Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Private Health Insurance (National Joint Replacement Register Levy) Amendment Bill implements the government's budget measure to amend the cost recovery arrangements for the National Joint Replacement Registry, the NJRR, to a utilisation based calculation.

The Commonwealth has funded the NJRR since its initial development in 1998. The NJRR collects demographic data related to joint replacement surgery in Australia and monitors the performance of all joint replacement prostheses used in Australia by collecting information on all joint replacement surgeries, including revisions, complications and other outcomes from device use. This results in improved quality of care for patients receiving joint replacement surgery.

In fact, thanks to the National Joint Replacement Registry, Australia was the first country in the world to recognise, and subsequently take regulatory action to remove, ASR hip replacements from the market. This happened eight or nine months before anywhere else in the world. Members of the House may remember that the ASR hip had extremely poor outcomes. As a result of this early evidence, fewer Australians were implanted with this dire device.

Since 2009 the NJRR has been funded on a cost recovery basis by a levy payable by manufacturers and distributors of those joint replacement prostheses listed in the Private Health Insurance (Prostheses) Rules. This ensures ongoing funding for the registry.

Under current arrangements, joint replacement prostheses manufacturers and distributors currently contribute to the cost recovered funding on a proportional basis. This is based on the number of different prostheses models they have available for sale compared with the total number of models available on the market. This methodology does not take into account utilisation or the revenue derived by a manufacturer or distributor from the sale of prostheses.

For example, under the current cost recovery arrangements, a joint replacement prostheses that is included in the prostheses rules, but has never been provided to a patient and never reported to the Joint Replacement Register will attract the same amount of levy as a prosthesis that generates a much higher volume of work because the prostheses is frequently provided to patients and reported to the register.

Over time, consultations with industry have indicated a strong preference for changes to the cost recovery arrangements of the National Joint Replacement Register, to determine individual companies' contributions using a utilisation based calculation. This bill allows for the implementation of that change.

Under the changes proposed in this bill, the NJRR levy will now be collected by taking into account the number of times a joint replacement prosthesis is recorded on the NJRR in a particular period.

Importantly, the current rules set a maximum levy of $5,000 for sponsorship of any one joint replacement prosthesis in any one financial year. The amendments made by this bill will similarly restrict the maximum amount of levy that a sponsor may pay for any individual joint replacement prosthesis to $5,000.

These changes will mean that over 85 per cent of companies will now be paying smaller individual contributions, and will result in a more equitable distribution of the cost recovery across the industry.

The number of joint replacement surgeries taking place in Australia is increasing every year, and these changes to the cost recovery arrangements will ensure that this important resource will continue to be available in the future.

Debate adjourned.