EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Aged Care,
Private Health Insurance (National Joint Replacement Register Levy) Act 2009
Private Health Insurance (National Joint Replacement Register Levy) Amendment Rule 2021
Authority
Section 8 of the Private Health Insurance (National Joint Replacement Register Levy) Act 2009 (the Act) provides that the Minister may make Private Health Insurance (National Joint Replacement Register Levy) Rules providing for matters required or permitted by the Act to be provided, or necessary or convenient to be provided, in order to carry out or give effect to the Act.
In addition to the power to make this instrument under section 8 of the Act, 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 purpose of the Private Health Insurance (National Joint Replacement Register Levy) Amendment Rule 2021 (the Amendment Rule) is to amend the Private Health Insurance (National Joint Replacement Register Levy) Rule 2015 (NJRR Rule) to reflect the Minister for Health and Aged Care agreeing to a delay in the levy date for 2020-21 and an increase in the levy amount for this financial year and future financial years. The levy date will remain as 30 November for future financial years after 2020-21. The census date for the purposes of calculating the levy amount for individual sponsors remains as 30 September for this financial year and future financial years.
Background
Sections 6 and 7 of the Act provide for the Private Health Insurance (National Joint Replacement Register Levy) Rules to specify the days on which National Joint Replacement Register Levy (NJRR levy) will be imposed and the rate at which it is to be imposed.
The NJRR levy supports the work of the National Joint Replacement Registry (NJRR). The NJRR, operated by the Australian Orthopaedic Association, collects data on the implantation of prosthetic joint replacement devices and reports on revision rates, complications and other outcomes for those devices for inclusion in the NJRR. Its aim is to improve the quality of care of patients undergoing joint replacement surgery. The NJRR is funded through cost-recovery.
NJRR levy is payable by sponsors of those joint replacement prostheses listed on the Private Health Insurance (Prostheses) Rules (No. 3) 2020.
Details of the changes as set by the Amendment Rule are as follows:
- Item 1 of Schedule 1 to the Amendment Rule repeals the previous section 5 of the Rule and substitutes the section to indicate that, for paragraph 6(1)(a) of the Act, 30 November in each financial year is specified as the national joint replacement register levy day for a financial year. The section notes that the exception to this is that the levy date for the 2020-21 financial year is specified as 31 March 2021. Section 5 previously indicated to readers that the NJRR Levy Day, for paragraph 6(1) (a) of the Act, was 31 October in each financial year.
- The NJRR Levy will be imposed once every financial year on 30 November, with the exception of the 2020-21 financial year, which will occur on 31 March 2021 instead, as per Item 1 of Schedule 1.
- Item 2 of Schedule 1 to the Amendment Rule repeals the previous definition of the NJRR funding amount in subsection 7(4) of the Rule and substitutes a new definition that includes the future levy days and levy amounts.
- The levy amounts are specified for the levy day for 31 March 2021 and the levy day on 30 November of each financial year from 2021-22 through to 2022-23.
- Item 2 of Schedule 1 to the Amendment Rule also provides a levy amount for the levy day on 30 November of any financial year after 30 November 2022.
The Amendment Rule will commence on the day after it is registered on the Federal Register of Legislation. This is a legislative instrument for the purposes of the Legislation Act 2003.
Consultation
Sponsors of joint replacement prostheses are aware that the levy is calculated annually, based on the funding requirements to administer the NJRR.
On the 18 November 2020, the Minister for Health and Aged Care, agreed to defer the levy day specified in the NJRR Rule from 30 November 2020 to 31 March 2021 to allow for industry stakeholders to be consulted on the increase in the levy amount.
A draft version of the National Joint Replacement Registry: Cost Recovery Implementation Statement (CRIS) - 1 July 2020 to 30 June 2021 was published on the Department of Health’s website to consult on the changes as detailed in the Amendment Rule for a period of two weeks from 25 November to 8 December 2020. The CRIS informs industry of the amount to be recovered.
Whilst the industry stakeholders provided comment in regards to the cap amount used for calculation of the rate of levy, they were supportive of NJRR and did not raise any issues with the costs to be recovered. The Department of Health intends to consult on the issue raised at the earliest opportunity with all the relevant stakeholders to ensure that this program continues to serve the needs of stakeholders.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Private Health Insurance (National Joint Replacement Register Levy) Amendment Rule 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 Legislative Instrument
The purpose of the Private Health Insurance (National Joint Replacement Register Levy) Amendment Rule 2021 (the Amendment Rule) is to make amendments as a result of the Minister for Health and Aged Care agreeing to a delay in the levy date for 2020-21, an increase in the levy amount for this financial year and future financial years and keeping the levy date to 30 November for future financial years. The census date for the purposes of calculating the levy amount for individual sponsors remains as 30 September for this financial year and future financial years.
The Private Health Insurance (National Joint Replacement Register Levy) Rule 2015 previously specified the day on which National Joint Replacement Register Levy (NJRR levy) was imposed and the rate at which that levy is to be imposed. Under the Amendment Rule, the NJRR Levy will be imposed once a financial year, on 30 November, with the exception of financial year 2020-21 where the levy date will occur on 31 March 2021.
Human rights implications
This instrument engages article 12 of the International Covenant on Economic Social and Cultural Rights (ICESCR), specifically the right to health.
Right to Health
The right to health – the right to the enjoyment of the highest attainable standard of physical and mental health – is contained in article 12(1) of the ICESCR. Whilst the UN Committee on Economic Social and Cultural Rights has stated that the right to health is not to be understood as a right to be healthy, it does entail a right to a system of health protection which provides equality of opportunity for people to enjoy the highest attainable level of health. In addition, the right to health must meet certain key requirements, including health care must be scientifically and medically appropriate and of good quality.
Analysis
The ongoing collection of the NJRR levy facilitates the administration of the NJRR. The purpose of the NJRR is to define, improve and maintain health outcomes for individuals receiving joint replacement surgery.
Conclusion
The Amending Rule is compatible with human rights because it supports the protection of human rights, in particular the right to health.
The Hon Greg Hunt MP
Minister for Health and Aged Care