minimum benefit
Clause 2(1) provides that the minimum benefit for hospital treatment provided in the circumstances specified in clause 1 of Schedule 2 is the amount set out in the table in Schedule 2.
The Rules increase the Schedule 2 minimum benefit for overnight shared ward accommodation in public hospitals in the ACT, NSW, Northern Territory, South Australia and Western Australia to reflect the March 2008 to March 2009 CPI movement. The minimum benefit for overnight shared ward accommodation in Queensland public hospitals is increased to reflect the December 2007 to December 2008 Brisbane CPI movement.
Schedule 3 – Same-day accommodation: hospitals in all States/Territories
Part 1 - General
1. Circumstances
Clause 1 provides that Schedule 3 applies, where a policy covers a type of hospital treatment, and the treatment:
- is provided to a patient at a hospital; and
- is a Type B procedure; and
- does not include part of an overnight stay at a hospital.
Type B procedures are procedures specified in clauses 3 to 7 of Schedule 3. A Type B procedure also includes a certified Type C procedure: definition of ‘Type B procedure’ in Rule 3 of Part 1 of the Rules.
2. Minimum benefit
Clause 2(1) provides that the minimum benefit for hospital treatment provided in the circumstances specified in clause 1 of Schedule 3 is the amount set out in Table 1 or 2 of clause 2, Schedule 3.
Clause 2(2) provides for the meaning of references to ‘Bands’ in Tables 1 or 2 of clause 2, Schedule 3 (as applicable).
The Rules increase the minimum benefits for same day accommodation to reflect the March 2008 to March 2009 CPI movement for all public hospitals (except Queensland public hospitals) as specified in Table 1 and for private hospitals as specified in Table 2. Clause 2 also increases the minimum benefit in Queensland public hospitals for same day accommodation to reflect December 2007 to December 2008 Brisbane CPI movement as specified in Table 1.
Part 2 – Type B procedures
3. Interpretation
Clause 3 provides that a Type B procedure is a procedure specified as a Band 1, 2, 3, or 4 as described in clauses 3 to 7, Part 2, Schedule 3.
Types of hospital treatment are classified into four specific bands based on the type of procedure and factors such as the type of anaesthetic used and theatre time.
4. Band 1
Clause 4 provides that for the purpose of the tables in clause 2 of Schedule 3, Band 1 treatment has the meaning given by clause 4.
Clause 4 provides that ‘Band 1 treatment’ is hospital treatment that involves a professional service of the type identified by the MBS item number specified in clause 4, or other treatment requiring day admission to a hospital that is not Band 2, 3 or 4 treatment.
Band 1 treatment includes specified category 3 therapeutic procedures and specified category 5 – diagnostic imaging services.
5. Non-band specific Type B day procedures
Clause 5(1) provides that hospital treatment that involves a professional service of the type identified by the MBS item number specified in clause 5 is a non-band specific Type B day procedure.
Clause 5(2) provides that a non-band specific Type B day procedure is Band 2, 3 or 4 treatment depending on anaesthetic type and, where applicable, theatre times as specified in clause 6 of this Schedule.
Clause 5(3) provides that if a non-band specific Type B day procedure does not involve anaesthetic or theatre times, the minimum benefit is the benefit for Band 1 treatment.
6. Other bands
Clause 6 provides a definition of Band 2 treatment, Band 3 treatment and Band 4 treatment.
7. Certified Type C procedure
Clause 7(1) provides that minimum benefits for day-only accommodation provided for in Schedule 3 are payable for patients receiving a Type C procedure only if certification under clause 7(2) is provided.
Clause 7(2) provides the requirements which must be satisfied in order for a Type C procedure to receive certification for hospital treatment at a hospital for a period that does not include part of an overnight stay.
Type C procedures are procedures specified in clause 8, Part 3 of Schedule 3.
Part 3 – Type C procedures
8. Interpretation
Clause 8 provides that a Type C procedure is a procedure specified in clause 8 by reference to MBS items.
These procedures normally do not require hospital treatment. Clause 8 specifies certain items in the general medical services table, the diagnostic imaging services table, and the pathology services table.
The Rules insert MBS items 66607, 66660 and 66900 at P2 and insert MBS items 73062, 73063, 73064 and 73065 at P6. This amendment reflects the new MBS items that were created in the Health Insurance (Pathology Services Table) Amendment Regulation 2009 (No.1) which was made under the Health Insurance Act 1973. These new MBS item numbers commenced on 1 May 2009.
Schedule 4 – Nursing-home type patient accommodation: hospitals in all State/Territories
1. Circumstances
Clause 1 provides that Schedule 4 applies, where a policy covers a type of hospital treatment, and the treatment is provided to a nursing-home type patient (NHTP) at a hospital.
2. Interpretation
Clause 2 provides the definition of a NHTP for private health insurance purposes. A patient becomes a NHTP after they have received hospital treatment at a hospital for a continuous period of hospitalisation exceeding 35 days and are then receiving accommodation and nursing care as an end in itself.
