Bills Digest No. 152 2002-03
Health and Ageing
Legislation Amendment Bill 2003
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Health and Ageing Legislation Amendment Bill
2003
Date Introduced: 27 March 2003
House: Senate
Portfolio: Health and Ageing
Commencement:
- Schedules 1, 3 and 4 commence on Royal
Assent.
- Schedule 2 commences 28 days after Royal
Assent.
- The items in Schedule 5 commence on various
dates.
To:
- Amend the National Health Act 1953 to increase the
number of members on the Pharmaceutical Benefits Advisory
Committee; and make other changes to pharmaceutical supply
arrangements.
- Make other changes to the National Health Act and related
legislation in the Health and Ageing portfolio.
The Pharmaceutical Benefits Advisory
Committee ('PBAC') is an independent statutory
body established on 12 May 1954 under
section 101 of the National Health Act to make recommendations and
give advice to the Minister about which drugs and medicinal
preparations should be made available as pharmaceutical benefits.
No new drug may be made available as a pharmaceutical benefit
unless the Committee has so recommended.
The Committee is required by the Act to
consider the effectiveness and cost of a proposed benefit compared
to alternative therapies. In making its recommendations the
Committee, on the basis of community usage, recommends maximum
quantities and repeats and may also recommend restrictions as to
where PBS subsidy is available. When recommending listings, the
Committee provides advice to the Pharmaceutical Benefits Pricing
Authority regarding comparison with alternatives or their cost
effectiveness.
The PBAC currently has a total
membership of twelve, and currently must include eight members
selected from the following six interests or professions:
consumers, health economists, practising community pharmacists,
general practitioners, clinical pharmacologists, and medical
specialists. At least one member must be selected from each of
these groups.(1) The remaining four members (a third of
the PBAC membership) are appointed by the Minister subject to them
having qualifications and experience in a field related to the
functions of the PBAC that allow them to contribute meaningfully to
its deliberations.(2) The current amendments provide for
PBAC membership to be increased by up to four people. The
membership will consist of a chairperson with not less than eleven
and not more than fifteen members. The amendments also provide that
not less than two-thirds of the total number of members be selected
from nominations of the prescribed external organisations. This
maintains the current ratio between the number of members selected
from nominations of external groups, and the number of members
appointed by the Minister.
The proposed increase in the PBAC
membership is intended to address the currently substantially
increased workload of the medical specialists on the committee. The
drugs and medicines put forward to the PBAC for listing are
increasingly complex and specialised in their intended operation.
The supporting clinical information submitted by manufacturers also
tends to be lengthy. The adequate assessment of these new medicines
for listing consequently calls for detailed scrutiny by
professionals who have specialist expertise in different areas of
medicine. There has also been considerable ongoing concern on the
part of the pharmaceutical manufacturing industry about the delays
involved in the assessment process for drugs submitted for listing.
Also, there has been some industry concern at what has been
described as a lack of transparency at how drugs are
listed.(3) Although it is not the intention of the
proposed increase in PBAC membership to address these industry
concerns, it will increase the resources the PBAC has available to
expedite applications and communicate its subsequent
decisions.
Section 100 of the National Health Act
enables certain specialised drugs and medicines which are not
normally available through GPs or pharmacies to still be supplied
as pharmaceutical benefits under certain conditions. Special supply
arrangements might apply, for instance, in the case of highly
specialised drugs for treatment of hospital in-patients with
specific conditions. The Bill proposes to
amend section 100 to clarify that these special supply arrangements
can be used for the funding of particular medicines that are not
available through the normal operation of the Pharmaceutical
Benefits Scheme ('PBS').
Pharmaceutical benefits can only be
supplied (and pharmacists reimbursed) for drugs and medicines
supplied at approved premises. If a pharmacist relocates premises
which are not as yet approved for the supply of pharmaceutical
benefits, the pharmacist currently needs to proceed under the act
of grace provisions in order to be reimbursed for the supply of
medicines under PBS subsidy. Part 3 of Schedule 1 of the
Bill proposes to amend the National Health Act
to allow a pharmacist to supply medicines under subsidy while
approval is pending, and obtain the reimbursement once approval is
granted.
New arrangements have been introduced
with some States for the supply of pharmaceutical benefits to
hospital out-patients, day admitted patients and admitted patients
on discharge. This amendment will ensure that the forms and
quantities of the medicines supplied under PBS subsidy from
hospitals will conform to the specifications in the Schedule of
Pharmaceutical Benefits, which currently apply to pharmacists
and medical practitioners.
