Critical assessment: Government contemplates postponing 1 July reforms amidst private hospitals’ concerns

MedTech & Diagnostics News: Australia’s private hospital industry has been bracing itself for a storm of unprecedented challenges. Michael Roff, CEO of the Australian Private Hospitals Association (APHA), recently shed light on the imminent Prostheses List (PL) reforms and the looming 1st July deadline for the removal of nearly 500 general use items from the existing PL.

In a candid interview with Health Industry Hub, Mr Roff expressed APHA’s deep concerns about the impending deadline, emphasising that meeting it would result in severe financial disruptions to the service mix in many private hospitals. APHA contends that the Department of Health’s lack of comprehension regarding the intricate nature of these changes poses a significant threat to patients and specific procedures, including bariatric surgery, neurosurgery, cardiac surgery, and even cancer surgery, to some extent.

“One of the issues that we raised way back into last year was that the the Department needed to consult with the software vendors who provide the billing and claiming software because they are a key part in this implementation. And they only just started meeting with them in the last couple of weeks.

“The Department has been told that once they get the final specifications of what the changes will be – and no decisions been made on that yet – then it would take the software vendors about twelve months to develop, build and test new software before it could be validly used in claiming. That’s a key part of the puzzle that just hasn’t been included. That’s one of the many reasons that this mooted change cannot go ahead on 1st July,” Mr Roff stated.

In response to the mounting concerns raised by private hospitals, a spokesperson from the Department of Health and Aged Care told Health Industry Hub “Through more recent consultations, private hospitals have indicated that there are significant issues with adjusting internal business systems that manage the patient admission, theatre fees, billing and claiming as well as procurement and inventory control that would not be ready for 1 July 2023 implementation of bundling arrangements. 

“The Department is currently in the process of briefing the Health Minister on options to progress the changes to general use items, and this may include delay of implementation. Private Hospitals have been assured that the Department will provide support in the transition to new arrangements. The Department does not anticipate any impacts on patient care nor that patients will experience any out-of-pocket costs associated with the removal of these items from the PL.”

The Department of Health explained that the structure of the PL was specifically designed for single-use implantable devices and determining the corresponding benefits that insurers must cover. However, this funding mechanism is deemed inadequate for general use items, which are typically low-cost, multi-use items used widely in hospital procedures.

These general use items were originally slated for removal from the PL on 1 March 2022, however following consultation by the Department of Health and Aged Care with key stakeholders since November 2021, including with the Australian Private Hospital Association, this was delayed to 1 July 2023.

“Tightening the scope of the PL and removing ineligible General Use Items is an important piece of structural reform. It allows the PL to be refocussed on high-cost implantable devices and other specific purpose medical devices used in medical procedures. This includes adding to the list some high-cost non-implanted devices that the sector has lobbied for,” the Department of Health concluded.

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