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Private Health Insurance (Prostheses Application and Listing Fees) Amendment (Cost Recovery)

Current status

This bill became law on Mar 16th, 2023.

Policy area

Health, care & disability

What does this bill do?

Medical deviceA product covered by the reform, such as an implant, that can be listed for private health insurance benefits if it meets the rules. and human tissue productA product based on human tissue that is treated as part of the listing scheme under the bill. sponsors will pay an annual levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. to keep each listed product on the private health insurance benefits list, replacing the old application and listing fee model.

Why was it introduced?

Old prostheses application and listing fees no longer matched the government's plan to modernise the Private Health Insurance Prostheses ListThe list of medical devices and related products that private health insurers must help pay for under set rules. and its cost recovery arrangements. This bill replaces those fees with a levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. on each listed medical deviceA product covered by the reform, such as an implant, that can be listed for private health insurance benefits if it meets the rules. or human tissue productA product based on human tissue that is treated as part of the listing scheme under the bill. and lets regulations set the amounts and related rules.

Broader context

Australia’s private health insurance Prostheses ListThe list of medical devices and related products that private health insurers must help pay for under set rules. was already being overhauled under the 2021-22 federal budget, after years of work on how listed medical devices and human tissue products were defined, managed and paid for, and the old fee model no longer matched that redesign. This bill responded by replacing one-off application and listing fees with a framework for an ongoing cost-recovery levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. for sponsors. Parliament passed it in March 2023, with the substantive amendments commencing on 1 July 2023 and the amended levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. provisions applying to the 2024-25 financial year and later years.

Key criticism

The main criticism was not of charging a cost-recovery levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. itself, but of asking Parliament to pass the framework before the key regulations, levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. settings and listing rules were clear, creating uncertainty about how hospitals, suppliers and patients would be affected. That concern was raised mainly by Coalition speakers and crossbench senators who still broadly supported the reform, so the criticism was cautious and focused on transparency, scrutiny and implementation rather than outright opposition.

Who supported it?

Ged Kearney MP introduced this bill. It passed on the voices.

Introduced in House 01 Dec 2022
Passed House 07 Feb 2023
Passed Senate 07 Mar 2023
Became law 16 Mar 2023

Did it become law?

Yes

Became law 16 Mar 2023

Final passage

Passed without a counted vote

2 recorded amendment or procedural votes were found, but no counted vote on the bill itself was recorded.

Passage speed

105 days

From introduction to the latest recorded parliamentary step

Official record

View on APH

Parliament of Australia bill page

Meaning

What does this bill do?

  1. Medical deviceA product covered by the reform, such as an implant, that can be listed for private health insurance benefits if it meets the rules. and human tissue productA product based on human tissue that is treated as part of the listing scheme under the bill. sponsors will pay an annual levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. to keep each listed product on the private health insurance benefits list, replacing the old application and listing fee model.

  2. The levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. can only recover the Australian Government’s likely costs of running the ongoing listing process for these products, rather than raising extra revenue.

  3. Regulations can set different levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. amounts for different products or situations, including setting no levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. at all or exempting some products.

  4. The first levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. applies from the financial year starting 1 July 2024, so there is no levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. imposed for 2023-24 under this new law.

Show source excerpts
  1. The PHI Fees Bill provides for the imposition of a cost recovery levy on each kind of medical device and human tissue product on the PL. The amount of the levy will be set by regulations. The Bill will further authorise the making of regulations and rules to provide for matters in relation to the levy. The existing application and listing fees under the PHI Fees Act will be repealed.
    Private Health Insurance (Prostheses Application and Listing Fees) Amendment (Cost Recovery) explanatory memorandum
  2. (4) Before the Governor‑General makes regulations for the purposes of subsection (3) prescribing the amount of the levy for a financial year, the Minister must be satisfied that the amount is set at a level that is designed to recover no more than the Commonwealth’s likely costs in connection with the ongoing listing of all listed items for that financial year.
    Private Health Insurance (Prostheses Application and Listing Fees) Amendment (Cost Recovery) Act 2023 final Act text
  3. (1) The regulations may prescribe different amounts for the purposes of subsection 4(3) for different circumstances.
    Private Health Insurance (Prostheses Application and Listing Fees) Amendment (Cost Recovery) Act 2023 final Act text
  4. Item 4 provides that section 4 of the Private Health Insurance (Medical Devices and Human Tissue Products Levy) Act 2007 as amended by this Schedule applies in relation to the financial year beginning on 1 July 2024 and each later financial year.
    Private Health Insurance (Prostheses Application and Listing Fees) Amendment (Cost Recovery) explanatory memorandum

