Government reverses plan on medical device fees

The government was on the verge of removing about 500 "general use items" - such as surgical staples, sutures and sponges - from the federal prostheses list, which compels insurance companies to cover their cost.

Government reforms to the prostheses list meant general use items no longer met the criteria for coverage.

The items were scheduled to come off the list on July 1 after which patients would have had to foot the bill.

Private hospital groups such as Catholic Health Australia (CHA) protested the plan which they said would add up to $4000 to some surgeries.

More than 70 per cent of the affected surgeries are performed on women.

CHA chief executive Jason Kara said regional patients would have been hit particularly hard because smaller hospitals running on thin margins would have faced the prospect of cancelling some types of surgery altogether.

"There is a real risk that treatments will be delayed and already struggling hospitals could be forced to scale back their services to reduce financial losses, especially in regional areas with smaller populations," he told ACM in April.

But Mr Butler announced on May 1 the government had changed course in response to the widespread concerns and would keep general use items on the prostheses list.

"The government has listened to the concerns about the pressure removing general use items would have caused and decided that this achieves the best outcome for patients," Mr Butler said

"To maintain access to quality healthcare and to provide certainty to private hospitals and patients, the cost of these common surgery items will continue to be funded through the prescribed list."

Mr Kara said the decision would save patients significant extra costs.

"Private hospital patients around the country can today breathe a sigh of relief, knowing their health insurer will still be required to cover critical surgical items," he said.

"The government's commitment to upholding the funding for general use items is a crucial decision that will help ensure no patient is left behind, especially women and those in regional communities."

Australian Medical Association (AMA) president Professor Steve Robson welcomed the decision as a win for patients.

"With rising private health insurance premiums, this announcement will go a long way to ensuring patients are shielded from further financial pain from July 1," Professor Robson said.

"The AMA was extremely concerned that the former policy would see private insurers continue to squeeze the private hospital sector and make it more difficult for patients to access services."

When the government announced the plan to remove general use items from the prostheses list, it said it was because they no longer qualified for inclusion.

"They either do not meet the current criteria for listing or because they will not meet the new definition or listing criteria," the government said.

The minister had initially planned to force insurers to keep covering the items by setting up new arrangements that would bundle general use items together on a new list, but this plan was ditched without explanation.

ACM asked the minister why the bundling plan was scrapped and how the general use items could be maintained on the prostheses list if they no longer met the criteria.

The minister's office didn't provide an attributable response, but ACM understands new criteria will have to be created to accommodate the items.