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News & Trends - MedTech & Diagnostics

Health Department issues consultation on medical device pricing and reporting rules

Health Industry Hub | May 24, 2024 |

MedTech & Diagnostics News: The Department of Health has initiated a consultation on two key compliance measures for the Prescribed List (PL), with a tight deadline for responses set for June 13.

As part of ongoing reforms to the PL, the department is seeking to align the charges for supplying medical devices with the corresponding PL benefits. Additionally, hospitals would be required to report any non-financial gifts or benefits received, such as devices or products listed on the PL.

Consultation Paper 8b addresses a critical policy intent of the PL reforms: ensuring that privately insured patients with private health insurance are not burdened with out-of-pocket costs for medical devices used during hospital procedures.

Currently, the Private Health Insurance (PHI) Act does not prevent charging more than the PL benefit listed in the Medical Devices and Human Tissue Products (MDHTP) Rules. Consequently, if the cost of a medical device or human tissue product exceeds the PL benefit, the hospital bears the additional expense, which may be passed on to the patient.

The proposed measure aims to ensure that hospitals are charged only the PL benefit for listed medical devices or human tissue products, thereby protecting patients from unnecessary out-of-pocket expenses.

To enforce this, the proposal includes regulations prescribing criminal and civil liabilities for sponsors who overcharge for PL-listed items. These regulations would act as safeguards, allowing sanctions if necessary.

The department plans to collaborate with the Office of Parliamentary Counsel (OPC) to draft legislation requiring sponsors to declare, during the PL application process, that they will not charge above the PL benefit.

Consultation Paper 8a proposes expanding reporting measures to include gifts, benefits, and discounts related to PL items. The department is exploring whether private hospitals or medical device sponsors should be responsible for this reporting.

Concerns have been raised about benefits claimed for devices on the PL when no expenditure was incurred, such as hospitals receiving free devices but claiming PL benefits. The department aims to gain transparency on the frequency and scale of such gifting and discounts through this proposed reporting process.

Previously, the responsibility for maintaining and reporting the register was intended for hospitals. However, the department is now considering whether sponsors, who provide the free or discounted items, would be better suited to this task.

There is no proposal to impose sanctions for claiming gifts or benefits, but there would be an obligation to provide accurate information annually. Penalties are proposed for giving false or misleading information. For transparency, the department may publish a summary of the annual reports when appropriate.

Stakeholders are encouraged to provide feedback on these proposed measures by the June 13 deadline, ensuring their perspectives are considered in finalising the reforms.

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