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Medicare Agreements Act 1992

Authoritative Version
Act No. 226 of 1992 as made
An Act to amend the Health Insurance Act 1973 to provide for the making of new Medicare Agreements, and for related purposes
Administered by: Health
Date of Assent 24 Dec 1992
Date of repeal 10 Mar 2016
Repealed by Amending Acts 1990 to 1999 Repeal Act 2016

Medicare Agreements Act 1992

No. 226 of 1992

TABLE OF PROVISIONS

PART 1—PRELIMINARY

Section

 

1.

Short title etc.

2.

Commencement

 

PART 2—AMENDMENTS PROVIDING FOR NEW MEDICARE AGREEMENTS

3.

Interpretation

4.

Repeal and substitution of section:

23E. Interpretation

5.

Agreement with States for provision of Public hospital services and other health services until 30 June 1993

6.

Insertion of new sections:

 

24. Agreement with States for provision of public hospital services and other health services from 1 July 1993

 

25. Terms and conditions of financial assistance

 

26. Conditions relating to Medicare Principles and Commitments

 

27. Variation of an Agreement

 

28. Certain variations of an Agreement to be made by special procedures

 

29. Tabling of an Agreement

 

30. Appropriation

7.

Payments by the Commonwealth

8.

Insertion of new Schedule:

SCHEDULE 2A

HEADS OF AGREEMENT


TABLE OF PROVISIONS—continued

Section

 

 

PART 3—AMENDMENTS RELATING TO MEDICARE AGREEMENTS THAT END ON 30 JUNE 1993

9.

Interpretation

10.

Repeal of section 23F

11.

Appropriation

12.

Repeal of Schedule 2


Medicare Agreements Act 1992

No. 226 of 1992

An Act to amend the Health Insurance Act 1973 to provide for the making of new Medicare Agreements, and for related purposes

[Assented to 24 December 1992]

The Parliament of Australia enacts:

 

PART 1—PRELIMINARY

Short title etc.

1.(1) This Act may be cited as the Medicare Agreements Act 1992.

(2) In this Act, “Principal Act” means the Health Insurance Act 19731.

Commencement

2.(1) Parts 1 and 2 commence on the day on which this Act receives the Royal Assent.

(2) Part 3 commences on 1 July 1993.


PART 2—AMENDMENTS PROVIDING FOR NEW MEDICARE AGREEMENTS

Interpretation

3.  Section 3 of the Principal Act is amended by omitting the definition of “agreement” and substituting the following definition:

‘agreement’ means:

(a)     before 1 July 1993—an agreement under section 23F; or

(b)     on or after 1 July 1993—an agreement under section 24;”.

Repeal and substitution of section

4.  Section 23E of the Principal Act is repealed and the following section is substituted:

Interpretation

“23E.(1) In this Part, unless the contrary intention appears:

‘Agreement’, except in section 23F, means an Agreement made under section 24;

‘base hospital funding grant formula’ means the method (set out in an Agreement on the day that it is entered into) of calculating the amount of base hospital funding grant payable in respect of a financial year during the grant period;

‘Commitments’ means the Commitments set out in subsection 26(2);

‘financial assistance’ means financial assistance payable under an Agreement;

‘grant period’ means:

(a)     the period beginning on 1 July 1993 and ending on 30 June 1998; or

(b)    if the period is extended—that extended period;

‘hospital service’ means a health service of a kind provided in a hospital and includes:

(a)     accommodation in a hospital for the purposes of receiving treatment; and

(b)     nursing care and treatment; and

(c)     medical care and treatment including diagnostic services; and

(d)     outpatient, accident and emergency services;

‘Medicare Principles’ means the Principles set out in subsection 26(2);

‘other health services’ means those services listed in an Agreement as being other health services;

‘public hospital service’ means a hospital service provided in:

(a)     a recognised hospital; or

(b)     a hospital in respect of which the Commonwealth, or a State, provides funding for the provision of hospital services to public patients;


Note 1: For the meaning of ‘hospital’ see subsection 3(1).

Note 2: For the meaning of ‘recognised hospital’ see subsection 3(1).

‘substantial reduction in the amount of non-base hospital funding payable’

has the meaning given in an Agreement.

“(2) For the purposes of this Part and Schedules 2 and 2A:

(a)     a reference to a State includes a reference to the Northern Territory and the Australian Capital Territory; and

(b)    a reference to the Australian Capital Territory includes a reference to the Jervis Bay Territory.”.

