Health insurers forced to fund general use surgical items as concerns mount over patients facing out of pocket costs

MedTech News: A new funding arrangement for around 500 surgical general use and consumable items is being established by the government for use by private health insurers and hospitals.

Key stakeholders, including Catholic Health Australia, have welcomed this mandate as for months hospitals groups, surgeons, patient organisations and the medtech industry have voiced concerns over private health insurers wriggling their way out of ensuring a new funding framework for these essential surgical items.

The default benefits for the General Use Bundles will be mandated through changes to the Private Health Insurance Act (Benefit Requirements) Rules 2011. This will clearly define the benefits insurers will pay to hospitals when these items are used in surgery for private patients. These items include sutures, haemostatic agents and skin glues.

The individually listed items are to be removed from the existing Prostheses List, which sets the benefits for implantable devices and items for private patients.

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CHA Health Policy Director Caitlin O’Dea said today’s announcement was a sensible decision.

“Our member hospitals always wanted to preserve the choice that is at the heart of good private health care. The last thing that we wanted is for some procedures to become too expensive for hospitals to stage.

“Mandatory funding will ensure that breast cancer, bariatric and gynaecological surgeries will no longer be at risk of cutbacks. Our hospitals are struggling to absorb rising costs of keeping patients and staff safe from COVID and a further $100 million annual funding reduction would have really hit them hard.”

The Independent Health and Aged Care Pricing Authority (IHACPA) has provided advice for the bundling, which provides clear information about the new bundles for use by insurers and hospitals, while also reducing the complexity of the Prostheses List.

Ms O’Dea said CHA would work with the Government now to determine the final mandated price of each item in the new ‘bundled system’ as well as other details of the reform yet to be determined.

“We want to thank the Minister and the Department for listening and for reaching a sensible solution. We look forward to working closely with them and other stakeholders to develop the pricing of the bundles and a reasonable time frame for implementation,” she said.

Mark Butler MP, Minister for Health and Aged Care, said “These general use and consumable items are the kind that could be used in any surgery performed in Australia, and the inclusion of separate entries for each on the Prostheses List appears to have been contributing to inflated costs for private patients.

“Insurers will be mandated to fund General Use Bundles, which means private patients will not face additional out of pocket costs for these consumables when they have surgery.

“The Government’s priority is that Australians access affordable medical devices and that the taxpayer gets value for money, both in the public system and through our support for private health insurance.”

These changes come into effect on 1 July 2023 and will ensure continued access to these items for private patients.

The Clinical Implementation Reference Group – which advises on items identified for removal from the Prostheses List – confirmed there would be no clinical implications or adverse outcomes to patients, with these items continuing to be available under the new funding arrangement.

The changes will not affect the overall benefits paid by insurers since IHACPA used utilisation trend data to develop its advice.

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