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HEALTH INSURANCE COMMISSION REGULATIONS (AMENDMENT) 1996 NO. 159
EXPLANATORY STATEMENTSTATUTORY RULES 1996 No. 159
Issued by Authority of the Minister for Health and Family Services
Health Insurance Commission Act 1973
Health Insurance Commission Regulations (Amendment)
Section 8E of the Health Insurance Commission Act 1973 (the Act) provides that the Health Insurance Commission (the HIC) shall perform such functions in relation to health insurance and other health related matters as are prescribed in the Health Insurance Commission Regulations.
Section 44 of the Act provides that the Governor-General may make regulations for the purposes of the Act.
Regulation 3P allows the HIC to perform the function of administering the Better Practice Program (the Program). This Program is a voluntary program designed to provide financial recognition by the Government for general practices that focus on patient needs and provide continuing, comprehensive whole of patient care. In order to be eligible to participate in the Program, general practices must employ appropriately trained medical practitioners, provide out of surgery visits, and ensure that their patients have access to appropriate after hours care. These and other requirements are set out in the Better Practice Program eligibility criteria. Once eligible, practices may receive quarterly payments, the amount of which is determined by the HIC in accordance with a payment formula.
The primary purpose of amending Regulation 3P is to:
* oblige the HIC to use a new formula when making decisions as to the amount payable to individual practices in payment quarters commencing after 31 July 1996;
* insert a reference to new eligibility criteria, which will apply to all applications lodged after 31 July 1996; and
* enhance current HIC review procedures.
Payment formula
The new formula, which is set out in Schedule 2A, was developed in response to specific issues raised by the profession, and was the subject of lengthy consultation with key organisations. The amendments to Regulation 3P will oblige the HIC to use this new formula when making decisions as to the amount payable to individual practices in payment quarters commencing after 31 July 1996, irrespective of the date of application or the date that the HIC determined a practice's eligibility for the Program. The previous payment formula will only be used if, as a result of a reconsideration or review, the HIC remakes decisions concerning the amount payable to individual practices for payment quarters before 1 August 1996.
As the Program is voluntary, individual practitioners at a practice have the option of refusing consent to the use of their data for the purpose of assessing a practice's eligibility, or determining its payment. Eligibility decisions are made based on the services provided by all practitioners at the practice. If an individual medical practitioner refuses consent to the use of his or her data for the purposes of assessing a practice's eligibility for the Program, the HIC will not have sufficient data about the practice to assess its eligibility. The amendments to Regulation 3P provide for applications to be rejected if this occurs. In instances where an individual medical practitioner consents to the use of his or her data for the purposes of assessing eligibility of the whole practice, but not for the purposes of calculating the practice's payment, the amendments to the Regulations allow the HIC to exclude the individual practitioner's data from the practices payment calculation. Where consent is obtained, Schedule 2A outlines the data to be used for the purposes of calculating a payment.
Eligibility Criteria
An important feature of the Program is that eligibility decisions are made on an annual basis in accordance with certain eligibility criteria, which have changed over time in response to issues raised by members of the medical profession. To date, there has been one change to the eligibility criteria. The new criteria came into effect on 1 December 1995. Applications are assessed in accordance with the criteria in force at the time that the practice's application was lodged with the HIC.
The amendments to Regulation 3P also provide for the use of revised eligibility criteria for applications lodged after 31 July 1996. The criteria have only been modified slightly to ensure consistency between the eligibility and payment components of the Program. No substantive changes of a policy nature have been made at this stage to the eligibility criteria.
The amendments to Regulation 3P also ensure that applications lodged on or before 31 July will continue to be assessed against the eligibility criteria that were in force at the time the application was lodged with the HIC. The HIC is also required to use the eligibility criteria in force at the time the practice's application was lodged when remaking decisions concerning eligibility.
Eligibility decisions are made each year and the regulations now make it clear that eligibility to participate in the Program throughout that year depends on the practice's continued compliance with the relevant eligibility criteria The HIC has the function of monitoring compliance with the eligibility criteria and can cancel a practice's participation in the Program should the practice cease to comply with the criteria.
Review Procedures
The amendments to Regulation 3P also enhance the current internal review procedures available to the HIC. The regulations provide three tiers of review. Decisions relating to eligibility and payment under the Program can be reconsidered by the HIC before an application for review is lodged by a practice. The practice can then request an internal review of the decision by the HIC. Once the other reviews have taken place, the matter can then be reviewed by the Administrative Appeals Tribunal
Details of the amendments to Regulation 3P are attached.
The amendments to Regulation 3P commenced on gazettal.
ATTACHMENT A
Details of Amendments to Regulation 3P
The primary purpose of these amendments is to oblige the Health Insurance Commission to use a new formula when making decisions as to the amount payable to individual practices from 31 July 1996. All quarterly payments made after 1 August 1996 will be calculated using the new formula set out at Schedule 2A irrespective of the date of eligibility or application. The amendments also empower the HIC to assess applications lodged after 31 July 1996 in terms of revised eligibility criteria and enhance the current review procedures. Specifically:
* subregulation 3.1 - amends subparagraph 3P (1)(b)(i) to enable the HIC to cancel a practice's eligibility to participate in the Better Practice Program when the practice ceases to comply with the eligibility criteria.
* subregulation 3.2 - amends subparagraph 3P (1)(b)(ii) to remove a phrase that appears in paragraph 3P (1)(b) and so is unnecessary in the subparagraph.
* subregulation 3.3 - amends paragraph 3P (2)(a) and requires the HIC to make decisions concerning the amount payable to each general practice in accordance with subregulation 3P (2A). This subregulation requires the HIC to calculate the amount payable for any payment quarter commencing after 31 July 1996 in accordance with a payment formula, which is specified in Schedule A.