Agreement with States for provision of public hospital services and other health services until 30 June 1993

5.  Section 23F of the Principal Act is amended by adding at the end the following subsection:

“(5) An agreement entered into under subsection (1) or (3) operates until 30 June 1993.”.

Insertion of new sections

6.  After section 23F of the Principal Act the following sections are inserted:

Agreement with States for provision of public hospital services and other health services from 1 July 1993

“24.(1) The Commonwealth may enter into an Agreement with a State for and in relation to:

(a)  the State providing, for the period beginning on 1 July 1993 and ending on 30 June 1998:

(i) public hospital services; and

(ii) other health services; and

(b)  the Commonwealth providing financial assistance in the respect of the provision of those services.

“(2) The Agreement:

(a)     must be in terms that give effect substantially to the Heads of Agreement specified in Schedule 2A; and

(b)    may provide for matters other than the Heads of Agreement, including points of understanding between the parties to it.

Terms and conditions of financial assistance

“25.(1) Financial assistance is not payable to a State in respect of a period commencing after 1 July 1993 unless an Agreement has been entered into by that State.

“(2) The 5 components of the financial assistance payable under an Agreement are as follows:

(a) a base hospital funding grant;


 

(b)  a hospital bonus payment;

(c) a hospital incentive package;

(d)     a mental health incentive package;

(e)     other health services funding.

“(3) The Agreement must provide for the method of calculating the amount of base hospital funding grant payable in respect of a financial year during the grant period.

“(4) Financial assistance is payable in the amounts provided for in the Agreement.

“(5) The Agreement must provide for the amount of hospital bonus payment payable to a State under the hospital bonus component to be reviewed each time the percentage of the national population who, at 30 June 1993, are covered by a supplementary hospital table falls by at least 2 percentage points or a multiple thereof.

Note 1: If the percentage of the national population at 30 June 1993 who are covered by a supplementary hospital table is x%, then a review would be triggered under this section if the rate drops to (x-2)%.

Note 2: Subsequent review during the life of the Agreement would be triggered by additional drops of 2 percentage points over the base established at 30 June 1993. That is, if the percentage of the national population at 30 June 1993 who are covered by a supplementary hospital table subsequently drops to (x-4)%, this would trigger another review. Similarly, drops to (x-6)%, (x-8)% etc. would trigger further reviews.

“(6) Financial assistance is to be provided on the conditions set out in the Agreement and in section 26.

“(7) In calculating the percentage of the national population who are covered by a supplementary hospital table at any time, regard must be had to the data published by the Private Health Insurance Administration Council.

Conditions relating to Medicare Principles and Commitments

“26.(1) It is a condition of the grant of financial assistance by the Commonwealth to a State in respect of the provision by the State of public hospital services that the State, in providing those services, gives effect to the Medicare Principles and undertakes the Commitments listed below:

(a)     in the manner required by subsections (3) to (6) and the Agreement; and

(b)    within the timetable set out in the Agreement.

“(2) The Medicare Principles and Commitments are as follows:


 

MEDICARE PRINCIPLES

The Commonwealth and the States are committed to the following principles in the provision of public hospital services:

Explanatory Note:

The Principles focus on the provision of public hospital services to eligible persons, but operate in an environment where eligible persons have the right to choose private health care in public and private hospitals supported by private health insurance.

Choices of services

Principle 1: Eligible persons must be given the choice to receive public hospital services free of charge as public patients

Explanatory Note 1:

Hospital services include in-patient, out-patient, emergency services (including primary care where appropriate) and day patient services consistent with currently acceptable medical and health service standards.

Explanatory Note 2:

At the time of admission to a hospital, or as soon as practicable after that, an eligible person will be required to elect or confirm whether he or she wishes to be treated as a public or private patient.

Universality of services

Principle 2: Access to public hospital services is to be on the basis of clinical need

Explanatory Note 1:

None of the following factors are to be a determinant of an eligible person’s priority for receiving hospital services:

whether or not an eligible person has health insurance;

an eligible person’s financial status or place of residence;

whether or not an eligible person intends to elect, or elects, to be treated as a public or private patient.

Explanatory Note 2:

This principle applies equally to waiting times for elective surgery.

Equity in service provision

Principle 3: To the maximum practicable extent, a State will ensure the provision of public hospital services equitably to all eligible persons, regardless of their geographical location

Explanatory Note 1:

This principle does not require a local hospital to be equipped to provide eligible persons with every hospital service they may need.

Explanatory Note 2:

In rural and remote areas, a State should ensure provision of reasonable public access to a basic range of hospital services which are in accord with clinical practices.


