National Health (Paraplegic and Quadriplegic Program) Special Arrangement 2021

Eligible person: a person who is an eligible person within the meaning of the Health Insurance Act 1973 (i.e. eligible for Medicare benefits), has paraplegia or quadriplegia, and is a member of an authorised association. This triple condition creates a closed class. Membership of the association is a prerequisite, which gives the associations gatekeeping power over access to the program.

Authorised association: only two bodies are named: The Paraplegic & Quadriplegic Association of NSW (ABN 42 000 355 948) and Independence Australia Group (ABN 80 973 805 243). No other associations may supply pharmaceutical benefits under this special arrangement unless the instrument is amended. This grants a statutory duopoly over this supply channel.

Pharmaceutical benefits covered: those listed in Schedule 1, which is not included in the source. Each benefit is a brand of a listed drug in a particular form and manner of administration, as previously declared by the Minister under s 85(2) of the Act.

Responsible person: identified by a code in Schedule 1, with the details in Schedule 2. This is the person determined by the Minister under s 84AF of the Act for that brand.

Maximum amount: the maximum quantity of the pharmaceutical item that may be supplied per month to an eligible person, as set out in Schedule 1. This operates as a hard cap on supply per person per month, but there is no stated total program cap.

Payment calculation: For each pack quantity supplied, the association receives either (a) the “price to pharmacists” under the 98B determination plus 2.75% handling fee, or (b) the claimed price plus wholesale mark-up (calculated proportionately from the approved ex‑manufacturer price or proportional ex‑manufacturer price, using the methodology under the 98B determination) plus 2.75% handling fee. The handling fee is a flat percentage, not a fixed dollar amount, so it scales with drug price inflation.

Supply without prescription: section 12 expressly overrides s 89 of the Act. This is the central deregulatory feature, but it applies only to the two authorised associations. Supply may be by pick‑up or by sending to the person.

No co‑payment: s 13 prohibits demanding or receiving any payment or other valuable consideration for the supply, other than the Commonwealth payment and the delivery charge. This includes any attempt to charge a handling fee or mark‑up to the patient.

Delivery charge: s 15 permits a charge equal to the actual cost of sending the drugs. This is the only permissible charge to the patient. It must be a pass‑through of postage or courier costs only; the association cannot add any administrative fee.

Eligible persons: people with paraplegia or quadriplegia who are members of either authorised association and satisfy the Medicare eligibility test. This is a small subset of the disabled population. They benefit from drug supply without prescription, without co‑payment, and with home delivery if desired. They lose the ability to obtain these drugs through community pharmacies under ordinary PBS arrangements (no co‑payment, no prescription) because the program is exclusive. However, they could still use the ordinary PBS with prescription and co‑payment if they chose. In practice, the financial incentive (zero co‑payment) strongly steers them toward the associations.

Authorised associations: the two named entities. They gain a new revenue stream from Commonwealth payments, including the 2.75% handling fee and wholesale mark‑up. They also bear the costs of ordering, storing, and distributing the drugs, as well as preparing monthly claims. They must maintain an “adequate supply” (s 17). The handling fee likely does not cover the full cost of these activities if drug prices are low or if the association’s logistics costs are high. The fixed percentage may create cross‑subsidies: high‑price drugs generate more handling fee than low‑price drugs, but the per‑unit dispensing cost is similar.

The Commonwealth (Department of Health / Chief Executive Medicare): the ultimate payer. The payment formula is set by the instrument, and the Commonwealth bears the cost of the handling fee and wholesale mark‑up on top of the base drug price. Because there is no co‑payment, the Commonwealth pays 100% of the cost. This contrasts with ordinary PBS where the patient pays a co‑payment. The Commonwealth also processes claims (s 16) and handles internal reviews (s 18).

Responsible persons and wholesalers: they are the suppliers to the authorised associations. The associations may order directly from the responsible person or from a wholesaler (s 17). This may affect distribution patterns, but the total volume is likely small relative to the broader PBS.

Other community pharmacies and other paraplegic/quadriplegic associations: they are excluded from this program. Community pharmacies lose the opportunity to dispense these drugs to these patients under this zero‑co‑payment arrangement. Other associations (e.g. in other states) are not authorised; their members must join the NSW or Independence Australia Group to access the program. This creates an incentive for patients to switch membership to an authorised association, potentially weakening other support organisations.