Context

Broader context for this bill

Australia’s private health insurance Prostheses ListThe list of medical devices and related products that private health insurers must help pay for under set rules. was already being overhauled under the 2021-22 federal budget, after years of work on how listed medical devices and human tissue products were defined, managed and paid for, and the old fee model no longer matched that redesign. This bill responded by replacing one-off application and listing fees with a framework for an ongoing cost-recovery levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. for sponsors. Parliament passed it in March 2023, with the substantive amendments commencing on 1 July 2023 and the amended levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. provisions applying to the 2024-25 financial year and later years.

  1. 2021-22

    Federal budget funds Prostheses ListThe list of medical devices and related products that private health insurers must help pay for under set rules. modernisation

    The 2021-22 budget committed $22 million over four years to modernise and improve the private health insurance Prostheses ListThe list of medical devices and related products that private health insurers must help pay for under set rules., creating the reform program this bill helped implement.

    Hansard ↗
  2. 01 Dec 2022

    Government introduces a new cost-recovery model for listed devices

    The bill was introduced to replace the old prostheses application and listing fee structure with levies tied to the ongoing management of the updated prescribed listThe new name used in the bill for the prostheses benefits list once the reform is fully in place..

    Hansard ↗
  3. 07 Mar 2023

    Parliament passes the bill

    Both houses passed the bill as part of a three-bill package described in debate as the first tranche of legislative changes for Prostheses ListThe list of medical devices and related products that private health insurers must help pay for under set rules. reform.

    Parliamentary timeline ↗
  4. 16 Mar 2023

    Royal AssentThe final formal step that turns a passed bill into an act of Parliament. turns the bill into law

    Royal AssentThe final formal step that turns a passed bill into an act of Parliament. completed the legal change needed to move from the old fee model to a levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue.-based system under later regulations.

    Parliamentary timeline ↗
  5. 2024-25

    New levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. framework applies from 2024-25

    The amended levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. provisions apply to the financial year beginning on 1 July 2024 and later years, while actual levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. imposition days are set in later rules.

    User payload summaryBullets ↗

Legislative route

How did it move through Parliament?

House Senate
Introduced 01 Dec 2022

The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.

Introduced and read a first time

Second reading opened 01 Dec 2022

A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.

Second reading moved

Second reading debate 07 Feb 2023

The bill reached this recorded parliamentary step.

Sent to Federation Chamber for debate 07 Feb 2023

The bill reached this recorded parliamentary step. For this bill, the Federation Chamber reported back later the same day and the House then completed its remaining formal steps that day.

Referred to Federation Chamber

Federation Chamber debate 07 Feb 2023

The bill reached this recorded parliamentary step.

Second reading debate

House second reading agreed 07 Feb 2023

The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.

Second reading agreed to

Returned from Federation Chamber without amendment 07 Feb 2023

The bill reached this recorded parliamentary step. The official House record shows the referral out and return both happened on the same day, before the House moved to its final formal votes.

Reported from Federation Chamber

House third reading agreed 07 Feb 2023

The chamber agreed to the bill at third reading, which completed passage through that chamber.

Third reading agreed to

Introduced 08 Feb 2023

The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.

Introduced and read a first time

Second reading opened 08 Feb 2023

A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.

Second reading moved

Second reading debate 07 Mar 2023

The bill reached this recorded parliamentary step.

Senate second reading agreed 07 Mar 2023

The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.

Second reading agreed to

Committee of the Whole debate 07 Mar 2023

The bill reached this recorded parliamentary step.

Senate third reading agreed 07 Mar 2023

The chamber agreed to the bill at third reading, which completed passage through that chamber.

Third reading agreed to

Passed both houses 07 Mar 2023

Both houses passed the bill in the same form, completing parliamentary passage.

Finally passed both Houses

Assent 16 Mar 2023

The Governor-General gave Royal AssentThe final formal step that turns a passed bill into an act of Parliament., turning the bill into an Act.

