Health
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Hospital Circular 14/2003

Date Issued: 22 July 2003

Publication: 14/2003

Distribution: Public Hospitals

Attention: Public Hospitals, Extended Care Centres, Metropolitan Health Services, and Regional Offices

Subjects:

  1. Public Hospital fees – Changes
    1. Private Admitted Patients - overnight stays and same day patients
    2. Private sector Hospital Outreach Services
    3. Surgically Implanted Prostheses, Human Tissue Items and Other Medical Devices
    4. Classification of Patients in Hospitals: Calculation of Step-down Periods
    5. Day Only Arrangements - Type B and Type C lists
    6. Compensable admitted patients (excluding WorkCover and TAC recipients).

  2. Specified Grants.

  3. Guidelines for Individual Health Funds when approving psychiatric care programs for benefits for privately insured private patient hospital-based psychiatric care.

  4. Administrative changes

    1. Hospitals responsible for accessing latest fees-information from Commonwealth
    2. Commonwealth Circulars: New numbering system for Circulars.

  5. State’s Fees Manual.

1. PUBLIC HOSPITAL FEES - CHANGES

  1. Private Admitted Patients - overnight stay, same day and hospital outreach service patients.

    The Commonwealth has advised that the overnight accommodation basic default benefits for shared ward acute hospital treatment in public hospitals in Victoria, and for hospital outreach services (see 1.2 below), will be increased by 3.4% (CPI movement for Australia March 2002 to March 2003). Accordingly the State Department of Human Services (DHS) has determined that effective 1 July 2003, Victorian public hospital private admitted patient bed day rates for 2003/2004 for private admitted: shared overnight stays, shared ward same day stays, and outreach hospital services stays will increase by 3.4%.

    The private admitted single room rates for acute treatment is not subject to a Commonwealth default benefit. Accordingly the State Department has increased the published rate for private single room overnight accommodation by 4.5% on the 2002/2003 rates; and developed a new private single room same day rates as published in the Fees and Charges for Acute Health Services in Victoria: A Handbook for Public Hospitals ('State's Fees Manual'). The private patient rates for a single room was developed on the basis that the Commonwealth’s default benefit for private admitted same day public hospital Band 4 is equal to the Commonwealth’s default benefit for private admitted shared accommodation,“Surgical” patients, length of stay 1-14 days.

    Should the State Department further wish to amend any of the above the published 2003/2004 private patient accommodation charges, hospitals will be notified by DHS Hospitals Circular.

    It is of course a matter for individual hospitals to weigh up the various considerations in charging the published public hospital single accommodation charge. Considerations might include the benefit health funds will assign to the public hospital; the co-payment a partially covered patient is willing to pay as an elected private patient; and – subject to sound internal polices and practice, - the amount of co-payment (eg Front end deductible) a hospital can viably forgo.

    Published rates for 2003/2004 are as follows:

    Table 1 - Private Overnight Stay
    Patient Classification
    Length of Stay
    Fee per day ($)
    Shared
    Single
    Advanced Surgical 1 - 14 days
    15 + days    		 303
    210    		 548
    424
    Surgical/Obstetric 1 - 14 days
    15 + days    		 279
    210    		 520
    424
    Other 1 - 14 days
    15 + days    		 243
    210    		 458
    424
    Psychiatric 1 - 42 days
    43 - 65 days
    66 + days    		 279
    243
    210    		 520
    458
    424
    Rehabilitation 1 - 49 days
    50 - 65 days
    66 + days    		 279
    243
    210

    520
    458
    424

    Table 2 - Private Same Day Admissions
    Band
    Fee Shared
    Fee Single room
    Band 1 176 327
    Band 2 210 392
    Band 3 243 453
    Band 4 279 520

    Table 3 - Hospital Outreach Services
    $150 per day, effective 1 July 2003.

    Public hospitals are reminded that:

    • Fees for patients in single bed rooms are to be charged only when a patient is accommodated in the single bed room by his or her choice (that is, a patient accommodated in a single room for medical reasons is not to be charged single room rates); and
    • The private bed day fees exclude private patient charges for surgically implanted prostheses, human tissue items, and other medical devices, the reference for which is Appendix A of the State fees manual.
    Private Patient Revenue Incentives.
    • Private patient revenue targets for 2003/2004 have been increased by only 2% thereby providing further incentive to hospitals.
    • A number of hospitals have increased the ratio between private, public patients while on others the ration has declined. If, at the end of the 2003/3004 financial year the net ratio has improved across the entire State, any savings made in public medical payments will be distributed as an equipment grant pro-rata to those hospitals that have improved their ratios.

