Commonwealth Numbered Regulations - Explanatory Statements

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NATIONAL HEALTH AMENDMENT REGULATIONS 2000 (NO. 2) 2000 NO. 218

STATUTORY RULES 2000 No. 218

Issued by authority of the Minister for Health and Aged Care

National Health Act 1953

National Health Amendment Regulations 2000 (No. 2)

Section 140 of the National Health Act 1953 (the Act) provides that the Governor-General may make Regulations for the purposes of the Act.

The Health Legislation Amendment (Gap Cover Schemes) Act 2000 (the amending Act) was passed by Parliament on 8 June 2000, received Royal Assent on 27 June 2000 and commenced on proclamation. The amending Act amended the National Health Act 1953 and the Health Insurance Act 1973 to provide for 'gap cover schemes'. The purpose of these schemes is to enable registered health benefits organisations to provide no gap and/or known gap private health insurance without the need for contracts.

The 'gap' is the difference, paid by the policy holder, between fees charged by doctors for in-hospital medical services and the combined health insurance benefit and Medicare benefit.

Previously, the gap could only be covered in circumstances where the service was rendered by, or on behalf of, a medical practitioner who had a contract either directly with the fund, or with a hospital that had a contract with the fund.

Gap cover schemes have been designed to improve the attractiveness to consumers of private health insurance products in the market by providing funds with a separate and additional non-contractual means of addressing the gap that will help to achieve wider availability of no and known gap private health insurance cover for consumers across the board.

Section 73BDD of the Act provides that registered organisations may apply to the Minister for approval of gap cover schemes. Section 73BDDA of the Act provides that the purpose of these schemes is to enable registered health benefits organisations to provide no gap and/or known gap private health insurance cover in situations where the cost of treatment exceeds the Medicare Benefits Schedule fee and there is not a medical purchaser-provider agreement or practitioner agreement attached to a hospital purchaser-provider agreement in place which applies to the treatment.

Subsection 73BDD(5) of the Act sets out certain matters relating to the approval of gap cover schemes which must be included in regulations. These include the form and content of applications; the manner of dealing with applications; approval criteria; the imposition and variation of conditions. and an index or method for measuring the inflationary impact of schemes.

Section 73BDE of the Act sets out other matters that must or may be included in regulations. These include annual reporting requirements; Ministerial review of the operation of gap cover schemes; and revocation and variation of gap cover schemes.

Section 73BDEA of the Act provides that, subject to section 73BDE, the regulations may make provision relating to the operation and regulation of gap cover schemes approved by the Minister.

Section 73AB of the Act requires registered organisations (health funds) to provide the Department of Health and Aged Care with all information specified in the Hospital Casemix Protocol (HCP), except to the extent that the Secretary of the Department has agreed that the information need not be given.

The HCP is prescribed by regulation 49A of the National Health Regulations 1954 (the Regulations) and is set out in Schedule 7 to the Regulations.

The HCP contains financial, demographic and clinical information provided by registered health benefits organisations in respect of every episode of hospital treatment for which a charge is billed to a fund.

Subsection 135A(1) of the Act prohibits the communication, either directly or indirectly, of any information acquired in the performance of duties, or in the exercise of powers or functions under the Act, except where this communication is made in the performance of duties, or in the exercise of powers or functions under the Act or the Health Insurance Commission Act 1973. Paragraph 135A(3)(b) provides, however, that the Secretary of the Department of Health and Aged Care may divulge information to a prescribed authority or person in accordance with the regulations.

Subregulation 52B(2) of the Regulations sets out the information which may be provided to the Private Health Insurance Administration Council (PHIAC) for the purpose of, and to the extent necessary for, carrying out its functions under the Act.

The purpose of the Regulations is to set out in detail the process for approval, variation, revocation, review and reporting in relation to gap cover schemes; to permit the identification, within the HCP, of episodes of hospital treatment provided on a no or known gap basis under a gap cover scheme; and allow this information to be provided to PHIAC.

The amendments inserted a new Part 5A into the Regulations, dealing with gap cover schemes and a new data collection item into the HCP in Schedule 7 to the Regulations.

Details of the Regulations are set out in the Attachment.

The Regulations commenced on the commencement of the Health Legislation Amendment (Gap Cover Schemes) Act 2000.

