Narcotic Drugs Regulation 2016 [F2016L01613]-Concluded matters [2017] AUSStaCSDLM 46 (8 February 2017)

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Instrument	Private Health Insurance (Prostheses) Amendment Rules 2016 (No. 3) [F2016L01596]
Purpose	Amends the Private Health Insurance (Prostheses) Rules 2016 (No. 4) by changing listings in Part A and B of the Schedule
Last day to disallow	1 December 2016
Authorising legislation	Private Health Insurance Act 2007
Department	Health
Scrutiny principle	Standing Order 23(3)(b)
Previously reported in	Delegated legislation monitors 8 and 10 of 2016

Drafting

The committee commented as follows:

Schedule 1, item 1 of the Private Health Insurance (Prostheses) Amendment Rules 2016 (No. 3) [F2016L01596] (the amendment instrument) amends the minimum benefit for billing code BS120 in Part A of Private Health Insurance (Prostheses) Rules 2016 (No. 4) [F2016L00381] (the principal instrument) to correct an error.

The amendment instrument increases the minimum benefit for billing code BS120 in Part A from $168 to $336. The minimum benefit represents the amount that is required to be paid for the provision of certain prostheses under private health insurance policies covering hospital treatment, where relevant conditions are met.

However, the committee notes that the minimum benefit of $168 for billing code BS120, which relates to intraoperative accessories in Part A of the principal instrument, was in effect from 8 September to 6 October 2016, and that the correction in the amendment instrument to specify a minimum benefit of $336 is not applied retrospectively.

The committee therefore seeks clarification as to whether the correct minimum benefit was applied for the supply of the relevant listed prosthesis during that period (if any). The committee seeks to ensure that no person was disadvantaged by the apparent error in the principal instrument.

The committee requests the advice of the minister in relation to this matter.

Minister's first response

The Minister for Health and Aged Care advised:

The minimum benefit of $168 for billing code BS120, which relates to intraoperative accessories in Part A of the principal instrument, was in effect from 8 September to 6 October 2016. The correction in the amendment instrument to specify a minimum benefit of $336 was not applied retrospectively. The device sponsor has advised my Department that the device was used 12 times during this period at a benefit of $168 each. Making these amendments retrospectively would have imposed a retrospective liability on private health insurers.

Committee's first response

The committee thanks the minister for her response.

The committee notes the minister's advice that applying the correction to the minimum benefit retrospectively would have imposed a retrospective liability on private health insurers.

However, the committee is concerned about any possible detrimental effect on individuals that may arise if an incorrect benefit was provided between 8 September and 6 October 2016. The committee therefore seeks clarification as to whether any individual was disadvantaged by the apparent error in the principal instrument in any of the 12 instances in which the relevant listed prosthesis was provided during that period.

The committee requests the further advice of the minister in relation to this matter.

Former minister's second response

The former Minister for Health and Aged Care further advised:

The device sponsor of billing code BS120, Boston Scientific, has confirmed that the 12 devices in question were charged to hospitals at $168. Hospitals would then have been able to claim 100 per cent of the purchase price back from private health insurers, as the purchase price matched the incorrect benefit for period 8 September 2016 to 6 October 2016. As such, no individual patients or hospitals were disadvantaged by the error in the principle instrument.

Boston Scientific advised that the amount they normally charge to hospitals for BS120 is $336 (the correct benefit). Boston Scientific was disadvantaged by $2,016 for the 12 devices charged at $168. Boston Scientific's Australian revenue is approximately $200 million per annum.

Boston Scientific was pleased with the response from my Department to rectify the error quickly and efficiently, which helped minimise the impact.

Committee's second response

The committee thanks the former minister for her response and has concluded its examination of the instrument.