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2002-2003-2004
THE PARLIAMENT OF THE
COMMONWEALTH OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
NATIONAL HEALTH AMENDMENT
(PROSTHESES) BILL 2004
EXPLANATORY
MEMORANDUM
(Circulated
by authority of the Minister for Health and Ageing,
the Hon Tony Abbott
MP)
NATIONAL HEALTH AMENDMENT (PROSTHESES) BILL 2004
OUTLINE
On 3 April 2003 the Government announced a new range of
measures to improve the regulatory framework and introduce greater competition
into the private health insurance industry. One of the measures announced was
the change in the manner of funding of prostheses by health funds.
Health funds currently meet, in relation to applicable benefits
arrangements (hospital cover),
100 per cent of the cost of all surgically
implanted prostheses and other medical devices listed on the Prostheses Schedule
[Schedule 5 to the determination under paragraph (bj), Schedule 1 of the
National Health Act 1953 (the Act)]. Under these arrangements, the cost
to funds of prostheses and medical devices has been growing at an unsustainable
rate over the last decade, and is recognised by funds as a significant driver of
premium growth. The current arrangements are also administratively cumbersome
and limit consumer choice in whether they wish to purchase, for a lower premium,
a health insurance product that may include co-payments or gaps for more
expensive prosthetic items.
This bill amends the Act to require
registered health benefit organizations (health funds), to offer a no gap and
gap permitted range of prostheses in relation to every in hospital procedure on
the Medicare Benefits Schedule (MBS) for which they provide cover.
The
Bill amends the Act to allow the Minister to determine in writing:
• no gap prostheses - prostheses that are to be covered by health
funds with no gap payable, at the benefit amount listed for each no gap
prosthesis.
• gap permitted prostheses - prostheses that are to be
covered by health funds, but a gap may be payable by the health fund
contributor, and the minimum and maximum benefit amount for each gap permitted
prosthesis.
In making decisions regarding listing and benefit levels
of prostheses that health insurance funds will be required to cover, the
Minister may take into account advice from experts in the field of prostheses
and in the health insurance industry.
Determinations made in relation
to the listing of no gap and gap permitted prostheses and the benefit levels of
prostheses will be disallowable instruments. Once the Legislative
Instruments Act 2003 commences, these determinations will be legislative
instruments.
Health funds will still be permitted to choose to provide, under their
applicable benefits arrangements, cover for prostheses which are not listed on
the no gap or gap permitted prostheses determination, for example, more
expensive prostheses relating to MBS procedures, and prostheses not related to
MBS procedures.
This initiative does not affect the ability of health
funds to provide cover for prostheses under their tables of ancillary health
benefits (ancillary cover).
No Gap Prostheses
The bill amends
Schedule 1 of the Act to require health funds to provide contributors no gap
cover for prostheses in relation to in-hospital procedures on the MBS. The
benefit that the health fund must pay is the no gap benefit amount listed in the
Minister’s determination, and the contributor should have no out of pocket
costs for a no gap prosthesis.
Health funds must offer at least one
hospital cover policy covering all episodes of hospital treatment, and all
in-hospital professional services rendered to a patient for which a Medicare
benefit is payable [paragraph (bd), Schedule 1 of the Act].
Contributors
may elect to pay lower premiums for lesser benefits [paragraph (ba), Schedule 1
of the Act]. The ability of contributors to elect not to be covered for an
episode of hospital treatment/professional service is to be retained. However,
once a contributor has hospital cover for an episode of hospital
treatment/professional service, the health fund will be obliged to pay benefit,
at the benefit amount, for no gap prostheses associated with that episode of
hospital treatment/professional service.
By way of example, a
contributor may elect not to be covered, under their hospital cover, for cardiac
surgery. If this is the case, the health fund will not be obliged to pay
benefit at the benefit amount for no gap prostheses associated with cardiac
surgery.
However, unless a contributor has elected not be covered for
cardiac surgery, the health fund will be obliged to provide cover for cardiac
surgery, including cover for no gap prostheses associated with cardiac surgery.
The health fund will pay the benefit amount set for each no gap prosthesis
associated with the cardiac surgery.