ATTACHMENT

NOTES ON CLAUSES

Regulation 1: Name of Regulations

Regulation 1 provides that the Regulations may be cited as the National Health Amendment Regulations 2000 (No. 2).

Regulation 2: Commencement

Regulation 2 provides that the Regulations commence on the commencement of the Health Legislation Amendment (Gap Cover Schemes) Act 2000.

Regulation 3: Amendment of National Health Regulations 1954

Regulation 3 provides that the National Health Regulations 1954 are amended by Schedule 1.

SCHEDULE 1 - AMENDMENT

PART 5A        GAP COVER SCHEMES

Item 1

The Schedule inserts a new Part 5A into the National Health Regulations dealing with Gap Cover Schemes. This new part sets out in detail the process for approval, variation, revocation, review and reporting in relation to gap cover schemes

Regulation 37A        Definitions

Regulation 3 7A explains that "criteria" refers to the criteria to which the Minister must have regard in deciding whether to approve a proposed gap cover scheme, as set out at subregulation 37C(4).

This regulation also notes that definitions for other expressions used in Part 5A of the regulations, namely Council, gap cover scheme, known gap policy and no gap policy are found in subsection 4(1) of the National Health Act 1953 (the Act).

Regulation 37B        Application for approval of a scheme

Regulation 37B provides that an application by a registered organisation (also referred to as a "health benefits fund" or "fund") to the Minister for approval of a gap cover scheme (a scheme) must:

-       be in writing; and

-       address the criteria.

The criteria that must be addressed in the fund's application for scheme approval are set out at subregulation 37C(4).

Regulation 37C        Minister to decide each application

Subregulation 37C(1) provides that the Minister must, as soon as practicable after receiving an application for approval of a scheme from a fund, either approve the scheme or refuse to approve the scheme.

Subregulation 37C(2) provides that in making a decision whether to approve a proposed scheme, the Minister must consider the extent to which the scheme meets the criteria. The criteria are set out at subregulation 37C(4).

Subregulation 37C(3) provides that, without limiting the other criteria which must be considered by the Minister in deciding whether to approve a scheme, the Minister must not approve a proposed scheme unless satisfied that it complies with paragraph 37C(4)(c), that is, that it will not have an inflationary impact.

Subregulation 37C(4) specifies the criteria to be taken into account by the Minister. These criteria are:

-       a scheme which enables provision of a no gap policy must eliminate the cost of hospital treatment and associated professional attention provided to people covered by that policy. That is, the Minister, in deciding whether to approve a scheme, will assess the extent to which the proposed scheme will genuinely eliminate gaps for all those covered by a no gap policy provided under the scheme. No gap policies provide consumers with certainty that additional expenses will not be incurred for services covered by the policy.

-       a scheme which enables provision of a known gap policy must cover all but a specified amount or percentage of the full cost of specified hospital treatment and associated professional attention provided to people covered by that policy. That is, the Minister, in deciding whether to approve a scheme, will assess the Went to which the proposed scheme will genuinely result in identified gaps for all those covered by a known gap policy provided under the scheme.

-       that the fund's application for scheme approval demonstrates that the scheme will not have an inflationary impact. A scheme would be regarded as inflationary if, for example, it provided for open-ended reimbursement of medical fees, or increased the total cost borne by contributors.

This criterion ensures that arrangements to cover the gap which are negotiated under gap cover schemes will genuinely reduce or eliminate the current in-hospital medical gap. In order to deliver real results, the schemes must ensure that pressure is not placed on the financing of the health system through increased fund benefit payments under gap cover schemes being applied in ways that do not genuinely reduce the gap, but instead result in medical fees being increased to reinstate the patient contribution. Similarly, to provide real benefit to consumers, the schemes must be designed to ensure that the global cost to contributors does not increase as a result of the schemes. For example, contributors covered by a policy provided under a scheme should not face a higher total cost for a medical episode than that which a person not covered by such a policy could expect to pay.

-       that schemes require people covered by a known gap policy provided under a scheme to be informed of any amount that the person can reasonably be expected to pay in respect of a professional service. This information must be provided to patients in writing before any professional attention is given, if the circumstances permit. In other cases, such as an emergency, where it is not possible to provide information on fees to the patient before attention is given by the medical practitioner, this information should be provided to the person in writing as soon as practicable after the medical attention has been provided. The patient must acknowledge that he or she has received this information on expected charges.

