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Private Health Insurance Legislation Amendment Bill (No. 1) 2010

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2009-2010

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

PRIVATE HEALTH INSURANCE LEGISLATION AMENDMENT BILL (NO. 2) 2009

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Health and Ageing, the Hon. Nicola Roxon, MP )





PRIVATE HEALTH INSURANCE LEGISLATION AMENDMENT BILL (NO. 2) 2009

 

OUTLINE

 

The Bill provides for amendments to the Private Health Insurance Act 2007 (the Act) to allow for conditional listing of prostheses in the Private Health Insurance (Prostheses) Rules (the Prostheses Rules), and allow the Minister for Health and Ageing to make Rules specifying criteria for listing prostheses in the Prostheses Rules. 

 

Commonwealth Prostheses List

The Commonwealth Prostheses List (the List), contained in the schedule to the Private Health Insurance (Prostheses) Rules (the Prostheses Rules), sets out the private health insurance benefits payable for prostheses listed in the schedule.

 

Under subsection 72-1(2) of the Act there must be a benefit for hospital treatment covered under the policy (or for hospital-substitute treatment where it is covered) that is the provision of a prosthesis of a kind listed in the Prostheses Rules (i.e. a listed prosthesis) in circumstances:

§   in which a Medicare benefit is payable; or

§   set out in the Prostheses Rules.

 

The Prostheses Rules must only list a kind of prosthesis if an application is made under subsection 72-10(2) of the Act in relation to that kind of prosthesis and the Minister has granted the application.  In considering whether or not to grant an application, the Minister’s current practice is to assess the application against what are known as ‘mandatory criteria’ and ‘non-mandatory’ criteria.  The mandatory criteria reflect the requirements of item 4 of the table in subsection 72-1(2) of the Act, and the additional requirement that the kind of prosthesis to which the application relates must be included on the Australian Register of Therapeutic Goods.  The non-mandatory criteria reflect policy requirements and are set out in administrative guidelines.

 

Conditional Listing

 

Where a listed prosthesis is provided in circumstances in which a Medicare benefit is payable there is currently some ambiguity in item 4 of the table in subsection 72-1(2) of the Act as to whether the Prostheses Rules can set out additional circumstances or conditions that must be satisfied before a private health insurance benefit is payable for hospital treatment or hospital-substitute treatment that is the provision of that kind of prosthesis.

 

A situation has recently arisen in which a Medicare benefit is payable in relation to the professional service associated with the provision of a kind of prosthesis.  It has been decided that, in addition to requiring that the kind of prosthesis be provided in circumstances in which a Medicare benefit is payable, further limiting conditions should be imposed on when a private health insurer must provide a benefit for hospital treatment or hospital-substitute treatment that is the provision of a prosthesis of that kind.  

 

The Bill will amend item 4 of the table in subsection 72-1(2) of the Act to allow for the Prostheses Rules to specify conditions that must be satisfied in relation to the provision of a listed prosthesis in addition to the circumstances currently set out in item 4.

 

It is likely that with further developments in medical technology there will be a greater need for listing kinds of prostheses on a conditional basis.

 

New Criteria for Listing Prostheses on the List

 

A number of kinds of prostheses on the List have recently been identified as not meeting the non-mandatory criteria for listing.  Although these prostheses do not meet all of the current criteria for listing, some are clinically effective, cost effective, provide significant health benefits to patients and often prevent the need for expensive downstream medical costs, so there are good reasons to keep such prostheses listed.

 

In the future, these kinds of prostheses and other kinds of prostheses may be included in a new Part of the List, provided that they meet newly established criteria (including mandatory criteria) for listing kinds of prostheses in this new Part.  The Bill will enable the new mandatory criteria relevant to listing prostheses in the new Part to be set out in the Prostheses Rules.  The new mandatory criteria will not negate any of the current mandatory criteria for listing. 

 

The Bill will allow the Prostheses Rules to specify criteria that must be satisfied in order for an application under subsection 72-10(2) of the Act to be granted.  The Bill will allow for the Prostheses Rules to provide for different listing criteria to apply in different circumstances.

 

The Bill will provide that the Minister must not grant an application under subsection 72-10(2) of the Act if any applicable listing criteria are not satisfied in relation to the application.  However, the Minister may refuse to grant an application under subsection 72-10(2) even where the applicable listing criteria specified in the Prostheses Rules are satisfied.  This is consistent with the discretion currently afforded to the Minister with respect to granting applications under subsection 72-10(2) of the Act.