Gap Permitted Prostheses
The bill also amends Schedule 1 of the Act to regulate the provision of
benefit by health funds in relation to gap permitted prostheses. The same
requirements as for no gap prostheses will apply, except health funds must not
pay benefit at less than the minimum amount listed for a gap permitted
prosthesis. In addition, health funds must not pay benefit above the maximum
amount listed for a gap permitted prosthesis.
A gap permitted prosthesis
is likely to leave a contributor with a ‘gap’ or out of pocket
expense, but the gap should be no more than the difference between the minimum
and maximum benefit amount for the no gap prosthesis.
In addition, a
heath fund may offer, and contributors may choose, a hospital cover policy which
covers some or all of the gap or out of pocket expense for some or all gap
permitted prostheses.
Prostheses Payments under hospital
purchaser-provider agreements
The Bill inserts a new section 73BDAAA
relating to arrangements for payment for no gap and gap permitted prostheses
where a no gap or gap permitted prostheses is provided as part of an episode of
hospital treatment covered by a hospital purchaser-provider agreement (HPPA)
between a health fund and a hospital or day hospital facility.
Section
73BDAAA is designed to ensure that a contributor to a health fund will receive
the same cover for a no gap or gap permitted prothesis, when the hospital or day
hospital facility where they receive treatment has a HPPA with the
contributor’s health fund.
For a no gap prosthesis, the health fund
pays the benefit amount. For a gap permitted prostheses, the health fund pays
at least the minimum benefit amount, and must not exceed the maximum benefit
amount.
In the case of a no gap prothesis, the HPPA must provide that
the hospital or day hospital facility agrees to accept payment, of the benefit
amount, by the health fund as the full amount that the health fund contributor
is liable to pay the hospital or day hospital facility for the prosthesis.
In the case of a gap permitted prostheses, the HPPA must provide that
the hospital or day hospital facility agrees that payment by the health fund
will not leave the contributor liable, in relation to a gap permitted
prosthesis, to pay more than the ‘gap’ (that is, the difference
between the minimum and maximum benefit amount for a gap permitted
prosthesis).
The changes to the arrangements will make a significant contribution towards reducing pressure on health insurance premiums and the growth in of Government outlays on the 30% Private Health Insurance Rebate. When the measure was announced, the estimated savings were $3.0m in 2003-04, $13.7m in 2004-05, $19.5m in 2005-06 and $25.7m in 2006-07. Delays in implementation have meant that these savings will also be delayed.
REGULATION IMPACT STATEMENT
On 2 April 2002 the Government announced a review of the regulatory
arrangements of the private health insurance industry to consider if the rules
and regulations were delivering affordable, high quality private health care for
health fund members.
The review took into consideration objectives in
relation to:
• private health insurance policy;
• health
policies;
• fiscal policy objectives;
• competition policy
objectives; and
• industry policy.
The preliminary work of the
review considered ways in which further reductions in private health insurance
industry regulation could be employed to minimise future premium increases while
also providing mechanisms to protect the interest of members. Four areas were
identified where changes to the regulatory framework for private health
insurance could assist in reducing cost pressures on premiums: prostheses;
reinsurance; second tier benefits; and reporting on management expenses.
The Government has already implemented a number of measures arising from
the review, including:
• a reduction in regulation around the
introduction of new products balanced by an improved reporting regime for the
industry;
• increased powers for the Private Health Insurance Ombudsman
to deal with complaints;
• the publication of an annual State of the
Health Funds report to provide consumers with comparative information on the
performance and services of the health funds; and
• changes to
administrative arrangements relating to premium increases.
On 3 April
2003 the Government announced a new range of measures to improve the regulatory
framework and introduce greater competition into the private health insurance
industry. One of the measures announced was a change in the manner in which the
funding of prostheses by health funds occurs.
The cost to funds of prostheses and medical devices has been growing at
an unsustainable rate over the last decade and is recognised by funds as a
significant driver of premium growth. There was a 28 per cent real increase in
prostheses benefits paid in 2002-03 compared to 2001-02. Benefits paid in
2002-03 totalled over $545 million.
