EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Private Health Insurance Act 2007
Private Health Insurance (Prostheses) Rules 2011 (No. 1)
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 benefit for the provision of a prosthesis, of a kind listed in the Private Health Insurance (Prostheses) Rules (i.e. a listed prosthesis), in specified circumstances and under any specified conditions. The specified circumstances are that the listed prosthesis is provided in circumstances in which a Medicare benefit is payable or those other circumstances which are set out in the Private Health Insurance (Prostheses) Rules. The specified conditions are those set out in the Private Health Insurance (Prostheses) Rules, currently in relation to insulin infusion pumps and billing code SO041 (Osmed Sphere / Hemisphere tissue expander).
If the complying health insurance policy also covers hospital-substitute treatment, the same requirements apply.
The Private Health Insurance (Prostheses) Rules 2011 (No. 1) (the Rules) commence on 21 February 2011.
The Rules revoke the Private Health Insurance (Prostheses) Rules 2010 (No. 2) (the Previous Rules).
Rule 5 provides that the Schedule lists the kinds of prostheses:
- in relation to which the Minister has granted applications for listing under subsection 72-10(5) of the Act; or
- which are listed as a result of the transitional arrangements covering kinds of prostheses that were listed as no gap prostheses or gap permitted prostheses for the purposes of the National Health Act 1953 immediately before the commencement of the Act.
The Schedule has three parts:
- Part A – Prostheses;
- Part B – Human Tissue List; and
- Part C – Other Prostheses.
New rule 5A sets out, for the purposes of paragraph (d) of item 4 of the table in subsection 72-1(2) of the Act, the circumstances in which a benefit is required for the provision of a listed prosthesis other than the circumstances in which a medicare benefit is payable. The circumstances were set out in paragraph 5(b) of the Previous Rules.
New rule 5B sets out conditions which must be satisfied for a benefit to be required in relation to the provision of a listed prosthesis which is an insulin infusion pump or a listed prosthesis for which there is a statement of requirements set out under the listing for that kind of prosthesis in the Schedule. A statement of requirements is set out under the listing for billing code SO041 (Osmed Sphere / Hemisphere tissue expander). Conditions for insulin infusion pumps were set out in paragraph 5(b) of the Previous Rules.
The Rules set out the method for determining the minimum (and maximum) benefit payable for listed prostheses provided as part of hospital treatment or part of hospital-substitute treatment (rules 6 and 7).
The Rules also make reference to the timing of applications to have a kind of prosthesis listed in the Schedule (rule 8) and to the role of Prostheses Advisory Committee (PLAC) and the Negotiating Oversight Committee (NOC) (rule 9).
The Rules set out the criteria which a listing application must meet under subsection 72-10(6) of the Act in order for a kind of prosthesis to be listed in Part C of the Schedule (rule 10).
The Rules differ from the Previous Rules by:
- making technical amendments, including:
moving subparagraph 5(b)(iii) of the Previous Rules into new rule 5B of the current Rules;
removing references to “circumstances where a Medicare benefit is payable” when the reference is redundant. This circumstance is already set out in paragraph (c) of item 4 of the table in subsection 72-1(2) of the Act;
changing the heading of Part C to better reflect the kinds of prostheses listed in Part C;
- specifying that the Schedule may set out conditions in relation to the provision of a listed prosthesis;
- adding conditions to the new listing of billing code SO041 (Osmed Sphere / Hemisphere tissue expander) in Part A of the Schedule;
- adding 412 new items to Part A of the Schedule as no gap prostheses or gap permitted prostheses;
- changing the current listing of many existing products in Parts A and B of the Schedule including:
amending the descriptions of products;
allocating new billing codes in respect of expansions of existing billing codes;
compressing billing codes to cover a range of products offered at the same benefit;
changing sponsor names to reflect new sponsor arrangements; and
changing the minimum benefit and/or maximum benefit; and
- deleting 273 products in Part A of the Schedule.
In Part A of the Schedule, products are grouped according to their clinical effectiveness, as assessed by Clinical Advisory Groups (CAGs) or the Panel of Clinical Experts (PoCE). The purpose of the groupings is to identify products of similar clinical effectiveness or clinical design, in order to assist in determining the benefits payable for the products and to assist with clinical choice.
Benefits payable for new products have either been negotiated with sponsors or have been determined through the truncated benefit process and have been incorporated into the Rules.
CONSULTATION
The Rules have been made having regard to recommendations made by the Prostheses List Advisory Committee (PLAC), a ministerially appointed committee comprised of nominees from health insurers, hospitals, clinicians, prostheses sponsors and consumer representatives.
