Issued by the Authority of the Minister for Health and Aged Care
Private Health Insurance Act 2007
Private Health Insurance Legislation Amendment Rules (No. 3) 2024
Authority
Subsection 333-20(1) of the Private Health Insurance Act 2007 (the Act) authorises the Minister to, by legislative instrument, make specified Private Health Insurance Rules providing for matters required or permitted by the corresponding Chapter, Part, or section to be provided; or necessary or convenient to be provided in order to carry out or give effect to that Chapter, Part or section.
The Private Health Insurance Legislation Amendment Rules (No.3) 2024 (the Amendment Rules) amends the:
Subsection 33(3) of the Acts Interpretation Act 1901 provides that where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
Purpose
The Amendment Rules make consequential amendments to the Benefit Requirements Rules and the Complying Product Rules to implement changes to the private health insurance (PHI) clinical categorisation and procedure type classification of items of the Medicare Benefits Schedule (MBS) to reflect changes to MBS items commencing 1 July 2024.
Changes to the clinical categorisation and procedure type classification of MBS items are achieved by amending:
Amendments are made to index the monetary qualifiers for MBS items to be included in Type A procedure patient classifications for Advanced surgical patient and Surgical patient by amending Schedule 1. The indexation changes to Type A MBS thresholds are in line with the annual indexation of MBS fees of 3.5% per cent from 1 July 2024 announced by the Government as part of the 2024-25 Budget.
Further amendments are made to Schedules 1 and 3 of the Benefit Requirement Rules, to reflect a change of procedure type for MBS item 32230. This item was listed as both a Type A Surgical and Type B non-band specific procedure and is now only listed as Type B non-band specific procedure. This amendment is based on utilization data analysis, clinical advice and published feedback to the 2022 consultation on hospital treatment certification and dual-listed MBS items.
Nurse practitioner MBS items 82200, 82205, 82210 and 82215 will be removed from the Common treatments list in Schedule 6 of the Complying Product Rules to align with terminology of other items categorised as N/A (Not Hospital treatment).
MBS items 40804 and 49594 will be listed under Type A Advanced Surgical in Schedule 1 of the Benefit Requirement Rules, due to the schedule fees of these items exceeding the fee threshold for Type A Surgical procedures.
The MBS item changes relevant to these Amendment Rules, and also reflected in the associated PHI technical document, are given effect by, and detailed in, the following legislative instruments commencing 1 July 2024 and can be viewed on the Australian Government Federal Register of Legislation (FRL) website (www.legislation.gov.au) by title or Unique ID:
The above instruments will make changes to reflect Government policy to MBS items in the General Medical Services Table (GMST), PST and DIST.
Many of these MBS changes relate to measures announced in the 2023-24 Budget under Strengthening Medicare and A Modern and Clinically Appropriate Medicare Benefits Schedule measure, the 2023-24 Mid-Year Economic and Fiscal Outlook (MYEFO) under the An Effective and Clinically Appropriate Medicare measure, the 2024-25 Budget and the Strengthening Medicare Taskforce recommendations.
PHI minimum benefits for these MBS item changes are reflected in benefit classifications assigned in these Amendment Rules including:
Detailed information on MBS items, including fact sheets and quick reference guides, can be viewed on the Department of Health and Aged Care’s (department) MBS Online website (www.mbsonline.gov.au) and in the Explanatory Statement that accompanies each set of regulatory changes. These statements also outline consultation that took place on the MBS changes.
The private health insurance classification and categorisation changes commencing
1 July 2024 are detailed in the Attachment to this Explanatory Statement. Further PHI clinical category and procedure type information, including announcement of changes through PHI ‘Circulars’ and the ‘Private Health Insurance Classification of MBS items’ technical document (PHI technical document) can be viewed on the Department’s website (www.health.gov.au).
Consultation
Private Health Insurance Rules classifications for MBS items
Medical officers within the department provide expert clinical advice to assist in determining the appropriate PHI clinical category and procedure type for accommodation benefits for MBS items in private health insurance rules.
The department’s weekly email to private health sector stakeholders including peak insurer and hospital representative associations, private health insurers and private hospitals, includes a Regulatory Amendments and Consultations Calendar which provides information on anticipated changes to MBS items and consultation processes.
Feedback received from stakeholders was considered when determining the final amendment.