Prostheses benefits now account for
12.0 per cent of total hospital benefits, up from 1.7 per cent in
1989-90. Current rates of growth in prostheses costs are estimated to
contribute around 2% to total premium growth each year.
Health funds
currently meet 100 per cent of the cost of all surgically implanted prostheses
and other medical devices listed on the Government’s Prostheses Schedule
(Schedule 5 to the determination under paragraph (bj), Schedule 1 of the
National Health Act 1953). There are few incentives for ensuring value
for money in the current arrangements. For example, there is little
evidence-based assessment of safety, effectiveness and cost-effectiveness and
pricing arrangements are left to individual funds and suppliers.
The
existing prostheses arrangements are unique in private health insurance
regulation in that consumers cannot choose to purchase a health insurance
product that may include co-payments or gaps for prosthetic items. Consumers
cannot decide that they do not wish to insure for more expensive or unproven
items. This is not the case for any other item or service covered by private
health insurance.
The Prostheses Schedule is also unique in private
health insurance regulation in that it specifies actual medical items. Other
provisions relating to hospital treatment are broad and do not prescribe the
type of treatment that must be funded.
In addition to the increasing cost
of the current arrangements as outlined above, funds, hospitals and suppliers of
prostheses (manufacturers and distributors) complain that the arrangements are
cumbersome simply because the list of prostheses now includes over 8,000 items.
Suppliers resent being asked to cover the cost of listed items. There can also
be pricing disputes between funds and suppliers and disputes with hospitals over
alleged incorrect charging for items.
The overall objective of Government private health insurance policies, is
to make private health insurance more competitive and valuable to consumers with
the aim of giving Australians greater choice in health care, while providing
consumers with certainty that there is a sustainable and balanced health system
for the future by supporting a private health sector that complements the public
health system.
Consistent with this, the objectives of the proposed new
prostheses arrangements are to:
• reduce the pressure on the level of
private health insurance premiums by limiting the growth in benefits for
prostheses;
• reduce the administrative burden on the industry; and
• provide contributors with more choice in the provision of
prostheses.
Three options were identified as part of the regulation review process,
for implementing prostheses arrangements that may meet the above objectives. An
assessment of each option is provided below.
The groups most likely to be
affected by these options are:
• health
funds;
• consumers;
• suppliers of prostheses;
• doctors; and
• Government.
A legislative framework would be established by the Government to support a
Prostheses Schedule allowing health funds to charge a gap in certain
circumstances. The evidence requirements for listing on the schedule would be
increased and the schedule would be limited to items that met a narrow
definition of replacement body parts.
Under this option, there would be no specific legislative requirements to
cover prostheses. Funds could choose to offer products which cover prostheses,
with or without gaps, and would be required to provide clear information on the
level of coverage for each product.
Under this option the Government would legislate to require health funds to
offer a no gap range of prostheses in relation to every in-hospital procedure on
the Medicare Benefits Schedule (MBS) for which they are providing cover.
Provided that a no gap range of prostheses is available for every
procedure on the MBS, funds could then offer a range of more expensive
prostheses which may involve a gap. The same requirements as for no gap
prostheses would apply, except health funds must not pay benefit less than the
minimum amount listed for a gap permitted prosthesis, or more than the maximum
amount listed for a gap permitted prosthesis.
The intention is that
health funds would still have the freedom to choose to provide cover for
prostheses that are not related to MBS procedures covered and are not listed on
the no gap or gap permitted prostheses determination.
Members would
still be able to choose to pay lower premiums for lesser benefits. Health funds
would not be required to pay the benefit amount for a no gap prosthesis or the
minimum amount for a gap permitted prosthesis, where a member has made an
election not to be covered for the procedure.
On health funds –The increased requirements for listing by
restricting the number prostheses listed, would result in a reduction in the
level of benefits that health funds would pay for prostheses. They would also
have more choice in the level of cover for items that have a gap. However,
health funds would continue to be subject to detailed and costly regulation.
On consumers – Consumers could face considerable
uncertainty about coverage and may face significant gaps for many prosthetic
items. Consumer choice of private health insurance product would be restricted.
On suppliers – Suppliers would need to provide more
information to justify listing and would not be guaranteed a no gap benefit
would be paid by health funds.
