EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Aged Care
Private Health Insurance Act 2007
Private Health Insurance Legislation Amendment Rules (No. 4) 2022
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 Legislation Amendment Rules (No.4) 2022 (the Amendment Rules) amends the Private Health Insurance (Benefit Requirements) Rules 2011 (the Benefit Requirements 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 consequential amendments to the Benefit Requirements Rules to implement changes to the private health insurance procedure type classification of items of the Medicare Benefits Schedule (MBS) to reflect the introduction, from 1 April 2022, of two new items for:
- testing of tumour prostate tissue to detect BRCA1/2 pathogenic gene variants in people with metastatic castration-resistant prostate cancer to help determine eligibility for PBS Olaparib (73304); and
- a temporary substitute positron emission tomography (PET) item for use during thallium-201 supply shortage (61644).
Changes to the procedure type classification of MBS items is achieved by amending Schedule 3 of the Benefit Requirements Rules for the purpose of specifying minimum hospital accommodation benefit requirements, to classify two new MBS items as Type C procedures. For a further new MBS item, 73303, no changes are required to the Benefit Requirement Rules. In addition, no changes are required to the Private Health Insurance (Complying Product) Rules 2015 for the purposes of classifying these MBS items as they are in the Diagnostic Imaging Services Table (DIST) and Pathology Services Table (PST) which are automatically categorised as Support treatments.
The MBS item changes relevant to these Amendment Rules, are given effect by, and detailed in the following legislative instruments, accessible on the Federal Register of Legislation (FRL) at www.legislation.gov.au:
- Health Insurance (Section 3C Diagnostic Imaging – Additional Nuclear Medicine Services) Determination 2022
- Health Insurance (Section 3C Co-Dependent Pathology Services) Amendment Determination (No.2) 2022
The instrument will make changes to MBS items of the pathology services table (PST) and diagnostic imaging services table (DIST), to reflect Government policy.
Detailed information on MBS items, including fact sheets and quick reference guides, can be accessed at MBS Online available at 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.
These private health insurance changes commencing 1 April 2022 are detailed in the Attachment to this Explanatory Statement. Further information can be accessed in private health insurance information provided online at www.health.gov.au.
Consultation
Consultation on proposed private health insurance classification of these additional MBS items was undertaken during February and March 2022. Feedback was sought from those most likely to be directly affected by the changes including peak industry representatives.
Due to the limited time available prior to 1 April commencement for emergency items consultation was not possible for item 61644, however its classification and categorisation mirrors that of existing item number 61325 for which it substitutes. Feedback received from stakeholders was taken into account when determining the final classifications.
Background
MBS items with the potential to be provided to privately insured patients as hospital treatment are allocated to clinical treatment categories under the Complying Product Rules and hospital accommodation procedure type classifications under the Benefit Requirements Rules, to provide clarity in the administration of treatments by insurers and facilitate claims and benefit payments.
Benefit Requirements Rules
The Benefit Requirements Rules provide for 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 3 of the Benefit Requirements Rules sets out minimum same-day hospital accommodation benefits payable by insurers for procedures requiring hospital treatment that does not include part of an overnight stay at a hospital (‘Type B procedures’).
Type B procedures are further classified into four separate treatment bands (1 to 4) based on anaesthesia type and/or theatre time, and a fifth ‘non-band specific’ classification for items that could fall into different bands depending on how treatment is delivered to an individual patient. Part 2 of Schedule 3 identifies MBS items against Type B procedure Band 1, or the Type B non-band specific classification. 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 of Schedule 1).
Schedule 3 of the Benefit Requirements Rules also identifies by MBS item those services that do not normally require hospital treatment (‘Type C procedures’). 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 of Schedule 3).
Complying Product Rules
The Complying Product Rules sets out the gold, silver, bronze and basic product tiers for hospital cover, and which clinical treatment categories are included in each Hospital Treatment Product Tier.
The 38 clinical categories (Schedule 5) are treatments that must be covered by private health insurance products in the product tiers Basic, Bronze, Silver and Gold, when delivered as hospital treatment.
MBS items that are likely to be relevant to the scope of cover for only one clinical category have been placed against that category in the table at Schedule 5 of the Complying Product Rules. Where an MBS item is not likely to be a reason for admission for hospital treatment it has generally been placed in the Support treatments list, even if specific to a single body system.
MBS items that may be relevant to the scope of cover for two clinical categories are placed against the clinical category that is in the lowest product tier for which the MBS item is likely to apply.
Schedule 7—Support treatments list
The Support treatments list (Schedule 7) consists of MBS items, such as pathology tests and diagnostic tests, generally used to support the provision of a primary treatment in one of the clinical categories, or in the Common treatments list. Items in the Support treatments list are unlikely to be the primary reason for treatment in hospital.
MBS items in the Diagnostic Imaging Services Table (DIST), Pathology Services Table (PST) and 3C Determinations are automatically categorised as Support Treatments under Schedule 7 of the Complying Product Rules.
Insurers are required to provide cover for MBS items in the Common and Support treatments lists where the MBS item is for hospital treatment within the scope of cover for a clinical category included in a patient’s private health insurance policy.
‘Type C’ procedures under the Private Health Insurance (Benefit Requirements) Rules 2011 are also listed in the clinical categories or the Common treatments or included in the Support treatments list. Type C services do not normally require, but may be provided as, hospital treatment with the appropriate certification.
Inclusion of an MBS item against a clinical category or in the Common or Support treatments lists has no bearing on whether that service requires a hospital admission and does not imply these services necessarily require admission.
MBS items which cannot be claimed for services provided as hospital treatment are not intended to be listed in the clinical categories, Common treatment or Support treatment lists.
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 1 April 2022.
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
Details of the Private Health Insurance Legislation Amendment Rules (No. 4) 2022
Section 1 Name
Section 1 provides that the name of the instrument is the Private Health Insurance Legislation Amendment Rules (No. 4) 2022 (the Amendment Rules)
Section 2 Commencement
Section 2 provides that the instrument commences on 1 April 2022.
Section 3 Authority
Section 3 provides that the Amendment Rules are made under section 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.
All Schedule changes come into effect from 1 April 2022.
Schedule 1—Amendments—Type C procedures
Private Health Insurance (Benefit Requirements) Rules 2011 (Benefit Requirements Rules)
Schedule 1 of the Amendment Rules repeals the existing list of MBS items classified as Type C procedures in the Benefit Requirements Rules and substitutes an amended list.
- Type C procedures normally do not involve hospital treatment.
Item 1 provides for an amended list of MBS items classified as Type C procedures.
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. 4) 2022
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.4) 2022 (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 classify new MBS items by procedure‑type for the purposes of minimum benefits for accommodation.
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.
Analysis
The amendment relating to insertion of MBS items in the Benefit Requirements Rules is as a consequence of the changes to the MBS that take effect on 1 April 2022.
The addition of new MBS items to accommodation benefit classifications 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.
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.
Alastair Wilson
A/g Assistant Secretary
Private Health Industry Branch
Medical Benefits Division
Health Resourcing Group
Department of Health