 

COMMITMENTS

In order to achieve Principles 1 to 3, the Commonwealth and States make the following Commitments regarding public hospital services for eligible persons:

Information about service provision

Commitment 1: The Commonwealth and a State must make available information on the public hospital services eligible persons can expect to receive as public patients

Explanatory Note 1:

The joint Commonwealth/State development of a Public Patients’ Hospital Charter for each State will be a vehicle for the public dissemination of this information.

Explanatory Note 2:

The Charter will set out the public hospital services available to public patients.

Efficiency and quality in service provision

Commitment 2: The Commonwealth and the States are committed to making improvements in the efficiency, effectiveness and quality of hospital service delivery

Explanatory Note:

This includes a commitment to quality improvement, outcome measurement, management efficiency and effort to integrate the delivery of hospital and other health and community services.

“(3) To give effect to the Medicare Principles and Commitments, a State must:

(a)  agree to the development, in consultation with the Commonwealth, of a Public Patients’ Hospital Charter which must set out:

(i) how the Medicare Principles are to apply in respect of the provision, in that State of public hospital services; and

(ii) the process by which eligible persons, in respect of public hospital services received by them, can lodge complaints and how those complaints are to be heard by an independent body (‘complaints body’); and

(b)  either:

(i) adopt the Principles and Commitments; or

(ii) if the State cannot adopt the Principles and Commitments—make reasonable efforts to adopt the Principles and Commitments; and

(c)     once developed, distribute the Charter to the public; and

(d)    otherwise give effect to the Principles and the Charter and adhere to the Commitments as required by the Agreement.


 

“(4) The complaints body, which does not have to be created solely for this purpose, is to be independent of the State’s hospitals and the State’s Department of Health.

“(5) The complaints body is to be given powers that would enable it to investigate, conciliate and adjudicate upon complaints received by it.

“(6) The complaints body is to be given a role in recommending improvements in the delivery of hospital services in respect of which the Commonwealth provides financial assistance.

“(7) An Agreement may define the State efforts that will be taken to be reasonable efforts to adopt the Principles.

“(8) In this section, ‘adopt’ means to enact legislation that establishes the Principles and Commitments as guidelines that will govern the delivery of public hospital services to eligible persons in a State, but neither the obligation to enact that legislation, nor the State legislation so enacted, operates to create in any person legal rights not in existence before the enactment of the State legislation, unless the State legislation expressly provides otherwise.

Variation of an Agreement

“27.(1) Subject to section 28, an Agreement may be varied by agreement, in writing, between the parties to it.

“(2) Without limiting subsection (1), the parties may, by agreement, provide for certain specified variations to the Agreement to be agreed to and made on behalf of the parties by the Commonwealth and the State Ministers for health.

“(3) A variation must comply with the conditions in this Part and the Heads of Agreement set out in Schedule 2A.

“(4) In this section:

‘Commonwealth Minister for health’ means the Minister for Health, Housing and Community Services or any other Commonwealth Minister who administers matters to which this Part and the Agreement relate and includes any other Commonwealth Minister who may be acting for and on behalf of either of those Ministers;

‘State Minister for health’ means the State Minister for health or any other State Minister who administers, for the State, matters to which this Part and the Agreement relate and includes any other State Minister who may be acting for and on behalf of any of those State Ministers.

Certain variations of an Agreement to be made by special procedures

“28.(1) An Agreement may be varied in a way that:

(a) changes the base hospital funding grant formula so that the amount of base hospital funding grant payable under the


 

Agreement is less than the amount that would be payable if the formula was not changed; or

(b)    effects a substantial reduction in the amount of non-base hospital funding payable under it; or

(c)     changes the definition of substantial reduction in the amount of non-base hospital funding that is set out in the Agreement on the day that it is entered into; or

(d)     terminates the Agreement before 30 June 1998; only if:

(e)     the parties to it agree, in writing, that the Agreement:

(i) in the case of paragraphs (a),(b) and (c)—be so varied with effect from a specified day; or

(ii) in the case of paragraph (d)—be so terminated on a specified day before 30 June 1998; and

(f) both Houses of the Commonwealth Parliament approve, by resolution, the variation of the Agreement with effect from the specified day.

Note: For the meaning of ‘substantial reduction in the amount of non-base hospital funding payable’ see subsection 23E(1).

“(2) In this section, ‘non-base hospital funding’ means the amount of financial assistance payable under an Agreement by reference to the components set out in paragraphs 25(2)(b) to (2)(e).

Tabling of an Agreement

“29. An Agreement must be tabled in each House of the Parliament within 15 sitting days of that House after it is made.