Key criticism

The main case against this bill

The main criticism was not of charging a cost-recovery levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. itself, but of asking Parliament to pass the framework before the key regulations, levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. settings and listing rules were clear, creating uncertainty about how hospitals, suppliers and patients would be affected. That concern was raised mainly by Coalition speakers and crossbench senators who still broadly supported the reform, so the criticism was cautious and focused on transparency, scrutiny and implementation rather than outright opposition.

No party represented in the debate opposed the bill, but several senators wanted the detailed rules settled first.

Too much left to regulations

Critics argued the bill set up the levyAn annual charge on sponsors that is meant to cover the government’s cost of running the listing system, not raise extra revenue. scheme while leaving the real operating details to subordinate legislationRules and regulations made under the main act that set many of the operational details not written into the bill itself. that Parliament had not yet seen, including cost-recovery settings, listing pathways and other practical rules.

Raised by Coalition MPs and senators, including Julian Leeser, Melissa McIntosh, Anne Ruston and Paul Scarr Source ↗

Rushed scrutiny and uncertain real-world effects

Some senators said the timetable was too rushed and that stakeholders and Parliament lacked enough information to judge whether the new arrangements would work fairly in practice or whether promised savings would actually reach consumers.

Raised by Anne Ruston, Paul Scarr and David Pocock Source ↗

Further sources

parlinfo.aph.gov.au ↗ parlinfo.aph.gov.au ↗

Votes

Recorded votes

How the bill itself passed

The bill passed both chambers on the voices. The counted divisions below were about amendments or procedure, not final passage.

Passed

House passed the bill

House agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.

07 Feb 2023

Passed on the voices

In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.

Passed

Senate passed the bill

Senate agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.

07 Mar 2023

Passed on the voices

In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.

Amendments at a glance

Recorded amendment and procedural votes grouped by chamber. Expand a vote to see the party breakdown.

Senate

Defeated

Steele-John private insurance criticism defeated

Aye 13 No 26

Moved by Jordon Steele-John (Greens). Defeated 13 to 26. Support came from Greens, Jacqui Lambie Network, and minor parties and independents. Opposition came from Labor, Liberal Party, and Nationals.

07 Mar 2023

The Senate rejected the Greens statement criticising reliance on private health insurance while allowing the bill package to continue.

Party Recorded votes Aye / No
Labor 0 / 21
Greens 10 / 0
Liberal Party 0 / 3
Jacqui Lambie Network 2 / 0
Nationals 0 / 2
Independent 1 / 0
Defeated

Pocock ACCC savings scrutiny defeated

Aye 14 No 30

Moved by David Pocock (Independent). Defeated 14 to 30. Support came from Greens, Jacqui Lambie Network, and minor parties and independents. Opposition came from Labor, Liberal Party, and Nationals.

07 Mar 2023

The Senate rejected David Pocock’s proposal for extra ACCC reporting on private health insurance practices and whether prostheses savings reached consumers.

Party Recorded votes Aye / No
Labor 0 / 21
Greens 10 / 0
Liberal Party 0 / 6
Nationals 0 / 3
Independent 2 / 0
Jacqui Lambie Network 2 / 0

These are amendment votes, not the final passage vote on the bill itself. The bill passed both chambers on the voices.

Parliamentary debate

Who spoke, and what they said

Start here — lead voices

Sponsor speech Supports

Ged Kearney

Australian Labor Party • MP 01 Dec 2022

Kearney supports the bill, saying it updates the cost-recovery arrangements for medical deviceA product covered by the reform, such as an implant, that can be listed for private health insurance benefits if it meets the rules. and human tissue productA product based on human tissue that is treated as part of the listing scheme under the bill. listings so the system can be administered in a financially sustainable way.

Read in Hansard ↗
Lead supporting voice Supports

Paul Scarr

Liberal Party • Senator 07 Mar 2023

Scarr says the coalition supports the bill because it continues work begun by the former government, but he is concerned that too much of the detail will be left to regulations that the Senate has not yet seen.

Read in Hansard ↗
Lead non-major voice Supports

David Pocock

Independent • Senator 07 Mar 2023

Pocock supports the bill and says it should deliver savings on prostheses to consumers, but he wants extra scrutiny so Parliament can check whether the promised savings actually flow through.

Read in Hansard ↗
Lead voice Mixed

Anne Ruston

Liberal Party • Senator 07 Mar 2023

Ruston says the coalition supports the bill in principle and wants the Prostheses ListThe list of medical devices and related products that private health insurers must help pay for under set rules. reforms to go ahead, but she argues the Senate should slow down and wait for the subordinate rules and consultation to be finished because too many details are still unknown.

