Price cuts in new agreement that imposes limits on PL reform

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The Medical Technology Association of Australia (MTAA) has announced a new four-year memorandum of understanding (MoU) with the federal government that will see further changes to the Prostheses List.

The new MoU will supersede the association's current four-year agreement with the federal government and effectively imposes limits on the complex four-year reform process announced in last year's Budget in return for price reductions.

The discussions on those reforms, which have been difficult, will continue under the existing workstreams.

MTAA chair Maurice Ben-Mayor said the agreement is the culmination of more than "12 months of intensive stakeholder negotiation and years of work to retain the Prostheses List and protect patient access and doctor choice in Australia’s private health system."

Under the MoU, the medical device sector has agreed to $900 million in new price reductions in return for commitments from the federal government.

These commitments include the continued funding of services for Cardiac Implantable Electronic Devices for the next 12 months until a review of how to fund these services is completed, a phased reduction of prices for devices with a benefit level of more than 7 per cent above those in the public system and co-designed pathways for new Prostheses List listings.

“During this challenging time for the health sector it was encouraging to have Minister Hunt lead the reforms away from abolishing the Prostheses List and towards a process that would provide greater certainty for the MedTech industry,” said Mr Ben-Mayor said.

CEO Ian Burgess said the total cuts incurred by the medical device industry will now exceed $2 billion over eight years.

“While the four-year agreement provides a degree of certainty for Australian MedTech, there’s still far more needing to be done to ensure insurer savings from these cuts are passed on to patients in the form of lower actual premiums. MTAA is keen to continue to work with the Commonwealth and key stakeholders to ensure the final reform package benefits patients and not just the insurance companies’ bottom line,” he said.

“We expect Government to ensure the enormous sacrifices of Australian MedTech companies – who played a vital role in saving lives during the pandemic – aren’t in vain. Insurers must be forced to tighten their own belt, cut their multi-million dollar ‘management fees’ and exorbitant executive benefits so that Australian families receive the full benefit of these cuts as guaranteed premium declines and faster access to new and innovative technologies.”

Mr Ben-Mayor added, “Achieving the key foundations of the reforms wouldn’t have been possible without the continued and tireless work of stakeholders, including the Australian Private Hospitals Association (APHA), Catholic Health Australia (CHA), the Consumer Health Forum (CHF) and doctor groups – their contribution has helped set the positive direction for the future of the PL reforms.”