  2. Private Sector Hospital Outreach Services.

    1. Background

      The Commonwealth has advised that legislative amendments enable private health funds to cover approved alternative models of health care delivery as a direct substitute to in-hospital care for admitted privately insured patients. Only those services that have been approved by the Commonwealth (see below) will be covered by hospital table health insurance. Past Commonwealth HBF Circulars include HBF 698, 714, 740, 747, 793, and 817.

    2. Outreach Service – Definition.

      Commonwealth National Health Act 1953, Section 5D –Schedule 8.

      In the Schedule 8 determination effective from 28 August 2002, Outreach Service means any service specified in a determination under section 5D of the Commonwealth National Health Act 1953,that is provided to a patient by, or on behalf of, a hospital or day hospital facility, as a direct substitute for hospital treatment that would otherwise be provided in a hospital; or day hospital facility, but does not include service provided by a medical practitioner that would attract a Medicare benefit or 85% of the schedule fee.

      The default benefit for outreach services only applies to those services approved by the Commonwealth Minister for Health and Ageing or her delegate under Section 5D of the Act.

      Commonwealth Circular HBF 793 refers.

    3. Federal Ministerial Approval.

      Public hospitals in Victoria providing hospital outreach services are required to comply with State guidelines including those in the Department of Human Services Victoria’s Public Hospitals Policy and Funding Guidelines as may be amended from time to time.

      In addition, public hospital, private hospital and day hospital facilities wishing to gain Federal Minister approval to offer an approved outreach service to privately insured private admitted patients will now be required to meet Commonwealth minimum guidelines.

      Only those services that have been approved by the Federal Minister will be covered by hospitals table health insurance and reinsurance arrangements (where eligible).

      The State Department encourages public hospitals that have a current outreach service program for public patients (eg HITH, RITH) to apply for eligibility to admit privately insured patients.

      Public hospitals wishing to offer an outreach program must follow State requirements in addition to any Commonwealth requirements. The DHS contact for acute outreach programs (e.g. HITH) is Ms Vivien Adler, Manager, Continuity Unit, ph (03)96161334, e-mail Vivien.Adler@dhs.vic.gov.au. The DHS contact for sub acute care outreach programs (e.g. RITH and contracted Interim Care) is Mr Simon Moy, Manager, Sub-Acute Unit, ph (03) 96162169, email :

      For important details, please refer to Commonwealth HBF Circulars 740, 747, and 817 to access:

      1. Guidelines for the Establishment and Implementation of the Private Sector Outreach Services. The Commonwealth notes that their Guidelines have been developed with reference to a comprehensive evidence base that included existing public sector hospital in the home guidelines and public and private sector evaluation reports;
      2. Application Form for Private Sector Outreach Services; and
      3. Table of Hospitals Approved to Provide Private Sector Outreach Services. The table lists approved Outreach Services facilities and the start/finish dates of the facility’s approval period. However on Commonwealth approval of an Outreach Services facility, the Commonwealth will also advise the facility directly.
    4. Private patient bed day fees for private sector outreach programs provided for or on behalf of Victorian public hospitals.

      The Victorian Department of Human Services (DHS) has determined the Victorian public hospital bed day fee for:
      (a) privately insured private sector outreach service patients; and
      (b) private self insured outreach service patients
      is $150 per day, effective 1 July 2003

      For the purpose of this section the Department of Human Services, Victoria (DHS) definitions1 are as follow:

      • Privately insured private outreach service patients means admitted privately insured patients who elect to receive private sector hospital outreach services provided by, or on behalf of a public facility approved by the Federal Minister to provide outreach services to privately insured patients.
      • Private self insured outreach service patients are patients who are not privately insured for private sector hospital outreach services provided by, or on behalf of a public hospital, to admitted patients in their place of residence as a substitute for traditional hospital accommodation. Place of residence for acute and sub acute outreach service patients may vary eg may include the home setting and may/may not include residential facilities such as nursing homes, hostels or other forms of supported accommodation.
    5. Default Benefit Payable.

      Under the Commonwealth National Health Act 1953, Schedule 8 the default benefit by private health funds for outreach services payable by health funds in respect of Commonwealth approved outreach services is $150 per day effective 1 July 2003– being an increase of 3.4% on the previous Commonwealth default benefit specified in Commonwealth HBF Circular 793.

  3. Surgically Implanted Prostheses, Human Tissue Items And Other Medical Devices; And Related Matters.

    1. Background.

      Commonwealth National Health Act 1953, Schedule 5 (Benefits payable in Respect of Surgically Implanted Prostheses, Human Tissue Items, and Other Medical Devises) sets out how the benefits are to be determined, what benefits will be paid for and what to do if the health fund and other party cannot reach agreement on the fee or charge for an item. Schedule 5 has three appendices: Appendix A (surgically implanted prostheses), Appendix B (human tissue items) and Appendix C (other medical devices) which set out the items that health funds are required to pay benefits for.

