New funding arrangement for surgical consumables

A new funding arrangement for around 500 surgical general use and consumable items is being established for use by private health insurers and hospitals.

The Hon Mark Butler MP
Minister for Health and Aged Care

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A new funding arrangement for around 500 surgical general use and consumable items is being established for use by private health insurers and hospitals.

The default benefits for the General Use Bundles will be mandated through changes to the Private Health Insurance Act (Benefit Requirements) Rules 2011. This will clearly define the benefits insurers will pay to hospitals when these items are used in surgery for private patients. These items include sutures, haemostatic agents and skin glues.

The individually listed items are to be removed from the existing Prostheses List, which sets the benefits for implantable devices and items for private patients.

The Independent Health and Aged Care Pricing Authority (IHACPA) has provided advice for the bundling, which provides clear information about the new bundles for use by insurers and hospitals, while also reducing the complexity of the Prostheses List.

These changes come into effect on 1 July 2023 and will ensure continued access to these items for private patients.

The Clinical Implementation Reference Group – which advises on items identified for removal from the Prostheses List – confirmed there would be no clinical implications or adverse outcomes to patients, with these items continuing to be available under the new funding arrangement.

The changes will not affect the overall benefits paid by insurers since IHACPA used utilisation trend data to develop its advice.

Reforms are currently in progress to better align private system prices for surgical devices with those paid within the public health system, and comparable international markets.

Quotes attributable to Minister Butler:

“These general use and consumable items are the kind that could be used in any surgery performed in Australia, and the inclusion of separate entries for each on the Prostheses List appears to have been contributing to inflated costs for private patients.

“Insurers will be mandated to fund General Use Bundles, which means private patients will not face additional out of pocket costs for these consumables when they have surgery.

“The Government’s priority is that Australians access affordable medical devices and that the taxpayer gets value for money, both in the public system and through our support for private health insurance.”

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