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Health Legislation Amendment Bill (No. 2) 1999
Schedule 1 Amendment of the National Health Act 1953 to allow registered organizations greater product flexibility

Part 1 Amendments relating to discounted rates of contributions

1  At the end of section 73BA

Add:

             (4)  The Minister may, after having regard to the management expenses incurred by all organizations, make a determination in writing of the maximum percentage of discount that organizations, under their rules and in accordance with paragraph (s) of Schedule 1, may offer to contributors in respect of their rates of contribution.

             (5)  Determinations under subsection (4) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901 .

2  Paragraph (q) of Schedule 1

Repeal the paragraph, substitute:

                     (q)  The organization will, for each applicable benefits arrangement, and for each table of ancillary health benefits, offered by the organization:

                              (i)  if the arrangement or table covers memberships consisting of a contributor and also 2 or more other persons of whom at least one is not a dependent child of the contributor—charge the same contribution in respect of each such membership; and

                             (ii)  if the arrangement or table covers memberships consisting of a contributor and one or more dependent children of the contributor—charge the same contribution in respect of each such membership; and

                            (iii)  if the arrangement or table covers memberships consisting solely of a contributor—charge the same contribution in respect of each such membership; and

                            (iv)  if the arrangement or table covers memberships consisting of a contributor and one other person who is not a dependent child of the contributor—charge the same contribution in respect of each such membership;

                            unless, under the rules of the organization, a discounted rate of contribution is payable by or in respect of such a contributor.

                      (r)  For the purposes of paragraph (q), dependent child , in relation to a contributor, means a person:

                              (i)  who is covered as a dependant of the contributor; and

                             (ii)  whom the organization accepts under its rules as a dependent child of the contributor;

                            but does not include;

                            (iii)  a person who is the spouse or partner of another person; or

                            (iv)  a person (other than a full-time student) who is 18 or older; or

                             (v)  a full-time student who is 25 or older.

                      (s)  The rules of the organization may provide that a discounted rate of contribution is payable by or in respect of a contributor for an applicable benefits arrangement, or for a table of ancillary health benefits, offered by the organization, only if at least one of the following payment circumstances applies to the payment of contribution by or in respect of that contributor:

                              (i)  it is paid at least 6 months in advance;

                             (ii)  it is paid through a payroll deduction;

                            (iii)  it is paid through a direct debit from an account at a bank or other financial institution;

                            (iv)  it is paid on behalf of the contributor concerned because the contributor is to be treated, under the rules of the organization, as belonging to a contribution group.

                      (t)  The rules of the organization may provide that a discounted rate of contribution is payable by or in respect of a contributor in respect of a payment circumstance set out in paragraph (s) only if:

                              (i)  the percentage by which the rate of contribution is discounted does not exceed the percentage determined by the Minister from time to time under subsection 73BA(4); and

                             (ii)  the discount applies in respect of the rates of contribution applicable to each membership group referred to in paragraph (q) that is covered by an applicable benefits arrangement or table of ancillary health benefits offered by the organization; and

                            (iii)  the discount, although it may be renewed, is not granted for more than 12 months; and

                            (iv)  the organization is satisfied, on reasonable grounds, that the revenue forgone by providing the discount is likely to be less than, or equal to, the reduction in management expenses attributable to that payment circumstance.

                     (u)  The rules of the organization, if they provide for one or more discounted rates of contribution:

                              (i)  will provide a full statement of all undiscounted rates of contribution separately from those discounted rates; and

                             (ii)  will identify each payment circumstance set out in paragraph (s) in respect of which a discounted rate is available and indicate the amount of discount expressed as a percentage of the undiscounted rate of contribution; and

                            (iii)  will preclude an entitlement to a greater discount because more than one payment circumstance applies in respect of a contributor.

                     (v)  The organization, if required in writing by the Minister to do so, will provide documentary evidence to the Minister indicating how the organization satisfied itself of the matter referred to in subparagraph (t)(iv).

                    (w)  The organization will comply with any direction of the Minister under this Act served on it.

3  Saving provision

If, under an applicable benefits arrangement of an organization in force immediately before the commencement of items 1 and 2 of this Schedule, the organization purported to allow a contributor to the health benefits fund conducted by that organization an entitlement to a discount in the rate of contribution payable by that contributor, that entitlement continues to be available after that commencement on the terms originally agreed between the organization and the contributor despite the fact that it is not consistent with the conditions to which registrations are subject applying after that commencement.



