Private Health Insurance (Health Insurance Business) Amendment Rules (No. 2) 2021

Administered by Department of Health, Disability and Ageing

Legislation au F2021L01260 Rules Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Issued by the Authority of the Minister for Health and Aged Care

 

Private Health Insurance Act 2007

 

Private Health Insurance (Health Insurance Business) Amendment Rules (No. 2) 2021

 

Authority

 

Section 333-20(1) of the Private Health Insurance Act 2007 (the Act) authorises the Minister to, by legislative instrument, make specified Private Health Insurance Rules providing for matters required or permitted by the corresponding Chapter, Part or section to be provided; or necessary or convenient to be provided in order to carry out or give effect to that Chapter, Part or section.

 

The Private Health Insurance (Health Insurance Business) Amendment Rules (No.2) 2021 (the Amendment Rules) amends the:

  • Private Health Insurance (Health Insurance Business) Rules 2018 (the Health Insurance Business Rules).

 

Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

 

Purpose

 

The Amendment Rules make a consequential amendment to the Health Insurance Business Rules subsequent to the listing of 40 new temporary Medicare Benefits Schedule (MBS) items from 15 September 2021 for specialist telehealth and phone services performed by the admitting medical practitioner or admitting dental practitioner for private patients admitted to hospital. The amendment will ensure the new MBS items will not be considered hospital treatment for the purposes of the Private Health Insurance Act 2007I (the Act).

 

The new MBS items will be excluded from the definition of hospital treatment by adding the MBS items to the classes of treatments specified for the purposes of subsection 121-5(4) of the Act by amending:

  • Part 3 Rule 8 of the Health Insurance Business Rules to include reference to the new MBS items.

 

The MBS item changes relevant to these Amendment Rules, are given effect by, and detailed in, the following legislative instrument, accessible on the Federal Register of Legislation (FRL) at www.legislation.gov.au:

  • Health Insurance (Section 3C General Medical Services – COVID-19 Telehealth and Telephone Attendances) Amendment (In-Hospital Telehealth and Phone Services) Determination 2021.

 

The expansion of specialist telehealth and phone services will ensure continuity of care for private in-hospital patients and are necessary to keep both health care practitioners and patients safe during the evolving COVID-19 pandemic.

 

These changes, along with other temporary COVID-19 MBS telehealth items, will remain in place until 31 December 2021, with ongoing arrangements to be considered as part of broader Government consideration of MBS telehealth arrangements.

 

Background

 

Subsection 121-5(4) of the Act specifies that despite subsections (1), (2) and (2A), treatment is not hospital treatment if it is specified in, or is included in a class of treatments specified in, the Private Health Insurance (Health Insurance Business) Rules for the purposes of this subsection.

 

Health Insurance Business Rules

A treatment with the potential to be provided to privately insured patients as hospital treatment can be excluded from the definition of hospital treatment under subsection 121-5(4) of the Act if it is specified in, or included in a class of treatments specified in, the Private Health Insurance (Health Insurance Business) Rules for the purposes of that subsection.

 

The Amendment Rules

The consequential amendments in these Amendment Rules are administrative in nature and do not substantively alter existing arrangements established under the Act.

 

Commencement

 

The Amendment Rules commence on 15 September 2021.

 

Details

 

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

 

Consultation

 

MBS item related consultation

The Amendment Rules are consequential to MBS items changes. Detail on the MBS items and consultations undertaken can be found in the Explanatory Statement to the:

  • Health Insurance (Section 3C General Medical Services – COVID-19 Telehealth and Telephone Attendances) Amendment (In-Hospital Telehealth and Phone Services) Determination 2021

 

– available online from FRL at www.legisation.gov.au, and in the information factsheet available from the MBS Online website at www.mbsonline.gov.au.

 

Private health insurance consultation on MBS items

Due to the short implementation timeframe and the nature of the items consultation with the private health insurance sector was not undertaken. The Department’s weekly email to private health sector stakeholders will provide information on the changes. Regular updates are provided in the Regulatory Amendments Calendar as part of this weekly email.

