National Health Amendment Regulations 2000 (No. 2)
Statutory Rules 2000 No. 218
I, WILLIAM PATRICK DEANE, Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the National Health Act 1953.
Dated 10 August 2000
WILLIAM DEANE
Governor-General
By His Excellency’s Command
MICHAEL WOOLDRIDGE
Minister for Health and Aged Care

National Health Amendment Regulations 2000 (No. 2)1
Statutory Rules 2000 No. 2182
made under the
National Health Act 1953

Contents
	Page
	1	Name of Regulations	2
	2	Commencement	2
	3	Amendment of National Health Regulations 1954	2
Schedule 1	Amendments	3

1	Name of Regulations
		These Regulations are the National Health Amendment Regulations 2000 (No. 2).
2	Commencement
		These Regulations commence on the commencement of the Health Legislation Amendment (Gap Cover Schemes) Act 2000.
3	Amendment of National Health Regulations 1954
		Schedule 1 amends the National Health Regulations 1954.

Schedule 1	Amendments
(regulation 3)
[1]	After Part 5
insert
Part 5A	Gap Cover Schemes
37A	Definitions
		In this Part:
criteria means the criteria set out in subregulation 37C (4).
Note   The following expressions used in this Part are defined in subsection 4 (1) of the Act:
•	Council
•	gap cover scheme
•	known gap policy
•	no gap policy.
37B	Application for approval of a scheme (Act s 73BDD (5))
		An application by a registered organization for approval of a gap cover scheme must:
	(a)	be in writing; and
	(b)	address the criteria.
37C	Minister to decide each application (Act s 73BDD (5))
	(1)	As soon as practicable after receiving an application for approval of a gap cover scheme, the Minister must:
	(a)	approve the scheme; or
	(b)	refuse to approve the scheme.
Note   A decision to refuse to approve a scheme is reviewable under regulation 37I.
	(2)	In making a decision, the Minister must consider the extent to which the scheme meets the criteria.
	(3)	Without limiting subregulation (2), the Minister must not approve a scheme unless paragraph (4) (c) of the criteria is complied with.
	(4)	The criteria for a scheme are as follows:
	(a)	the scheme must eliminate the cost of hospital treatment and associated professional attention provided to a person or persons insured under a no gap policy;
	(b)	the scheme must cover all but a specified amount or percentage of the full cost of particular hospital treatment and associated professional attention provided to a person or persons insured under a known gap policy;
	(c)	the registered organization must provide particulars sufficient to demonstrate to the satisfaction of the Minister that the scheme will not have an inflationary impact, for example, by:
	(i)	providing for open-ended reimbursement of medical fees; or
	(ii)	increasing the total cost borne by contributors;
	(d)	the scheme must require that:
	(i)	a person or persons insured under a known gap policy must be informed in writing, where the circumstances make it appropriate, of any amounts that the insured person or persons can reasonably be expected to pay for hospital treatment and associated professional attention:
	(A)	if possible, before the hospital treatment and associated professional attention is provided; or
	(B)	otherwise, as soon as practicable after the hospital treatment and associated professional attention is provided; and
	(ii)	the person or persons must acknowledge receipt of the information;
	(e)	the scheme should provide for a simplified billing arrangement, if practicable, in respect of a person or persons insured under a no gap policy or a known gap policy;
	(f)	the scheme must ensure that a person or persons insured under a no gap policy or a known gap policy will not be disadvantaged if the scheme were to be revoked under subsection 73BDE (4) or paragraph 73BDE (5) (b) of the Act, for example, by:
	(i)	transferring the insured person or persons to another insurance policy; and
	(ii)	preserving any accrued benefits, such as waiting periods that have been served;
	(g)	the scheme must require a person providing hospital treatment or associated professional attention to a person or persons insured under a no gap policy or a known gap policy to disclose to the insured person or persons any financial interest that the first-mentioned person has in the products or services recommended or provided to the insured person or persons;
	(h)	the scheme must provide for the maintenance of the professional freedom of medical practitioners, within the scope of accepted clinical practice, to identify appropriate treatments when providing professional attention to a person or persons insured under a no gap policy or a known gap policy.
Note   The Minister must not approve a gap cover scheme unless the scheme provides for insured persons to be informed in writing, where the circumstances make it appropriate, of any amounts that the person can reasonably be expected to pay for treatment and the insured person acknowledges receipt of the advice: see subsection 73BDD (7) of the Act.
37D	Approval may be subject to conditions (Act s 73BDD (5))
	(1)	The Minister may approve a gap cover scheme subject to such conditions as the Minister thinks appropriate to ensure that the scheme meets the criteria to the greatest practicable extent.
	(2)	To ensure that the scheme continues to meet the criteria to the greatest practicable extent, the Minister may, at any time after approving a scheme:
	(a)	impose conditions, or additional conditions, to which the continued operation of the scheme is subject; or
	(b)	vary any condition to which the operation of the scheme is subject.
Note   A decision made under this regulation is reviewable under regulation 37I.
37E	Measuring inflationary impact — cost of hospital treatment and associated professional attention (Act s 73BDD (5))
	(1)	The inflationary impact of a gap cover scheme on the total cost of hospital treatment and associated professional attention is measured, after the first year of operation of the scheme, using the following method:
Step 1	Calculate the change in the cost of hospital treatment and associated professional attention incurred under the scheme averaged over the relevant period using data derived from information provided under the Hospital Casemix Protocol.	
