National Health (Remote Area Aboriginal Health Services Program) Special Arrangement 2017

Approved Aboriginal health service means an Aboriginal health service for which an approval is in force under section 9. To be approved, the service must satisfy the five conditions in section 9(2). Notably, it cannot itself be an approved pharmacist or an approved hospital authority, so it cannot dispense PBS items under the ordinary scheme - it must obtain medicines through this special arrangement. The service must have a primary function of meeting Aboriginal and Torres Strait Islander health care needs, but the instrument does not require that all patients be Indigenous; the statutory purpose (section 7) refers to persons living in isolated areas generally.

Remote zone is defined by reference to the Rural, Remote and Metropolitan Area (RRMA) Classification, 1991 Census Edition, as in force in November 1994. This is a fixed historical definition; it does not change with subsequent editions or updates. Each clinic operated by the Aboriginal health service from which eligible pharmaceutical benefits are supplied must be in a remote zone. This creates a geographic constraint: if a clinic is later reclassified by newer versions of RRMA but does not fall within the 1994 remote zone, it may no longer qualify.

Eligible pharmaceutical benefit is a ready-prepared pharmaceutical benefit, but with three exclusions: benefits that can only be supplied under Part VII of the Act in accordance with a section 100 special arrangement; benefits that can only be supplied under the prescriber bag provisions; and benefits referred to in Schedule 8 to the current Poisons Standard (controlled drugs). This means high-risk or specially controlled medicines are not available through this arrangement; they must be obtained through ordinary PBS channels or other special arrangements.

Eligible order is an order in writing (in a form approved by the Chief Executive Medicare) made by an approved Aboriginal health service to an approved pharmacist or approved hospital authority for the supply of eligible pharmaceutical benefits. The order must be direct to the supplier; the instrument does not permit intermediaries.

Remote area Aboriginal health service prescription (section 12) is a detailed prescription that must include the patient’s name, address and medicare number (if known), the pharmaceutical benefit’s identity, quantity, form, strength, dose, frequency and route of administration, the prescriber’s name and address, the approved Aboriginal health service’s name and registration number, and the date. It must be written and signed by a PBS prescriber who is an employee or contractor of the Aboriginal health service and qualified under State or Territory law to supply all eligible pharmaceutical benefits.

Supply under this special arrangement (section 13) requires the supply to be by an approved pharmacist or approved hospital authority in response to an eligible order, directly to the approved Aboriginal health service, in a pack quantity, and either as part of a bulk supply or on presentation of a remote area Aboriginal health service prescription (with the medicine prepared and labelled accordingly).

Registration number is the unique number allocated by the Chief Executive Medicare after approval (section 10). This number appears on prescriptions (section 12(1)(g)(ii)).

The instrument directly affects three categories of participants. First, approved Aboriginal health services. These are the gatekeepers. To participate, a service must apply to the Health Secretary and satisfy the five conditions in section 9(2). The service must not already be an approved pharmacist or hospital authority; this prevents double-dipping and ensures the arrangement is used only by entities that cannot supply PBS medicines under the ordinary scheme. The requirement that each clinic be in a remote zone (using the fixed 1994 RRMA classification) means some services that have expanded or relocated may find themselves ineligible if their clinics are now in areas no longer classified as remote by current standards. The service must employ or contract health professionals (PBS prescribers) qualified under State or Territory law to supply all eligible pharmaceutical benefits - a potentially high bar if the service relies on nurses or Aboriginal health practitioners who may not hold unrestricted authority to supply all PBS items.

Second, approved pharmacists and approved hospital authorities that supply the medicines. They must accept eligible orders from approved Aboriginal health services, supply in pack quantities, and prepare labelled medicines for patient-specific prescriptions. They are entitled to payment under section 14 and must claim in writing in the form approved by the Chief Executive Medicare. The fees are fixed: $3.47 handling fee per pack quantity plus the determination-based price and administration fee, and an extra $5.49 if patient-specific. Crucially, no amount is payable for transportation or cold chain maintenance (section 15(2)). For a pharmacist in a remote area, the actual cost of freight to the Aboriginal health service (which may be hundreds of kilometres away) and maintaining cold chain for temperature-sensitive medicines must be absorbed. This may reduce the number of pharmacists willing to participate, or require Aboriginal health services to subsidise transport themselves.

Third, patients of approved Aboriginal health services. They receive eligible pharmaceutical benefits free of charge (section 17). The Aboriginal health service must not demand or receive any payment or other valuable consideration for the supply. This eliminates the usual PBS co-payment, which for general patients is considerable. The trade-off is that patients are limited to the medicines stocked by the Aboriginal health service, and supply is only by, or under the direction of, the qualified health professionals. There is no mechanism for a patient to take a prescription to any pharmacy; the system is closed.

The Health Secretary has approval powers and can approve forms for applications and prescriptions. The Chief Executive Medicare allocates registration numbers, approves forms for eligible orders and claims, and processes payments. The Department is responsible for the RRMA classification used.

Duties of the approved Aboriginal health service (sections 9, 11, 12, 17):

• It must apply for approval and maintain the conditions that led to approval. If at any point it ceases to satisfy the conditions (for example, if it loses qualified employees, a clinic moves out of the remote zone, or it becomes an approved pharmacist), its approval may be at risk.
• It must maintain a stock of eligible pharmaceutical benefits supplied under this special arrangement and store them in facilities that prevent access by unauthorised persons, maintain quality (chemical/biological stability and sterility), and comply with manufacturer conditions (section 9(3)).
• It must ensure pharmaceutical benefits are supplied to patients only by, or under the direction of, its qualified employees or contractors (section 9(2)(e)(iii)).
• It must not demand or receive any payment or other valuable consideration for the supply of an eligible pharmaceutical benefit to a patient, if that benefit was supplied to the Aboriginal health service under this special arrangement (section 17). This is an absolute prohibition. However, the instrument does not define what happens if the service breaches this; there is no penalty stated within the instrument. Enforcement would rely on the underlying Act or administrative action (such as revocation of approval).
• It must make eligible orders in writing (in a form approved if any) (section 11).
• It must ensure remote area Aboriginal health service prescriptions contain all required particulars (section 12) and are written and signed by an authorised person.