Taxpayers: they fund the program, including the handling fee and wholesale mark‑up. The absence of a co‑payment means there is no direct contribution from the patient, shifting the entire cost to the public purse.

Right of eligible person to receive supply: s 12 gives an eligible person the right to request and receive a pharmaceutical benefit from an authorised association without a prescription. This is conditional on membership and Medicare eligibility. There is no right to any particular brand; the association supplies the brand it holds (as per Schedule 1).

Right of authorised association to be paid: s 14 entitles the association to payment from the Commonwealth for each pack quantity supplied, calculated under the formula. This is a statutory right, but it depends on submitting valid claims.

Right of authorised association to charge delivery: s 15 permits a charge equal to actual sending cost. This is a right, but it must be limited to cost; it cannot be a profit centre.

Duty not to demand payment: s 13 prohibits the association from demanding or receiving any payment or valuable consideration for the supply other than the Commonwealth payment and the delivery charge. This is a prohibition, so any attempt to impose an administrative fee, handling fee, or co‑payment would breach the instrument. The prohibition likely extends to any indirect payment, such as requiring a donation or membership upgrade as a condition of supply.

Duty to supply on request: s 12 says the association “may supply”. This is permissive, not mandatory. However, the association’s authorisation is premised on supplying benefits under the arrangement. If it refused supply to an eligible member without good reason, it could risk its authorisation being revoked (though the instrument does not specify revocation grounds).

Duty to submit claims in approved form: s 16 requires claims to be made on a form approved in writing by the Chief Executive Medicare. The association cannot rely on the general PBS claims rules under s 99AAA of the Act; it must use this bespoke form. The Chief Executive must then determine the amount and make payment.

Duty to maintain adequate stock: s 17(b) says the association “may keep in stock … an adequate supply”. The word “may” suggests permission, not a statutory duty. But if the association fails to keep adequate stock and cannot supply members, it will undermine the purpose of the arrangement; this could become a ground for revoking authorisation under the Act.

Right to order from responsible person or wholesaler: s 17(a) allows the association to obtain stock from the responsible person or a wholesaler. This preserves the normal PBS supply chain.

Right to internal review: s 18 gives a person affected by a decision of the Chief Executive Medicare (e.g. a decision to refuse a payment) the right to apply to the Secretary for review. The time limit is 28 days from notice, extendable by the Secretary. The Secretary must then review, affirm, vary, or set aside the decision and give reasons. This is a truncated merits review process; there is no mention of further AAT or court review (though that may exist under the Act generally).

The instrument itself does not create specific penalty provisions. However, because the arrangement is made under Part VII of the National Health Act 1953, the general enforcement provisions of that Act and any regulations apply. Section 6 of the instrument states that a provision of Part VII of the Act applies subject to this Special Arrangement. This means that the criminal offences and civil penalty provisions of the Act still apply to conduct under this arrangement, unless inconsistent. For example, s 89 of the Act (supply only on prescription) is overridden, so no offence for supplying without prescription under this arrangement. But other offences, such as false claims for payment (likely under s 103A of the Act or similar), would still apply.

Breach of s 13 (no co‑payment): If an authorised association demands or receives a payment or other valuable consideration for the supply beyond the Commonwealth payment and delivery charge, that would be a breach of the instrument. The consequence is not stated in the instrument. Presumably, the Secretary could revoke the association’s authorisation under s 100 of the Act, or the Commonwealth could refuse to pay future claims. There may also be debt recovery provisions if an overpayment is detected. The association could face civil penalty proceedings under the Act for invalid claims.

Internal review as enforcement: s 18 provides an administrative remedy for a person affected by a decision of the Chief Executive Medicare. This is a form of enforcement of the association’s rights. It does not create penalties but allows scrutiny of payment decisions.

Misuse of member eligibility: If an association supplies to a person who does not meet the eligibility criteria (e.g. not a member, or not having paraplegia/quadriplegia), the Commonwealth could refuse payment or seek recovery. The association may be liable for amounts paid incorrectly.