 

Part 2 Amendments relating to loyalty bonus schemes

4  After subsection 73BA(2)

Insert:

          (2A)  The Minister may determine, in writing, guidelines relating to the establishment by an organization, under its rules and in accordance with the conditions set out in paragraph (ma) of Schedule 1, of loyalty bonus schemes.

          (2B)  Such guidelines:

                     (a)  may cover all or any of the following:

                              (i)  the circumstances in which organizations can offer financial benefits, goods or services under a loyalty bonus scheme;

                             (ii)  the types of actual and contingent financial benefits that can be offered to a contributor, a dependant of a contributor or a third party under such a scheme;

                            (iii)  the types of goods or services that can be offered by the organization or, at the instigation of the organization, by a third party, to a contributor or dependant; and

                     (b)  are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901 .

5  After paragraph (m) of Schedule 1

Insert:

                   (ma)  The rules of the organization may permit the organization to implement a scheme (to be known as a loyalty bonus scheme) under which:

                              (i)  the organization offers actual or contingent financial benefits to a contributor to the health benefits fund conducted by the organization, or to a dependant of such a contributor, or to a third party on behalf of such a contributor or dependant; or

                             (ii)  the organization offers, or arranges for a third party to offer, goods or services to such a contributor or dependant;

                            in recognition of the period of time over which contributions have been paid by or on behalf of such a contributor under an applicable benefits arrangement or for a table of ancillary health benefits, only if the provision of such financial benefits, goods or services is consistent with any guidelines that are determined by the Minister under subsection 73BA(2A).

                   (mb)  The organization will not, in determining whether a contributor or a dependant of a contributor may participate in a loyalty bonus scheme, have regard to any of the following matters:

                              (i)  the suffering by the contributor, or a dependant of the contributor, from a chronic disease, illness or other medical condition or from a disease, illness or medical condition of a particular kind;

                             (ii)  the age of the contributor or of a dependant of a contributor;

                            (iii)  the frequency of the rendering of professional services to the contributor or to a dependant of a contributor;

                            (iv)  the amount, or extent, of the benefits to which the contributor becomes, or has become, entitled during a period;

                             (v)  any matter prescribed for the purpose of this provision.



 

Part 3 Amendments relating to waiting periods

6  After section 73BA

Insert:

73BAA   Waiver of waiting periods

             (1)  Nothing in this Act prevents a registered health benefits organization from waiving, in whole or in part, in relation to a contributor to the health benefits fund conducted by the organization or to any dependant of the contributor, the requirement of a waiting period applicable to that contributor or dependant.

             (2)  For the avoidance of doubt, subsection (1) applies to waiting periods established before, as well as to waiting periods established on or after, the day on which this section commences.

7  Paragraph (bb) of Schedule 1

Omit “paragraph (bc)”, substitute “paragraph (j)”.

8  Paragraph (bc) of Schedule 1

Repeal the paragraph.

9  Paragraph (j) of Schedule 1

Repeal the paragraph, substitute:

                      (j)  Except in a case to which subparagraph (ka)(i) applies, if the rules of the organization permit the fixing of waiting periods in relation to the provision of benefits to:

                              (i)  a contributor to the health benefits fund conducted by that organization: or

                             (ii)  a dependant of that contributor;

                            under an applicable benefits arrangement of the organization (whether or not that arrangement is an arrangement modified by an election of the kind referred to in paragraph (ba)), a waiting period so fixed:

                            (iii)  will commence, in respect of each such contributor or dependant, on a day that is worked out in a manner specified in the regulations; and

                            (iv)  will not exceed, in respect of an ailment, illness or condition (including a pre-existing ailment) that is identified in the regulations, a period that is specified in relation to that ailment, illness or condition.

10  Paragraph (k) of Schedule 1

Repeal the paragraph.

11  Paragraph (ka) of Schedule 1

Omit “or (k)” (wherever occurring).

12  Paragraph (kc) of Schedule 1

Omit “paragraph (k)”, substitute “paragraph (j)”.

13  Paragraph (kd) of Schedule 1

Omit “subparagraph (bc)(i) or”.

14  Saving provision

If, immediately before the commencement of items 6 to 13 of this Schedule, a waiting period was applicable to a person under an applicable benefits arrangement of a particular registered organization, the amendments made by those items do not affect the circumstances in which that waiting period applies to that person or the duration of that waiting period.



 

Part 4 Amendments relating to coverage of pharmaceutical benefits costs

15  Paragraph 73A(1)(a)

After “a condition that”, insert “, except in the circumstances set out in subsection 92B(2),”.

