Types of hospital procedures
The Private Health Insurance (Benefits Requirements) Rules 2011 set out the minimum default accommodation benefits that private health insurers need to pay for hospital treatment. These depend on the MBS items for the procedure performed or services provided.
The rules define these procedures by grouping MBS items into:
- Type A procedures – usually done in hospital, with part of an overnight stay (higher accommodation benefits)
- Type B procedures – usually done in hospital, without part of an overnight stay (lower accommodation benefits)
- Type C procedures – don’t normally need hospital treatment or accommodation (no accommodation benefits).
If the medical practitioner certifies that the patient requires hospital treatment, health insurers can pay higher hospital accommodation benefits for Type B and C procedures.
Under Rule 7, the regulations state that 'the medical practitioner providing the professional service must certify in writing that due to the medical condition of the patient or because of the special circumstances specified, it would be contrary to accepted medical practice to provide the procedure to the patient except in a hospital'. This is known as a Type C certificate.
Clinicians must complete certification documents as set out in the rules, and private health insurers must check that certification documents meet the requirements.
Dual-listed MBS items
Our position on hospital treatment certification is that it is the clinical decision by the medical practitioner to treat the patient on an overnight basis that determines whether a procedure meets the requirements of an MBS item as a Type A procedure.
If it does, certification is not required, regardless of whether the MBS item is also dual listed as a Type B procedure.
Claims for benefits are usually submitted to insurers electronically. This can result in limited inclusion of relevant information provided on the reasons for Type C certification.
This may require manual follow up with the hospital, or medical practitioner, for further details.
We do not consider the time required to request and receive further information a satisfactory reason to deny payment of benefits, or unnecessarily delay payment of benefits, as processes should already be in place to facilitate prompt engagement between relevant parties.
Feedback from stakeholders indicate that MBS items should only be in one classification, and avoid dual listing wherever possible. To address this, we will consider a process for review of dual listed items.
Updates to the legislation
There is no regulatory process to resolve disputes between a private health insurer and hospital over a Type C certificate. A small number of disputes are still unresolved after several years, and we are aiming to ensure greater accountability by practitioners and insurers.
To solve this problem, we are working on amendments to the Health Insurance Act 1973 that will both:
- encourage better certification processes for hospital admission by medical practitioners and hospitals
- expand the authority and functions of the Professional Services Review when certifying that Type C treatments or procedures must take place in hospital.
We will also encourage medical colleges, in consultation with other stakeholders, to develop guidance on when hospitalisation is appropriate. This will help medical practitioners understand accepted medical practice in Australia.
These guidelines will:
- provide transparency and accountability for clinical decisions
- reduce inappropriate practices
- not limit a medical practitioner’s clinical autonomy.
Our July 2017 circular will help you understand how to apply the rules and avoid potential disputes.
Read the fact sheet on Hospital certification for MBS items for repetitive transcranial magnetic stimulation (rTMS)
More information about procedure types is available in our December 2020 consultation paper.
Also read our budget fact sheet on improving affordability and sustainability of private health insurance.