National Health (Closing the Gap—PBS Co-payment Program) Special Arrangement 2026
In ForceCTH
Jurisdiction
Commonwealth
Collection
legislative instrument
Plain English Summary
6/10 complexity
What this instrument does, in plain terms
Establishes a special arrangement called the National Health (Closing the Gap—PBS Co‑payment Program) Special Arrangement 2026 (the instrument) to change how certain Pharmaceutical Benefits Scheme (PBS) medicines are supplied to registered Aboriginal and Torres Strait Islander patients (called CTG registered patients). The instrument takes effect 1 April 2026 (see section 2).
What it covers and who is affected
Which medicines: It applies to PBS pharmaceutical benefits supplied under Part VII of the National Health Act 1953, except medicines that can only be supplied under the prescriber bag provisions (section 7(1)–(2)).
Who can get the changed treatment: A person can become a CTG registered patient when a registering practitioner registers them on HPOS or, in limited cases, by telephone (section 8(1), (3)–(4)). The practitioner must form an opinion the person would suffer setbacks without adherence help and is unlikely to adhere without assistance (section 8(1)(b)). The patient must identify as Aboriginal or Torres Strait Islander and consent to participate (section 8(1)(a)(ii)–(iii)).
Who supplies medicines under the arrangement: Supplies must be made by an approved supplier (an approved pharmacist, approved medical practitioner, or approved hospital authority) — defined in section 5 and applied in section 6.
Key mechanical changes to charges and payments
Co‑payments for CTG registered patients are either eliminated or reduced depending on the patient’s usual charge category:
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
If the patient would otherwise pay the concessional beneficiary charge or the general patient reduced charge (or is receiving a supply treated under subsections 99(2AB) or (2B) of the Act), the supplier may charge nil for that supply (section 10(2)).
If the patient would otherwise pay the general patient charge, the supplier may charge an amount equal to the concessional beneficiary charge (less any allowable discount) (section 10(3)(a)).
For supplies deemed under subsection 99(2A), the supplier may charge no more than the lower of the concessional beneficiary charge and the Commonwealth price for the medicine (section 10(3)(b)).
Where suppliers charge nil or a reduced amount, the Commonwealth pays suppliers specified compensating amounts so suppliers receive payment for the supply (section 12(2)–(5)). The payment formulas vary depending on which co‑payment rule applied (section 12).
Special patient contributions (co‑payments that apply to particular listed brands) may still be charged in certain situations by approved pharmacists, medical practitioners or hospital authorities (sections 10(4)–(9)).
A special arrangement supply is not eligible for increased discounting (section 9(1)), and the instrument modifies the value counted towards PBS safety net thresholds for these supplies (section 11).
Suppliers claim the Commonwealth payments through Chief Executive Medicare under modified claim rules; manual claims must include an indicator that the claim is for a special arrangement supply (section 13(2)–(4)).
Why the instrument matters (stated purpose and how it operates financially and administratively)
The instrument is presented as making an adequate supply of PBS medicines available to registered Aboriginal and Torres Strait Islander patients by removing or reducing out‑of‑pocket costs and by ensuring suppliers are paid by the Commonwealth for those supplies (see simplified outline and sections 4, 10, 12).
Costs, incentives, trade‑offs and implementation mechanics (source‑grounded)
Who pays and who receives money: Patients face lower out‑of‑pocket costs (section 10). The Commonwealth reimburses suppliers under the payment formulas in section 12. Suppliers therefore have a direct financial incentive to participate because the instrument provides statutory payment entitlements where suppliers charge nil or reduced co‑payments.
Who decides access: Registration requires an approving judgment by a registering practitioner that the patient needs adherence support and is unlikely to adhere without it; that practitioner effectually decides which patients receive the treatment of this program (section 8(1)(b)). The instrument limits registration to practitioners with specified approvals or identification numbers (section 8(2)).
Compliance and administrative burden: Registering practitioners must use HPOS for registration except where IT access is unavailable (section 8(3)–(4)). Suppliers must make claims to Chief Executive Medicare using rules adapted for special arrangement supplies, and manual claims must include a special indicator (section 13(2)–(4)). These steps create administrative tasks for practitioners and suppliers.
Bureaucratic discretion and operational control: The Chief Executive Medicare and the Secretary are the payment/claim processing authorities for suppliers (section 13(2)). Determinations under subsection 84C(7) of the Act set pricing references used by this instrument (section 11(2), section 12(3), (5)). Those existing administrative instruments and officials therefore determine key numeric values applied under this arrangement.
Interaction with broader PBS settings: The instrument explicitly modifies aspects of Part VII (discounting eligibility, safety‑net valuation, and payment claim rules) rather than replacing them, so it operates by layering adjustments onto the existing PBS framework (sections 9, 11, 12, 13). Supplies treated under certain Part VII deeming provisions are handled differently for charging and claiming (sections 9(2), 10 notes, 13(3)).
Potential behavioural and market effects (mechanical, source‑grounded observations)
For patients: Lower co‑payments reduce immediate price barriers to obtaining listed PBS medicines for registered patients (section 10).
For suppliers: The instrument creates statutory payment entitlements to replace lost co‑payments (section 12). Suppliers must follow claim procedures to receive those payments (section 13). Approved suppliers (pharmacists, medical practitioners, hospital authorities) are the actors authorised to make special arrangement supplies (sections 5–6), so the instrument channels supply through existing approved supplier categories.
Transitional arrangements
Actions taken under the previous 2016 special arrangement that could be done under this instrument are treated as having been done under this instrument (section 14). People registered under the earlier arrangement are taken to be registered under this instrument at commencement (section 15).
Implementation risks and practical constraints (source‑grounded)
Reliance on practitioner judgement for registration creates a gatekeeping step that depends on practitioner availability and recordkeeping (section 8(1)(b)).
HPOS is the primary registration mechanism, with a telephone fallback only where IT access is not functioning (section 8(3)–(4)), which may affect timeliness or scale of registrations in settings with connectivity issues.
The instrument depends on cross‑referenced determinations and Part VII constructs (discounts, safety net, Commonwealth prices, special patient contributions). Changes in those underlying instruments or in payment/determination settings will change the numeric outcomes of this arrangement without further change to this instrument (sections 9, 11, 12).