In making its recommendations, the PLAC was advised by CAGs, other clinical experts, and benefits negotiators.
Details of the Rules are set out in the Attachment.
The Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Authority: Section 333-20 of the
Private Health Insurance
Act 2007
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (PROSTHESES) RULES 2011 (No. 1)
PART 1 PRELIMINARY
1. Name of Rules
Rule 1 provides that the title of the Rules is the Private Health Insurance (Prostheses) Rules 2011 (No. 1).
2. Commencement
Rule 2 provides for the Rules to commence on 21 February 2011.
3. Revocation
Rule 3 provides for the revocation of the Private Health Insurance (Prostheses) Rules 2010 (No. 2), as those rules were amended by the Private Health Insurance (Prostheses) Amendment Rules 2010 (No. 1) and the Private Health Insurance (Prostheses) Amendment Rules 2010 (No. 2).
4. Definitions
Terms used in the Rules have the same meaning as in the Act. In addition, certain terms are defined for the purposes of the Rules, including the definitions of gap permitted prosthesis and no gap prosthesis. A new definition of listed prosthesis has been added. A listed prosthesis is a prosthesis of a kind listed in the Schedule to the Rules.
Part 2 Benefit requirements
5. Listing of, and benefits for, prostheses
The table in subsection 72-1(2) of the Act (the Table) sets out some requirements that a policy that covers hospital treatment must meet in order for the policy to be a complying health insurance policy under section 63-10 of the Act. Item 4 of the Table provides that there must be a benefit for hospital treatment covered under the policy (and hospital substitute treatment, where the policy also covers such treatment) that is the provision of a listed prosthesis:
- in the circumstances in which a medicare benefit is payable or those other circumstances set out in the Private Health Insurance (Prostheses) Rules; and
- when the conditions set out in the Private Health Insurance (Prostheses) Rules (if any) are also satisfied. If the conditions are not satisfied, there is no benefit required even if the listed prosthesis is provided in the circumstances set out either under the Act or the Private Health Insurance (Prostheses) Rules.
Paragraph 5(a) provides that the Schedule to the Rules sets out listed prostheses. The listed prostheses are:
- kinds of prostheses in relation to which the Minister has granted an application for listing under subsection 72-10(5) of the Act, including those for which the applicant has paid any initial listing fee imposed under the Private Health Insurance (Prostheses Application and Listing Fees) Act 2007 within the specified timeframe; and
- kinds of prostheses that were, immediately before the commencement of the Act on 1 April 2007, listed as a no gap prosthesis or a gap permitted prosthesis for the purposes of the National Health Act 1953 (see section 12, Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007).
Paragraph 5(aa) provides that the circumstances in which there must be a benefit payable for the provision of a listed prosthesis, other than circumstances in which a medicare benefit is payable, are set out in rule 5A of the Rules.
Paragraph 5(ab) provides that conditions that must be satisfied in relation to the provision of a listed prosthesis in order for a benefit to be payable are set out in rule 5B of the Rules. These conditions further limit when a benefit is required to be payable for the provision of a listed prosthesis in the circumstances where a medicare benefit is payable (refer to paragraph (c), item 4 of the Table) or in the circumstances which are set out in the Rules (refer to paragraph (d), item 4 of the Table).
Paragraph 5(b) provides that rule 6 sets out the method for working out the minimum and maximum benefit for hospital treatment, covered under a complying health insurance policy, that is the provision of a listed prosthesis.
Paragraph 5(c) provides that rule 7 sets out the method for working out the minimum benefit and maximum benefit for hospital-substitute treatment, covered under a complying private health insurance policy, that is the provision of a listed prosthesis.
It is not possible for a private health insurer to cover hospital treatment or hospital-substitute treatment under a policy, but exclude coverage of the provision of an associated listed prosthesis. This coverage requirement is provided for in Rule 8 of the Private Health Insurance (Complying Product) Rules.
5A. Circumstances in which a prosthesis is provided other than circumstances in which a medicare benefit is payable
New Rule 5A specifies circumstances for the purposes of paragraph (d) of item 4 of the Table. A benefit must be payable under a policy which is a complying health insurance policy for covered hospital treatment and hospital-substitute treatment (if the policy covers hospital-substitute treatment) that is the provision of a listed prosthesis which is associated with podiatric treatment by an accredited podiatrist. This is the case even if a medicare benefit is not payable for that provision.
This circumstance was specified in paragraph 5(b) of the Previous Rules.
A note to rule 5A provides that the provision of a listed prosthesis in circumstances in which a medicare benefit is payable is dealt with in paragraph (c) of item 4 of the Table.
