Issued by the Authority of the Minister for Health and Aged Care
Private Health Insurance Act 2007
Private Health Insurance Legislation Amendment Rules (No. 2) 2025
Authority
Subsection 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 Legislation Amendment Rules (No.2) 2025 (the Amendment Rules) amends the:
- Private Health Insurance (Benefit Requirements) Rules 2011 (the Benefit Requirements Rules)
Subsection 33(3) of the Acts Interpretation Act 1901 provides that 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 consequential amendments to the Benefit Requirements Rules to implement changes to the private health insurance (PHI) procedure type classification of items of the Medicare Benefits Schedule (MBS) to reflect changes to an MBS item commencing 31 January 2025 and 1 July 2025.
Changes to the procedure type classification of MBS items are achieved by amending:
- Schedules 3 of the Benefit Requirements Rules for the purpose of specifying minimum hospital accommodation benefit requirements, to add an item and remove a deleted item, as appropriate.
Commencing 31 January 2025, the reclassification of MBS item 297 from a Type C procedure to an Unlisted procedure is to correct an administrative error in the legislative amendment commenced 1 January 2025 when the item was incorrectly added to the Type C table.
Commencing 1 July 2025, the replacement of MBS item 42738 with MBS items 43030 and 43032. These new items will be classified as Type C procedures, relating to a measure announced in the 2024-25 Budget and the MBS Review Taskforce recommendations.
Detailed information on MBS items, including fact sheets and quick reference guides, can be viewed on the Department of Health and Aged Care’s (department) MBS Online website (www.mbsonline.gov.au) and in the Explanatory Statement that accompanies each set of regulatory changes. These statements also outline consultation that took place on the MBS changes.
The private health insurance classification and categorisation changes commencing
1 July 2025 are detailed in the Attachment to this Explanatory Statement. Further PHI clinical category and procedure type information, including announcement of changes through PHI ‘Circulars’ and the ‘Private Health Insurance Classification of MBS items’ technical document (PHI technical document) can be viewed on the Department’s website (www.health.gov.au).
There are no private health insurance classification and categorisation changes commencing
31 January 2025. The PHI technical document commencing 1 January 2025 remains unchanged and in effect.
Consultation
Private Health Insurance Rules classifications for MBS items
Medical officers within the department provide expert clinical advice to assist in determining the appropriate PHI clinical category and procedure type for accommodation benefits for MBS items in private health insurance rules.
The department’s weekly email to private health sector stakeholders including peak insurer and hospital representative associations, private health insurers and private hospitals, includes a Regulatory Amendments and Consultations Calendar which provides information on anticipated changes to MBS items and consultation processes.
Feedback received from stakeholders was considered when determining the final amendments.
MBS item related consultation
The Amendment Rules relating to the procedure type classifications are consequential to MBS items changes. Detail on the MBS items and consultations undertaken, including by the Taskforce, MSAC and with medical professional organisations can be found in the Explanatory Statements to the MBS Regulations that can be viewed on the FRL website (www.legislation.gov.au), and the Department’s ‘MBS Online’ website (www.mbsonline.gov.au).
Implementation liaison groups involving professional bodies and clinical experts also inform development of MBS items. Consultation encompasses private hospital and private health sector representation.
Background
MBS items with the potential to be provided to privately insured patients as hospital treatment are allocated to hospital accommodation procedure type classifications under the Benefit Requirements Rules to provide clarity in the administration of treatments across policy tiers by insurers and facilitate claims and minimum benefit payments.
Benefit Requirements Rules
The Benefit Requirements Rules provide for the minimum benefit requirements for psychiatric care, rehabilitation, palliative care, and other hospital treatments. Schedules 1 to 5 of the Benefit Requirements Rules set out the minimum levels of accommodation benefits payable by private health insurers associated with private patients’ hospital treatment: 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 and 2— Type A procedures
Schedule 1 of the Benefit Requirements Rules provides for benefits for different patient categories by categorising MBS item numbers into patient classifications for accommodation benefits. Procedures requiring hospital treatment that includes part of an overnight stay (Type A procedures) comprise ‘Advanced surgical patient’, ‘Obstetric patient’, ‘Surgical patient’, ‘Psychiatric patient’, ‘Rehabilitation patient’ and ‘Other patients.’
Against these patient classifications, Schedule 1 sets out the minimum accommodation benefit payable by insurers per night for overnight accommodation for private patients at private hospitals in all states and territories, and for private patients in overnight shared ward accommodation at public hospitals in Victoria and Tasmania.
Schedule 2 of the Benefit Requirements Rules states the minimum accommodation benefit payable by insurers per night, for private patients in overnight shared ward accommodation at all other State and Territory public hospitals. For each jurisdiction listed in Schedule 2, the minimum benefit payable by insurers per night is averaged across all patients, rather than being specific to patient classification as for Schedule 1.