Read in Hansard ↗

All speeches by bloc

Labor

5 speakers · 6 contributions · 4 support · 1 unclear

  1. Mike Freelander Mike Freelander supports the bill, saying it will make device funding more transparent, reduce costs over time and help keep private health insurance affordable.
    “I congratulate the health minister and the Albanese Labor government for bringing this bill to the House. It seeks to improve not only how we fund our devices but gives more transparency in how we fund them and it will allow the private hospitals and the private insurance providers to understand better the costs and reduce their own cost, which will, in time, reduce premiums and premium rises, and will encourage people to stay in private health insurance.”

    Australian Labor Party • MP • 07 Feb 2023

    Read the full speech in Hansard ↗
  2. Jerome Laxale Laxale supports the bill and says it will modernise the Prostheses ListThe list of medical devices and related products that private health insurers must help pay for under set rules., improve cost recovery arrangements and help put downward pressure on private health insurance premiums.
    “I rise to support these bills as they seek to implement and modernise and improve the private health insurance Prostheses List. We know that the proposed legislation would amend private health insurance legislation to better define the items for which set benefits are paid by private health insurers so that these benefits are only payable for medical devices or human tissue products that meet specific definitions.”

    Australian Labor Party • MP • 07 Feb 2023

    Read the full speech in Hansard ↗
  3. Anthony Chisholm Anthony Chisholm speaks to the bill, focusing on the measures in this Bill are important as they will broadly support further reform activity aimed at keeping downward pressure on private health insurance premiums by reducing the costs associated with medical devices and human tissue products.
    “The measures in this Bill are important as they will broadly support further reform activity aimed at keeping downward pressure on private health insurance premiums by reducing the costs associated with medical devices and human tissue products.”

    Australian Labor Party • Senator • 08 Feb 2023

    Read the full speech in Hansard ↗
  4. Jenny McAllister McAllister supports the bill, saying it will let the departmentThe Commonwealth department that administers the reform work and consulted with stakeholders on the changes. recover costs for listing medical devices and human tissue products in a financially sustainable way.
    “The second bill is the Private Health Insurance (Prostheses Application and Listing Fees) Amendment (Cost Recovery) Bill 2022. This bill provides for levies payable by medical technology sponsors for the listing of medical devices and human tissue products. These levies are essential as they allow the department to administer the listings in a financially sustainable and appropriate manner.”

    Australian Labor Party • Senator • 07 Mar 2023

    Read the full speech in Hansard ↗
  5. Ged Kearney ★ 2 contributions Kearney supports the bill as part of modernising the private health insurance prostheses system, saying the new levies will let the departmentThe Commonwealth department that administers the reform work and consulted with stakeholders on the changes. administer listings in a financially sustainable way.

    Hansard records 2 separate contributions by Ged Kearney, including an amendment-moving contribution. They are grouped here so the speaker is listed once.

    Moved amendment Australian Labor Party • MP • 01 Dec 2022

    Kearney supports the bill, saying it updates the cost-recovery arrangements for medical deviceA product covered by the reform, such as an implant, that can be listed for private health insurance benefits if it meets the rules. and human tissue productA product based on human tissue that is treated as part of the listing scheme under the bill. listings so the system can be administered in a financially sustainable way. She says the new levies should reflect the ongoing costs of managing the prescribed listThe new name used in the bill for the prostheses benefits list once the reform is fully in place. and related compliance work.

    “This bill amends the Private Health Insurance (Prostheses Application and Listing Fees) Act 2007 to update cost-recovery arrangements.”
    Read this contribution in Hansard ↗

    Second reading speech Australian Labor Party • MP • 07 Feb 2023

    Kearney supports the bill as part of modernising the private health insurance prostheses system, saying the new levies will let the departmentThe Commonwealth department that administers the reform work and consulted with stakeholders on the changes. administer listings in a financially sustainable way. She argues the change will help improve the system and keep pressure down on private health insurance premiums.