16  Section 92B

Repeal the section, substitute:

92B   Persons not to enter into certain refund agreements

             (1)  Except as provided in subsection (2), a person who is an insurer must not enter into a contract of insurance that comprises or contains a refund agreement.

Penalty:  20 penalty units

             (2)  If:

                     (a)  a registered organization enters into an applicable benefits arrangement with a contributor to the health benefits fund conducted by the organization; and

                     (b)  the organization purports, under that arrangement, to cover 100% of the cost to the contributor of hospital treatment provided to the contributor or a dependant as an admitted patient at a hospital or a day hospital facility with which the organization has a hospital purchaser-provider agreement;

the organization must provide, in its rules, that the cost so covered includes the whole of the amount that, but for the arrangement, would be the cost to the contributor or dependant of pharmaceutical benefits dispensed to the contributor or dependant while the contributor or dependant is a patient at the hospital or day hospital facility.



 

Part 5 Amendments relating to certain procedures rendered in approved procedures facilities

17  Subsection 4(1)

Insert:

approved procedures facility means premises in respect of which a declaration under subsection 5C(1) is in force.

18  At the end of subsection 5A(1)

Add:

              ; or (ba)  in respect of some or all of the professional services in respect of which a medicare benefit is payable that are included within a kind of such professional services to which this paragraph is expressed to extend.

19  After subsection 5A(1)

Insert:

          (1A)  Paragraph 5A(1)(ba) extends to professional services in respect of which a medicare benefit is payable that are determined by the Minister, for the purposes of paragraph (bka) of Schedule 1, to be out-of-hospital procedures in circumstances where those procedures are rendered in an approved procedures facility.

          (1B)  The reference in subsection (1) to a liability to fees and charges in respect of a professional service to which paragraph (1)(ba) extends, because of the operation of subsection (1A), includes a reference to a liability to any additional amount charged by the medical practitioner rendering the service that is attributed by the medical practitioner to the additional costs related to the rendering of the service in an approved procedures facility.

20  After section 5B

Insert:

5C   Declarations in relation to approved procedures facilit ies

             (1)  The Minister may, in writing, declare premises specified in the declaration to be an approved procedures facility for the purposes of this Act and the Health Insurance Act 1973 .

             (2)  A declaration under subsection (1) may be expressed to take effect from a day earlier than the day on which the declaration is made.

             (3)  A decision whether to make a declaration under this section must be in accordance with any guidelines in force under subsection (4).

             (4)  The Minister may, by written instrument, make guidelines relating to the making of such decisions.

             (5)  The guidelines are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901 .

21  Before subsection 73BA(3)

Insert:

          (2C)  The Minister may determine, in writing, that a professional service in respect of which a medicare benefit is payable is an out-of-hospital procedure if the Minister is satisfied:

                     (a)  that it is a procedure that, if performed in a hospital or day hospital, would involve an episode of hospital treatment; but

                     (b)  that it is a procedure that can appropriately be performed in an approved procedures facility instead of a hospital or day hospital facility;

and, where the Minister makes such a determination in respect of a professional service, the Minister may also determine an amount, to be known as the facility benefit, in respect of additional costs related to the rendering of that service in the approved procedures facility.

          (2D)  Determinations made under subsection (2C) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901 .

22  After paragraph (bk) of Schedule 1

Insert:

                  (bka)  Subject to paragraph (bkb), the level of benefit that is payable in respect of the performance, in an approved procedures facility, of a professional service:

                              (i)  that is determined by the Minister, under subsection 73BA(2C), to be an out-of-hospital procedure; and

                             (ii)  that is covered by an applicable benefits arrangement of the organization;

                            must be an amount at least equal to:

                            (iii)  if the medical expenses incurred in respect of the service are greater than or equal to the Schedule fee (within the meaning of Part II of the Health Insurance Act 1973 ) in respect of the service—the sum of 25% of the Schedule fee and the facility benefit determined by the Minister under that subsection in respect of that service; or

                            (iv)  if the medical expenses incurred in respect of the service are less than the Schedule fee—the sum of the amount (if any) by which the medical expenses incurred exceed 75% of the Schedule fee and the facility benefit determined by the Minister under that subsection in respect of the service.

                  (bkb)  The amount of benefit referred to in paragraph (bka) must not exceed the amount referred to in subparagraph (bka)(iii) or (iv) (whichever is applicable) unless the professional service is rendered by a medical practitioner with whom the organization has a medical purchaser-provider agreement that applies to that service.