Australian Health Care Agreement

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1 Information Bulletin Australian Health Care Agreement Document Number IB2005_005 Publication date 23-Feb-2005 Functional Sub group Corporate Administration - Fees Department of Health, NSW 73 Miller Street North Sydney NSW 2060 Locked Mail Bag 961 North Sydney NSW 2059 Telephone (02) Fax (02) Summary Advises key components of the new Australian Health Care Agreement between the Australian Government and New South Wales. Replaces Doc. No. Author Branch Inter-Government and Funding Strategies Branch contact space space space Applies to Area Health Services, Statutory Health Corps and Affiliated Health Orgs, NSW Ambulance Service, NSW Dept of Health, Public Hospitals Distributed to Area Health Services, Statutory Health Corps and Affiliated Health Orgs, NSW Ambulance Service, NSW Department of Health, Public Hospitals Review date 23-Feb-2010 File No. 98/6578 Previous reference 2005/5 Status Active Director-General

2 INFORMATION BULLETIN File No 98/6578 Information Bulletin No 2005/5 Issued 27 January 2005 Contact Inter-Government and Funding Strategies Branch (02) AUSTRALIAN HEALTH CARE AGREEMENT THIS INFORMATION BULLETIN SUPERCEDES BULLETIN No 2004/46 1. INTRODUCTION The new Australian Health Care Agreement (AHCA) between the Australian Government and New South Wales was signed on 30 August It replaces the previous Agreement, which expired on 30 June The Agreement commenced on 1 July 2003 and remains in force until 30 June This information bulletin is to advise the key components of the new agreement and re-state New South Wales obligations under the Agreement. The Agreement: has financial penalty clauses that can be imposed if New South Wales fails over consecutive years to meet one or more of the compliance requirements; does not contain explicit protection for states and territories in the event of dispute or disagreement relating to funding under the Agreement contains indexation arrangements to adjust the base funding, subject to New South Wales meeting compliance requirements, for the increasing cost of providing health services, increasing population demand for health services and increasing health costs imposed by the non-demographic factors such as cost of new technologies; and acknowledges the value in a partnership between the states and territories and the Australian Government. 2. PRINCIPLES AND OBJECTIVES OF THE AGREEMENT The primary objective of this Agreement is to secure access for the community to public hospital services based on the following principles: 1. eligible persons are to be given the choice to receive, free of charge as public patients, health and emergency services of a kind or kinds that are currently, or were historically, provided by hospitals; 2. access to such services by public patients free of charge is to be on the basis of clinical need and within a clinically appropriate period; and 3. arrangements are to be in place to ensure equitable access to such services for all eligible persons, regardless of their geographic location. Distributed in accordance with circular list(s): A 5 B C 5 D E 73 Miller Street North Sydney NSW 2060 F G H 3 I J 2 Locked Mail Bag 961 North Sydney NSW 2059 K L M N P Q Telephone (02) Facsimile (02) In accordance with the provisions incorporated in the Accounts and Audit Determination, the Board of Directors, Chief Executive Officers and their equivalents, within a public health organisation, shall be held responsible for ensuring the observance of Departmental policy (including circulars and procedure manuals) as issued by the Minister and the Director-General of the Department of Health.

3 In applying these principles, the Australian Government and New South Wales agree that: 1. the range of services available to public patients should be no less than was available on 1 July 1998; and 2. all public hospital services available to private patients should be accessible on a public patient basis, where there is a demonstrated clinical need. Other objectives of this Agreement are to: 1. improve the transparency of the Australian Government s and New South Wales s financial contributions to public hospital services; 2. improve the quality and timeliness of information available to the public to enable the performance of public hospital services to be assessed; 3. improve the focus of public hospital services and mental health services on safety, quality and improved patient outcomes; 4. assist the move nationally to a greater focus on the care and services provided to support the transition from hospital to home; 5. improve the efficiency and effectiveness of public hospital services; 6. increase the responsiveness of services for people in need of mental health services; and 7. improve the provision of palliative care services. 3. RESPONSIBILITIES Under the Agreement New South Wales is responsible for the provision of public hospital services to eligible persons and will: 1. ensure that public hospital services are provided in accordance with this Agreement and that eligible persons are able to access public hospital services, free of charge, as public patients; 2. continue to provide support for medical specialist training positions; 3. financially contribute at a level that at least matches the cumulative rate of growth of Australian Government funding; 4. provide performance information and contribute to the development of new performance indicators with a particular focus on health outputs and outcomes, as set out in Schedule C; and 5. maintain a public patients hospital charter and an independent complaints body as outlined in Schedule D. The performance information will be published in an annual report: The State of Our Public Hospitals. 4. REFORM The Agreement recognises that there are a number of areas in which the Australian Government and the states and territories have agreed to work collaboratively to achieve national service delivery reform. These include: 1. improving the interface between hospitals and primary and aged care services; 2. achieving continuity between primary, community, acute, sub-acute, transition and aged care, whilst promoting consumer choice and improved responsiveness. Initial priorities for a stronger continuum of care approach will be cancer care and mental health services; and 2