Appropriation

“30.(1) Subject to subsection (2), an amount (including an advance) payable under this Part is to be paid out of amounts appropriated by the Parliament from time to time.

“(2) An amount (including an advance) in respect of an item listed in paragraph 25(2)(a), (b), (c) or (d) is payable out of the Consolidated Revenue Fund, which is appropriated accordingly.”.

Payments by the Commonwealth

7.  Section 125 of the Principal Act is amended by omitting subsection (2).

Insertion of new Schedule

8.  After Schedule 2 to the Principal Act the following Schedule is inserted:


 

SCHEDULE 2A                                                   Section 24

HEADS OF AGREEMENT

1.   The Agreement is to relate to a specified period but may provide for the extension of that period.

2.   The Agreement is to list the hospitals in the State that are to be recognised hospitals for the purposes of the Agreement but may provide for the making of alterations to the list.

3.   The Agreement is to provide for the payment by the Commonwealth to the State of amounts for the purposes of:

(a)    assisting the State in meeting the costs of providing public hospital services;

(b)    providing incentives to the State to encourage the more effective provision of health services;

(c)    providing bonus payments to improve access by public patients to public hospital services;

(d)    assisting the State to meet the costs of reforming mental health services;

(e)    assisting the State in meeting the costs of providing other nominated health services subject to agreed outcomes measures.

4.   The Agreement is to provide for the Commonwealth to vary the amount of its payments to take account of movements in costs, utilisation of hospital and other health services and population changes.

5.   The Agreement is to provide for the State to ensure that public hospital services of a kind specified in the Agreement will be available, in hospitals, to all eligible persons without charge as public patients.

6.   The Agreement is to provide for State commitment to the Medicare Principles and Commitments which will be applied in the provision of public hospital services under the Agreement.

7.   The Agreement is to make provision for certain charges to apply in recognised hospitals.

8.   The Agreement is to provide for the Commonwealth and the State to agree, during the first year of the Agreement, on national health goals and targets and a timetable for their continuing development and implementation over the life of the Agreement.

9.   The Agreement is to provide for the creation of consultative bodies to consider matters relating to the Agreement.

10.   The Agreement is to make provision in relation to the provision by the State to the Commonwealth of statistical and other information.

11.   The Agreement is to authorise the Commonwealth to vary the amount of its payments:


 

(a)    if the State fails to comply with conditions specified in the Agreement or in Part 3; or

(b)   in accordance with any further agreement between the Commonwealth and the State providing for such variation.

12.   The Agreement will provide for specific reference to conditions in respect of the various payments.

13.   The Agreement will provide for a Memorandum of Understanding relating to a Public Patients’ Hospital Charter that will describe the application of the Medicare Principles to public hospital services including the operation of a complaints mechanism overseeing the provision of those services.”.

 

PART 3—AMENDMENTS RELATING TO MEDICARE AGREEMENTS THAT END ON 30 JUNE 1993

Interpretation

9.  Section 23E of the Principal Act is amended by omitting “Schedule 2 and” from subsection (2) and substituting “Schedule”.

Repeal of section 23F

10.  Section 23F of the Principal Act is repealed.

Appropriation

11.  Section 30 of the Principal Act is amended by omitting subsection (1) and substituting the following subsection:

“(1) An amount (including an advance) in respect of the item at paragraph 25(2)(e) is to be paid out of amounts appropriated by the Parliament from time to time for that purpose.”.

Repeal of Schedule 2

12.  Schedule 2 to the Principal Act is repealed.

NOTE

1. No. 42, 1974, as amended. For previous amendments, see No. 58, 1975; Nos. 59, 91, 101, 109 and 157, 1976; No. 75, 1977; Nos. 36, 89 and 133, 1978; Nos. 53 and 123, 1979; No. 132, 1980; Nos. 118 and 176, 1981; Nos. 49, 80 and 112, 1982; Nos. 54 and 139, 1983; Nos. 15, 46, 63, 120, 135 and 165, 1984; Nos. 24, 65, 70, 95 and 167, 1985; Nos. 28, 75 and 94, 1986; Nos. 44, 131, 132 and 141, 1987; Nos. 85, 87, 99 and 155, 1988; Nos. 59, 84, 95 and 164, 1989; Nos. 3, 106 and 141, 1990; Nos. 6, 57, 68, 70, 73, 84, 116, 141, 171, 172, 175, 190, 193 and 211, 1991; and Nos. 88 and 136, 1992.

[Minister’s second reading speech made in

House of Representatives on 4 November 1992

Senate on 11 November 1992]