Commonwealth Numbered Regulations - Explanatory Statements

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HEALTH INSURANCE (1994-1995 PATHOLOGY SERVICES TABLE) REGULATIONS (AMENDMENT) 1995 NO. 155

STATUTORY RULES 1995 No. 155

Issued by the Authority of the Minister for Human Services and Health

Health Insurance Act 1973

Health Insurance (1994-1995 Pathology Services Table) Regulations (Amendment)

Section 133 of the Health Insurance Act 1973 (the Act) provides that the Governor-General may make regulations for the purposes of the Act.

Section 9 of the Act provides, in effect, that Medicare benefits shall be calculated by reference to the fees for medical services (including pathology services) set out in the table (which includes the pathology services table) in Schedule 1A to the Act.

Section 4A of the Act provides that a table of pathology services may be prescribed. The Health Insurance (1994-1995 Pathology Services Table) Regulations (the Pathology Services Table) prescribe such a table. The Health Insurance (1994-1995 Pathology Services Table) Regulations (Amendment) (the new regulations) will amend the Pathology Services Table.

Regulation 1 of the new regulations prescribes a commencement date of 1 July 1995 for the new regulations.

Regulation 2 of the new regulations provides that the Pathology Services Table is amended as set out in the new regulations.

The new Regulations have been developed with the co-operation and support of the two peak pathology professional groups and the Health Insurance Commission.

Regulation 3 of the new regulations will add a new rule (new Rule 1A) to the Rules for the Interpretation of the Pathology Services Table to implement a 1995/96 Budget initiative. It is anticipated that this measure will result in annual savings in Medicare pathology outlays of about 4.25 per cent. This amounts to $36.5 million in 1995-96 prices.

Regulation 3 of the new regulations is made in reliance on subsection 4B(2) of the Act which provides that a regulation "may make provision, by way of a rule of interpretation, for two or more pathology services to be treated, in specified circumstances, as one pathology service."

New Rule 1A will apply when general practitioners order more than three items in the Pathology Services Table for their non-hospitalised patients. In effect, it limits the payment of Medicare benefits in any one patient episode to the three items with the highest Schedule fees.

Paragraphs (a) to (c) of new sub-rule 1A(1) prescribe the definitions which are to apply under new Rule 1A, and paragraph (d) of new sub-rule 1A(1) lists the items which are exempted from the operation of new Rule 1A. The exemptions are:

•       item numbers 66241, 66417 and 69241 (designated pathology services) which cover certain specialised tests which have been referred from one approved pathology authority to another;

•       item numbers 73053 and 73055 (Pap smear tests) which have been excluded to avoid any adverse effect on cervical cancer screening or disproportionate loss for laboratories specialising in these tests; and

•       the items included in Groups P10 and P11 (providing Patient Episode Initiation and Specimen Referred fees) as these items, only one of which is payable in a patient episode, are provided to reimburse pathologists for fixed costs such as the collection, transport and reporting on specimens.

New sub-rule 1A(2) links new Rule 1A to subsection 4B(2) of the Act by providing that the purpose of the new Rule is to determine the circumstances under which multiple pathology services should be treated as a single pathology service for the purpose of the payment of Medicare benefits.

New sub-rule 1A(3) specifies that the items with the highest and second highest Schedule fees are each to be regarded as one service. This means that each is entitled to the normal Medicare benefits rebate. The remaining items are to be treated as one service. In cases where two items have the second highest Schedule fee, this new sub-rule ranks those items by reference to their number in the Pathology Services Table to determine which is classed as a service on its own, and which is combined with other items. The use of item numbers is an artificial device which in practice will not affect the benefits payable.

New sub-rule 1A(4) covers the situation where two or more items have the highest Schedule fee. It uses the same device adopted in Sub-rule 1A(3) to determine which should be categorised as one pathology service for Medicare benefit purposes and which should be combined with other items.

New sub-rule 1A(5) provides that where the third and succeeding items are to be treated as one service, the Medicare benefits payable will be equivalent to the rebate for the item with the highest Schedule fee in the combined items.