No specific monetary penalty: The instrument lacks any bespoke penalty provisions. Enforcement relies on the broader Act and on administrative actions such as suspension or revocation of authorisation. This creates uncertainty. Without clear penalty scales, the risk of non‑compliance is managed through the payment process and potential loss of the program itself. The association’s incentive to comply is the flow of Commonwealth payments.

Handling fee compliance: If the association claims payment using the wrong formula (e.g. claiming claimed price when it should use price to pharmacists, or miscalculating wholesale mark‑up), the Office of the Chief Executive Medicare would likely detect inconsistencies through claim audits. Overpayments would be recoverable as debts due to the Commonwealth under the Act.

National Health Act 1953: This instrument is made under s 100 of that Act, which allows the Minister to make special arrangements for the supply of pharmaceutical benefits that may depart from the usual Part VII provisions. Section 6 expressly provides that Part VII of the Act applies subject to this instrument, and that each supply under the arrangement is a supply under Part VII. This means that the general provisions of Part VII (e.g. regarding pricing, brand substitution, supply chain) apply unless inconsistent with the special arrangement. The arrangement overrides the prescription requirement (s 89), the co‑payment rules (ss 84AA-84AD are implicitly overridden by s 13’s prohibition on payments), and the standard claim procedure (s 99AAA is replaced by s 16’s requirement for a separate approved form). Other provisions, such as definitions and the listing of drugs, remain applicable.

National Health (Pharmaceutical Benefits) Regulations: section 6 also says regulations or other instruments made for Part VII apply subject to this arrangement. So regulations about records, labelling, and storage may still apply. The arrangement does not exempt the associations from labelling or record‑keeping requirements unless inconsistent.

Health Insurance Act 1973: The definition of eligible person in s 10 references the Health Insurance Act. This ensures that only people enrolled in Medicare (or otherwise eligible under that Act) qualify. It does not incorporate any other provisions of that Act.

A New Tax System (Australian Business Number) Act 1999: The definition of ABN is cross‑referenced, but only for identifying responsible persons in Schedule 2. No tax consequences are created by the instrument.

Competition and Consumer Act 2010 (Cth): The instrument does not reference competition law. However, by limiting the supply of these pharmaceutical benefits to only two associations, it may restrict competition in the supply of these drugs to this patient group. State CCA provisions could be relevant if the associations engage in anti‑competitive conduct (e.g. tying membership to drug supply). The instrument itself is made under Commonwealth law and likely immunised from competition law challenge as a Commonwealth program, but the associations’ behaviour outside the strict terms of the arrangement remains subject to competition law.

State and territory pharmacy regulation: The instrument is a Commonwealth instrument and overrides state laws that require prescriptions for supply, but only to the extent necessary. States may still have laws about storage of medicines, dispensing by non‑pharmacists, or licensing of distribution points. The associations must ensure they comply with state laws where they operate. The instrument does not provide any immunity from state regulation.

Privacy Act 1988 (Cth): The associations will hold health information about eligible persons. They are likely agencies or organisations subject to the Privacy Act because they receive Commonwealth funding. The instrument does not impose specific privacy obligations beyond the general law.

Internal review under Acts Interpretation: Section 18 creates a standalone internal review mechanism. It does not displace the general application of the Administrative Appeals Tribunal Act 1975 or the right to seek judicial review under the Administrative Decisions (Judicial Review) Act 1977. The instrument is silent on whether the internal review is a prerequisite to external merits review.

The source text contains no amendment history. The instrument is titled “National Health (Paraplegic and Quadriplegic Program) Special Arrangement 2021” and is cited as PB 31 of 2021. It was made under s 100 of the National Health Act 1953 and appears to be the original version. There is no information in the source about any amending instruments, commencement dates beyond “the day after registration” (s 19), or variations. The instrument may have been amended by later special arrangements or by amending determinations, but nothing in the provided text indicates such amendments. The user provided only the base instrument. A practising lawyer would need to check the Federal Register of Legislation for subsequent amending instruments. Because the instrument relies on Schedules 1 and 2, those schedules could be amended without a full instrument replacement, but that is not reflected here.

The absence of a provision for automatic variation suggests that any change to the program (e.g. adding new drugs, changing maximum amounts, altering the handling fee percentage) would require a new special arrangement or an amending determination under s 100. The instrument does not delegate power to vary the lists to an officer. Therefore, the program is relatively rigid once made.