5B. Conditions in relation to provision of a listed prostheses
Under paragraphs (c) and (d) of item 4 in the Table, the Private Health Insurance (Prostheses) Rules may set out conditions that must be satisfied in relation to the provision of a listed prosthesis in circumstances in which a medicare benefit is payable, or in the circumstances set out in rule 5A, whatever the case may be. If these conditions are not satisfied, no benefit is required to be payable under a complying health insurance policy that covers hospital treatment.
New Rule 5B specifies that the conditions that must be satisfied are:
- in the case of any listed prosthesis for which there is a statement of a requirement under the heading ‘Conditions’ in the Schedule under the listing for that kind of prosthesis, that requirement (refer to subrule 5B(1)); and
- in the case of a listed prosthesis that is an insulin infusion pump, in addition to any statement of requirement which is set out in the Schedule under subrule 5B(1): the professional service associated with providing the insulin infusion pump to the patient is a professional attendance by a consultant physician in the practice of his or her specialty and is provided as a certified Type C or certified overnight Type C procedure. The insulin infusion pump must also be provided for the purpose of administering insulin.
6. Benefits for prostheses provided as part of hospital treatment
Subrule 6(1) provides that, for a no gap prosthesis provided as part of an episode of hospital treatment by a private hospital, the minimum and maximum benefit are each the amount for that prosthesis set out under the column heading ‘Minimum Benefit’ in the Schedule.
Subrule 6(2) provides that, for a gap permitted prosthesis provided as part of an episode of hospital treatment by a private hospital, the minimum benefit and the maximum benefit are the amounts set out in the Schedule for that prosthesis under the column headings ‘Minimum Benefit’ and ‘Maximum Benefit’.
Subrule 6(3) provides that, for a no gap prosthesis provided as part of an episode of hospital treatment by a public hospital, the minimum benefit is the lesser of: the amount for that prosthesis set out in the Schedule under the column heading ‘Minimum Benefit’; or, the amount of the insured person’s liability to the public hospital for that prosthesis. The maximum benefit is the amount for that prosthesis set out under the column heading ‘Minimum Benefit’ in the Schedule.
Subrule 6(4) provides that, for a gap permitted prosthesis provided as part of an episode of hospital treatment by a public hospital, the minimum benefit is the lesser of: the amount for that prosthesis set out in the Schedule under the column heading ‘Minimum Benefit’; or, the amount of the insured person’s liability to the public hospital for that prosthesis. The maximum benefit is the amount for that prosthesis set out under the column heading ‘Maximum Benefit’ in the Schedule.
7. Benefits for prostheses provided as part of hospital-substitute treatment
Subrule 7(1) provides that, for a no gap prosthesis provided as part of an episode of hospital substitute treatment, the minimum and maximum benefit are each the amount for that prosthesis set out under the column heading ‘Minimum Benefit’ in the Schedule.
Subrule 7(2) provides that, for a gap permitted prosthesis provided as part of an episode of hospital-substitute treatment, the minimum benefit and the maximum benefit are the amounts set out in the Schedule for that prosthesis under the column headings ‘Minimum Benefit’ and ‘Maximum Benefit’.
8. Timing of applications to have a prosthesis listed
Rule 8 provides that, as a matter of normal administrative practice, if the Minister grants an application, then the prosthesis must be listed in the Schedule the next time the Minister makes or varies the rules.
9. Minister may have regard to recommendations and advice
Subrule 9(1) provides that, in making a decision under section 72-10 of the Act, the Minister may have regard to a recommendation from the Prostheses List Advisory Committee when deciding whether or not to grant the application to list a prosthesis.
Subrule 9(2) provides that the Minister may have regard to the amounts as negotiated between the Negotiating Oversight Committee and the applicant when setting the minimum and (if any) maximum benefits.
10. Listing criteria for prostheses to be listed in Part C of the Schedule
Rule 10 sets out the listing criterion that must be met for a listing application to be granted for listing a kind of Prosthesis in Part C of the Schedule. This criterion is that the kind of prosthesis is either an insulin infusion pump or an implantable cardiac device.
Notes to rule 10 provide that:
- the power to make listing criteria is found in subsection 72-10(6) of the Act; and
- the Minister may not grant a listing application if any applicable listing criteria have not been met, and has the power to refuse to grant a listing application even if the listing criteria have been satisfied (see subsection 72-10(7) of the Act).
SCHEDULE
The Schedule lists kinds of prostheses and contains the ‘Minimum Benefit’ and ‘Maximum Benefit’ for kinds of prostheses for private and public hospital treatment, and hospital-substitute treatment.