the eligible person is taken, for the purposes of this Act, to have assigned his or her right to the payment of the medicare benefit:

(d)

unless paragraph (e) applies—to the organization; or

(e)

if the gap cover scheme makes express provision for the assignment of the right to payment of the medicare benefit to an approved billing agent, to a hospital or day hospital facility or to some other person prescribed for the purposes of this paragraph as an appropriate assignee—to that approved billing agent, to that hospital or day hospital facility or to that other person, as provided for under the terms of the gap cover scheme.

2 Subsection 20A(2D)

National Health Act 1953

3 Subsection 4(1)

gap cover scheme means a scheme prepared by a registered organization under which the registered organization is able to offer no gap policies, or known gap policies.

4 Subsection 4(1)

known gap policy means a contract of insurance entered into by a registered organization that covers all but a specified amount or percentage of the full cost of particular hospital treatment and associated professional attention for the person or persons insured.

5 Subsection 4(1)

no gap policy means a contract of insurance entered into by a registered organization that covers the full cost of particular hospital treatment and associated professional attention for the person or persons insured.

6 After Division 4 of Part VI

Division 4A—Gap cover schemes 73BDDA Purpose of gap cover schemes

The purpose of a gap cover scheme is to enable a registered organization to offer insurance coverage for the cost of particular hospital treatment and associated professional attention for the person or persons insured where:

(a)

the cost of the treatment or attention is greater than the Schedule fee (within the meaning of Part II of the Health Insurance Act 1973 ) for the treatment or attention; and

(b)

there is not a hospital purchaser-provider agreement, a medical purchaser-provider agreement or a practitioner agreement between the registered organization and the service provider concerned; and

(c)

the person insured pays a specified amount or percentage under a known gap policy or the full cost of the treatment or attention is covered under a no gap policy.

(1)

A registered organization may, at any time, prepare a gap cover scheme.

(2)

Subject to regulations made for the purpose of this section, the registered organization may apply to the Minister for approval of such a scheme. The scheme is of no effect unless an approval by the Minister is in force in relation to it.

(3)

The Minister's approval of such a scheme does not limit the application of the Trade Practices Act 1974 or the Competition Code of any participating jurisdiction (within the meaning of section 150A of that Act).

(4)

Any arrangement that is entered into for the purposes of such a scheme does not constitute a hospital purchaser-provider agreement, a medical purchaser-provider agreement or a practitioner agreement.

(5)

The regulations must provide, in relation to the approval of gap cover schemes by the Minister under this section, for:

(a)

the form and content of, and the manner of dealing with, applications for approval of such schemes; and

(b)

the criteria to be taken into account by the Minister in determining whether to approve such schemes; and

(c)

the power of the Minister to impose conditions on the operation of such schemes and to vary such conditions; and

(d)

an index or method for measuring the inflationary impact of gap cover schemes on the total cost of treatment and the rise in private health insurance premiums.

(6)

Without limiting the criteria to be specified in regulations made for the purposes of paragraph (5)(b), criteria must include the following:

(a)

the provision of particulars sufficient to demonstrate, to the satisfaction of the Minister, that the operation of the gap cover scheme for which approval is sought will not have an inflationary impact;

(b)

the requirement that a person providing hospital treatment or associated professional attention under a gap cover scheme for which approval is sought must disclose to the insured person any financial interest that the first-mentioned person has in any products or services recommended or given to the insured person.

(7)

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.

(1)

Subject to regulations made for the purposes of this subsection, each registered organization must provide an annual report to the Minister and the Council in respect of any gap cover scheme that it operates.

(2)

Regulations made for the purposes of subsection (1):

(a)

must provide for the form and content of each report; and

(b)

must provide for the date by which each report is to be provided to the Minister and to the Council; and

(c)

may provide for the Minister to permit the provision of a report after the date provided for under paragraph (b) in specified circumstances; and

(d)

may provide for the initial report in respect of a gap cover scheme to be provided in respect of a period of more or less than a year in circumstances specified in the regulations; and

(e)

may provide for reporting on the proportion of cases in which advice about the expected costs of treatment was provided to insured persons in advance.

(3)

Where a scheme fails to perform in accordance with:

(a)

the requirements of paragraph 73BDD(6)(b); or

(b)

any prescribed criteria for approval; or

(c)

any condition imposed by the Minister;