Schedule 3— Type B procedures
Schedule 3 of the Benefit Requirements Rules sets out minimum same-day hospital accommodation benefits payable by insurers for procedures that normally require hospital treatment that does not include part of an overnight stay (Type B procedures).
Part 2 of Schedule 3 identifies MBS items against Type B procedure Band 1, or the Non-band specific Type B day procedure classification. Treatment Bands 1 to 4 are described based on anaesthesia and/or theatre time.
The treatment band applicable to a Non-band specific Type B day procedure item is relevant to the circumstances of the hospital treatment provided to a patient.
The Benefit Requirements Rules also sets out circumstances in which benefits for accommodation, including part of an overnight stay, may be payable for patients receiving a Certified Type B Procedure (at Part 3 Schedule 1).
Schedule 3— Type C procedures
Type C procedures are those services that do not normally require hospital treatment.
Schedule 3 Part 3 of the Benefit Requirements Rules identifies Type C procedures by MBS item.
The Benefit Requirements Rules, together with the Private Health Insurance (Health Insurance Business) Rules 2018, establish that Type C procedures do not normally qualify for minimum benefits for hospital treatment, including for accommodation, except in circumstances where a patient may receive as hospital treatment a Certified Type C Procedure (at Part 2 Schedule 3) or a Certified Overnight Type C procedure (at Part 3 of Schedule 1).
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.
Details
Details of the Amendment Rules are set out in the Attachment. The Amendment Rules are a legislative instrument for the purposes of the Legislation Act 2003.
Attachment A
Details of the Private Health Insurance Legislation Amendment Rules (No.2) 2025
Section 1 – Name
Section 1 provides that the name of the instrument is the Private Health Insurance Legislation Amendment Rules (No. 2) 2025 (the Amendment Rules).
Section 2 – Commencement
Section 2 provides that Schedule 1, Item 1 of the instrument commences on 31 January 2025 and Schedule 1, Items 2 and 3 commence on 1 July 2025.
Section 3 – Authority
Section 3 provides that the Amendment Rules are made under subsection 333-20(1) 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 of the instrument commences on 31 January 2025 and Schedules 2 and 3 commence on 1 July 2025.
Schedule 1—Amendments—Procedure types
Private Health Insurance (Benefit Requirements) Rules 2011 (Benefit Requirements Rules)
Schedule 2 of the Amendment Rules repeals the existing list of MBS items classified as Type B Non-band specific in the Benefits Requirement rules and substitutes an amended list.
- Type B procedures normally require hospital treatment that do not include part of an overnight stay.
Schedule 2 of the Amendment Rules repeals the existing list of MBS items classified as Type C in the Benefits Requirement rules and substitutes an amended list.
Type C procedures normally do not involve hospital treatment.
Items added to the lists of procedure types may be new, extended, renumbered, or reclassified MBS items. Similarly, MBS items deleted from the lists may be due to removal or expiry from the MBS, renumbering, or procedure type reclassification.
Item 1, commencing 31 January 2025, provides for an amended list of MBS items classified as Type C procedures. The amended list of MBS items reflects the following item changes:
- Additions: number = 0
- Deletions: number = 1 (297)
Item 2, commencing 1 July 2025, provides for an amended list of MBS items classified as Type B Non-band specific procedures. The amended list of MBS items reflects the following item changes:
- Additions: number = 0
- Deletions: number = 1 (42738)
Item 3, commencing 1 July 2025, provides for an amended list of MBS items classified as Type C procedures. The amended list of MBS items reflects the following item changes:
- Additions: number = 2 (43030 and 43032)
- Deletions: number = 0
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Private Health Insurance Legislation Amendment Rules (No. 2) 2025
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 Legislation Amendment Rules (No. 2) 2025 (the Amendment Rules) is to amend the following instruments:
- Private Health Insurance (Benefit Requirements) Rules 2011 (the Benefit Requirements Rules).
The Amendment Rules make consequential amendments to the:
- Benefit Requirements Rules to reclassify an MBS item by procedure‑type from Type C to Unlisted and replacement of a Type B Non-band specific MBS item with two Type C MBS items for the purposes of minimum benefits for accommodation and, in relation to Type C procedures, access to any minimum benefits as hospital treatment unless provided as a Certified Type C procedure.
Human rights implications
The Amendment Rules engage the right to health by facilitating the 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.
The amendments relating to omission or insertion of MBS items in the Benefit Requirements Rules, and under definitions of hospital treatment are as a consequence of the changes to the MBS that take effect on 31 January 2025 and 1 July 2025.
The addition of new MBS items to accommodation benefit classifications, and specified clinical categories, allows for the specified treatments under those items and the related minimum benefit amounts to be claimed by patients who have the relevant private health insurance policies.
The amendments relating to monetary qualifiers are a consequence of routine MBS indexation.
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.
Paul McBride
Assistant Secretary
Private Health Strategy Branch
Health Systems Strategy Division
Health Strategy, First Nations and Sports Group
Department of Health and Aged Care