|Title:||Fees Chargeable in respect of Surgically Implanted Prostheses used in Hospitals and Health Services|
|Document ID:||Operational Circular OP 2042/06|
|Date of issue:||Thursday, 30 March 2006|
|Status:||NO LONGER APPLICABLE|
|Description:||SUPERSEDED BY OD 0159/08|
|Period of effect:||from 31 March 2006|
|Authorised by:||Dr Neale Fong, Director General, Department of Health, 27-Mar-2006|
|Print version:||View print version|
Fees Chargeable in respect of Surgically Implanted Prostheses used in Hospitals and Health Services
The Commonwealth introduced legislative amendments on 10 March 2005 necessary for the implementation of new prostheses arrangements.
The amendments require registered health funds to offer a “no gap” and “gap” permitted range of prostheses in relation to every admitted hospital procedure on the Medicare Benefits Schedule (MBS) for which they provide cover.
At least one clinically appropriate no-gap prosthesis for each MBS admitted hospital procedure would be listed on a new Prosthesis List.
Under the new legislation, if the product has only a Minimum Benefit Level then a gap payment is not required (no gap prosthesis) and the health fund will cover the full cost. In these circumstances the health fund member (if covered) will not incur any out of pocket costs for that prosthesis.
If a listed product has a Minimum Benefit Level and a Maximum Benefit Level then a gap payment may be required (gap prosthesis). The health fund will cover the cost of the gap prosthesis to at least the minimum benefit level and the health fund member will be responsible for any outstanding amount up to, but not exceeding, the difference between the maximum and the minimum.
The new prostheses arrangements implemented on 31 October 2005 include the new Prostheses List, which itemises the benefits payable against all no-gap and gap products.
2. Prostheses fees to be charged by Public Hospitals
The Commonwealth does not regulate prostheses fees charged by WA public hospitals, these fees are set by the State. The State has adopted the Minimum Benefit Levels set out in the Commonwealth’s Prostheses List as the fees and charges by WA public hospitals.
3. Commencement Date
The Prostheses List is effective from 31 October 2005 when new arrangements commence i.e. applicable for prostheses and medical devices implanted on or after 31 October 2005.
However to reflect arrangements negotiated between the States, Territories and Health Fund Insurers a discount will be applicable to the Prostheses List for any cardio-thoracic or ophthalmic claim for reimbursement processed from that date, subject to the conditions outlined in Clause 4 below.
4. Determination of the Prostheses Benefit Level to be Charged
For items with a minimum benefit only, other than Cardio-thoracic and Ophthalmic items (as described under Categories in the Prostheses List), the fee charged will be the minimum benefit. No invoices are required to be submitted to Health Funds.
For Cardio-thoracic items on the list a discount of 7.5% applies and for Ophthalmic items on the List a discount of 20% applies. No invoices required.
If a public hospital is unable to procure any cardio-thoracic or ophthalmic items on the Prostheses List at or below the agreed percentage discount from the Prostheses List minimum benefit, then that hospital may provide a supplier invoice to the relevant health fund for reimbursement. The health fund under the current legislation is able to pay a benefit for that prosthesis up to the minimum benefit level listed on the Prosthesis list. Given the additional administrative and financial cost of procuring and sending an invoice to a fund, it is expected that hospitals will only provide an invoice where the cost is significantly above the discount level.
Certain items on the Prostheses List have a maximum and minimum benefit. The maximum charge for these prostheses is the maximum benefit level.
Reimbursement from health funds above the minimum benefit is at the discretion of health funds.
Any prostheses charge above the benefit level paid by the health fund, will be the private patient’s responsibility. Therefore the public health organisation will need to ascertain from the relevant health fund for each prosthesis that has a maximum benefit, what benefit level above the minimum, if any, the health fund will pay. Note that discounts still apply to the minimum benefit level for cardio-thoracic and ophthalmic items as outlined above.
Hospitals and Health Services must comply with this Policy Directive with respect to charging for Prostheses on the Prostheses List and are required to cease other charging practices with private health funds such as charging the supplier invoice price for prostheses on the Prostheses List except in exceptional circumstances as outlined above.
5. Informed Financial Consent
Hospitals are to ensure that patients in billed categories provide informed financial consent prior to surgery, and in doing so, understand that they are liable for any charges not covered by their health insurer for any prostheses items.
There are a small number of prostheses which are either not on the Commonwealth’s Prostheses List, or a benefit amount has not been determined. In these circumstances hospitals will need to ensure procedures are in place whereby informed financial consent is obtained from the patient in advance of their procedure where a gap payment may result.
6. Categories of Patient to be Billed
7. Web Link for the Latest Prostheses List
The Australian Government’s Department of Health & Ageing Private Health Insurance Branch maintains the prostheses list. The web link provided below details the October 2005 prostheses list (Circular PHI 58/05).
Since this point in time there have been a number of small adjustment to this list details of which can be found at Commonwealth’s web site. It remains the responsibility of the Hospitals & Health Services to obtain all determination revisions directly from the Commonwealth (by accessing Commonwealth Circulars on their website):
However, the WA Department of Health will continue to notify public hospitals of the effective date of future revised determinations and related information from the Commonwealth.
Dr Neale Fong
This circular last updated: Tuesday, 9 December 2008 at 3:15pm