- Reforms announced by the Australian Government to save patients $800 – 900m per year
- Multiple other reforms to improve the operation of the Prostheses List
- It is critical that reforms maintain patient and clinician device choice and access
In December 2020, the Department of Health released a Consultation Paper inviting comment on whether the Prostheses List (PL) should be retained or abolished as demanded by insurers. Following strong expressions of support for the PL by consumer, clinical, hospital and medtech industry groups, the Australian Government decided to retain the PL.
In the 2021-22 Federal Budget, the Government announced $22 million in funding for reforms to the Prostheses List, including reductions of Prostheses List benefits over time in line with public prices for prostheses. The reforms included a commitment to maintain clinician choice and patient access to prostheses.
On 12 March 2022, the Australian Government signed a Memorandum of Understanding (MOU) with the MTAA on key aspects of the reform including the methodology for calculating benefit reductions under the reforms. These benefit reductions would deliver $800-900 million over 4 years in medical device benefit reductions for insurers. The largest part of the reductions was implemented on 1 July 2022. 51% of PL items had a benefit reduction.
The MOU also specifies that items identified for removal will have faster benefit reductions prior to removal and that they would be funded through alternative bundling arrangements. The Independent Hospital and Aged Care Pricing Authority (IHACPA) has undertaken a process to recommend the cost of the bundle. This is important to ensure consumer access to these items.
There is an extensive reform process still underway which includes:
- Redefining the scope of what is eligible to be included on the Prostheses List
- Introducing new supporting legislation for the Prostheses List
- Regrouping the Prostheses List for simplification purposes (MOU guarantees no additional net savings from this)
- Streamlining and improving listing pathways for new devices on the Prostheses List
- Introduction of post-listing reviews
- Addition of a compliance framework
- An evaluation framework and process for the reforms
To succeed, the reforms must maintain clinician choice and patients access, including new innovation, and ensure fair payment for devices and services. MTAA continues to collaborate with other stakeholders and the Department to ensure this occurs and the PL is not wrapped in unnecessary red tape or becomes a barrier to the use of the best devices. MTAA is concerned that reforms targeted for 1 July 2023 will be rushed.
MTAA has provided an additional $800-900 million in savings to insurers under the MOU in addition to over $1.6 billion in savings from the previous agreement. In return, MTAA looks forward to an effective functioning PL well into the future for the benefit of Australians.