The source text does not mention any litigation history. There are no references to court cases, tribunal decisions, or prior disputes. The instrument has an internal review mechanism (s 18) but does not refer to external review in the Administrative Appeals Tribunal or the courts. It is unlikely that this specific instrument has generated reported litigation, given its narrow scope and the likely small number of eligible persons. However, there may be administrative appeals concerning claims decisions under s 18 that have not been published. The general PBS system has a long litigation history (e.g. disputes about pricing, listing), but no specific cases are cited in the source. A thorough search of the AustLII database for “PB 31 of 2021” or “Paraplegic and Quadriplegic Program” would be needed to confirm.

The instrument does not create any personal rights that are easily litigated. The only decisions subject to review are those of the Chief Executive Medicare, likely regarding payment claims. The eligible person has a right to receive supply, but the remedy for refusal is not specified (possibly breach of contract or administrative law). The associations are statutory entities and could potentially be sued for breach of statutory duty, but no cases are mentioned.

Given the lack of litigation history in the source, a deep dive must note this gap. The instrument is designed to be administrative, not adversarial. The internal review mechanism likely resolves most disputes without court involvement.

Membership requirement as barrier: The eligibility condition in s 10(c) requires the person to be a “member of the association”. The instrument does not define membership. The associations can control their own membership rules. They could impose fees, conditions, or even deny membership to certain qualified people. This creates a potential private bottleneck: the association could choose to exclude a person with paraplegia because they live in another state, for example. There is no right of review against a membership decision; only decisions of the Chief Executive Medicare are reviewable. So a person denied membership has no access to the program.

No co‑payment, but delivery charge may be disproportionate: The delivery charge under s 15 must equal “the cost of sending the pharmaceutical benefit”. If the association uses a courier service that charges a flat rate per parcel, and the drug pack is small, the charge may be relatively high compared to the drug’s value. The person cannot avoid this charge if they want home delivery. There is no cap on the cost; the association could choose an expensive courier. The only restriction is that it must be actual cost; no mark‑up. However, the association is not required to use the cheapest method.

Maximum amount per month is a hard cap, but the instrument does not specify what happens if a person needs more than the maximum: The doctor or specialist cannot prescribe a higher amount; the association cannot supply more. The person would have to seek the additional supply through the ordinary PBS (with prescription and co‑payment). The cap is set in Schedule 1. If the schedule values are low, this could cause a treatment gap.

Claims must be on a specific form, not the usual PBS online system: s 16(3) overrides s 99AAA of the Act. The association must submit on a form approved in writing by the Chief Executive Medicare. If the association mistakenly uses the standard PBS claim process, the claim may be rejected. There is no provision for retroactive correction.

Handling fee of 2.75% is based on the pack quantity price, but the wholesale mark‑up adds a layer of cost that may not reflect actual costs: The handling fee is a percentage, so it gives the association a stronger incentive to supply more expensive drugs. For low‑cost drugs, the fee might not cover the administrative cost of ordering, storing, and dispensing. The association could cross‑subsidise within its portfolio, but if it only supplies low‑cost drugs, the program may be uneconomic.

No cap on total expenditure: The program is demand‑driven. If the number of eligible persons increases or if maximum amounts are high, Commonwealth liability is open‑ended. There is no sunset clause or review trigger.

Internal review time limit is short (28 days): s 18(2)(b)(i) allows only 28 days from the day the decision first came to the notice of the applicant. This is relatively tight for a person who may be in hospital or have communication difficulties. The Secretary can extend the period, but the association or person must apply. If they miss both, the decision becomes final.

No explicit confidentiality or privacy protections: The instrument does not address how the association must handle health information. Under the Privacy Act, it must have a privacy policy. But there is no specific tailoring for this program. The association could share data with the Commonwealth without consent, subject to privacy law.

Only two associations are authorised; they are both in New South Wales (one is national but based in NSW): If a person is in Western Australia or Tasmania, they may have to join an association headquartered elsewhere. The association may not have local premises; pick‑up option may be impractical, forcing reliance on delivery charges.

