Funding Arrangements for surgically implanted prostheses devices

Should you or others listed on your membership ever require a device listed on the Commonwealth's Prostheses schedule 5, this information will be of importance.  Some of the most common surgically implanted prostheses devices are hip and knee joint replacements, cardiac stents, cardiac pacemakers and intra-ocular lenses used for cataract surgery.

The National Health Amendment (Prosthesis) 2004 provided significant reform in the management of prosthesis claims. The purpose of this is to ensure that suppliers are accountable for the items that they supply and they need to clinically justify their charges. This process enabled a national setting of prosthesis prices across the industry. The amendment allows for a gap payment for certain devices listed on the Prosthesis Schedule to be charged.  The arrangement established a more competitive framework for the pricing of devices than that which previously existed. These changes mean that for the first time devices listed on the schedule are subjected to clinical review of their effectiveness and, suppliers of equivalent devices will be encouraged to compete on the basis of price. 

The legislation contains significant safeguards for consumers ensuring that they will, at all times, be guaranteed 100% coverage of clinically equivalent prosthesis devices for each procedure listed on the Medical Benefits Schedule (MBS).  Clinical Advisory Groups comprising clinical experts in the relevant fields have been established to advise the Health Minister regarding the clinical appropriateness and equivalence of these devices. Whilst the legislation provides for gap payments for certain devices it is important to note that this will only occur if the supplier of a device insists on a price which is higher than that accepted by the supplier of a clinically competitive alternative device.  It is anticipated that the number of suppliers insisting on gap payments will be relatively small.

It is important to note, the suppliers of prosthesis are consulted at each stage of this process and have every opportunity to provide additional information to the Clinical Advisory Groups to support their submission if they dispute the clinical evaluation of their product.

This is a progressive change commencing 31 October 2005. The first six groups of prostheses that were evaluated on the basis of their clinical equivalence are hips, knees, cardiac defibrillators, pacemakers, cardiac stents and intraocular (cataracts) lenses.

Latrobe Health Services members continue to have clinically equivalent prostheses devices available for every medical procedure listed on the Commonwealth Medical Benefits Schedule at a NO GAP price.  Should you or your doctor choose to utilise a prosthesis that is not listed as a NO GAP item then you will be charged a Gap that is, the difference between the NO GAP price for a clinically equivalent device and the price that the supplier has set. 

The work that is attended by the Clinical Advisory Groups of clinical experts ensures that your doctor's decisions will not be compromised or limited as all devices have been evaluated on the basis of their clinical equivalence. The Clinical Advisory Group determines that the NO GAP item provides no different clinical outcome to that of the Gap item, therefore there is no justification for the difference in price.

If you or anyone on your membership is planning any medical treatment it is vital that you discuss the possible need for prosthesis with your treating doctor. Some specific questions you need to ask are:

• Do I require the use of any surgically implanted prostheses devices
• What are the prosthesis item numbers that are planned to be used
• Are these devices listed as NO GAP items or Gap items
• If they are Gap items, what is the reason that they are being used rather than the no gap item
• What is the gap cost that I will have to pay as an out of pocket
• If there is a gap cost you will need to consider whether you are prepared to pay this gap
• Ask why you can't have the clinical equivalent NO GAP item
• If you agree to the gap item provide your written consent to pay this
• What other out of pocket costs will be charged in relation to your hospital stay such as medical costs for the surgeon, assistant surgeon, anaesthetist or any other medical provider involved with your care.

• Ensure that the hospital confirms the planned use of either a no gap or gap item
• Ensure that the hospital provides you full informed financial consent regarding all aspects of your hospital stay

Of course should you have any queries regarding your admission to hospital please contact Latrobe Health Services on 1300 362 144.

Further information on these changes will become available on the Department of Health and Ageing's website (www.health.gov.au) and the Australian Health Insurance Association's (AHIA) website (www.ahia.org.au).