EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Private Health Insurance (National Joint Replacement Register Levy) Act 2009
Private Health Insurance (National Joint Replacement Register Levy) Amendment Rules 2010
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, or necessary or convenient in order to carry out or give effect to the Act.
The Act deals with the imposition of the national joint replacement register levy (the levy). The levy is imposed on each sponsor for joint replacement prostheses. The levy funds the National Joint Replacement Registry (NJRR) which was established by the Australian Orthopaedic Association in 1998. The NJRR collects data on the implantation of prosthetic joint replacement devices, and reports revision rates, complications and other outcomes. The NJRR also monitors mortality rates. Its purpose is to define, improve and maintain the quality of care of patients receiving joint replacement surgery. The information collected provides an accurate measure of the success or otherwise of a procedure. This information is then used to inform surgeons, other health care professionals, governments, sponsors of joint replacement products and patients.
The Private Health Insurance (National Joint Replacement Register Levy) Rules 2010 (the Principal Rules):
- specify the two national joint replacement register levy days within a financial year upon which the levy is imposed on each sponsor for joint replacement prostheses;
- set the rate of levy; and
- specify the two census days to determine the number of joint replacement prostheses sponsored for the purpose of calculating the rate of levy.
The Principal Rules also allow for a transitional rate of levy to apply during the financial year ending 30 June 2010. The transitional rate is necessary because only one census day occurs during that financial year due to the commencement of the Act.
The levy is collected in accordance with the Private Health Insurance Act 2007 and the Principal Rules, on the day specified by the Private Health Insurance (Levy Administration) Rules.
The purpose of the Private Health Insurance (National Joint Replacement Register Levy) Amendment Rules 2010 (the Amendment Rules) is to amend the Principal Rules in order to provide for a rate of levy for hand articulation prostheses and foot articulation prostheses that is equal to zero. The amendment is required in order to ensure that sponsors are only levied in relation to those joint replacement prostheses whose usage is reported to and monitored by the NJRR.
In relation to the formula which sets out the rate of levy, the Amendment Rules also provide for minor changes which are required as a result of specifying the rate of levy for hand articulation prostheses and foot articulation prostheses as zero.
Consultation
Joint replacement prostheses sponsors, private health insurers and the NJRR were consulted regarding the development of the Principal Rules, and of arrangements for the administration and collection of the national joint replacement register levy.
In developing the Amendment Rules, additional consultation was undertaken with the Medical Technology Association of Australia (the industry representative body), following its representations that the usage of hand articulation prostheses and foot articulation prostheses is not reported to, nor monitored by, the NJRR. This was confirmed by the Australian Orthopaedic Association, which manages the NJRR.
Regulation Impact Statement
The Office of Best Practice Regulation has advised that no Regulatory Impact Statement is required.
Details of the Amendment Rules are set out in the Attachment.
The Amendment Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (NATIONAL JOINT REPLACEMENT REGISTER LEVY) AMENDMENT RULES 2010
1. Name of Rules
Rule 1 provides that the title of the Amendment Rules is the Private Health Insurance (National Joint Replacement Register Levy) Amendment Rules 2010.
2. Commencement
Rule 2 provides for the Amendment Rules to commence on the day after registration.
3. Amendment of the Private Health Insurance (National Joint Replacement Register Levy) Rules 2010
Rule 3 provides that the Schedule of the Amendment Rules amends the Private Health Insurance (National Joint Replacement Register Levy) Rules 2010.
Schedule – Amendments
Item 1 - Part 2, Subrule 5(1)
Item 1 of the Schedule to the Amendment Rules amends subrule 5(1) of the Principal Rules so that the subrule sets two rates of levy – a rate of levy for a hand articulation prosthesis or a foot articulation prosthesis and a rate of levy for any other joint replacement prosthesis.
Paragraph 5(1)(a) sets the rate of levy imposed on sponsors on a national joint replacement register levy day in relation to each hand articulation prosthesis or foot articulation prosthesis that they sponsor as at the most recent census day. The rate of levy imposed in respect of each such prosthesis is set at zero.
Paragraph 5(1)(b) sets the rate of levy imposed on sponsors for a national joint replacement register levy day in respect of “any other joint replacement prosthesis” (that is, any joint replacement prosthesis other than a hand articulation prosthesis or a foot articulation prosthesis) that they sponsor as at the most recent census day. Paragraph 5(1)(b) specifies the formula to be used for calculating the rate of levy imposed in respect of each such prosthesis. Paragraph 5(1)(b) has the effect that the total levy imposed on all sponsors for these prostheses per national joint replacement register levy day will amount to $800,000, so that the total levy imposed on all sponsors for these prostheses during a financial year will amount to $1,600,000. Hand articulation prostheses and foot articulation prostheses are excluded from the formula in paragraph 5(1)(b), ensuring that the total levy imposed during a financial year remains at $1,600,000.
Item 2 – Part 2, Subrule 5(2)
Subrule 5(2) of the Principal Rules has the effect that the total levy amount imposed on a sponsor during any financial year for the same joint replacement prosthesis cannot be more than $5,000.
Item 2 of the Schedule to the Amendment Rules updates the existing reference to “subrule (1)”, which is contained in subrule 5(2) of the Principal Rules, to “paragraph (1)(b)”. This amendment is made as a consequence of the amendment at Item 1 of the Schedule to the Amendment Rules.
Item 3 – Part 2, Subrule 7(1)
Rule 7 of the Principal Rules specifies the formula to be used for calculating the national joint replacement register levy imposed on each sponsor on 30 April 2010 for each joint replacement prosthesis sponsored by that sponsor on 15 March 2010.
Item 3 of the Schedule to the Amendment Rules amends subrule 7(1) of the Principal Rules so that the subrule sets two rates of levy for the national joint replacement register levy day of 30 April 2010 – a rate of levy for a hand articulation prosthesis or a foot articulation prosthesis and a rate of levy for any other joint replacement prosthesis.
Paragraph 7(1)(a) sets the rate of levy imposed on sponsors, for the national joint replacement register levy day of 30 April 2010, in relation to each hand articulation prosthesis or foot articulation prosthesis that they sponsor on the census day of 15 March 2010. The rate of levy imposed in respect of each such prosthesis is set at zero.
Paragraph 7(1)(b) sets the rate of levy imposed on sponsors, for the national joint replacement register levy day of 30 April 2010, in respect of “any other joint replacement prosthesis” (that is, any joint replacement prosthesis other than a hand articulation prosthesis or a foot articulation prosthesis) that they sponsor on the census day of 15 March 2010. Paragraph 7(1)(b) specifies the formula to be used for calculating the rate of levy imposed in respect of each such prosthesis. A transitional formula is specified for the 30 April 2010 national joint replacement register levy day because this date will be the only national joint replacement register levy day for the financial year ending 30 June 2010. Hand articulation prostheses and foot articulation prostheses are excluded from the formula in paragraph 7(1)(b), ensuring that the total levy imposed during the financial year ending 30 June 2010 is $1,600,000.
Item 4 – Part 2, Subrule 7(2)
Subrule 7(2) of the Principal Rules has the effect that the total levy amount imposed on a sponsor on 30 April 2010 for the same joint replacement prosthesis cannot be more than $5,000.
Item 4 of the Schedule to the Amendment Rules updates the existing reference to “subrule (1)”, which is contained in subrule 7(2) of the Principal Rules, to “paragraph (1)(b)”. This amendment is made as a consequence of the amendment at Item 3 of the Schedule to the Amendment Rules.