Medical device companies to pay for the latest stalled reform with a price cut

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The Department of Health and Aged Care has confirmed a 12-month delay in removing general-use items from the Prostheses List but that product suppliers will pay for it with a surprise 10 per cent price cut on 1 November.

Confirmation of the delay was expected in response to stakeholder concerns over the unintended consequences of the change.

In what was planned to be one of the first tranches of the latest reform of the Prostheses List (PL), which is the legislated framework for the private funding of medical devices, around 500 general-use and consumable products would be removed from 1 July 2023.

The items include infusion pumps and accessories, sponges, pliable patches, adhesion barriers, ligating devices, and catheters.

The plan is to remove these products from the PL and allow private hospitals and other impacted providers to negotiate their own funding arrangements.

According to a notice sent by the health department yesterday confirming the delay, "The Prostheses List on 1 July 2023, the Minister for Health and Aged Care, the Hon Mark Butler MP has agreed to retain the GUIs [general use items] on the Prostheses (PL) for a further 12 months.

"The new legislative instrument, Private Health Insurance (Medicare Devices and Human Tissue Products) Rules 2023 will include a self-repeal provision that will remove GUIs listed in Part D from 1 July 2024."

It said the delay was to "provide enough time to make the necessary arrangements (e.g. contracting and adjustment of internal business processes including system changes and workforce resourcing to facilitate contract negotiations)" and to "ensure no adverse impacts to privately insured patients, by continuing access to GUIs." 

It added, "Stakeholders are urged to use this time to work on all adjustments necessary to implement the changes by 1 July 2024."

However, the delay has come with a 'sting' with general-use items to take a further price reduction of 10 on 1 November 2023.

The Medical Technology Association of Australia confirmed that the new price reduction was announced with no prior advice or consultation.