 

The Amendment Rules are a legislative instrument for the purposes of the Legislation Act 2003.


ATTACHMENT

 

Details of the Private Health Insurance (Health Insurance Business) Amendment Rules (No. 2) 2021

 

Section 1 Name

 

Section 1 provides that the name of the instrument is the Private Health Insurance (Health Insurance Business) Amendment Rules (No. 2) 2021.

 

Section 2 Commencement

 

Section 2 provides that the instrument commences on 15 September 2021.

 

Section 3 Authority

 

Section 3 provides that the Amendment Rules are made under 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.

 

All Schedule changes come into effect from 15 September 2021.

 

Schedule 1—Amendments

Private Health Insurance (Health Insurance Business) Rules 2018

 

Schedule 1 of the Amendment Rules adds a new class to the classes of treatments specified for the purposes of subsection 121‑5(4) of the Private Health Insurance Act 2007 (the Act). This amendment excludes from the definition of hospital treatment new Medicare Benefits Schedule (MBS) items being introduced from 15 September 2021 for specialist telehealth and phone services performed by the admitting medical practitioner or admitting dental practitioner for private patients admitted to hospital.

 

Item 1 provides for insertion of text at Rule 8 specifying for the purposes of subsection 121‑5 (4) of the Act a new class of treatments as:

“any treatment which is a service to which an item in the tables of Schedule 5 of the Health Insurance (Section 3C General Medical Services – COVID-19 Telehealth and Telephone Attendances) Determination 2020 applies”.

 

Statement of Compatibility with Human Rights

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

Private Health Insurance (Health Insurance Business) Amendment Rules (No. 2) 2021

This disallowable 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 disallowable legislative instrument

 

The purpose of the Private Health Insurance (Health Insurance Business) Amendment Rules (No. 2) 2021 (the Amendment Rules) is to amend the:

  • Private Health Insurance (Health Insurance Business) Rules 2018 (the Health Insurance Business Rules).

 

The Amendment Rules make a consequential amendment to the Health Insurance Business Rules to:

  • add a new class to the classes of treatments specified for the purposes of subsection 121‑5 (4) of the Private Health Insurance Act 2007 (the Act). This amendment excludes from the definition of hospital treatment new Medicare Benefits Schedule (MBS) items being introduced from 15 September 2021 for specialist telehealth and phone services performed by the admitting medical practitioner or admitting dental practitioner for private patients admitted to hospital.

 

Human rights implications

The Amendment Rules engage the right to health by facilitating the appropriate payment of private health insurance benefits for health care services, encouraging access to, and choice in, health care services. Under Article 12 of the International Covenant on Economic, Social and Cultural Rights, specifically the right to health, the Amendment Rules assist 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, and to improve information provided to consumers of private health services to allow consumers to make more informed choices when purchasing services. Private health insurance regulation also requires that insurers do not differentiate the premiums they charge according to individual health characteristics such as poor health.

 

Analysis

The amendment relating to inclusion of the new  telehealth consultation MBS items as a new class of treatments specified for the purposes of subsection 121-5 (4) of the Act is a consequence of the changes to the MBS that take effect on 15 September 2021 and is consistent with the policy intent of the changes to the MBS.


Conclusion

This disallowable legislative instrument only engages human rights to the extent that it maintains current arrangements with respect to the regulation of private health insurance. Therefore, this instrument is compatible with human rights because these changes continue to ensure that existing arrangements advancing the protection of human rights are maintained.

 

Brian Kelleher
Assistant Secretary
Private Health Industry Branch
Medical Benefits Division