On Government – The
Government would be more involved with the day-to-day administration of the
arrangements, as current assessment processes would be increased.
This
option may meet the objective of reducing the pressure on health insurance
premiums to some degree. There would be tighter restrictions on the prosthesis
items that would be listed on the schedule, and for which health funds would
provide a benefit. There would also be a number of items for which a gap could
be charged. This would have the effect of reducing the amounts of benefits
health funds would pay.
However, consumer choice of product would be
restricted and uncertainty about the level of cover would increase. The
administrative burden on the industry in providing more evidence for approval of
the prosthesis items and for those items not listed would be increased.
On health funds – Health funds could choose which items to cover
and what level of benefits they pay thereby reducing their costs. However,
total deregulation would require duplication of administrative and assessment
processes between funds. This could lead to inconsistency and thus uncertainty
for consumers. Individual funds would not be protected from pressure to pay for
expensive and unproven items.
On consumers – Consumers are
not guaranteed anything with respect to the cost of prostheses. They could face
considerable uncertainty about coverage and significant gaps for prosthetic
items. They may miss out on clinically necessary or life-saving technology.
On suppliers – Suppliers would still not be guaranteed that
health funds would pay a no gap benefit without having to enter into costly
negotiations.
On Government – Government objectives with
respect to private health insurance would not be satisfied because consumers
have inadequate protection with respect to prostheses costs. Depending on the
response of the funds, this could pose a major problem for fund members.
This option would meet the objective of reducing pressure on health fund
premiums. Health funds would have more freedom in deciding the benefit level
and coverage of prosthesis items.
However, there is a significant risk
that consumers would face a reduction in the level of cover for prostheses and a
greatly reduced choice of products available to them. Suppliers would also be
faced with increased costs from negotiations.
On health funds – This option is based on a proposal put forward
by health funds and public and private hospitals. This option would address
current problems with administration and significantly reduce pressure on costs
over time. Rather than having to cover the full cost of the prostheses, health
funds will only be required to cover the amount of the no gap prostheses in
full. They may then choose to cover above that amount to a maximum determined
by the Minister.
On hospitals – This arrangement would
provide hospitals as purchasers of prostheses, with improved arrangements for
listing and pricing.
On consumers –This option contains
various consumer protections and provides national consistency in access to a no
gap prostheses product. For people with private health insurance needing an
in-hospital procedure, they will have the choice between different levels of
prostheses cover. They would still have the choice of a no gap product or could
choose a more expensive item with a co-payment. The majority of prostheses
would remain at no gap. The possible gaps, or out-of-pocket costs, that may
arise could be of concern to consumers. However, this option is expected to
significantly reduce growth in prostheses benefits over time and as a result
will alleviate some pressure on premiums.
On doctors –
Doctors would need to provide their patients with the information they need on
clinical and cost options in order for them to take an informed decision on
their prostheses options.
On suppliers – The no gap benefit
to be paid by health funds would be determined by the Minister for Health and
Ageing. The Minister would also determine the maximum amount that the fund
would be required to cover for a gap permitted prostheses. While the level of
benefit for no gap prostheses may have some impact on the price that suppliers
can negotiate for their products, they will still have some flexibility in
pricing their products through the gap permitted prostheses items. This option
will also provide them with greater certainty that their items will be covered
by health funds.
On Government – This option would
significantly reduce growth in prostheses benefits over time, alleviating some
pressure on premiums and the 30% private health insurance rebate. The
Government would work with industry to ensure the application of informed
financial consent arrangements for consumers.
On 17 April 2002, the Department of Health and Ageing wrote to a
broad range of private health industry stakeholders seeking their views on the
current regulatory arrangements. Submissions from interested stakeholders were
received by 10 May 2002 and were considered as part of the review processes.
Submissions were received from private health industry peak bodies and peak body
representatives, including private hospitals, health funds, consumer groups,
health professionals the Private Health Insurance Ombudsman and the Private
Health Insurance Administration Council (PHIAC) board. Health funds and private
and public hospitals worked together over two months to produce a joint
submission in relation to prostheses cover. In all, 25 submissions were
received.