4 3. exploring setting up a single national system for pharmaceuticals across all settings. This will be supported by ongoing joint work in the areas of information management, quality and safety improvement and workforce. Access to services for Aboriginal and Torres Strait Islander people will also be a high priority. Subject to the signing of an agreement between the Australian Government and New South Wales on issues including the rate of reimbursement, appropriate clinical guidelines, data requirements and risk sharing arrangements, pharmaceuticals may be provided through the Pharmaceutical Benefits Scheme (PBS) to admitted public and private patients on separation, to non-admitted patients and to day admitted patients for a range of cancer chemotherapy drugs made available by specific delivery arrangements provided under section 100 of the National Health Act FINANCIAL ASSISTANCE AND ASSOCIATED TERMS AND CONDITIONS New South Wales will qualify for full level of funding available under this Agreement subject to meeting 3 compliance requirements: 1. Adherence to the 3 principles of the agreement (Medicare principles); 2. At least matching the Australian Government s rate of funding increases; and 3. Meeting performance reporting requirements. New South Wales s performance each year against the compliance requirements will be assessed in the following year with a proportion of the previous year s funding being linked to performance. Thus funding in is dependent on performance in , funding in is dependent on performance in , and so on. If the Australian Government is satisfied that New South Wales has failed over consecutive years to meet one or more of the compliance requirements, its health care grant will be reduced for the remaining term of the Agreement, to a level based on the ongoing level of Health Care Grant indexed by Wage Cost Index series 1 only, and no further payment will be made in respect of the compliance payment. New South Wales has to ensure that all financial information in relation to public hospital services will be independently verified. The audited statements will be submitted to the Australian Government showing New South Wales has met funding matching requirements. 6. ELIGIBILITY, PATIENT STATUS, REFERRALS AND ELECTION The details on the eligibility, patient status, referrals and patient election matters are in the Agreement (Part 6). The Agreement particularly states that: 1. Provision of health care for entitled veterans in New South Wales are the subject of a separate Commonwealth-State agreement. However, entitled veterans have a right to elect to be treated as public patients. 2. New South Wales will ensure all eligible persons elect to receive admitted public hospital services as a public or private patient 3. An eligible public patient will be treated free of charge at any public hospital a. Emergency department, regardless of whether they subsequently become an 3

5 admitted private patient (unless a third party has entered into an arrangement with the hospital or New South Wales to pay for such services); b. Outpatient department (unless a third party has entered into an arrangement with the hospital or New South Wales to pay for such services or a patient has been referred to a named medical specialist who is exercising a right of private practice and the patient chooses to be treated as a private patient); c. For services that are a component of the episode of care (such as pathology and diagnostic imaging) will be regarded as a part of the public patient episode of care; d. Where care is directly related to an episode of admitted patient care, regardless of whether it is provided at the hospital or in private rooms 4. Those hospitals that rely on general practitioners for the provision of medical services (normally small rural hospitals), eligible patients may obtain non-admitted patient services as private patients where they request treatment by their own general practitioner, either as part of continuing care or by prior arrangement with the doctor. The following actions will be considered in breach of the Agreement: 1. Services provided to public patients which generate charges against the Commonwealth Medicare Benefits Schedule (MBS); 2. Emergency department patients referred to an outpatient department to receive services from a medical specialist exercising a right of private practice under the terms of employment or a contract with a hospital which provides public hospital services, except where there is a third party payment arrangement with the hospital or New South Wales; 3. The control of referral pathways so as to deny access to free public hospital services; and 4. The control of referral pathways so that a referral to a named specialist is a prerequisite for access to private patient outpatient services. 7. CHARGES FOR PUBLIC HOSPITAL SERVICES Fees may be charged by public hospitals for the following services provided to non-admitted patients and, in relation to (e) only, to admitted patients on separation: a. dental services; b. spectacles and hearing aids; c. surgical supplies; d. prostheses - however, this does not include the following classes of prostheses, which must be provided free of charge: o artificial limbs in accordance with clause 12; and o prostheses which are surgically implanted, either permanently or temporarily or are directly related to a clinically necessary surgical procedure (including breast prostheses); e. pharmaceuticals at a level consistent with the Pharmaceutical Benefits Scheme statutory co-payments; f. aids, appliances and home modifications; and g. other services as agreed between the Commonwealth and New South Wales. New South Wales must ensure that: 1. where an eligible person receives Magnetic Resonance Imaging services in a public hospital as an admitted public patient, no charges will be raised against either the patient or the 4

6 MBS; and 2. magnetic resonance imaging services provided on an admitted patient basis prior to 1 September 1998 will continue to be so provided. Note: Fees may be charged against the MBS for the provision of Magnetic Resonance Imaging services to non-admitted patients, on the condition that those services are provided in accordance with the Health Insurance Act 1973 as amended. Nursing-Home Type Patients may be charged a patient contribution as determined by the Commonwealth Minister for Health under paragraphs (b) and (c) of the definition of patient contribution in sub-section 3(1) of the Health Insurance Act CHARGES FOR PATIENTS OTHER THAN PUBLIC PATIENTS Private patients, compensable patients and ineligible persons may be charged an amount for public hospital services as determined by New South Wales. The cost of providing pharmaceutical services to non-public patients, while they receive services as admitted patients, will be provided free of charge and cannot be claimed against the Pharmaceutical Benefits Scheme. 9. CROSS BORDER FLOWS The Agreement contains the means to initiate an agreed mechanism between all states and territories to adjust for costs of admitted patient services provided to eligible people who are residents of other states. The Agreement also gives New South Wales the opportunity to enter into bilateral arrangements with other states/territories to adjust for costs of non- admitted patient services included in the scope of the Agreement. 10. FINANCIAL AND PERFORMANCE INFORMATION New South Wales will provide financial and performance information in accordance with Schedule C of the Agreement. 11. THE AGREEMENT The Australian Health Care Agreement can be found on the Australian Government s Internet site at: Robyn Kruk Director-General 5

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