PHI 91/10

This circular contains information for private health insurers regarding Private Health Insurance (Benefit Requirements) Amendment Rules 2010 (NO. 8) and Proposal to Reintroduce Requirement for Insurers to pay Hospitals within 60 Days

Page last updated: 14 February 2013

Printable version of 91/10 (PDF 21 KB)

22 December 2010

Private Health Insurance (Benefit Requirements) Amendment Rules 2010 (NO. 8) and Proposal to Reintroduce Requirement for Insurers to pay Hospitals within 60 Days

The Private Health Insurance (Benefit Requirements) Amendment Rules 2010 (No. 8) (the Amendment Rules) were registered with the Federal Register of Legislative Instruments (FRLI) on 15 December 2010 and took effect on 16 December 2010 (FRLI No: F2010L03222).

These Rules amended the Private Health Insurance (Benefit Requirements) Rules 2010 (the Rules).

The Private Health Insurance Act 2007 (the Act) requires that private health insurers pay benefits for hospital treatment, including psychiatric care, rehabilitation and palliative care, and other hospital treatment. The Rules specify the benefits that insurers must pay for hospital accommodation.

The amendment changes the hospital benefits listed in the Rules from minimum benefits to default benefits that will only operate in the absence of a relevant contracted rate, reverting to the process that applied prior to 2007. This change will enable insurers and hospitals to negotiate freely.

Amendments have been made to Part 1, Part 2 and Schedule 5 of the Rules. The Amendment Rules make clear that the benefits in the Schedules to the Rules do not operate as a minimum baseline, which cannot be overridden through an agreement between an insurer and a hospital. The amendment supports the current practice of health insurers and hospitals contracting with each other for particular benefits, and the minimum benefits in the Schedules to the Rules only regulate benefits that an insurer must pay in the absence of a contract between the insurer and the hospital. This amendment does not change the requirement for insurers to pay benefits for psychiatric care, rehabilitation and palliative care or other hospital treatment, or the requirements for insurers to pay minimum benefits for prostheses as set out in the Private Health Insurance (Prostheses) Rules.

Details of the amendments are set out in the Private Health Insurance (Benefit Requirements) Amendment Rules 2010 (No. 8), which are available on the ComLaw website.

The Department is also consulting with industry about a proposal to reinstate the requirement for insurers to pay hospital claims within 60 days of receipt of those claims. The intention of this proposal is to introduce regulatory measures that ensure timely payment of claims. Submissions about this proposal can be sent to Mr Stephen Lewis, Director, Legal Policy Section, Private Health Insurance Branch by 31 January 2011.

If you require further information please telephone: (02) 6289 9853/24 hr answering machine or email the enquiry to Private Health Insurance Branch

For more information visit 2012 Private Health Insurance (PHI) Circulars.

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