With the information provided by these submissions the above
options were developed by an inter-Departmental Committee.
Option 3, is
based on the joint proposal put forward by health funds and the private and
public hospitals.
Option 3 is the most likely to reduce the growth in prostheses benefits
over time. Health funds will have some control over their level of coverage of
benefits for prostheses items. This option will also reduce the administrative
burden for the industry.
Option 3 also has the support of the
main industry groups.
IMPLEMENTATION AND
REVIEW
Implementation
Amendment to the National
Health Act 1953, will be required to implement the recommended option.
Implementation is planned to commence in early 2005.
A
non-statutory advisory committee will advise the Minister on the listing and
pricing of prostheses and devices. Its composition will include
representatives of clinicians; health funds; private hospital representatives;
suppliers; the Department of Veterans’ Affairs; and consumers. The Chair
of the committee will be an independent clinician.
To support the
Committee there will be:
• Clinical Advisory Groups, comprised mainly
of expert clinicians to provide advice on the clinical effectiveness and
relative effectiveness of prostheses; and
• A Benefits Negotiating
Group to advise on appropriate level of benefits for the products.
A
Policy Advisory Group, comprising a senior representative of each of the key
stakeholders, will address major policy issues.
Review
A review of the new arrangements will commence two years after full implementation.
This clause provides that the Act may be cited as the National Health Amendment (Prostheses) Act 2004.
This clause sets out the commencement arrangements for provisions of this
Act. Each provision of this Act specified in column 1 of the table commences,
or is taken to have commenced, in accordance with column 2 of the table. Any
other statement in column 2 has effect according to its terms.
Sections 1
to 3 and anything in this Act not elsewhere covered by the table commences on
the day this Act receives the Royal Assent.
Schedule 1 to the Act
commences on a single day to be fixed by Proclamation. If any of the provisions
do not commence within the period of 6 months beginning on the day on which this
Act receives the Royal Assent, they commence on the first day after the end of
that period.
This clause provides that each Act that is specified in a Schedule to this
Act is amended or repealed as set out in the applicable items in the Schedule
concerned, and any other item in a Schedule to this Act has effect according to
its terms.
SCHEDULE 1 – AMENDMENTS
Item 1: Subsection 4(1)
Item 1 inserts a new definition of gap permitted prosthesis into subsection 4(1) of the National Health Act 1953 (the Act). It provides that gap permitted prosthesis means a prosthesis determined by the Minister under subsection 73AAG(7) to be a gap permitted prosthesis.
Item 2: Subsection 4(1)
Item 2 inserts a new definition of no gap prosthesis into subsection 4(1) of the Act. It provides that a no gap prosthesis means a prosthesis determined by the Minister under subsection 73AAG(6) to be a no gap prosthesis.
Item 3: Section 5F
Item 3 inserts a new section 5F into the Act, which provides that in the Act and the Health Insurance Act 1973, a reference to hospital treatment, or an episode of hospital treatment, includes a reference to a prosthesis provided as part of an episode of hospital treatment.
New section 5F is designed to remove any doubt that registered health benefits organizations (health funds) may pay benefit, under applicable benefits arrangements, for prostheses provided as part of an episode of hospital treatment, including no gap prostheses and gap permitted prostheses.
Item 4: Subsection 67(4) (at the end of the definition of hospital treatment)
Item 4 inserts a new part (c) in subsection 67(4), at the end of the definition of hospital treatment, which includes in hospital treatment, a prosthesis provided as part of an episode of hospital treatment.
Subsection 67(1) of the Act provides that a person, other than a health fund, shall not carry on health insurance business. Subsection 67(2) makes it an offence to contravene subsection 67(1). Subsection 67, unlike other private health insurance provisions in the Act, is directed at non health funds. The amendment to the definition of hospital treatment in subsection 67(4) is made to remove any doubt that the definition of ‘hospital treatment’ in subsection 67(4) of the Act includes prostheses provided as part of an episode of hospital treatment.
Item 5: At the end of section 73AAG
Item 5 inserts new subsections (6), (7) and (8) at the end of section 73AAG of the Act.
