Private Health Insurance Legislation Amendment Rules (No. 7) 2021

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. 7) 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 Legislation Amendment Rules (No. 7) 2021 (the Amendment Rules) amends the:

• Private Health Insurance (Benefit Requirements) Rules 2011 (the Benefit Requirements Rules);
• Private Health Insurance (Complying Product) Rules 2015 (the Complying Product Rules); and,
• 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 consequential amendments to the Benefit Requirements Rules and the Complying Product Rules to implement changes to the private health insurance clinical categorisations and procedure type classification of items of the Medicare Benefits Schedule (MBS) to reflect changes to MBS items that take effect from 1 January 2022.

Changes to the clinical categorisations and procedure type classification of MBS items are achieved by amending:

• Schedules 5, 6 and 7 of the Complying Product Rules for the purpose of describing hospital treatment(s) that must be covered under insurance policies, to categorise new, amended, and reviewed MBS items by Clinical category, Common or Support treatments list, and remove deleted items, as appropriate; and,
• Schedule 3 of the Benefit Requirements Rules for the purpose of specifying minimum hospital accommodation benefit requirements, to classify new, amended, and reviewed MBS items against procedure type classifications, and remove deleted items, as appropriate.

In alignment with the cessation on 31 December 2021 of temporary specialist in-hospital telehealth MBS items, the Amendment Rules will also repeal consequential amendments made to the Health Insurance Business Rules to ensure the items would not be considered Hospital treatment under the Private Health Insurance Act 2007.

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 Legislation Amendment (2021 Measures No. 3) Regulations 2021;
• Health Insurance (Section 3C General Medical Services – Telehealth and Telephone Attendances) Determination 2021;
• Health Insurance Legislation Amendment (Telehealth Clinical Support Services) Determination 2021;
• Health Insurance (Section 3C General Medical Services – General Practice Attendance for Assessing Patient Suitability for a COVID-19 Vaccine) Amendment (No. 4) Determination 2021;
• Health Insurance Legislation Amendment (Extension of Cessation Dates and Pathology COVID-19 Services Amendments) Determination 2021;
• Health Insurance (Section 3C Diagnostic Imaging – Cardiac MRI for Myocarditis) Determination 2021; and,
• Health Insurance Legislation Amendment (Section 3C General Medical Services‑Telehealth and Phone GP Fee Alignment) Determination 2021.

The above Instruments will make changes to MBS items of the general medical services table (GMST), pathology services table (PST) and diagnostic imaging services table (DIST) from 1 January 2022. These changes include minor administrative changes, telehealth arrangements, new items to support the suitability assessment for COVID-19 vaccine, a new item for cardiac MRI, and the extension of temporary items to support the Government’s response to the COVID-19 pandemic.

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.

For private health insurance purposes key changes resulting in additions to the Support treatments list and list of Type C procedures are:

• amended PST items 69479 and 69480 for polymerase chain reaction (PCR) testing for COVID‑19 to remove bulk-billing requirements such that a private health insurance benefit may apply when done as hospital treatment;
• new DIST item 63399 for cardiac magnetic resonance imaging (MRI) for myocarditis associated with mRNA COVID-19 vaccination; and,
• new DIST items 55208 and 55211 for ultrasound imaging and integrated Doppler flow measurement by spectral analysis of cavernosal tissue of the penis.

MBS item deletions and other minor amendments to the private health insurance classification and categorisation of MBS items from 1 January 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.

Background

The Health Insurance Business Rules outline the classes of treatments considered to be hospital treatment for the purposes of the Act. 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 across policy tiers 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 1 of the Benefit Requirements Rules also sets 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 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).

Schedule 4 of the Benefit Requirements Rules (at clause 2) classifies a patient remaining in hospital after a continuous 35-day period and receiving accommodation and nursing care as an end‑ in‑itself, as a NHTP.

Schedule 5 of the Benefit Requirements 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 for that type of hospital treatment. Schedule 5 generally 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 Benefit Requirements Rules.

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.

The Common treatments list (Schedule 6) consists of MBS items that are used across, and therefore common to, multiple clinical categories (3 or more). For example, professional attendances by a medical practitioner are on the Common treatments list except where the MBS descriptor expressly prevents claims for hospital treatment. MBS items on the Common treatments list will generally be for treatments that may be the primary reason for an admission. In some cases, they may also be associated with, or support, another treatment that is the reason for admission. Insurers are required to cover MBS items in the Common treatments list where the treatment falls within the scope of cover for the clinical categories included in an insurance policy, and the treatment is delivered as hospital treatment.