 

Financial Impact Statement

 

There are no financial impacts for the Government as a result of this Bill.

 

 



PRIVATE HEALTH INSURANCE LEGISLATION AMENDMENT BILL (NO. 2) 2009

 

NOTES ON CLAUSES

 

Clause 1 - Short Title

This clause provides that the Bill, once enacted, may be cited as the Private Health Insurance Legislation Amendment Act (No. 2) 2009

 

Clause 2 - Commencement

This clause provides that the Bill will commence on Royal Assent.

 

Clause 3 - Schedule(s)

This clause provides that each Act that is specified in a Schedule to this Bill is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item has effect according to its terms.  The Bill amends the Private Health Insurance Act 2007 (the Act).      

 

SCHEDULE 1—AMENDMENTS

Private Health Insurance Act 2007

 

Item 1 - Subsection 72-1(2)

Item 1 of the Bill amends the benefit requirement contained in item 4 of the table at subsection 72-1(2) of the Act.

 

Item 4 of the table in subsection 72-1(2) of Part 3-3 of the Act currently provides for the benefit requirements that a complying health insurance policy that covers hospital treatment must meet.  There must be a benefit for hospital treatment covered under the policy (and, if the policy covers hospital-substitute treatment, for hospital-substitute treatment covered under the policy) that is the provision of a prosthesis of a kind listed in the Prostheses Rules (i.e. a listed prosthesis) in circumstances:

§   in which a Medicare benefit is payable; or

§   set out in the Prostheses Rules.

 

New item 4 of the table provides that the benefit requirement that a complying health insurance policy that covers hospital treatment must meet is that there must be a benefit for hospital treatment covered under the policy, and if the policy covers hospital-substitute treatment there must be a benefit for hospital-substitute treatment covered under the policy, that is the provision of a prosthesis of a kind listed in the Prostheses Rules as described in either of the paragraphs below:

§   the prosthesis is provided in circumstances in which a Medicare benefit is payable, and, if the Prostheses Rules set out conditions that must be satisfied in relation to the provision of the prosthesis in those circumstances, those conditions are satisfied; or

§   the prosthesis is provided in other circumstances (i.e. other than those in which a Medicare benefit is payable) which are set out in the Prostheses Rules, and, if those Rules set out conditions that must be satisfied in relation to the provision of the prosthesis in those circumstances, those conditions are satisfied.

 

The purpose of this amendment is to clarify an ambiguity which currently exists in item 4 of the table as to whether, where a listed prosthesis is provided in circumstances in which a Medicare benefit is payable, the Prostheses Rules can set out additional circumstances or conditions which must be satisfied before a private health insurance benefit is payable for hospital treatment or hospital-substitute treatment that is the provision of that kind of prosthesis.

 

Item 2 - At the end of section 72-10

Item 2 inserts new subsections 72-10(6) and (7).  

 

Under subsection 72-10(1) of the Act, Prostheses Rules made for the purposes of item 4 of the table in subsection 72-1(2) of the Act must only list a kind of prosthesis if an application is made under subsection 72-10(2) of the Act in relation to that kind of prosthesis and the Minister has granted the application.  Under subsection 72-10(2) of the Act, a person may apply to the Minister to have the Prostheses Rules list a prosthesis of the kind to which the application relates.  Where the Minister grants the application and the applicant pays the relevant initial listing fee, the kind of prosthesis to which the application relates is listed in the Prostheses Rules, appearing in the schedule of the Prostheses Rules which is known as ‘the List’.

 

New subsection 72-10(6) states that the Prostheses Rules may set out criteria (listing criteria) to be satisfied in order for an application made under subsection 72-10(2) of the Act to be granted.  The Prostheses Rules may provide for different criteria to apply in different circumstances.

 

New subsection 72-10(7) states that the Minister must not grant an application which was made under subsection 72-10(2) of the Act if any applicable listing criteria are not satisfied in relation to that application.

 

The Note at the end of subsection 72-10(7) makes clear that the Minister may refuse to grant an application which was made under subsection 72-10(2) of the Act even if the applicable listing criteria are satisfied.  This is consistent with the discretion currently afforded to the Minister with respect to granting applications under subsection 72-10(2) of the Act.

 

The purpose of the new subsections is to make it clear that the Prostheses Rules can set out mandatory criteria in relation to the listing of kinds of prostheses, and that the Prostheses Rules can provide for different criteria to apply in different circumstances.  These new provisions will provide the Minister with flexibility to set out, in the Prostheses Rules, mandatory criteria relevant to listing prostheses in, for example, different Parts of the List.