This criterion responds to a strong consumer demand for all additional out-of-pocket expenses for a person covered by private health insurance to be communicated to that person before treatment is received, where possible, to enable an informed financial decision to be made by the patient on proceeding with treatment. It is the "surprise" factor of additional costs which is the most frustrating element of the gap for many consumers, and it is this unknown element that is aimed to be eliminated to the greatest extent possible by provision of information on charging from the doctor to the patient. Such knowledge will address one of the more frequent causes for complaint in this area, enhance consumer satisfaction with private health insurance, and thus help to improve the industry's retention rate and contribute to the long-term sustainability of the private health sector.

Providing the patient with written information on the gap may take place in a number of ways, and it is up to scheme designers to create a system which adequately meets the needs of fund contributors. As an example of how a patient may be provided with the opportunity to give informed financial consent to treatment, the coordinating physician may take responsibility for ensuring patients are given sufficient information including:

* which doctors will be involved in their care;

* what the total medical costs will be; and

* how much of these costs will not be covered by their private health insurance/ Medicare benefit entitlement.

In summary, informed financial consent ensures a known gap for the patient, except in the minority of cases where the procedure does not turn out as planned (eg, complications arising which require further interventions).

-       where practicable, the scheme should provide for a simplified billing arrangement for people covered under a no gap policy or known gap policy provided under the scheme.

Simplified billing broadly involves:

* the aggregation of patients' bills for in-hospital care; and

* the streamlining of claims procedures.

The first component refers to the aggregation of private patients' in-hospital medical bills into one single bill or a reduced number of bills, where this is possible. The second component ensures that patients do not have to be involved in claiming money from their health fund or from the HIC and passing it on to practitioners. This work is undertaken on behalf of patients by their health fund, or if specifically provided for under a scheme, an approved billing agency, hospital or day hospital, or other prescribed person.

The provision of simplified billing arrangements, while highly desirable, may not be able to be achieved in all cases, for example when the practitioners involved in an episode of care are not prepared to participate in the simplified billing process, or where appropriate systems to support simplified billing do not exist within the fund. Thus simplification of bills is only required where practicable, as it should not pose an obstacle to the expansion of health fund products which provide no or known gap cover.

-       subsection 73BDE(4) and paragraph 73BDE(5)(b) of the Act and regulation 37H enable schemes to be revoked in certain circumstances. In order to protect the interests of consumers, schemes must make provision for persons covered by no or known gap policies provided under the scheme sufficient to demonstrate that these contributors will- not be disadvantaged in the event the scheme is revoked.

The precise manner in which a fund undertakes to safeguard contributors in the event of scheme revocation is a matter for the fund to determine. However, as an example, a fund may approach this problem by transferring the affected fund member to another insurance policy and preserving any accrued benefits to which the member may have previously been entitled.

-       that schemes require a person providing hospital treatment or associated professional attention to people insured under a no gap or known gap policy to disclose to the insured people any financial interest that the first-mentioned person has in the products or services recommended or provided to the insured person or persons.

This criterion will ensure that patients are fully informed of any vested interests held by the party referring them for services or products, to guard against such referrals being motivated by concerns other than the best interest of the patient.

As a result of the increasing corporatisation of the health sector, this issue is one of concern to a number of medical professionals and consumer groups. The nub of this concern is that pressure may be placed on medical practitioners participating in a corporate structure to refer patients for unnecessary services, with costs (both financial and medical) to the patient and Commonwealth.

-       Recognising the important principal that doctors' clinical independence be preserved at all times, schemes 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 attention to people insured under a no gap or known gap policy provided under a scheme.

Regulation 37D        Approval may be subject to conditions

Subregulation 37D(1) provides that the Minister may approve a gap cover scheme subject to any conditions that he or she considers appropriate to ensure the scheme meets the criteria set out in subregulation 37C(4) to the greatest practicable extent.

Subregulation 37D(2) provides that the Minister may, at any time after approving a scheme, impose conditions for the first time on a scheme, impose conditions additional to those previously imposed on a scheme, or may vary existing conditions.

Regulation 37E       Measuring inflationary impact - cost of hospital treatment and associated professional attention

Paragraph 73BDD(5)(d) of the Act provides that the regulations must provide for 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.

In order to measure the inflationary impact of a gap cover scheme on the total cost of treatment and associated professional attention, data collected by the Department of Health and Aged Care under the Hospital Casemix Protocol (HCP) will be employed.