MBS item related consultation
The Amendment Rules relating to clinical categorisations and procedure type classifications are consequential to MBS items changes. Detail on the MBS items and consultations undertaken, including by the Taskforce, MSAC and with medical professional organisations can be found in the Explanatory Statements to the MBS Regulations that can be viewed on the FRL website (www.legislation.gov.au), and the Department’s ‘MBS Online’ website (www.mbsonline.gov.au).
Implementation liaison groups involving professional bodies and clinical experts also inform development of MBS items. Consultation encompasses private hospital and private health sector representation.
Background
MBS items with the potential to be provided to privately insured patients as hospital treatment are allocated to clinical categories under the Complying Product Rules and to hospital accommodation procedure type classifications under the Benefit Requirements Rules to provide clarity in the administration of treatments across policy tiers by insurers and facilitate claims and minimum benefit payments.
Complying Product Rules
The Complying Product Rules sets out the ‘Basic, Bronze, Silver and Gold’ product tiers for complying health insurance policies, and which clinical categories of treatment are included in each ‘Hospital Treatment Product Tier’.
Schedule 5—Clinical categories
The 38 ‘Clinical categories’ named in column one of Schedule 5 are treatments that must be covered by private health insurance products in the product tiers set out in Schedule 4, Basic, Bronze, Silver and Gold, and the treatment is delivered as hospital treatment. The ‘Scope of cover’ is described for each clinical category in column two of the table with a non-exhaustive list of MBS items in column 3. The mention of an MBS item against a particular category does not mean it is only covered under that clinical category.
MBS items that are likely to be relevant to the scope of cover for only one clinical category have been placed against that category in the table at Schedule 5 of the Complying Product Rules. MBS items that may be relevant to the scope of cover for two clinical categories are placed against the clinical category that is in the lowest product tier for which the MBS item is likely to apply.
If an MBS item is relevant to the scope of cover for three or more clinical categories it has generally been placed into the list of ‘Common treatments’ (Schedule 6).
Where an MBS item is not likely to be a reason for admission for hospital treatment, it has generally been placed into the list of ‘Support treatments’ (Schedule 7), even if it is specific to a single body system.
Schedule 6—Common treatments
The Common treatments list (Schedule 6) consists of MBS items that are used across, and therefore common to, multiple clinical categories (generally three or more). For example, professional attendances by a medical practitioner are on the Common treatments list except where the MBS descriptor expressly prevents claims for hospital treatment or requires that treatment be delivered as other than hospital treatment.
MBS items on the list of Common treatments will generally be for treatments that may be the primary reason for admissions for hospital treatment. In some cases, they may also be associated with, or support, another treatment that is the reason for admission.
Insurers are required to cover MBS items in the list of Common treatments where the treatment falls within the scope of cover for the clinical categories included in an insurance policy and the treatment is delivered as hospital treatment.
Schedule 7—Support treatments
The Support treatments list (Schedule 7) consists of MBS items, such as pathology tests and diagnostic tests, generally used to support the provision of a primary treatment in one of the clinical categories or in the Common treatments list. Items in the Support treatments list are unlikely to be the primary reason for treatment in hospital.
MBS items of the DIST and PST, and items made under section 3C of the Health Insurance Act 1973 are automatically categorised as Support Treatments under Schedule 7 of the Complying Product Rules, so are not individually listed in the Rules. Support list PST and DIST items are listed in the PHI technical document.
Insurers are required to cover MBS items in the list of Support treatments where the treatment falls within the scope of cover for a clinical category included in a patient’s private health insurance policy and is provided as hospital treatment.
Type C procedures under the Benefit Requirements Rules are also listed in the clinical categories, the Common treatments list, or the Support treatments list. Type C services do not normally require, but may be provided as, hospital treatment with the appropriate certification.
Inclusion of an MBS item against a clinical category or in the Common or Support treatments lists has no bearing on whether that service requires a hospital admission and does not imply these services necessarily require admission.
MBS items for services that cannot be claimed as hospital treatment are not intended to be listed in the clinical categories, Common treatment or Support treatment lists; but are identified in the PHI technical document.
Benefit Requirements Rules
The Benefit Requirements Rules provide for the minimum benefit requirements for psychiatric care, rehabilitation, palliative care, and other hospital treatments. Schedules 1 to 5 of the Benefit Requirements Rules set out the minimum levels of accommodation benefits payable by private health insurers associated with private patients’ hospital treatment: benefits for overnight accommodation (Schedules 1 and 2); same-day accommodation (Schedule 3); Nursing-Home Type Patients (NHTP) (Schedule 4) and second-tier default benefits (Schedule 5).