Section 98 of the National Health Act
provides the Secretary or Minister with the power to cancel
approvals to supply pharmaceutical benefits. The
Bill proposes to amend section 98 to clarify
that the Secretary or Minister has the discretion whether to cancel
approval or not. Currently under the Act, the Secretary or Minister
may be obliged to cancel an approval in cases where this may not be
appropriate (for example, where a pharmacist has temporarily ceased
to trade due to illness).
Schedule 2 of the
Bill proposes amendments to remove an anomaly in
relation to gap cover insurance. The Medicare rebate covers 75% of
the Medical Benefits Schedule fee for in-hospital medical expenses
while private health insurance, through a Registered Health
Benefits Organisation ('RHBO'), covers the
remaining 25% of the MBS fee. Some medical practitioners charge a
fee that is more than the scheduled MBS fee, and there is
consequently a gap between the charged fee and the MBS fee. Some
RHBOs provide insurance to cover such gaps, sometimes under Medical
Purchaser-Provider Agreements with specific service providers.
Currently, legislation requires that if a service is provided as
part of a Medical Purchaser-Provider Agreement, the provider of
medical services must forward all accounts to the RHBO, otherwise
the RHBO is prevented from paying benefits to the patient in excess
of 25% of the MBS fee. In other words, they are prevented from
paying any gap benefit. This does not apply in the case of gap
cover arrangements not under a Medical Purchaser-Provider
Agreement.
This can disadvantage patients in some
cases where practitioners prefer to give accounts directly to RHBO
members, to forward on to their RHBO. If the member is not aware of
the requirements that apply in the case of Medical Purchaser
Provider arrangements, and claims the Medicare rebate prior to
lodging the claim with the RHBO, then the member will not receive
any gap benefit and will be left with an out-of-pocket expense. The
proposed amendment would require the medical practitioner to send
the account directly to the Health Insurance Commission rather than
the RHBO. Accounts would be submitted electronically, in conformity
with the HIC s electronic medical claiming model and the Government
s On-Line Strategy .
An unintended consequence of the
Health Legislation Amendment Act (No 2) 2001was that a
number of medical specialists who were recognised prior to June
2001as specialists for the purposes of the Health Insurance Act
1973 were no longer recognised as specialists, and could not
access Medicare benefits at the specialist rebate level. Schedule 3
of the Bill proposes amendments to the
Health Insurance Act 1973 to restore that status, and
access to specialist level Medicare benefits.
Currently, overseas trained doctors must
commit to provide services in districts of workforce shortage if
they wish to access Medicare. This reflects the Government s policy
regarding the maldistribution of the medical workforce, and the
difficulties experienced by some rural communities in accessing
general practitioner services. Schedule 4 of the
Bill proposes amendments to the Health Insurance
Act to enable overseas doctors who are accessing a bona fide
training program and have a occupational trainee visa to claim
Medicare benefits when they assist at operations as part of their
training programs. This will facilitate the exchange of medical
knowledge between Australia and
overseas.
The Bill proposes the following changes
relating to the Pharmaceutical Benefits Scheme and pharmaceutical
supply arrangements.
Part 1 amends section
100A of the National Health Act by increasing the maximum
number of PBAC members, including the Chairman, from 12 to 16. At
least two-thirds of the members must be selected from six different
professional groups, with the remaining members appointed by the
Minister. The current requirement for at least one member from each
professional group is maintained. PBAC is to have at least 12
members, but can function for periods of up to six months with
lesser numbers.
Part 2 amends section
100 of the National Health Act to clarify the conditions
under which special supply arrangements can be used for the funding
of particular medicines that are not available through the normal
operation of the Pharmaceutical Benefits Scheme. On the
recommendation of PBAC, the Minister can declare a 'drug or
medicinal preparation' to be a 'special pharmaceutical product' for
the purpose of such funding. Such declarations and any variations
or revocations are deemed to be 'disallowable instruments' and must
be tabled in Parliament within 15 sitting days.
Part 3 amends
subsection 99(3) of the National Health Act. The
new provision assists pharmacists who do not obtain the necessary
prior approval to supply benefits from a new location. Once
approval is obtained, the pharmacist will be entitled to a payment
of 90% of the pharmaceutical benefits supplied from the new
location.