For the authorised association:

1. Verify eligibility before each supply: Ensure the person is an eligible person under the Health Insurance Act (i.e. Medicare eligible). The association should obtain the person’s Medicare card number and verify status online if possible. Confirm that the person has paraplegia or quadriplegia. Evidence could be a medical certificate or self‑declaration, but the association should maintain records. Confirm that the person is a current member; maintain a membership register.

2. Limit supply to drugs in Schedule 1: Only supply brands, forms, and administrations listed in Schedule 1. Do not supply other PBS drugs under this arrangement. The association should have a copy of the current Schedule 1 (available from the Department of Health website) and ensure its stock matches.

3. Respect maximum monthly amounts: For each drug, check the “Maximum Amount” column in Schedule 1. Do not supply more than that quantity in a calendar month to one person. Keep a running tally. If the maximum is exceeded, the association would be supplying outside the arrangement and would be in breach of s 89 (prescription required) because the arrangement would not cover that excess.

4. Do not demand or receive any payment from the person: Accept only the delivery charge (if applicable). Do not charge a membership fee that is conditional on supply; that could be seen as “valuable consideration for the supply”. Membership fees should be separate and not tied to the volume of drugs supplied. If a person refuses to pay a delivery charge, the association cannot supply via sending; it must offer pick‑up. But pick‑up cannot be subject to any charge.

5. Calculate payment claims correctly: Determine whether the drug has a claimed price (if so, use method (b): claimed price plus wholesale mark‑up plus 2.75% handling fee). If no claimed price, use method (a): price to pharmacists plus 2.75% handling fee. The wholesale mark‑up must be calculated using the methodology in the 98B determination, but substituting the claimed price for the ex‑manufacturer price and using proportionate amounts. This is complex; the association should obtain the Department’s guidance or use a dedicated system.

6. Submit monthly claims on the approved form: Contact the Chief Executive Medicare to obtain the approved form (s 16(3)). Do not use the standard PBS online claiming system. Ensure claims are submitted monthly, not ad hoc. Keep records of all supplies to substantiate claims.

7. Maintain adequate stock and order appropriately: Order from the responsible person or a wholesaler. Keep records of orders and invoices. The association must ensure it has an adequate supply to meet expected demand (s 17(b) uses “may”, but practical compliance requires sufficient stock).

8. Handle internal review requests: If the Chief Executive Medicare makes a decision (e.g. reduce payment), the association has 28 days to apply to the Secretary for review. The application must be in writing. The association should maintain a calendar to track this deadline. The Secretary may extend the period on request.

9. Monitor compliance with state laws: Check state pharmacy and drug distribution laws. For example, in some states, only pharmacists can supply certain drugs. The Commonwealth instrument overrides prescription requirements but may not override state dispensing qualifications. Seek legal advice on state requirements.

10. Record keeping: Keep records of membership, eligibility verification, supply transactions, claims, and delivery charges for audit. The general PBS record‑keeping requirements under the Act and regulations apply.

For the eligible person:

1. Join one of the authorised associations: The Paraplegic & Quadriplegic Association of NSW or Independence Australia Group. Complete membership forms. Provide evidence of paraplegia or quadriplegia and Medicare eligibility.

2. Request supply of drugs covered by Schedule 1: The association can tell you which drugs are covered. If your usual drug is not listed, you cannot get it under this program.

3. Do not pay any co‑payment: The program is free at point of supply. If the association asks for payment (other than delivery charge), contact the Department of Health.

4. If you need more than the monthly maximum, consult your doctor: You may need a prescription and use the ordinary PBS.

5. Comply with any delivery charges: If you choose home delivery, pay only the actual postage or courier cost. The association should provide evidence of the cost.

For the Commonwealth (Chief Executive Medicare):

1. Establish the approved claim form: Under s 16(2), determine the amount payable. Ensure the form captures the required data.

2. Process claims promptly: The instrument does not set a time limit, but the Chief Executive must determine and pay.

3. Handle internal reviews: Under s 18, the Secretary must review applications within a reasonable time, provide decisions and reasons.

4. Audit associations for compliance: Verify eligibility of persons supplied, check monthly amounts, and ensure no prohibited payments. Recover any overpayments.

5. Maintain up‑to‑date Schedules 1 and 2: The instrument depends on those schedules. Any changes must be communicated to the associations.