    2. List Items.

      Commonwealth Circular PHI 02/2003 advises that the February 2003 version of Schedule 52 has been amended. The Circular notes the amendments made, mainly to include details inadvertently missed, to correct product details, to correct ECRI codes, to correct price increases (Appendix B only) and to delete items. Attached to the Circular page is an updated version of the Schedule 5 database.

    3. Supply Charge Arrangements.

      As of 1 August 2002, there is no Commonwealth Government mandated default supply charge payable by health funds to hospitals.

      Clause 5.3 of Schedule 5 provides that subject to any indications on the Australian Register of Therapeutic Goods (ARTG) in relation to a surgically implanted prosthesis or other medical devices specified in Appendix A or Appendix C, the level of benefit payable in respect of a surgically implanted prosthesis or other medical device specified in Appendix A or Appendix C is the fee or charge agreed between the registered health benefits organization (RHBO3) and one only of the manufacturer, supplier or hospital.

      Note: Other than the fees or charges permitted under clause 5.3, no additional charges can be imposed on a patient by a manufacturer, supplier, hospital or a RHBO.


      The Commonwealth Minister for Health and Ageing, announced a review of the regulation of the private health insurance industry. Stage two of those reforms are referred in Commonwealth Circular PHI 03/03. Hospitals will be kept informed by DHS Circular on this matter.

    4. No Gaps For Patients.

      Commonwealth Circular HBF 788 includes important reminder advice; and the new advice that one of the additional administrative guidelines for the Prostheses Schedule is: that maintaining the item on the Prostheses Schedule will not result in the patient paying a gap for the item due to a lack of agreement on benefit level between the manufacturer/supplier and health funds.

    5. Application Forms for Inclusion of New Items.

      Commonwealth Circulars to which are attached Application Forms for Inclusion of New Items (including Appendix A Surgically Implanted Prostheses Items, Appendix B Human Tissue Items, and Appendix C Other Medical Devises) to be included in the Schedule 5.

      • Application forms for inclusion on the August list are released around end April and close early June; and
      • Application forms for the February list are released around end September and close early November.

      Applications for Appendix C and Other Medical Devices will be accepted by the Commonwealth all year around and assessed by the Commonwealth Department of Health and Ageing's Private Health Industry Medical Devises Expert Committee (PHIMDEC) and/or the Secretariat (as applicable) in order of receipt.

      Applications will only be accepted on the most current forms.

    6. Enquiries.

      For enquiries about prostheses, mail the Commonwealth Department’s Prostheses team at the electronic mailbox with the e-mail address: Prostheses@health gov.au. Or telephone 0262899405 or 0262899461 or 0262899411.

  4. Classification of Patients in Hospitals: Calculation of Step-down Periods

    Recently the Department has received a number of queries about how to calculate step-down periods for determining private patients’ classification. Eg multiple procedures in one day; moving up or down to a more complex procedure.

  5. Day Only Arrangements - Type B and Type C Lists

    Amendments to the Patient Classification List, and the Type B (Day Only) and Type C (Exclusion) Lists effective 1 May 2003 are in Commonwealth Circular PHI 06/03.

  6. Compensable Admitted Patients (excluding WorkCover and TAC Recipients) 2002-2003.

    DHS has increased the 2002/2003 rates by 4.5%, effective 1 July 2003. See State Fees Manual for rates 2003/2004.

2. SPECIFIED GRANTS

A number of specified grants are distributed for discrete clinical services which are not included in output based classifications. The nature of these services and the amounts paid will be reviewed in 2003/2004 in order to ensure relevance and consistency of payment. Re-application will be necessary for all specified grants as part of this process. Pro forma application forms including costing methodologies to be used will be provided by 30 August 2003.

3. GUIDELINES FOR INDIVIDUAL HEALTH FUNDS WHEN APPROVING PSYCHIATRIC CARE PROGRAMS FOR BENEFITS FOR PRIVATELY INSURED PRIVATE PATIENT HOSPITAL-BASED PSYCHIATRIC CARE.

The Commonwealth Department of Health and Aged Care advises that the revised document Guidelines for determining benefits for health insurance purposes for private patient hospital -based psychiatric care is available. The Guidelines should assist individual health funds when approving psychiatric care programs for privately insured private patients, for the purpose of health insurance benefits. For details and a copy of the Guidelines, refer Commonwealth Circulars HBF 787.

The Guidelines were not developed for the purpose of public patient hospital based psychiatric care programs.