MBS fee indexation
From 1 July 2024, additional indexation will be applied to the MBS fees for most medical services in the General Medical Services Tables. This aligns with the Government announcement of 14 May 2024, as part of the 2024-25 Budget, which included changes to the indexation methodology applying to Government programs, including the MBS, to better align with changes in economic conditions.
Schedule 1 and 2— Type A procedures
Schedule 1 of the Benefit Requirements Rules provides for benefits for different patient categories by categorising MBS item numbers into patient classifications for accommodation benefits. Procedures requiring hospital treatment that includes part of an overnight stay (Type A procedures) comprise ‘Advanced surgical patient’, ‘Obstetric patient’, ‘Surgical patient’, ‘Psychiatric patient’, ‘Rehabilitation patient’ and ‘Other patients.’
Against these patient classifications, Schedule 1 sets out the minimum accommodation benefit payable by insurers per night for overnight accommodation for private patients at private hospitals in all states and territories, and for private patients in overnight shared ward accommodation at public hospitals in Victoria and Tasmania.
Schedule 2 of the Benefit Requirements Rules states the minimum accommodation benefit payable by insurers per night, for private patients in overnight shared ward accommodation at all other State and Territory public hospitals. For each jurisdiction listed in Schedule 2, the minimum benefit payable by insurers per night is averaged across all patients, rather than being specific to patient classification as for Schedule 1.
Schedule 3— Type B procedures
Schedule 3 of the Benefit Requirements Rules sets out minimum same-day hospital accommodation benefits payable by insurers for procedures that normally require hospital treatment that does not include part of an overnight stay (Type B procedures).
Part 2 of Schedule 3 identifies MBS items against Type B procedure Band 1, or the Non-band specific Type B day procedure classification. Treatment Bands 1 to 4 are described based on anaesthesia and/or theatre time.
The treatment band applicable to a Non-band specific Type B day procedure item is relevant to the circumstances of the hospital treatment provided to a patient.
The Benefit Requirements Rules also sets out circumstances in which benefits for accommodation, including part of an overnight stay, may be payable for patients receiving a Certified Type B Procedure (at Part 3 Schedule 1).
Schedule 3— Type C procedures
Type C procedures are those services that do not normally require hospital treatment.
Schedule 3 Part 3 of the Benefit Requirements Rules identifies Type C procedures by MBS item.
The Benefit Requirements Rules, together with the Private Health Insurance (Health Insurance Business) Rules 2018, establish that Type C procedures do not normally qualify for minimum benefits for hospital treatment, including for accommodation, except in circumstances where a patient may receive as hospital treatment a Certified Type C Procedure (at Part 2 Schedule 3) or a Certified Overnight Type C procedure (at Part 3 of Schedule 1).
The Amendment Rules
The consequential amendments in these Amendment Rules are administrative in nature and do not substantively alter existing arrangements established under the Act.
Details
Details of the Amendment Rules are set out in the Attachment. The Amendment Rules are a legislative instrument for the purposes of the Legislation Act 2003.
Attachment A
Section 1 – Name
Section 1 provides that the name of the instrument is the Private Health Insurance Legislation Amendment Rules (No. 3) 2024 (the Amendment Rules).
Section 2 – Commencement
Section 2 provides that the instrument commences on 1 July 2024.
Section 3 – Authority
Section 3 provides that the Amendment Rules are made under subsection 333-20(1) of the Private Health Insurance Act 2007.
Section 4 – Schedules
Section 4 provides that each instrument that is specified in a Schedule to the instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the instrument has effect according to its terms.
All Schedule changes commence 1 July 2024.
Schedule 1—Amendments—Clinical categories and Common treatments
Private Health Insurance (Complying Product) Rules 2015 (Complying Product Rules)
Schedule 1 of the Amendment Rules repeals the existing MBS items in the Clinical categories and Common treatments tables of MBS items in the Complying Product Rules, and substitutes amended tables.
Items added to the table may be new MBS items or recategorised due to item amendments. Similarly, MBS items deleted may be due to removal or expiry from the MBS or recategorisation.
Changes are detailed in the private health insurance clinical category and procedure type information and PHI technical document that can be viewed on the department’s website (www.health.gov.au).
Item 1 provides for an amended list of MBS items categorised against Clinical category (Schedule 5) to include new items and remove items deleted from the MBS from 1 July 2024.