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 of the Diagnostic Imaging Services Table (DIST), Pathology Services Table (PST) and 3C Determination items 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 or 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.

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 Health Insurance Business Rules for the purposes of that subsection.

From 15 September 2021, 40 temporary MBS items were introduced for specialist telehealth and phone services performed by the admitting medical practitioner or admitting dental practitioner for private patients admitted to hospital. These temporary telehealth MBS items were excluded from the definition of hospital treatment for the purposes of the Act through consequential amendments to Rule 8 of the Health Insurance Business Rules made by the Private Health Insurance (Health Insurance Business) Amendment Rules (No. 2) 2021. As these temporary MBS items will cease to be available from 1 January 2022, the associated changes to the Health Insurance Business Rules will be repealed.

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 January 2022.

Details

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

Consultation

MBS item related consultation

The Amendment Rules relating to clinical categorisations and procedure type classifications are consequential to MBS items changes. Detail on the MBS items and consultations undertaken, including by the MBS Review Taskforce, can be found in the Explanatory Statements to the MBS Regulations available online from FRL at www.legisation.gov.au, and on the MBS Online website at www.mbsonline.gov.au.

Private Health Insurance Rules classifications for MBS items

Medical officers with the Department provide expert clinical advice to assist in determining the appropriate private health insurance clinical category and level of accommodation benefits for MBS items in Private Health Insurance Rules.

The Department’s weekly email with Regulatory Amendments and Consultations Calendar to private health sector stakeholders including peak insurer and hospital representative associations, private health insurers and private hospitals, includes information on anticipated changes to MBS items and consultation processes.

Consultation for proposed 1 January 2022 private health insurance classifications of these MBS items included notifications of consultations in the Regulatory Amendments and Consultations Calendar and seeking direct feedback throughout December 2021 on draft proposed changes from representatives of those most likely to be directly impacted, including:

-          Private Healthcare Australia;

-          Australian Private Hospitals Association;

-          Day Hospitals Australia;

-          Members Health;

-          Catholic Health Australia;

-          HAMBS (Hospital and Medical Benefits System);

-          Australian Health Service Alliance;

-          National Procedures Banding Committee (industry committee); and,

-          Clinical college and professional medical association representatives.

Feedback received from stakeholders was considered when determining the final amendments.

For some changes it was not possible to consult, due to constraints on the timing of announcements subject to Budget approval processes. Post-implementation review opportunities are available.

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. 7) 2021

Section 1  Name

Section 1 provides that the name of the instrument is the Private Health Insurance Legislation Amendment Rules (No. 7) 2021 (the Amendment Rules).

Section 2  Commencement

Section 2 provides that the instrument commences on 1 January 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 January 2022.

Schedule 1—Amendments—Clinical Categories, Common and Support Treatments

Private Health Insurance (Complying Product) Rules 2015 (Complying Product Rules)

Schedule 1 of the Amendment Rules repeals the existing MBS items against the Clinical categories, Common and Support treatment lists of the Complying Product Rules, and substitutes amended lists.

Items added to a list may be new MBS items, or due to recategorisation following item amendments. Similarly, MBS items deleted may be due to deletion from the MBS, or recategorisation.

Changes are detailed in the private health insurance clinical category and procedure type information provided at www.health.gov.au.

Item 1 provides for an amended list of MBS items categorised against Clinical category (Schedule 5), amending the categories ‘Hospital psychiatric services’ and ‘Palliative care’ to remove temporary items deleted from the MBS following changes to telehealth from 1 January 2022.

Item 2 provides for an amended list of MBS items categorised in the Common treatments list (Schedule 6), to remove items deleted from the MBS from 1 January 2022.

Item 3 provides for an amended list of MBS items categorised in the Support treatments list (Schedule 7; items other than those of the Pathology Services Table or Diagnostic Imaging Service Table already included under the Complying Product Rules) from 1 January 2022.