Step 2	Calculate the change in the cost of hospital treatment and associated professional attention incurred under hospital purchaser-provider agreements, medical purchaser-provider agreements and practitioner agreements averaged over the relevant period using data derived from information provided under the Hospital Casemix Protocol.	
Step 3	Calculate the change in the cost of hospital treatment and associated professional attention incurred under all other services averaged over the relevant period using data derived from information provided under the Hospital Casemix Protocol.	
Step 4	Calculate the change in the cost of all hospital treatment and associated professional attention averaged over the relevant period using data derived from information provided under the Hospital Casemix Protocol.	
Step 5	Compare the result of step 1 with the result of step 2.	
Step 6	Compare the result of step 1 with the result of step 3.	
Step 7	Compare the result of step 1 with the result of step 4.	
	(2)	If the result of step 1 is greater than the result of step 2, 3 or 4, this indicates that the scheme has had an inflationary impact in comparison to the agreements referred to in step 2, the services referred to in step 3 or the cost of all hospital treatment and associated professional attention.
	(3)	However, if an inflationary impact is indicated, any effect on the comparative result caused by the scheme providing a different mix of services to that with which it is being compared must be taken into account by reference to the List of Australian National Diagnosis Related Groups in regulation 49B.
	(4)	For subregulation (1):
the relevant period means:
	(a)	if the scheme has been operating for at least 2, but less than 3 years — the preceding 2 financial years; and
	(b)	if the scheme has been operating for at least 3, but less than 4 years — the preceding 3 financial years; and
	(c)	if the scheme has been operating for at least 4, but less than 5 years — the preceding 4 financial years; and
	(d)	if the scheme has been operating for at least 5 years — the preceding 5 financial years.
37F	Measuring inflationary impact — private health insurance premiums (Act s 73BDD (5))
		The inflationary impact of a gap cover scheme on private health insurance premiums is measured by comparing the rise in the rate of premium attributable to the scheme for a financial year with the average weighted rise in the rate of all private health insurance premiums for the preceding 5 financial years.
37G	Annual report (Act s 73BDE (1) and (2))
	(1)	An annual report in respect of a gap cover scheme must:
	(a)	be in writing; and
	(b)	set out particulars of how the scheme has met the criteria during the financial year (or substitute period provided for by subregulation (3) or (4)) to which it relates; and
	(c)	be provided to the Minister and the Council on, or before, 31 July next after the end of that financial year or substitute period.
	(2)	In particular, the report must state the proportion of cases in which information about the expected costs of hospital treatment and associated professional attention was given to persons insured under a known gap policy in advance of the hospital treatment and associated professional attention being provided.
	(3)	If a scheme is approved by the Minister during the last 3 months of a financial year, the first annual report is to be for the period from the time of approval to the end of the next financial year.
	(4)	If a scheme is approved by the Minister during the first 9 months of a financial year, the first annual report is to be for the period from the time of approval to the end of that financial year.
	(5)	If a registered organization is unable to provide its report by the date specified in paragraph (1) (c), the Minister may grant an extension upon application in writing by the registered organization that sets out:
	(a)	the reasons for seeking the extension; and
	(b)	the length of extension required.
Note   A decision made under this subregulation is reviewable under subregulation 37I.
37H	Application to vary or revoke a scheme (Act s 73BDE (5))
	(1)	If a registered organization decides that the gap cover scheme is not operating in the intended manner, the registered organization may apply in writing to the Minister to:
	(a)	vary the scheme; or
	(b)	revoke the scheme.
	(2)	An application to vary a scheme must set out:
	(a)	particulars of the variation sought; and
	(b)	the reasons for the variation sought.
	(3)	An application to revoke a scheme must set out:
	(a)	the reasons for seeking revocation; and
	(b)	particulars of the arrangements made by the registered organization to ensure that a person or persons insured under a no gap policy or a known gap policy to which the scheme relates will not be disadvantaged if the scheme is revoked.
37I	Review of decisions by the AAT
		Application may be made to the Administrative Appeals Tribunal for review of a decision of the Minister:
	(a)	under paragraph 37C (1) (b) to refuse to approve a scheme; or
	(b)	under subregulation 37D (1) to impose a condition to which the operation of a scheme is subject; or
	(c)	under paragraph 37D (2) (a) to impose a condition to which the continued operation of a scheme is subject; or
	(d)	under paragraph 37D (2) (b) to vary a condition to which the continued operation of a scheme is subject; or
	(e)	under subregulation 37G (5) to refuse to grant an extension or to grant an extension for a shorter period than that applied for by the registered organization.
Note   Under section 27A of the Administrative Appeals Tribunal 
Act 1975, the decision-maker must give to any person whose interests are affected by the decision notice, in writing or otherwise, of the making of the decision and of the person’s right to have the decision reviewed. In giving that notice, the decision‑maker must have regard to the Code of Practice determined under section 27B of that Act (see Gazette No. S 432, 7 December 1994).
[2]	Paragraph 52B (2) (d)
omit
organization.
insert
organization;
[3]	After paragraph 52B (2) (d)
insert
	(e)	aggregated data derived from information provided under the Hospital Casemix Protocol.
[4]	Schedule 7, Part 1, clause 2, after definition of fund
insert
gap cover scheme has the same meaning as given in subsection 4 (1) of the National Health Act 1953.
[5]	Schedule 7, Part 5, after item 67
insert
68	Gap cover scheme identifier	C(5)	MAA	A unique identifier for an approved gap cover scheme
Blank = service not provided under a gap cover scheme	