The HCP contains financial, demographic and clinical information provided by registered health benefits organisations in respect of every episode of hospital treatment for which a charge is billed to a fund. The data collected under the HCP permits the identification of the framework in which every episode of hospital treatment is provided - that is it allows episodes to be classified according to whether they were provided:

* on a no or known gap basis under a gap cover scheme; or

* on a no or known gap basis under an Agreement; or

* outside the gap cover scheme and Agreement framework.

This information then enables a comparison to be made of the inflationary impact of the three forms in which services may be offered, and thus allows any inflationary impact of gap cover schemes to be highlighted.

To provide a base for comparison and to ameliorate the possible impacts of one-off unrepresentative movements in charges, the cost of treatment will be examined as an average over the preceding five years. As the schemes are not yet in existence, the five-year average of changes in costs will not be fully employed until the schemes have been in operation for a complete five years. Until this point of time is reached an averaging system will be introduced to incorporate data from each year of operation as it becomes available (the manner in which this will work is explained below). The period being averaged is the "relevant period", as defined in subregulation 37E(4).

To measure the inflationary impact of a gap cover scheme on the total cost of hospital treatment and associated professional attention, the following steps will be taken:

Step 1:       The change in the cost of hospital treatment and associated professional attention incurred under a gap cover scheme will be derived using information provided under the HCP. This will be calculated on a five year average basis once the schemes have been operating for five full years. Before that time the change in cost will be calculated as follows:

Year 1

Average change in cost of hospital treatment and associated professional attention under gap cover schemes in Year 1 =

Average cost of hospital treatment and associated professional attention under gap cover schemes in the first financial year of operation - Average cost of hospital treatment and associated professional attention for all services in the financial year preceding the first financial year of operation of gap cover schemes.

Year 2

Average change in cost of hospital treatment and associated professional attention under gap cover schemes in Year 2 =

Average change in cost of hospital treatment and associated professional attention under gap cover schemes in
Year 1 (as calculated above) + (Average cost of hospital treatment and associated professional attention under
gap cover schemes in the second financial year of scheme operation - Average cost of hospital treatment and
associated professional attention under gap cover schemes in the first financial year of scheme operation)

2

(ie divide by the number of years under consideration, in order to calculate the average change in cost of treatment over the period)

Year 3

Average change in cost of hospital treatment and associated professional attention under gap cover schemes in Year 3 =

Average change in cost of hospital treatment and associated professional attention under gap cover schemes in
Year 1 + Average change in cost of hospital treatment and associated professional attention under gap cover
schemes in Year 2 + (Average cost of hospital treatment and associated professional attention under gap cover
schemes in the third financial year of scheme operation - Average cost of hospital treatment and associated
professional attention under gap cover schemes in the second financial year of scheme operation)

3

(ie divide by the number of years under consideration, in order to calculate the average change in cost of treatment over the period)

Year 4

Average change in cost of hospital treatment and associated professional attention under gap cover schemes in Year 4 =

Average change in cost of hospital treatment and associated professional attention under gap cover schemes in
Year 1 + Average change in cost of hospital treatment and associated professional attention under gap cover
schemes in Year 2 + Average change in cost of hospital treatment and associated professional attention under
gap cover schemes in Year 3 + (Average cost of hospital treatment and associated professional attention under
gap cover schemes in the fourth financial year of scheme operation - Average cost of hospital treatment and
associated professional attention under gap cover schemes in the third financial year of scheme operation)

4

(ie divide by the number of years under consideration, in order to calculate the average change in cost of treatment over the period)

Year 5

Average change in cost of hospital treatment and associated professional attention under gap cover schemes in Year 5 =

Average change in cost of hospital treatment and associated professional attention under gap cover schemes in
Year 1 + Average change in cost of hospital treatment and associated professional attention under gap cover
schemes in Year 2 + Average change in cost of hospital treatment and associated professional attention under
gap cover schemes in Year 3 + Average change in cost of hospital treatment and associated professional
attention under gap cover schemes in Year 4 + (Average cost of hospital treatment and associated professional
attention under gap cover schemes in the fifth financial year of scheme operation - Average cost of hospital
treatment and associated professional attention under gap cover schemes in the fourth financial year of operation
of gap cover schemes)

5

(ie divide by the number of years under consideration, in order to calculate the average change in cost of treatment over the period)

Step 2       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 will be derived using information provided under the HCR This will be calculated on a five year average basis once the schemes have been operating for five full years. Before that time the change in cost will be calculated in a manner which mirrors the method set out in Step 1, above.

