Reducing the public and private sector price gap for some Prescribed List devices and products

We are reducing the benefits paid for some Prescribed List devices and products to better align with prices paid in the public sector.

What the reform is about

Some private health benefits paid for Prescribed List devices in private hospitals are higher than in public hospitals. Using the Independent Health and Aged Care Pricing Authority's (IHACPA's) public benchmark pricing, we can better align private and public costs.

How we will achieve this

The scheduled benefit reductions for devices in Part A with a gap of more than 7% above the weighted average public price are:

  • 40% of the gap on 1 July 2022
  • 20% of the gap on 1 July 2023
  • 20% of the gap on 1 July 2024 (final reduction).

We will not reduce benefits below 7% of the gap during the reform period.

These scheduled benefit reductions do not apply to Cardiac Electronic Implantable Devices or General Use Items.

For full details, see the Memorandum of Understanding (MoU) with the Medical Technology Association of Australia (MTAA).

Timeline

IHACPA recalculated the public benchmark price for the 2022/23 FY. We used this price to calculate the final benefit reduction by 20% of the gap.

The reduced benefits are effective from 1 July 2024.

Past activities

DateActivity
2 to 25 April 2024Sponsors review the benefits after the 20% reduction.
4 September 2023Requested device level data. IHACPA used this data to recalculate the benchmark price for medical devices in public hospitals. This data came from the sponsors of devices listed on Part A of the Prescribed List.
1 July 202320% benefit reduction.
1 July 202240% benefit reduction.
June 2022Released advice on the Prescribed List adjusted benefit amounts.
April 2022Released benchmark price for prostheses in public hospitals 2020–21. We used this information to calculate the gap between the public price and the Prescribed List benefit.
December 2021Released IHACPA methodology for determining the benchmark price for prostheses in public hospitals.
Date last updated:

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