Notes
1.	These Regulations amend Statutory Rules 1954 No. 35, as amended by 1957 No. 71; 1958 No. 63; 1962 Nos. 55, 70 and 113; 1965 Nos. 17, 94 and 185; 1966 No. 99; 1967 No. 86; 1969 Nos. 91 and 220; 1970 Nos. 70 and 166; 1971 Nos. 28, 76, 103 and 138; 1972 No. 79; 1973 Nos. 17, 75, 111, 221, 225 and 267; 1974 Nos. 52, 104, 105, 113 and 263; 1975 Nos. 14, 49, 66, 100, 124, 165 and 207; 1976 Nos. 113, 217 and 227; 1977 Nos. 11, 34, 51 and 112; 1978 Nos. 66, 178, 208 and 266; 1979 Nos. 59, 107, 208 and 231; 1980 Nos. 84, 292 and 309; 1981 Nos. 43, 97, 115, 232 and 318; 1982 Nos. 38, 82, 84, 250 and 284; 1983 Nos. 45, 247 and 267; 1984 Nos. 66, 161, 200, 308, 322 and 427; 1985 Nos. 86, 136, 186, 187, 206 and 288; 1986 Nos. 47, 53, 208, 330, 353 and 360; 1987 Nos. 50, 76, 100 and 310; 1989 Nos. 291, 292 and 334; 1990 Nos. 24, 86, 114, 292, 335 and 396; 1991 Nos. 40, 41, 232, 262, 263, 310 and 339; 1992 Nos. 136 and 187; 1993 Nos. 48, 85, 153, 260, 261, 273, 280 and 284; 1994 Nos. 2, 9, 106, 139, 201, 253, 256, 296, 349 and 451; 1995 Nos. 1, 14, 34, 52, 109, 116, 161, 220, 288, 289, 408 and 410; 1996 Nos. 46, 183 and 333; 1997 Nos. 16, 58, 133, 160, 179 and 353; 1998 Nos. 18, 73 and 262; 1999 Nos. 18, 140, 162, 174, 175, 236, 288 and 289; 2000 No. 2.
2.	Made by the Governor-General on 10 August 2000, and notified in the Commonwealth of Australia Gazette on 11 August 2000.