Health Resourcing Group
Department of Health

Overview

The Private Health Insurance (Health Insurance Business) Amendment Rules (No. 2) 2021, enacted to address the need for updated regulatory frameworks in response to changes in healthcare delivery, particularly in light of the COVID-19 pandemic, were introduced by the Australian Government under the authority of the Private Health Insurance Act 2007. This legislation aims to ensure that new Medicare Benefits Schedule (MBS) items for specialist telehealth and phone services performed by admitting medical or dental practitioners for private patients admitted to hospital are appropriately excluded from the definition of hospital treatment under the Act. This amendment is intended to maintain the integrity of the private health insurance system by ensuring that such services do not inadvertently qualify for hospital treatment coverage. The policy objective is to facilitate continuity of care for private in-hospital patients and to adapt to the evolving health care landscape necessitated by the pandemic. The rules were developed in response to the introduction of 40 new temporary MBS items for specialist telehealth and phone services, effective from 15 September 2021. The Amendment Rules consequentially amend the Private Health Insurance (Health Insurance Business) Rules 2018 to specify these new MBS items as a distinct class of treatments excluded from the definition of hospital treatment under the Private Health Insurance Act 2007. This legislative action ensures that the new telehealth services are not misclassified, thereby preventing potential discrepancies in insurance coverage and claims. The rules reflect the government's commitment to adapting health policies to the challenges posed by the COVID-19 pandemic, ensuring both patient safety and the sustainability of the private health insurance framework.

Scope and Application

The Private Health Insurance (Health Insurance Business) Amendment Rules (No. 2) 2021 applies to entities and individuals involved in the private health insurance industry, specifically to the conduct and transactions of health insurance businesses operating in Australia. The amendment rules are made under the authority of the Private Health Insurance Act 2007 and have a Commonwealth jurisdictional reach, meaning they apply across Australia. These rules primarily affect health insurers by modifying the Private Health Insurance (Health Insurance Business) Rules 2018 to exclude certain newly introduced Medicare Benefits Schedule (MBS) items for specialist telehealth and phone services from the definition of hospital treatment. This exclusion is intended to prevent these services from being considered hospital treatment for the purposes of private health insurance coverage. The Amendment Rules came into effect on 15 September 2021 and are consequential to the changes in MBS items related to telehealth services, which were introduced to address the needs arising from the COVID-19 pandemic. These changes are set to remain in place until 31 December 2021, with further considerations for ongoing telehealth arrangements to be evaluated as part of broader government policy reviews.

Key Provisions

The Private Health Insurance (Health Insurance Business) Amendment Rules (No. 2) 2021 (Amendment Rules) amend the Private Health Insurance (Health Insurance Business) Rules 2018 (Health Insurance Business Rules) to exclude new Medicare Benefits Schedule (MBS) items for specialist telehealth and phone services performed by admitting medical or dental practitioners for private patients admitted to hospital from the definition of hospital treatment under the Private Health Insurance Act 2007 (Act). This amendment is made by adding a new class of treatments specified for the purposes of subsection 121-5(4) of the Act (Section 1, Schedule 1, Item 1). The Amendment Rules are made under section 333-20 of the Act (Section 3). These changes aim to ensure continuity of care for private in-hospital patients during the COVID-19 pandemic and will be in effect until 31 December 2021 (Section 2). The Amendment Rules impose obligations on private health insurers and health service providers to comply with the updated definitions and classifications of treatments in the Health Insurance Business Rules. Insurers must ensure that the new MBS items for telehealth and phone services are not considered hospital treatment and, therefore, not covered by hospital cover policies. Health service providers must be aware of the new MBS items and the associated billing procedures for these services, which are now classified separately from hospital treatment under the Act. Failure to comply with the Amendment Rules may result in breaches of the Act and the Health Insurance Business Rules. While the explanatory statement does not detail specific offences or penalties for non-compliance, breaches of the Act and its regulations can generally lead to enforcement actions by the Australian Prudential Regulation Authority (APRA) or the Australian Competition and Consumer Commission (ACCC), including fines and other civil or administrative penalties. Insurers found to be in breach of their obligations may also face reputational damage and loss of consumer trust, which can have significant commercial implications. The Amendment Rules are designed to be administrative in nature and do not substantively alter the existing regulatory framework for private health insurance. They ensure that the introduction of new MBS items for telehealth and phone services does not disrupt the existing definitions and classifications within the Act and the Health Insurance Business Rules. By excluding these new MBS items from hospital treatment, the Amendment Rules maintain the integrity of the private health insurance system and support the ongoing provision of appropriate care for in-hospital private patients.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.