Schedule 2—Amendments—Type B procedures

Private Health Insurance (Benefit Requirements) Rules 2011 (Benefit Requirements Rules)

Schedule 2 of the Amendment Rules repeals the existing MBS items listed as Type B non-band specific procedures in the Benefit Requirements Rules and substitutes an amended table.

• Type B procedures normally involve hospital treatment that does not include any part of an overnight stay.

Items added to the lists of procedure types may be new MBS items, or due to procedure type reclassification following item amendments. Similarly, MBS items deleted from lists may be due to deletion from the MBS, or procedure type reclassification.

Item 1 provides for an amended list of MBS items classified as Non‑band specific Type B procedures.

Item 1 of the Amendment Rules makes an administrative correction to restore existing MBS items 38272 and 45535 to the Non-band specific Type B procedures list of the Benefit Requirement Rules. MBS items 38272 and 45535 each have both Type A Surgical and Non band specific Type B procedure type classifications. In the Private Health Insurance Legislative Amendment Rules (No. 6) 2021 of 1 November 2021 these items were included in the list of Type A Surgical procedures, but inadvertently omitted from the list of Type B procedures (spreadsheets provided to update payment systems correctly retained both classifications).

Schedule 3—Amendments—Type C procedures

Private Health Insurance (Benefit Requirements) Rules 2011

Schedule 3 of the Amendment Rules repeals the existing MBS items listed as Type C procedures in the Benefit Requirements Rules and substitutes a new table.

• Type C procedures normally do not involve hospital treatment.

Items added to the lists of procedure types may be new MBS items, or due to procedure type reclassification following item amendments. Similarly, MBS items deleted from lists may be due to deletion from the MBS, or procedure type reclassification.

Item 1 provides for an amended list of MBS items classified as Type C procedures.

MBS items added to the list of Type C procedures from 1 January 2022 are:

• PST items 69479 and 69480 for polymerase chain reaction (PCR) testing for COVID-19;
• DIST item 63399 for cardiac magnetic resonance imaging (MRI) for myocarditis associated with mRNA COVID-19 vaccination; and,
• DIST items 55208 and 55211 for ultrasound imaging and integrated Doppler flow measurement by spectral analysis of cavernosal tissue of the penis.

Schedule 4—Amendments— Specialist in-hospital telehealth

Private Health Insurance (Health Insurance Business) Rules 2018

Schedule 4 of the Amendment Rules is related to 40 temporary MBS items introduced on 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.

Consequential amendments to Rule 8 of the Health Insurance Business Rules made by the Private Health Insurance (Health Insurance Business) Amendment Rules (No. 2) 2021, excluded these temporary telehealth MBS items from the definition of hospital treatment for the purposes of the Act.

The temporary MBS items will no longer be available from 1 January 2022.

Item 1 repeals a previous amendment to Part 3 Rule 8 of the Health Insurance Business Rules that ensured temporary MBS items for specialist telehealth and phone services performed by the admitting medical practitioner or admitting dental practitioner for private patients admitted to hospital, would not be considered hospital treatment.

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. 7) 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 Legislation Amendment Rules (No. 7) 2021 (the Amendment Rules) is to amend the following instruments:

• Private Health Insurance (Benefit Requirements) Rules 2011 (the Benefit Requirements Rules);
• Private Health Insurance (Complying Product) Rules 2015 (the Complying Product Rules); and,
• Private Health Insurance (Health Insurance Business) Rules 2018 (the Health Insurance Business Rules).

The Amendment Rules make consequential amendments to the:

• Complying Product Rules to categorise new and amended items of the Medicare Benefits Schedule (MBS) into the appropriate Clinical category, Common or Support treatments list for the purpose of describing hospital treatment(s) that must be covered under insurance policies and remove deleted items;
• Benefit Requirements Rules to classify new and amended MBS items by procedure‑type 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, and to remove deleted items; and;
• Health Insurance Business Rules to repeal consequential amendments made that excluded temporary telehealth MBS items from the definition of hospital treatment, as those temporary items will no longer be available from 1 January 2022.

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 amendments relating to omission or insertion of MBS items in the Benefit Requirements Rules and the Complying Product Rules, and under definitions of hospital treatment are as a consequence of the changes to the MBS that take effect on 1 January 2022.

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.

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.

Mehak Vohra
A/g Assistant Secretary
Private Health Industry Branch
Medical Benefits Division

Health Resourcing Group
Department of Health