Subsection (6) provides that the Minister may determine in writing the prostheses that are no gap prostheses for the purposes of the Act, and the benefit amount for each of those no gap prostheses.
Subsection (7) provides that the Minister may determine in writing the prostheses that are gap permitted prostheses for the purposes of the Act, and the minimum and maximum benefit amounts for each of those gap permitted prostheses.
Subsection (8) provides that a determination made under subsection 73AAG(6)
or (7) before
the day on which section 3 of the Legislative Instruments
Act 2003 commences is a disallowable instrument for the purposes of section
46A of the Acts Interpretation Act 1901.
A no gap or gap permitted prosthesis determination made before the substantive provisions of the Legislative Instruments Act 2003 commence will be a disallowable instrument for the purposes of section 46A of the Acts Interpretations Act 1901. Once the substantive provisions of the Legislative Instruments Act 2003 commence, and, in accordance with paragraph 6(d) of that Act, a no gap or gap permitted prosthesis determination will become a legislative instrument.
No gap or gap permitted prosthesis determinations made after the substantive provisions of the Legislative Instruments Act 2003 commence will be legislative instruments.
Item 6: Subparagraph 73BD(2)(b)(i)
Item 6
inserts, after the word “related”, the words,
“goods and” into subparagraph 73BD(2)(b)(i). Following amendment,
paragraph 73BD(2)(b)(i) will provide that a HPPA must require the hospital or
day hospital facility to render, in respect of an episode of hospital treatment,
a single account covering all hospital services and related goods and services.
The purpose of this amendment is to remove any possible doubt whether the single
account must include any prostheses provided as part of the episode of hospital
treatment.
Item 7: After subsection 73BD
Item 7
inserts a new section 73BDAAA relating to no gap and gap permitted
prostheses payments under hospital purchaser-provider agreements (HPPAs).
Subsection (1) provides that section 73BDAAA will apply if:
• a
hospital purchaser-provider agreement between a health fund and a hospital or a
day hospital facility deals with the payment to be made by the health fund to
the hospital or day hospital facility in relation to a particular episode of
hospital treatment; and
• a no gap or gap permitted prosthesis is
provided as part of that episode of hospital treatment; and
• the
person to whom the prosthesis is provided is a contributor to the health
benefits fund conducted by the health fund; and
• under the terms on
which the person is a contributor, the person is covered (wholly or partly) in
respect of that episode of hospital treatment, or the professional service
associated with the provision of the prosthesis; and
• a Medicare
benefit is payable in respect of the professional service associated with the
provision of the prosthesis.
Subsection (2) provides that in working out the amount the health fund must
pay the hospital or day hospital facility for the episode of hospital treatment,
the amount taken into account to cover the cost of the
prosthesis:
• for a no gap prosthesis, must be the benefit amount
for the no gap prosthesis;
• for a gap permitted prosthesis, must be at
least the minimum benefit amount, and must not exceed the maximum benefit
amount, for the gap permitted prosthesis.
Subsection (3) provides that if the prosthesis is a no gap prosthesis, the
HPPA must provide that the hospital or day hospital facility agrees to accept
payment by the health fund under the agreement, of the benefit amount, in
relation to the episode of hospital treatment in satisfaction of any amount that
the contributor would, apart from the HPPA, owe the hospital or day hospital
facility for the prosthesis.
The purpose of this amendment is to ensure
that, where section 73BDAAA applies [see subsection 73BDAAA(1)], the contributor
does not have any out of pocket costs (costs not covered by the health fund) for
any no gap prosthesis provided as part of the episode of hospital
treatment.
Subsection (4) provides that if the prosthesis is a gap permitted prosthesis,
the HPPA must provide that the hospital or day hospital facility agrees that,
when payment is made by the health fund under the agreement for an episode of
hospital treatment, the contributor will not be liable to the hospital or day
hospital facility, in relation to the gap permitted prosthesis, for more than
the ‘gap’, that is, the difference between the minimum and maximum
benefit amount for the no gap prosthesis.
The purpose of this amendment
is to ensure that, where section 73BDAAA applies [see subsection 73BDAAA(1)],
the contributor does not have out of pocket costs (costs not covered by the
health fund) for any gap permitted prosthesis provided as part of the episode of
hospital treatment which are greater than the
‘gap’.