Step 3       The change in the cost of hospital treatment and associated professional attention incurred in relation to services other than those provided under gap cover schemes, hospital purchaser-provider agreements, medical purchaser-provider agreements and practitioner agreements will be derived using information provided under the HCP. This will be calculated on a five year average basis once the schemes have been operating for five full years. Before that time the change in cost will be calculated in a manner which mirrors the method set out in Step 1, above.

Step 4       The change in the cost of hospital treatment and associated professional attention incurred for all services (including those provided under gap cover schemes, hospital purchaser-provider agreements, medical purchaser-provider agreements and practitioner agreements) will be derived using information provided under the HCP. This will be calculated on a five year average basis once the schemes have been operating for five full years. Before that time the change in cost will be calculated in a manner which mirrors the method set out in Step 1, above.

Step 5       Once these figures have been calculated they need to be compared to determine the inflationary impact of gap cover schemes. The first such comparison will contrast the result of Step 1 to the result of Step 2. That is, the average change in costs under gap cover schemes will be compared to the average change in costs under Agreements.

Step 6       Under this step, the result of Step 1 will be compared to the result of Step 3. That is, the average change in costs under gap cover schemes will be compared to the average change in costs of services other than those provided under schemes or Agreements.

Step 7       Under this step, the result of Step 1 will be compared to the result of Step 4. That is, the average change in costs under gap cover schemes will be compared to the average change in costs for all services recorded by the HCP.

Under subregulation 37E(2) the results obtained under Steps 5 to 7 will be analysed.

If the result of Step 1 is greater than the result of Step 2, the gap cover scheme will appear, on a preliminary investigation, to have had an inflationary impact relative to Agreements.

If the result of Step 1 is greater than the result of Step 3, the gap cover scheme will appear, on a preliminary investigation, to have had an inflationary impact relative to services provided outside the gap cover scheme and Agreement framework.

If the result of Step 1 is greater than the result of Step 4, the gap cover scheme will appear, on a preliminary investigation, to have had an inflationary impact relative to all services recorded by the HCP.

Subregulation 37E(3) recognises, however, that the results obtained under subregulation 37E(2) provide only a preliminary indicator of possible inflationary impacts, which necessitates further examination to determine whether the suggested inflationary outcomes result from genuine changes in charging practices, or whether they instead represent differences arising from a distinct mix of services covered under the various categories set out at Steps 1 to 4. That is, if the cost of services provided under a gap cover scheme appear to have increased relative to services provided, for example, under agreements, this may be the result of an escalation of medical charges under schemes, or may instead reflect the fact that services provided under schemes are exclusively high cost procedures rather than low cost, simple procedures. To ensure the isolation of genuine inflationary effects, if gap cover schemes appear to be more inflationary than the other categories of service provision, a more detailed examination should be carried out by investigating the Diagnosis Related Groups to which the services under the different categories relate. Regulation 49B sets out the list of recognised Australian National Diagnosis Related Groups.

Subregulation 37E(4) defines "relevant period" for the purposes of subregulation 37E(l). The need to refer to a "relevant period" arises from the fact that although a five-year rolling averaging system has been chosen as an optimal mechanism for scrutinising changes in costs of treatment and associated professional attention under gap cover schemes, until the schemes have been operating for a complete five year period, it Will not be possible to employ the preferred five-year average method. To overcome this limitation, an averaging system will be built into the calculations once the schemes have been operational for two full years. The manner in which this will occur for years one to five of scheme operation is set out above.

Regulation 37F       Measuring inflationary impact - private health insurance premiums

To measure the inflationary impact of a gap cover scheme on private health insurance premiums, the following steps will be taken:

Step 1       The rise in the rate of fund premium attributable to the gap cover scheme for a financial year will be calculated. This will be calculated by the fund using data such as the cost of benefits paid under the schemes in the preceding year compared with contribution income, level of reserves, changes to member retention rates etc.

Step 2       The Department collects information on the average weighted increase in the rates of contribution across all funds on a yearly basis. This information is calculated as follows:

Weighted average percentage increase for each fund X Number of contributors for each fund

Total number of contributors to all funds

This information will be calculated for each of the five years preceding the year under consideration.