4. ADMINISTRATIVE CHANGES

  1. Fees for Surgically Implanted Prostheses, and Other Medical Devices: ‘Single Point of Contact’ with Funds.

    1. Background.

      Commonwealth National Health Act 1953, Schedule 5 provides that where the fee or charge for Appendix A or Appendix C items is agreed between the registered private health fund and either the manufacturer or supplier, then the health fund and the manufacturer or supplier must advise all hospitals (including public hospitals) of the fee or charge agreed within two weeks of the date of the agreement.

    2. State Administrative Arrangement.

      The Department of Human Services (DHS) is currently receiving material direct from some private health funds, and suppliers/manufacturers with respect to private health fund benefits and related billing arrangements.

      As each hospital is responsible for its own operation, the Department suggests that an appropriate ‘single point of contact’ be provided to each health fund. This will enable prostheses fees schedules and any related material to be sent by the individual fund (or their agent) to the hospital’s prostheses contact (eg the “billing officer”) direct.

      Accordingly the Department seeks that public hospitals:

      1. provide health funds with your nominated prostheses contact officer’s details including :
        - contact person(s)
        - title (eg accounts manager, theatre sister)
        - the name of the hospital
        - e-mail address
        - postal address
        - phone number
        - facsimile
        - other information as may be requested by the fund eg hospital provider number; and
      2. where funds provide agreed benefit level updates on the internet only, the public hospital is responsible to access that site in a timely manner. You may need to check whether a password is required to access funds’ “prostheses benefits” sites.

      This arrangement should improve the flow of information between public hospitals and the health funds under the current prosthesis arrangements.

      To assist hospitals in this task:

      1. please find a list of health fund prostheses contact officers in Commonwealth Circular HBF 815 Attachment 8
      2. Manufacturer/Supplier contact details are available. New prostheses manufacturers in HBF Circular 815.
      3. an individual health fund’s (HBA’s) registration form for hospital prostheses billing officers. Note: The HBA prostheses list including the maximum benefit payable for prostheses items is only available to registered users.

  2. Public hospitals responsible for accessing Commonwealth Circulars on select subjects – effective 1 July 2003.

    Effective 1 July 2003, public hospitals are responsible for accessing those selected Commonwealth Circulars, as detailed by subject item as set out in the new Appendix E of the State Fees Manual at the Fees and Charges for Acute Health Services in Victoria website. The State Department will cease distributing Hospital Circular advice for those routine items.

    Hospitals can access the select Commonwealth Circulars referred above, from the Commonwealth’s website. Alternatively, you may choose to receive the circulars direct by email, and should receive new circulars within 24 hours of publication (dependant on normal internet delays.) To subscribe to the circulars, email your subscription details to Private Health Industry Branch at privatehealth@health.gov.au. Please include: nature of business, company name, contact name, position, postal address, phone, fax and email address.

  3. Commonwealth Circulars: New numbering system for Circulars

    The Commonwealth Department of Health and Ageing’s “HBF/PH” dual Circular numbering system changed on 1 April 2003, to a single “PHI” numbering system. Ie to PHI (number) (year) eg PHI1/03.

    Commonwealth HBF Circular 814 refers.

5. FEES MANUAL

  1. Fees Manual

    The Fees and Charges for Acute Health Services in Victoria: A Handbook for Public Hospitals ('State's Fees Manual') on the Fees and Charges for Acute Health Services in Victoria website has been updated in accordance with this Circular advice. To view these updates please see:

    • Section A: Fees for Private Admitted Patients – Overnight & same day patients.
    • Section A: (5) Compensable (Excluding) VWA + TAC (recipients) patients.
    • Appendix A: Surgically Implanted Prostheses, Human Tissue Items and Other Medical Devices Fees.
    • Appendix C: Patient Classification Schedule
    • Appendix D: Type-B (day only) and Type C (exclusion) Lists
    • Appendix E: Key release dates for select Commonwealth Private Health Industry Circulars relevant to the State's Fees Manual

  1. as may be incorporated and amended from time to time in the Department of Human Services Victoria’s:

    1. Victorian Admitted Episodes Dataset Manual (previously entitled PRS2 Manual) at http://hdss.health.vic.gov.au/vaed/index.htm under heading - 'VAED/PRS2 User Manuals';
    2. Health Data Standards and Systems in Victorian Hospitals (HDSS) at http://hdss.health.vic.gov.au/bulletin/index.htm and
    3. Specification for changes to VAED Specifications for Revisions' at http://hdss.health.vic.gov.au/vaed/index.htm

  2. Schedule 5 of the current determination has three appendices:

    • Appendix A – Surgically Implanted Prostheses
    • Appendix B - human tissue items ; and
    • Appendix C – other medical devices

  3. Also referred to in this Circular as (private) health fund


Shane Solomon
Executive Director
Metropolitan Health and Aged Care Services

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