    “The second bill I introduced is the Private Health Insurance (Prostheses Application and Listing Fees) Amendment (Cost Recovery) Bill 2022. This bill provides for levies payable by medical technology sponsors for the listing of medical devices and human tissue products. These levies are essential as they allow my department to administer the listings in a financially sustainable and appropriate manner.”
    Read this contribution in Hansard ↗

Coalition

4 speakers · 3 support · 1 mixed

  1. Anne Ruston ★ Ruston says the coalition supports the bill in principle and wants the Prostheses ListThe list of medical devices and related products that private health insurers must help pay for under set rules. reforms to go ahead, but she argues the Senate should slow down and wait for the subordinate rules and consultation to be finished because too many details are still unknown.
    “I would say to those opposite: the simplest approach to enable these concerns to be allayed across the broader sector would be to delay any further debate on these bills until May or June, after your consultation process has finished and we have confirmed details around the subordinate legislation.”

    Liberal Party • Senator • 07 Mar 2023

    Read the full speech in Hansard ↗
  2. Paul Scarr ★ Scarr says the coalition supports the bill because it continues work begun by the former government, but he is concerned that too much of the detail will be left to regulations that the Senate has not yet seen.
    “The coalition, of course, supports this legislation. It reflects much of the work that was done by the coalition government. This is an example of an orderly transition in our democratic government, with policies which were introduced by a prior government being continued under the next government where they're in the best interests of the Australian people. It is something we should acknowledge.”

    Liberal Party • Senator • 07 Mar 2023

    Read the full speech in Hansard ↗
  3. Melissa McIntosh McIntosh says the coalition will support the bill, but she argues the government has not provided enough detail on the regulations and implementation.
    “We are supportive of this bill, but we're putting the government on notice: they cannot continue to expect us to pass bills without seeing any of the substantive detail. I urge the government to address the significant challenges the industry faces, and to engage with them and to provide in a timely way those details that are currently missing. It's a critical industry and it's also critical that this industry understands how items on the list will be costed, setting in place a process to reduce the gap between the cost of medical devices in the public and private health sectors. It will be the patients of Australia who will suffer if this isn't done with the utmost concentration on the provision of details. I know the medtech industry is behind it, ready to support and help, but we do urge the government to please provide those details as this legislation comes forth. Thank you.”

    Liberal Party • MP • 07 Feb 2023

    Read the full speech in Hansard ↗
  4. Julian Leeser Leeser says the coalition supports the bill because it is part of modernising the Prostheses ListThe list of medical devices and related products that private health insurers must help pay for under set rules. and improving access and affordability for patients, but he criticises the government for not providing enough detail on the key regulatory settings.
    “We are supportive of this bill, but we're putting the government on notice that they cannot continue to expect us to pass bills in this place without seeing any of the substantive details. Modernising and improving the Prostheses List is an important reform process, and the patients who would benefit from the reforms deserve to have the details properly considered.”

    Liberal Party • MP • 07 Feb 2023

    Read the full speech in Hansard ↗

Greens

1 speaker · 1 support

  1. Jordon Steele-John Steele-John says the Greens will support the bill, but argues it sits inside a health system that is too reliant on private insurance and should instead put more money into public healthcare.
    “I want to start by indicating that the Australian Greens will be supporting the Private Health Insurance Legislation Amendment (Medical Device and Human Tissue Product List and Cost Recovery) Bill 2022, the Private Health Insurance (Prostheses Application and Listing Fees) Amendment (Cost Recovery) Bill 2022 and the Private Health Insurance (National Joint Replacement Register Levy) Amendment (Consequential Amendments) Bill 2022. We do so while recognising that private health insurance is out of reach for too many people in Australia, and we acknowledge that the subsidy that this government provides to private health insurance corporations would be better spent and would better achieve health outcomes if we invested that money into the public healthcare system.”

    Australian Greens • Senator • 07 Mar 2023

    Read the full speech in Hansard ↗

Minor parties and independents

2 speakers · 2 support

  1. David Pocock ★ Pocock supports the bill and says it should deliver savings on prostheses to consumers, but he wants extra scrutiny so Parliament can check whether the promised savings actually flow through.
    “I support this legislation. I foreshadow that I will be moving a second reading amendment, which I commend to the Senate. I really believe that it would add a layer of scrutiny without slowing up or affecting what is proposed at all.”

    Independent • Senator • 07 Mar 2023

    Read the full speech in Hansard ↗
  2. Rebekha Sharkie Sharkie supports the bill because it improves prostheses pricing and cost recovery and helps bring long-running reforms to fruition.
    “I commend this bill to the House, and I support it.”

    Centre Alliance • MP • 07 Feb 2023

    Read the full speech in Hansard ↗

Record

Full record

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