MRCA Pharmaceutical Benefits Scheme (No. MRCC 44/2013) [F2013L02012]

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MRCA Pharmaceutical Benefits Scheme (No. MRCC 44/2013) [F2013L02012]

Portfolio: Veterans' Affairs
Authorising legislation: Military Rehabilitation and Compensation Act 20014
Last day to disallow: 19 March 2014 (Senate)

Purpose

2.25        The MRCA Pharmaceutical Benefits Scheme (No. MRCC 44/2013) sets out the circumstances in which the Military Rehabilitation and Compensation Commission may arrange for pharmaceutical benefits to be provided to members of the Defence Force, including former members or their dependants, at the concessional rate. It replaces the MRCA Pharmaceutical Benefits Scheme (2004 No. M22).

Background

2.26        The committee reported on the instrument in its Second Report of the 44th Parliament.

Committee view on compatibility

Right to health

Impact of changes to calculation of reimbursement on access to medicines

2.27        The committee sought clarification from the Minister for Veterans' Affairs in relation to the objective of the amendment to the pharmaceutical reimbursement measure and the impact the amendment will have on those affected.

Minister's response

The VPRS [Veterans' Pharmaceutical Reimbursement Scheme] reimbursement amount is calculated using an IT system known as the Pharmaceutical Allowance Calculator. The unintended advantage occurred in circumstances where the veteran or member received the pharmaceutical allowance via financial supplements that had not been included in the Pharmaceutical Allowance Calculator. This meant that the pharmaceutical allowance was not included in the calculation of their reimbursement, resulting in them receiving a reimbursement for some co-payments that had already been subsidised by the pharmaceutical allowance.

As the offsetting of co-payments against the pharmaceutical allowance is an integral part of the VPRS, the VPRS needed to be amended to stop these unintended payments. Without the amendments some people would continue to have all their co-payments off set against would not have their pharmaceutical allowance recognised in their reimbursement calculation.

The amendments to the VPRS included the addition of the "missing" financial supplements into the Pharmaceutical Allowance Calculator. These supplements should have been identified in the Pharmaceutical Calculator when the Veterans' Pharmaceutical Reimbursement Scheme commenced. The amendments prevent the payment of double-compensation and thereby protect the public revenue.

Unfortunately, the example given in reference to "policy intention" for the pharmaceutical reimbursement as mentioned in the Consultation part of the Explanatory Statement for the instrument was incorrect. The reference to policy intention was made in relation to the provision relating to a service couple where both members of the couple were eligible for the pharmaceutical reimbursement. This was an error. The provision in question (paragraph 37(c)) is beneficial in nature. It has nothing to do with public-revenue protection. Please accept my apology on behalf of the Department of Veterans' Affairs for the confusion.

The example should have referred to the situation described above where additional sources of pharmaceutical allowance were not included in the Pharmaceutical Allowance Calculator - the policy intention being that the pharmaceutical reimbursement should always be a net amount i.e. co-payments less pharmaceutical allowance, so as to avoid double-compensation.[1]

Committee response

2.28                  The committee thanks the Minister for Veterans' Affairs for his response and has concluded its examination of this instrument.

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