Sector watching for reform in 2021-22 Budget

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The federal government will deliver its 2021-22 Budget this evening with the private health sector anticipating a potential announcement on further reform of the Prostheses List.

The Prostheses List (PL) is the federal government's mechanism through which it mandates the private reimbursement of medical devices.

It has faced sustained scrutiny over several years with price reductions agreed through a 2017 agreement between the government and medical device companies followed by further calls for reform.

The private health insurance sector has called for the abolition of the PL with the adoption of a system based on episodic diagnosis-related groups (DRG).

This proposal would involve the independent setting of reimbursement amounts based on the 'bundled' prosthesis component of a procedure. 

The Medical Technology Association of Australia has opposed the proposal arguing it could lead to a reduction in access and out-of-pocket costs. It recently issued a joint statement with the AMA, the Consumers Health Forum and Australian Private Hospital Association supporting the principle of reform but opposing the adoption of DRGs.