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News & Trends - MedTech & Diagnostics

Department of Health announces latest consultation in Prostheses List reforms

Health Industry Hub | February 15, 2023 |

MedTech News: The Department of Health has released its consultation on the bundling of benefits for General Use Items in surgery, with the purpose of providing options for the new transitional arrangement planned for two years commencing 1 July 2023.

The Department identified a list of nearly 500 general use and consumable products for removal from the Prostheses List (PL) “because they either do not meet the current criteria for listing or because they will not meet the new definition or listing criteria”.

These items are to be removed on 1 July 2023, alongside commencement of the relevant Private Health Insurance Legislation Amendment (Medical Device and Human Tissue Product List and Cost Recovery) Bill 2022.

Months of uncertainty over how these items would be funded once they are removed from the PL led to significant concerns from Royal Australasian College of Surgeons (RACS), MTAA, Australian Medical Association (AMA), hospital groups such as Catholic Health Australia, and patient advocacy groups like Consumer Health Forum.

The RACS co-signed a submission with Australian and New Zealand Society for Vascular Surgery (ANZSVS), General Surgeons Australia (GSA) and Urological Society of Australian and New Zealand (USANZ) which highlighted that the PL reforms should not result in reduced access and choice of items defined as general use.  

Finally on 14 December 2022, Mark Butler MP, Minister for Health and Aged Care, agreed to require the General Use Items to be funded by private health insurers under the Private Health Insurance (Benefit Requirements) Rules 2011 (the Benefit Requirements Rules), similar in concept to minimum benefits for theatre and accommodation paid by insurers to hospitals.

The AMA welcomed the Government’s announcement of the new mandated funding arrangement as “removing a significant point of contention between health insurers and private hospitals that, if left unresolved, could have left patients with increased out of pocket costs and impacted on clinician choice”.

The Independent Health and Aged Care Pricing Authority (IHACPA) has proposed three types of bundle variants across the set of all General Use Items. These three variant types aim to capture different sources of variation in the utilisation of General Use Items and their associated PL benefits.

MTAA CEO, Ian Burgess, told Health Industry Hub “While IHACPA’s methodology is meant to provide similar overall funding for General Use Items as the Prostheses List, MTAA remains concerned that there could be specific episodes, types of surgery or even entire hospitals where the proposed payments aren’t sufficient to enable the hospital to provide clinically needed devices.

“This may go so far as to impact whether a hospital can continue to provide certain types of surgery. As always, rural and regional hospitals are most vulnerable. The fact that the payment will be mandated only for 2 years adds to this risk for subsequent years.

“We are assessing the 3 options and haven’t formally reached a position on which of these is preferrable. We will be strongly informed by the advice of hospitals.”

To ensure the continued viability of all components of the private health system, RACS acknowledged that reforms should be undertaken to prevent misuse or overuse of General Use Items.

“An appropriate reform would be to increase clinicians’ focus on choosing wisely in relation to such items, and prosthetic devices more generally. In principle RACS would be willing to work with regulators to educate surgeons and other clinicians about best practice in the use of such items and even provide opinions about different general use items and other disposables and prosthetics,” RACS said in its submission.

RACS also suggested the independent monitoring for access and use of medical devices removed from the PL.

“Monitoring should be based on the views of clinicians. Should monitoring find that clinicians believe their clinical choices have been significantly impacted, then the changes should be revisited,” said RACS.

The Department of Health is therefore seeking feedback from stakeholders on the preferred option for bundling of benefits for General Use Items. The consultation closes 27 March 2023.

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