Part 4 amends
sections 84DA and 84E of the National Health Act
to allow an agent to make and sign an application for a PBS
safety-net or concession card where the applicant is unable to sign
the application.
Part 5 repeals
subsection 94(6) of the National Health Act to
ensure that determinations of the forms, strengths and brands of
PBS medicines and their maximum quantities and repeats will apply
to the supply of pharmaceutical benefits by hospitals in the same
way as they do to pharmaceutical benefits supplied by
pharmacies.
Part 6 amends various
subsections in sections 98 and 98AA of the
National Health Act to make it clear that the decision-maker (be it
the Secretary or the Minister) has the discretion whether or not to
cancel an approval for the supply of pharmaceutical benefits.
Schedule 1 commences on Royal
Assent.
Schedule 2 amends section
73BDA of the National Health Act allowing medical
providers to forward account claims to the Health Insurance
Commission instead of a health fund. The Explanatory Memorandum
notes that this will allow 'a consolidated payment incorporating
both Medicare and private insurance benefits to be made to the
provider of medical services'.(4) Schedule
2 commences 28 days after Royal Assent.
Schedule 3 amends the
Health Insurance Act 1973 to restore specialist
recognition status for the purpose of ensuring access to Medicare
benefits at the specialist rebate level. Schedule
3 commences on Royal Assent.
Schedule 4 amends subsection
19AB(7) of the Health Insurance Act to ensure that no Medicare
benefit will be payable for the professional services of an
overseas trained doctor who assists at an operation unless the
doctor is the holder of an exemption granted under the Act.
Schedule 4 commences on Royal Assent.
Schedule 5 makes minor
technical amendments to the Aged Care Act 1997 and the
Health Insurance Act. The items in Schedule 5
commence on various dates.
It should be noted that neither the Act nor
the related regulations specify that the four new members of the
PBAC must be medical specialists, nor chosen from any particular
categories of the six specified in the regulations. Also, only
three of the four new positions need to be selected from
professional and consumer group nominations, and one new member
selected by the Minister.(5) The Minister, however, must
still select members whose qualifications and experience satisfy
the Minister that they can contribute meaningfully to the
deliberations of the committee. The conditions under which the
Minister can select members remains the same, even if the number of
members the Minister can select under those conditions has
increased.(6)
The proposal that two-thirds of the PBAC
membership be selected from external bodies and one third by the
Minister, may be subject to interpretation.(7) If this
applies only to the initial selection of PBAC members,
then there is no obvious requirement to maintain that
proportion where members leave or are removed (permanently or
temporarily) from the PBAC without being replaced. In this case,
circumstances might arise over time where the Ministerial
representation on the PBAC becomes greater than one-third, or
alternatively, the external representation greater than two-thirds.
Moreover, circumstances may arise during a six month period, where
the Ministerial representation on the PBAC exceeds that of
externally nominated members.(8) This would not arise if
the amended subsection 100A(3) made it clear that the membership
ratio of two-thirds to one third were to be maintained throughout
possible changes in the number of committee members.
- The members selected from these groups are
appointed by the Minister from nominations made by specific
community bodies and professional associations named in the
regulations related to the Act. Each of these bodies or
associations must nominate at least three people.
- Prior to December 2000, only the AMA could
make recommendations to the Minister for vacancies on the PBAC. A
review group convened by the then Parliamentary Secretary for
Health Senator Grant Tambling recommended that PBAC members should
come from a broader range of constituencies, and this
recommendation was enacted in the National Health Amendment
(Improved Monitoring of Entitlements to Pharmaceutical Benefits)
Act 2000.
- It has been suggested that delays and lack of
transparency will adversely affect pharmaceutical industry research
and development in Australia. See Drug giant warns PBS delays will
cost millions , Australian Financial Review, 24 April
2003.
- Explanatory Memorandum p. 9.
- Under the proposed amendments, eleven of the
maximum of sixteen PBAC members would need to be chosen from
external nominations (only three more than the current eight).
- Under the existing provisions, the Minister
can select at most four (out of twelve) members. Under the proposed
amendments, the Minister can select at most five (out of sixteen)
members.
- Proposed amendment to subsection 100A(3)
- The proposed amendment to subsection 100B(3)
enables the PBAC to perform its functions and exercise its powers
with fewer than twelve members for a period of no more than six
months.
Maurice Rickard
14 May 2003
Bills Digest Service
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ISSN 1328-8091
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