Step 3       The rise in the rate of premiums for the preceding five years will be totalled.

Step 4       The result of Step 3 will be divided by five to produce an average rise for the preceding five years.

Step 5       The rise in rate of fund premium attributable to the gap cover scheme, as determined in Step 1 will be compared with the average rise in premiums for the preceding five years, as determined in Step 4.

Step 6       If the result of Step 1 is greater than the result of Step 4, the gap cover scheme will be determined to have had an inflationary impact on private health insurance premiums.

Regulation 37G        Annual report

Subregulation 37G(1) provides that each fund with an approved gap cover scheme must provide the Minister and PHIAC with an annual report in respect of the operation of the scheme by 31 July each year. PHIAC will perform an independent monitoring function which will provide a concrete basis from which to assess the efficacy of gap cover schemes in delivering genuine results to consumers. Receipt of the fund's annual report will assist PHIAC in fulfilling this role.

Scheme annual reports must be in writing and set out particulars of how the scheme has met the criteria in respect of the preceding financial year (or the acceptable substitute period provided under subregulations 37G(3) and (4)).

Subregulation 37G(2) requires the annual report on approved scheme operation to include details on 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 treatment being provided. This will enable monitoring of the extent to which gap cover schemes are responding to consumer demand for information on charges to be provided before a course of treatment is finally decided upon.

The provision of annual reports to the Minister on the operation of gap cover schemes will enable continual monitoring of the effects of the schemes in practice. The information contained in the report will enable the Minister to determine how well the scheme is meeting the projections and undertakings provided by the fund in the original scheme application. This will ensure that schemes are achieving the results they were designed to provide, namely a real reduction in the level of out-of-pocket payments by patients with private health insurance. As the Minister will remain informed of the impact of schemes, he or she will be able to identify any potential problems that may be occurring in relation to the scheme and, if necessary, address these problems through the imposition or variation of conditions under regulation 37D, or in extreme cases, the revocation of the scheme under section 73BDE of the Act,

Subregulation 37G(3) provides that if a scheme is approved by the Minister during the last three months of a financial year, the first annual report on scheme operation is to be provided for the period from the time of approval to the end of the next financial year. An informative report could not reasonably be provided for less than a three month period, and it is therefore appropriate for the first report to be delayed until a further financial year has elapsed.

Subregulation 37G(4) provides that if a scheme is approved by the Minister during the first 9 months of a financial year, the first annual report is to be provided for the period from the time of approval to the end of that financial year.

Subregulation 37G(5) provides that the Minister may grant a fund an extension of time in which to provide it's annual report on scheme operation if the fund is unable to provide its report by the 31 July deadline. The Minister may grant such an extension upon fund application in writing. The fund application must set out the reasons for seeking the extension and the length of the extension required.

Regulation 37H        Application to vary or revoke a scheme

Subregulation 37H(1) provides that if a fund decides that a gap cover scheme is not operating in the manner in which it was intended to operate, the fund may apply in writing to the Minister to:

-       vary the scheme; or

-       revoke the scheme.

Subregulation 37H(2) provides that an application by a fund to vary a scheme must set out:

-       particulars of the variation sought; and

-       reasons for the seeking the variation.

Subregulation 37H(3) provides that an application by a fund for revocation of an approved scheme must set out:

-       the reasons for seeking the revocation; and

-       details of provisions made to ensure that persons covered by no or known gap policies provided under the scheme will not be disadvantaged in the event the scheme is revoked. Such details are required to be provided under paragraph 37C(4)(f) in order for the Minister to make a decision as to whether to approve a proposed scheme. Further details are also required to be provided at the time a fund applies for revocation of a scheme to allow the Minister to consider the arrangements in light of the fund's current situation and to provide the fund with an opportunity to update arrangements previously notified if necessary.

Regulation 37I        Review of Decisions by the AAT

Regulation 371 allows application to be made to the Administrative Appeals Tribunal for review of Ministerial decisions, set out below, in relation to gap cover schemes.

