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Tuesday, 21 August 1984
Page: 66

(Question No. 650)


Senator Hamer asked the Minister representing the Minister for Health, upon notice, on 28 February 1984:

(1) What are the criteria required for Category 2 hospitals under Medicare.

(2) Does the Neerim District Soldiers' Memorial Hospital in Gippsland satisfy the criteria for Category 2 hospitals.

(3) Will the Minister for Health provide a detailed explanation why the Neerim District Soldiers' Hospital in Gippsland is classified in Category 3.


Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question:

(1)-(3) The original criteria relating to the categorisation of private hospitals were contained in the order and principles published in Commonwealth of Australia Special Gazette No. S 30 dated 1 February 1984. All private hospitals were provided with copies of the Gazette.

The principles required that for categorisation purposes the characteristics of a hospital shall be ascertained in respect of in-patients, discharges and daily bed payments by reference to the period of 12 months commencing on 1 July 1982. The order stated that Category 2 hospitals would consist of those hospitals which had the following characteristics-

(i) more than 15 per cent of discharges and daily bed payments under the Health Insurance Act 1973 (other than discharges and daily bed payments in respect of nursing home type patients) in respect of surgical or maternity patients and

(ii) less than 35 per cent of daily bed payments under that Act in respect of nursing home type patients.

The order also gave me a discretionary power to categorise a hospital other than in accordance with a hospital's characteristics. However, the exercise of the discretionary power was limited by the order to those instances where a hospital had been the subject of a recommendation by the Minister for Health of a State.

A replacement order published in Commonwealth Gazette No. S 112 on 22 March 1984, a copy of which was sent to all hospitals, stated that Category 2 hospitals would, from that date, consist of those hospitals that-

(a) have-

(i) more than 15 per cent of discharges and daily bed payments under the Health Insurance Act 1973 (other than discharges and daily bed payments in respect of nursing home type patients) in respect of surgical or maternity patients and

(ii) not more than 50 per cent of daily bed payments under that Act in respect of nursing home type patients.

(b) have been the subject of the exercise of the Minister's discretionary power , as previously described; or

(c) are psychiatric hospitals having more than 70 approved beds.

The relevant statistics for Neerim, according to my Department's records, were as follows for 1982-83:

10 per cent of discharges and 14 per cent of daily bed payments were in respect of surgical or maternity patients.

10 per cent of daily bed payments were in respect of nursing home type patients .

These figures did not qualify the hospital for Category 2 as the surgical/ maternity bed days and discharges did not exceed 15 per cent.

The manager of the hospital subsequently requested me to review the category of the hospital because he believed that the utilisation statistics collected by the hospital met the criteria for Category 2. He was asked to submit the names and details of hospitalisation of all patients accommodated during the specified period so that a check could be made against the Department's records. It was subsequently established that claims for a substantial number of bed days during 1982-83 had either not been submitted by the hospital or had been claimed for at an incorrect rate.

My Department then sent a letter to the hospital giving a detailed analysis of the discrepancies and the manager was asked to claim for outstanding bed days and to request an adjustment for the bed days which had been claimed for at an incorrect rate. This request was complied with and adjusted Departmental records for the hospital for the 1982-83 period now show 15.1 per cent for surgical/ maternity discharges and 20.8 per cent for surgical/maternity bed days. Recent figures for the period 1 August 1983 to 31 January 1984 show that the hospital had 16.1 per cent surgical/maternity bed days and 15.3 per cent surgical/ maternity discharges. As these figures qualified the hospital for Category 2, I then consulted with the State Health Minister, giving details of the hospital's latest statistics and seeking his views about reclassifying the hospital. Mr Roper recently advised that he had no objection to the hospital being reclassified and Neerim has consequently been classified as Category 2 with effect from 7 June 1984.