* subregulation 3.4 - amends subparagraph 3P 2(a)(ii) to restrict the application of the criteria outlined in the document Eligibility Criteria and Payment Arrangements for the Better Practice Program, as from 1 December 1995," which was published by the Department of Human Services and Health in October 1995, to Better Practice Program applications lodged with the HIC after 30 November 1995 and before 1 August 1996.
* subregulation 3.5 - inserts a new paragraph 3P (2)(aa) which, subject to the new subregulation 3P (2A), outlines the processing arrangements for applications lodged after 31 July 1996. The HIC are required to make eligibility decisions for applications lodged after 31 July 1996 in accordance with the criteria outlined in the document "Eligibility Criteria for the Better Practice Program," which will be published by the Department of Health and Family Services in July 1996. Decisions concerning the amount payable to each general practice that lodges an application after 31 July 1996 must be made in accordance with the new payment formula, which is detailed in Schedule 2A.
* subregulation 3.6 - inserts new subregulations 3P(2A)and 3P(2B):
- subregulation 3P(2A) requires the HIC to calculate the amounts payable to all eligible practices, for any payment quarter commencing after 31 July 1996, in accordance with the new payment formula detailed in Schedule 2A.
- subregulation 3P(2B) empowers the HIC to reconsider a decision it has made up to the time when the practice affected by the decision submits an application requesting an internal review.
* subregulation 3.7 - amends subregulation 3P(4) and outlines the process that the HIC must follow if it reconsiders a decision before a formal request for a review has been lodged by the practice, or when it receives an application from the practice affected by a decision for an internal review of that, decision.
* subregulation 3.8 - amends paragraph 3P(4)(a) and requires the HIC to reconsider or review a decision in accordance with the eligibility criteria and payment formula that were in effect when the original decision was made.
* subregulation 3.9 - amends paragraph 3P(4)(b) and requires the HIC to make a decision that either affirms or replaces the original decision under reconsideration or review.
* subregulation 3.10 - makes an amendment to subregulation 3P(5), which sets out the advice that the HIC must include in a notice to the persons who lodged the application, once it has made a reconsidered decision.
The notice must contain the terms of the decision and advise that a copy of the reasons for the decision may be obtained from the HIC on submission of a written request. In instances where the HIC has reconsidered a decision before a request for review has been lodged by the practice, it must also advise that the person affected by the decision can apply for an internal review of this decision by the Inc.
* subregulation 3.11 - amends paragraph 3P(6)(b) to ensure that the validity of a reconsidered decision is not affected in instances where the HIC fails to advise practices that they may request a statement of reasons for the decision, or that they may request a review of the decision.
* subregulation 3.12 - amends subregulation 3P(7) to introduce a three tiered process for reviewing decisions. In instances where the HIC has reconsidered a decision before a request for review has been lodged, the person affected by the decision may request an internal review of that decision by the HIC.
If dissatisfied by a decision that is made following an internal review by the HIC, the person affected by the decision may then apply for review of this decision by the Administrative Appeals Tribunal. Applications for a review of a reconsidered decision would need to be made in accordance with the Administrative Appeals Tribunal Act 1975.
* subregulation 3.13 - inserts new subregulations 3P(9), 3P(10), 3P(11) and 3P(12):
- subregulation 3P(9) clarifies that a practice will be ineligible for the Program if any medical practitioner currently working at the practice refuses consent to the use of their data, which is held by the HIC, for the purpose of assessing the practice's eligibility for the Program.
- subregulation 3P(10) clarifies that once a general medical practice is deemed eligible for the Program, it is entitled to four quarterly payment, providing it continues to meet the eligibility criteria.
- subregulation 3P(11) sets out the definition of a 'general medical practice' that is used for the purposes of the Better Practice Program.
- subregulation 3P(12) defines the meaning of the word "lodged" for the purposes of Regulation 3P.
* subregulation 4.1 - inserts new Schedule 2A, which details the formula that will be used when calculating quarterly payments due to be made to all eligible practices after 31 July 1996:
- schedule 2A(1) is a glossary of terms used in this schedule.
- schedule 2A(2) outlines the data that will be used in calculating the amount payable to eligible practices. A practice's payment is calculated using Medicare and Department of Veterans' Affairs claims data held by the HIC. Only claims relating to items 1 - 98 of the Medicare Benefits Schedule will be used in calculating payments.
The data used to calculate the payment relates to services provided to practices in a twelve month reference period, which ends four months prior to the start of the quarter in which a payment is to be made.
Only data that has been processed before the start of the quarter for which the payment is being calculated, and which has been extracted from the HIC database prior to the payment calculation, will be used for the purposes of calculating payment.
If the HIC remakes a decision as a result of a reconsideration or review, the HIC will recalculate a practice's payment using the data for the twelve month reference period relevant to the quarter in which the payment was made. Only data that has been processed by the HIC and that has been extracted from the HIC database prior to the decision being made, will be used for the purposes of calculating payment.
If any medical practitioner at the practice has refused consent for the use of his/her data, Schedule 2A(2) requires the HIC to exclude this data when calculating a practice's payment.
- Schedule 2A(3) outlines the mathematical formula that will be used to calculate the amount payable to each eligible general practice. There are three elements to the formula:
. practice size, which is calculated using a measure of the patient load at the practice, independent of the number of services provided to the patients. This guarantees the practice a minimum payment proportional to the practice size;
. patient continuity, which is the extent to which patients return to the same practice as opposed to any other practice; and
. rural loading, which is determined by the practice's rural, remote and metropolitan areas classification
These elements and their application to practices participating in the Better Practice Program are described in some detail in the schedule.
- schedule 2A(4) details the mathematical formula used to determine patient continuity.