The Minister's decisions which may be reviewed by the AAT are:

-       the decision to refuse to approve a scheme under paragraph 37C(1)(b);

-       the decision a impose a condition on the scheme on approval under subregulation 37D(1);

-       the decision to impose a condition to which a previously approved scheme is subject under paragraph 37D(2)(a);

-       the decision to vary a condition to which a previously approved scheme is subject under paragraph 37D(2)(b);

-       the decision to refuse a fund's application for an extension of time in which to provide its annual report on scheme operation, or to grant an extension for a shorter period than that applied for by the fund, under subregulation 37G(5).

Item 2

Paragraph 52B(2)(d)

As a result of the introduction of new paragraph 52B(2)(e), a consequential amendment is required to paragraph 52B(2)(d) to remove the full stop which currently concludes the subregulation and replace it with a semi-colon to indicate that the subregulation continues at this point, concluding at paragraph 52B(2)(e).

Item 3

After paragraph 5211(2)(d)

Subsection 135A(1) of the Act ensures that information obtained, either directly or indirectly, in the performance of duties, or in the exercise of powers or functions under the Act, is not conveyed except in the performance of duties, or in the exercise of powers or functions under the Actor the Health Insurance Commission Act 1973. Paragraph 135A(3)(b) provides, however, that the Secretary of the Department of Health and Aged Care may divulge information to a prescribed authority or person in accordance with the regulations.

Subregulation 52B(2) of the Regulations sets out the information which may be provided to PHIAC for the purpose of, and to the extent necessary for, carrying out its functions under the Act.

New paragraph 52B(2)(e) expands the range of information which may legitimately be provided to PHIAC, without offending section 135A of the Act, to include aggregated HCP data. This data is needed by PHIAC to allow it to fulfil its monitoring and advising function under paragraph 82G(1)(bb) of the Act, under which PHIAC must provide advice to the Minister on the operation of gap cover schemes, with particular reference to the extent to which the schemes genuinely reduce or eliminate the cost to consumers of hospital treatment and associated professional attention.

Item 4

Schedule 7, Part 1, clause 2, after the definition of fund

This item inserts a definition of "gap cover scheme" into the HCP, explaining that the term has the same meaning as given in subsection 4(1) of the National Health Act 1953.

Item 5

Schedule 7, Part 5, after Item 67

This item inserts a new field into the HCP, set out below, to enable information to be collected on inhospital medical services provided under gap cover schemes.

Column 1	Column 2	Column 3	Column 4	Column 5
Item No.	Data item	Fleld size	Required	Coding Description
68	Gap Cover Scheme Identifier	C(5)	MAA	A unique identifier for an approved Gap Cover Scheme. Blank means the service was not service was not provided under a Gap Cover Scheme.

The new item permits such services to be identified separately from services provided under either the agreement framework (ie Medical Purchaser-Provider Agreements or Practitioner Agreements/ Hospital Purchaser-Provider Agreements), or through standard payment mechanisms which do not allow gap benefits to be paid by funds.

Column 1 identifies the number of the data collection item - the proposed item will be number 68 of Part 5 of the HCP.

Column 2 specifies the data item to be recorded, which in this case will be a unique identifier of a gap cover scheme allocated to each scheme on receiving Ministerial approval to commence operation.

Column 3 specifies the size and attributes of the data field to be entered. "C" indicates that this is a character field. Legal characters are alpha, 0-9 and blanks. The unique gap cover scheme identifier will be entered here - it will be comprised of the three letter registered health benefits organisation identifier from Part 6 of the HCP and a two-digit numeric indicator.

Column 4 specifies the circumstances in which the data item must be completed. In this case the item is identified as "MAA" which means mandatory for all. This indicates that this item must contain a valid entry regardless of whether the episode occurred in a contracted hospital or a non-contracted hospital.

Column 5 provides a description of the information to be recorded in the data item. This explains that the data recorded represents a unique identifier for a gap cover scheme.

A blank space is not a valid entry for some fields. It is only valid for fields which identify specific conditions for a blank return. Column 5 identifies that a blank entry will be valid for this data item as it will reflect the fact that the service being recorded was not provided under a gap cover scheme.

ABBREVIATIONS USED IN NOTES ON CLAUSES

Act       National Health Act 1953

fund       health benefits fund or registered health benefits organisation

HCP       Hospital Casemix Protocol

Minister       Minister for Health and Aged Care

PHIAC       Private Health Insurance Administration Council

registered organisation       registered health benefits organisation

Regulations       National Health Regulations 1954

scheme       gap cover scheme