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Circular No 08/17

General PHIAC Circulars

HIGH COST CLAIMANTS POOL REVERSALS AND THRESHOLD

PHIAC is seeking advice from insurers regarding the process of reversing claims previously included in the High Cost Claimants Pool (HCCP). PHIAC is also seeking the opinion of insurers in regard to the level of the HCCP threshold.

The Private Health Insurance (Risk Equalisation Policy) Rules 2007 do not make provision for reversal of a claim that has been previously included in the HCCP. In particular, if a claim was reversed for a benefit paid in a period more than three quarters previously there is no mechanism to include the reversal in the current quarter.

PHIAC requests feedback from stakeholders in regard to how reversals affecting the HCCP should be treated, with a view to achieving consistency in the industry. In particular, feedback is sought on:

• how reversals of benefits previously included in the HCCP are currently treated

• how reversals of benefits included in the HCCP by an insurer more than three quarters previously should be treated

The HCCP threshold is set at $50,000 in the Private Health Insurance (Risk Equalisation Policy) Rules 2007. The Department of Health and Ageing said in 2006 (Circular 57/06 Attachment 1) that the threshold would be evaluated annually taking into account the increase in total hospital and medical benefits, with less frequent full revaluation based on statistical characteristics of data. PHIAC requests feedback from stakeholders in regard to the level of the HCCP threshold, with appropriate justification for any recommendation.