Item 8: Paragraph (bi) of Schedule
1
Item 8 amends paragraph (bi) of Schedule 1 to omit
“condition set out in paragraph” and substitute “conditions
set out in paragraphs (bl), (bm), (bn), (bo) and ”.
Paragraph
(bi) sets the minimum benefit payable by health funds for episodes of hospital
treatment not covered by a HPPA, in situations of emergency. The amendment
requires health funds to apply, in relation to payment of benefit for no gap and
gap permitted prostheses, the new conditions of registration relating to no gap
and gap permitted prostheses set out in paragraphs (bl), (bm), (bn) (bo).
Item 9: Paragraph (bj) of Schedule 1
Item
9 amends paragraph (bj) of Schedule 1 to omit “condition set out in
paragraph” and substitute “conditions set out in paragraphs (bl),
(bm), (bn), (bo) and ”.
Paragraph (bj) provides for the Minister
to set the minimum benefit payable by health funds for episodes of hospital
treatment not covered by a HPPA, otherwise than in situations of emergency. The
amendment requires health funds to apply, in relation to payment of benefit for
no gap and gap permitted prostheses, the new conditions of registration set out
in paragraphs (bl), (bm), (bn) and (bo).
Item 10: After paragraph
(bk) of Schedule 1
Item 10 inserts four new conditions of
registration after paragraph (bk) of Schedule 1 – contained in paragraphs
(bl), (bm), (bn), and (bo). Paragraphs (bl) and (bm) relate to no gap
prostheses, and paragraphs (bn) and (bo) relate to gap permitted
prostheses.
Paragraph (bl) provides that paragraph (bl) applies to a no
gap prosthesis if:
• the prosthesis is provided as part of an
episode of hospital treatment; and
• a Medicare benefit is payable in
respect of the professional service associated with the provision of the
prosthesis; and
• the person to whom the prosthesis is provided is a
contributor to the health benefits fund conducted by the health fund;
and
• under the terms on which the person is a contributor, the person
is covered (wholly or partly) in respect of the episode of hospital treatment or
the professional service; and
• the episode of hospital treatment is
provided in a hospital or day hospital facility with which the health fund does
not have a HPPA covering episodes of hospital treatment of that
kind.
Paragraph (bm) provides that if paragraph (bl) applies to a no gap
prosthesis:
• each applicable benefits arrangement of the health
fund must provide for benefits to be payable in respect of the prosthesis;
and
• the amount of benefit payable by the health fund in respect of
the no gap prosthesis must equal the benefit amount for the no gap
prosthesis.
Paragraph (bn) provides that paragraph (bn) applies to a gap
permitted prosthesis if:
• the prosthesis is provided as part of an
episode of hospital treatment; and
• a Medicare benefit is payable in
respect of the professional service associated with the provision of the
prosthesis; and
• the person to whom the prosthesis is provided is a
contributor to the health benefits fund conducted by the health fund;
and
• under the terms on which the person is a contributor, the person
is covered (wholly or partly) in respect of the episode of hospital treatment or
the professional service; and
• the episode of hospital treatment is
provided in a hospital or day hospital facility with which the health fund does
not have a HPPA covering episodes of hospital treatment of that
kind.
Paragraph (bo) provides that if paragraph (bn) applies to a gap
permitted prosthesis:
• each applicable benefits arrangement of the
health fund must provide for benefits to be payable in respect of the
prosthesis; and
• the amount of benefit payable by the health fund in
respect of the gap permitted prosthesis must at least equal the minimum amount
for the gap permitted prosthesis; and
• the amount of benefit payable
by the health fund in respect of the gap permitted prosthesis must not exceed
the maximum amount for the gap permitted prosthesis.
Paragraphs (bm) and
(bo) are not subject to paragraph (d), Schedule 1 of the Act. Paragraph (d)
provides:
“The amount of benefit payable by the organization in
respect of hospital treatment for a person who is not a nursing-home type
patient will not exceed the fees or charges incurred in respect of that hospital
treatment.”