EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Private Health Insurance Act 2007
Private Health Insurance (Prostheses) Amendment Rules 2007 (No.2)
Section 333-20 of the Private Health Insurance Act 2007 (the Act) provides that the Minister may make Private Health Insurance (Prostheses) Rules, providing for matters required or permitted by Part 3-3 of the Act, or necessary or convenient in order to carry out or give effect to Part 3-3 of the Act.
Item 4 of the table in subsection 72-1(2) of Part 3-3 of the Act provides for requirements that a complying health insurance policy that covers hospital treatment must meet. There must be a minimum benefit for the provision of a prosthesis of a kind listed in the Private Health Insurance (Prostheses) Rules.
Item 4 of the table provides that in order for a private health insurer to be required to pay the minimum benefit, a Medicare benefit must be payable in respect of the professional service associated with the provision of the listed prosthesis.
If the complying health insurance policy also covers hospital-substitute treatment, the same requirements apply.
The Private Health Insurance (Prostheses) Rules 2007 (No.4) (the Rules) commence on 15 December 2007.
The Private Health Insurance (Prostheses) Amendment Rules 2007 (No.2) (the Amendment Rules) commence on 15 December 2007 and amend the Schedule to the Rules.
The Schedule to the Rules has two parts:
- Part A – Prostheses; and
- Part B – Human Tissue List.
The Amendment Rules update Part A of the Schedule to the Rules by:
- changing the minimum benefit and/or maximum benefit of thirteen (13) items; and
- deleting five (5) items, billing codes DV003, DV013, DV014, DV015 and DV016.
CONSULTATION
The Amendment Rules have been made having regard to recommendations made by the Prostheses and Devices Committee (PDC), a ministerially appointed committee comprised of nominees from private health insurers, hospitals, clinicians, prostheses and devices suppliers, and consumer representatives.
In making their recommendations, the PDC were advised by Clinical Advisory Groups, other clinical experts, and benefits negotiators, all appointed by the PDC.
Details of the Amendment Rules are set out in Attachment.
The Amendment Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (PROSTHESES) AMENDMENT RULES 2007 (No.2)
1. Name of Rules
Rule 1 provides that the title of the Rules is the Private Health Insurance (Prostheses) Amendment Rules 2007(No.2).
2. Commencement
Rule 2 provides for the Rules to commence on 15 December 2007.
3. Amendment of the Schedule to the Private Health Insurance (Prostheses) Rules 2007 (No.4)
Rule 3 provides for the amendments to the Schedule to the Private Health Insurance (Prostheses) Rules 2007(No.4).
The amendments include:
- The deletion of billing codes DV003, DV013, DV014, DV015 and DV016; and
- Changes to the minimum and/or maximum benefits for the thirteen items listed in the table below. A notation has also been included for billing code OH260.
Billing Code | Minimum benefit | Maximum benefit | Notations |
LO133 | $3120.00 | | |
LO134 | $3860.00 | | |
LO135 | $4120.00 | | |
LO136 | $3520.00 | | |
LO138 | $5020.00 | | |
LO140 | $3860.00 | | |
LO141 | $4120.00 | | |
LO142 | $3120.00 | | |
OH260 | $42.00 | | The price indicated is per unit and there are 10 units per pack. |
PM068 | $20.00 | | |
DY302 | $230.00 | | |
DP980 | $4,320.00 | | |
DP981 | $2,930.00 | | |
Overview
The Private Health Insurance (Prostheses) Amendment Rules 2007 (No. 2) were enacted to amend the schedule of the Private Health Insurance (Prostheses) Rules 2007 (No. 4). These rules, introduced by the Australian government, aim to address the need for updated minimum and maximum benefits for certain prostheses covered under private health insurance policies. The rules were developed following recommendations from the Prostheses and Devices Committee, which comprises representatives from various stakeholders including private health insurers, hospitals, clinicians, and consumer advocates. The policy objective behind these amendments is to ensure that the benefits provided under private health insurance policies for prostheses remain aligned with current clinical standards and costs. The rules, which came into effect on 15 December 2007, include changes to the benefits for thirteen items and the deletion of five specific billing codes, reflecting a commitment to maintaining fair and updated coverage for policyholders.
Scope and Application
The Private Health Insurance (Prostheses) Amendment Rules 2007 (No.2) apply to the amendments of the Private Health Insurance (Prostheses) Rules 2007 (No.4), impacting the benefits associated with prostheses under private health insurance policies in Australia. These Rules are pertinent to private health insurers and policyholders who seek coverage for prostheses as part of their hospital or hospital-substitute treatment. The rules establish minimum and maximum benefits for the provision of prostheses listed in the Schedule, with the stipulation that these benefits are contingent upon the availability of a corresponding Medicare benefit for the professional service related to the prosthesis. The Amendment Rules modify the Schedule by updating the minimum and maximum benefits for thirteen items and removing five items identified by specific billing codes. These changes are effective from 15 December 2007 and are made in consultation with the Prostheses and Devices Committee, which includes representatives from various stakeholders in the healthcare and insurance sectors.
Key Provisions
The Private Health Insurance (Prostheses) Amendment Rules 2007 (No.2) provide for amendments to the Private Health Insurance (Prostheses) Rules 2007 (No.4) concerning the benefits associated with prostheses covered by private health insurance policies. Section 333-20 of the Private Health Insurance Act 2007 empowers the Minister to make these rules to ensure compliance with the Act. Under section 72-1(2), a complying health insurance policy must provide a minimum benefit for the provision of a prosthesis listed in the Rules. Additionally, the policy must cover hospital-substitute treatment with the same requirements. The Amendment Rules update the Schedule to the Rules by altering the minimum and/or maximum benefits for thirteen prostheses and removing five specific billing codes (DV003, DV013, DV014, DV015, and DV016).
The Amendment Rules impose specific obligations on private health insurers. Insurers must adhere to the updated minimum and maximum benefits for thirteen prostheses and ensure that their policies provide these benefits in line with the Act. They must also ensure that the same requirements apply if the policy covers hospital-substitute treatment. The deletion of the five billing codes means that these specific prostheses are no longer covered under the Rules, and insurers are no longer required to provide benefits for them.
Breach of the provisions in the Amendment Rules may lead to civil and criminal consequences. Insurers who fail to comply with the minimum and maximum benefit requirements for the listed prostheses may face penalties. While the exact penalties are not specified in the Amendment Rules, non-compliance with provisions of the Private Health Insurance Act 2007 can attract significant penalties under the Act, including fines and potential criminal charges. Insurers are expected to update their policies to reflect the changes in the Rules to avoid these consequences.