The Budget 2021-22 includes a pathway for reform of the Prostheses List with stakeholders to learn more detail at a meeting with the Department of Health this afternoon.
The Budget announced included $23.1 million over four years from 2021-22 (and $2.1 million per year ongoing) to "modernise and improve the administration of the Prostheses List".
Yet it also included a number of other reforms to the private health sector, including $303.9 million in savings over four years from the continuation of the current policy settings for the income thresholds for the Medicare Levy Surcharge (MLS) and Private Health Insurance Rebate. The government announced it will review these MLS settings.
The Budget also includes funding for an independent study to investigate private hospital default benefit arrangements and $0.9 million over two years to improve Private Health Insurance program modelling capabilities.
Private Healthcare Australia said it welcomed the pathway to reform the Prostheses List.
“Health funds have committed to lower health insurance premiums while keeping the same range of medical devices accessible to members. We have committed to work with hospitals on short-term transition arrangements to avoid any funding uncertainty resulting from the reform process," said chief executive Dr Rachel David.
“The current Federal Government regulatory system which determines the price private payors must pay for commonly used medical devices is broken. The fee-per-item system of over 11,000 items is unwieldy, has no controls on volume, and is highly inflationary. High fixed prices for commonly used, generic technologies have enabled transfer pricing, secret rebates and kickbacks, and upcoding to the extent price has become totally uncoupled from the value of these items.
“It is now urgent that changes to the current pricing regime be made well in advance of next year’s premium round to ensure the 14 million Australians who rely on PHI will benefit from this measure. Without change, more people will give up private health insurance as premiums rise, putting extra pressure on our public hospital system."
The Medical Technology Association of Australia (MTAA) welcomed the decision to retain the Prostheses List.
It said it remains "cautiously optimistic" ahead of today's briefing despite the Budget only included high-level detail.
MTAA CEO, Ian Burgess, said stakeholder industry groups were ready to see positive Prostheses List reforms that ensure patients continue to have access to the best life-saving medical technologies with no out-of-pocket costs.
“MTAA has put forward the most comprehensive proposal for positive Prostheses List reform with improvements that are delivered in collaboration with industry via a new MTAA-Government Agreement,” he said.
“Tonight’s announcement has ensured the Department of Health is well resourced to engage in broad consultation during the Prostheses List reform process. MTAA looks forward to working with the Government to ensure the future of the Prostheses List and also the Budget commitment to new streamlined pathways for listing devices is delivered."