3. Application
Clause 3(1) is an application clause which relates to patients who were admitted to hospital, or returned to hospital with less than a seven day break from a previous hospital admission, before the commencement of the Private Health Insurance (Benefit Requirements) Amendment Rules 2007 (No.4) on 23 November 2007.
4. Provision of acute care
Clause 4 allows a NHTP who requires acute care to cease being a NHTP for the period of acute care, and then become a NHTP again once they are again receiving accommodation and nursing care as an end in itself.
5. Ceasing and resuming hospital treatment
Clause 5 provides that a NHTP who leaves hospital but returns to a hospital, whether or not the same hospital, not more than 7 days later will continue to be a NHTP unless they require acute care.
6. Minimum benefit
Clause 6 provides that the minimum benefit for hospital treatment provided in the circumstances specified in clause 1 of Schedule 4 is the amount set out in Table 1 or 2 of Schedule 4 (as applicable).
The Rules increase the minimum benefit per night for public hospitals in the ACT from $93.15 to $96.40.
Schedule 5 – Second-tier default benefits
The purpose of second-tier default benefits is to protect quality private facilities and to provide an incentive for private facilities to become accredited and meet other administrative criteria, hence increasing the level of quality hospital care available to consumers.
Schedule 5 sets the minimum benefits for most episodes of hospital treatment (excluding treatment provided to nursing-home type patients) provided at private hospitals specified in Schedule 5 payable by insurers with which the private hospital does not have a negotiated agreement.
The Schedule 5 minimum benefit will generally be higher than the basic minimum benefit set by Schedules 1, 2, or 3 of the Rules. However, if in a particular case the level of benefit set by Schedule 5 should be less than the level of benefit set by Schedules 1, 2, or 3 then the level of benefit set by Schedules 1, 2, or 3 (as applicable) applies.
1. Interpretation
Clause 1(1) provides the definitions of facility and negotiated agreement for the purpose of Schedule 5. A facility means a private hospital specified in clause 4 of Schedule 5.
Clause 1(2) provides that in Schedule 5 (except for clause 1(4)), the ACT is taken to be part of NSW and the Northern Territory is taken to be part of the State of South Australia.
Clause 1(3) provides that private hospitals are comparable if they fall within the same category from the list contained in this clause.
Clause 1(4) provides for a definition of the term licensed beds.
2. Circumstances
Clause 2 provides that Schedule 5 applies where a policy covers a type of hospital treatment, and the treatment:
- is provided to a patient who is not a nursing-home type patient; and
- the treatment is provided at a facility.
3. Minimum benefit
Clause 3(1) provides that the minimum benefit for hospital treatment provided in the circumstances specified in clause 2 of Schedule 5, where a facility does not have a negotiated agreement with the insurer, is the amount worked out using the method set out in Schedule 5.
Clause 3(2) provides that if the minimum benefit worked out in accordance with the method set out in Schedule 5 for an episode of hospital treatment is below the amount set out in Schedules 1, 2, or 3, the minimum benefit is the amount set out in Schedules 1, 2, or 3 for that episode of hospital treatment.
Clause 3(3) provides that if a hospital ceases to be a facility, the minimum benefit continues to apply as if the hospital continued to be a facility at the time the treatment was provided, in relation to insured persons who were admitted patients at the facility, or booked for hospital treatment at the facility, before the hospital ceased to be a facility.
Clause 3(4) provides that the minimum benefit payable by a private health insurer for an episode of treatment is an amount no less than 85% of the average charge for the equivalent episode of hospital treatment under that insurer’s negotiated agreements with all comparable private hospitals in the State in which the facility is located.
Clause 3(4) also provides the timeframes for the calculation of 85% of the average charge for an equivalent episode of hospital treatment.
Clause 3(5) provides for the formula for calculating the average charge for the equivalent episode of hospital treatment by an insurer in each State.
Clause 3(6) provides that in clause 3(4), each episode of hospital treatment must be identified using the patient classification system and payment structure in force on 1 August of the first year with all comparable private hospitals in the State in which the facility is located.
Clause 3(7) provides that in clause 3(4), for the purpose of calculating the average charge for the equivalent episode of hospital treatment in a State with all comparable private hospitals in the State in which the facility is located certain matters are to be included, and certain matters are not to be included.
Clause 3(8) provides the method for calculating the minimum benefit for insurers with less than 5 negotiated agreements in force on 1 August of the first year with a particular category of comparable private hospitals in a State. In such cases, all of that insurer’s negotiated agreements with all categories of private hospital in that State are to be used to calculate the minimum benefit.
4. Facilities
Clause 4 provides that the hospitals specified in the table to Schedule 5 are facilities for the purpose of Schedule 5.
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT OF HEALTH AND AGEING
JUNE 2009