The amended list reflects the following changes:
Item 2 provides for an amended list of MBS items categorised in the Common treatments list (Schedule 6) from 1 July 2024.
The amended Common treatments list reflects the following changes:
Schedule 2—Amendments—Procedure types
Private Health Insurance (Benefit Requirements) Rules 2011 (Benefit Requirements Rules)
Schedule 2 of the Amendment Rules repeals the existing MBS items listed as Type A Advanced Surgical, Type A Surgical, Type B non-band specific day procedures, and Type C procedures in the Benefit Requirements Rules and substitutes amended tables.
Items added to the lists of procedure types may be new, extended, renumbered, or reclassified MBS items. Similarly, MBS items deleted from the lists may be due to removal or expiry from the MBS, renumbering, or procedure type reclassification.
Procedure type reclassification of existing items may occur due to changes to the MBS item, review of classifications in line with current clinical practice, alignment with MBS indexed monetary qualifiers for Type A items, or to allocate ‘dual-classified’ items to a single classification where appropriate.
Item 1 Subclause 4(3) of Schedule 1 of the Benefit Requirements Rules sets out the MBS item numbers that form part of the criteria for a patient to be considered an “advanced surgical patient” for the purposes of the Benefit Requirements Rules. This subclause also includes a qualifier – the MBS fee for the professional service the patient will receive must be greater than a specified amount.
Item 1 amends the value of this specified amount from $938.80 to $971.65 (indexed by 3.5%, the indexation rate for MBS fees effective 1 July 2024).
Item 2 provides for an amended list of MBS items classified as Type A procedures: Advanced surgical patient, from 1 March 2024. The amended list of MBS items reflects the following item changes:
Item 3 Subclause 6(3) of Schedule 1 sets out the MBS item numbers that form part of the criteria for a patient to be considered a “surgical patient” for the purposes of the Benefit Requirements Rules. This subclause also includes a qualifier – the MBS fee for the professional service the patient will receive must fall within a range of two specified amounts.
Item 3 amends the range of this specified amount from $279.55 to $938.80 to the new range of $289.35 to $971.65 (indexed by 3.5%, the indexation rate for MBS fees effective 1 July 2024).
Item 4 provides for an amended list of MBS items classified as Type A procedures: Surgical patient, from 1 July 2024. The amended list of MBS items reflects the following item changes:
Item 5 provides for an amended list of MBS items classified as Non-band specific Type B day procedures, from 1 March 2024. The amended list of MBS items reflects the following item changes:
Item 6 provides for an amended list of MBS items classified as C procedures. The amended list of MBS items reflects the following item changes:
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Private Health Insurance Legislation Amendment Rules (No. 3) 2024
This disallowable legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
The purpose of the Private Health Insurance Legislation Amendment Rules (No. 3) 2024 (the Amendment Rules) is to amend the following instruments:
The Amendment Rules make consequential amendments to the:
The Amendment Rules engage the right to health by facilitating the payment of private health insurance benefits for health care services, encouraging access to, and choice in, health care services. Under Article 12 of the International Covenant on Economic, Social and Cultural Rights, specifically the right to health, the Amendment Rules assist with the progressive realisation by all appropriate means of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.
Private health insurance regulation assists with the advancement of these human rights by improving the governing framework for private health insurance in the interests of consumers. Private health insurance regulation aims to encourage insurers and providers of private health goods and services to provide better value for money to consumers, and to improve information provided to consumers of private health services to allow consumers to make more informed choices when purchasing services. Private health insurance regulation also requires that insurers do not differentiate the premiums they charge according to individual health characteristics such as poor health.
The amendments relating to omission or insertion of MBS items in the Benefit Requirements Rules and the Complying Product Rules, and under definitions of hospital treatment are as a consequence of the changes to the MBS that take effect on 1 July 2024.
The addition of new MBS items to accommodation benefit classifications, and specified clinical categories, allows for the specified treatments under those items and the related minimum benefit amounts to be claimed by patients who have the relevant private health insurance policies.
The amendments relating to monetary qualifiers are a consequence of routine MBS indexation.
This disallowable legislative instrument only engages human rights to the extent that it maintains current arrangements with respect to the regulation of private health insurance. Therefore, this instrument is compatible with human rights because these changes continue to ensure that existing arrangements advancing the protection of human rights are maintained.
Alastair Wilson
A/g Assistant Secretary
Private Health Strategy Branch
Benefits Integrity Division
Health Resourcing Group
Department of Health and Aged Care