Duties of the approved pharmacist or approved hospital authority (sections 13, 14, 16):

• They must supply to the Aboriginal health service directly, in a pack quantity, in response to an eligible order.
• If the supply is on a remote area Aboriginal health service prescription, they must prepare and label the medicine in accordance with that prescription (section 13(2)).
• They must make a claim for payment in writing in the approved form (section 16). The normal PBS claim rules under subsections 99AAA(2), (4) and (5) do not apply (section 16(4)), so they cannot rely on the ordinary electronic claiming processes.

Rights of the approved pharmacist or approved hospital authority (section 14):

• They are entitled to be paid by the Commonwealth the amount worked out under section 15.
• The payment amount includes the price to pharmacists, administration, handling and infrastructure fee (from the determination under s98B(1)(a) of the Act), a $3.47 handling fee, and where patient-specific, a $5.49 s100 Remote Area Aboriginal Health Service Patient Specific Medicine Supply Fee. There is no right to claim extra for transport or cold chain.

Rights of the approved Aboriginal health service (implied):

• The right to receive eligible pharmaceutical benefits from pharmacists/hospitals under this arrangement, provided it complies with the ordering and prescription requirements.

Rights of patients:

• They have no direct right under this instrument. The duty is on the Aboriginal health service to supply free of charge. A patient cannot enforce a right to a particular medicine; the service’s obligation is only to supply from its stock under direction of qualified professionals.

Rights of the Health Secretary and Chief Executive Medicare:

• The Health Secretary may approve forms for applications (section 8(3)) and prescriptions (section 12(3)). The Chief Executive Medicare may approve forms for eligible orders (section 11(2)) and claims (section 16(3)).
• The Chief Executive Medicare allocates registration numbers (section 10).
• They can refuse approval (section 9(1)(b)).

The instrument itself contains no penalty provisions. It does not create criminal offences or civil penalties for breach of its requirements. Section 17 states that an Aboriginal health service “must not” demand or receive payment, but no penalty for doing so is specified. This is unusual for a regulatory instrument; typically, such prohibitions are backed by offences under the Act or by conditions linked to approval.

Enforcement is likely to be administrative: the Health Secretary could revoke an approval under the general powers in the Act or under the terms of the approval. However, the instrument does not explicitly provide for revocation of approval in Part 2. The conditions in section 9(2) are for initial approval; there is no express power to revoke if a condition later ceases to be met. The Act (section 100) may provide such a power, but it is not referenced in this instrument. This creates uncertainty: a service that breaches section 17 or fails to maintain stock or storage may face no immediate statutory consequence within this instrument. The Commonwealth could, however, pursue recovery of payments for supplies that were not made in accordance with the arrangement, perhaps under the Public Governance, Performance and Accountability Act 2013 or general law.

For approved pharmacists or hospital authorities who make false claims, the ordinary fraud provisions of the Criminal Code (Cth) would apply. The instrument does not create any specific record-keeping or audit obligations. The claims process (section 16) requires a written claim in an approved form, but the instrument does not mandate what information must be included beyond the form.

Because this instrument operates within the broader National Health Act framework, enforcement mechanisms in Part VII of the Act (such as offences for false statements, over-supply, or failure to comply with special arrangements) may apply. However, section 18 excludes the application of the Conditions for Approved Pharmacists Determination 2017, but does not exclude the Act’s general offences.

The absence of explicit penalties or compliance mechanisms in this instrument is a noteworthy design choice. It places heavy reliance on trust and administrative oversight, which may be efficient in small, remote programs but also creates enforcement gaps. A service that deliberately overcharges patients could face no immediate sanction beyond having its approval revoked, and the instrument does not say how revocation would occur.

This instrument is made under section 100 of the National Health Act 1953, which allows the Minister to make special arrangements for the supply of pharmaceutical benefits. It sits within the PBS framework but modifies the standard rules for its participants.

National Health Act 1953 (the Act): The instrument defines “Act” as the National Health Act 1953 (section 6). Part VII of the Act (sections 84-105) governs the PBS. This instrument displaces the ordinary claiming and supply rules for the limited set of transactions it covers. Section 14(2) clarifies that references in Part VII to “payment” include payment under this instrument, so that other provisions about payments (e.g., those concerning assignment or recovery of overpayments) apply. Section 16(4) expressly disapplies subsections 99AAA(2), (4) and (5) of the Act for claims under this instrument - those subsections would otherwise impose time limits or other requirements on claims. The instrument does not otherwise exclude the Act, so other obligations in Part VII (such as the requirement for approved pharmacists to only supply to persons entitled, or prohibitions on certain supplies) still apply, subject to the specific exceptions.

National Health (Pharmaceutical Benefits) (Conditions for approved pharmacists) Determination 2017: Section 18 states that this determination does not apply to the dispensing or supply of a pharmaceutical benefit if it is supplied under this special arrangement. That determination normally imposes conditions such as labelling, record-keeping, storage, and patient counselling obligations on pharmacists. By exempting supplies under this arrangement, Parliament recognised that the normal conditions may be inappropriate where the pharmacist supplies in bulk to an Aboriginal health service rather than directly to a patient, and the health service itself is responsible for patient-level supply. However, this exemption may create confusion for pharmacists who supply both under this arrangement and under the ordinary PBS - they need to know which conditions apply to which supply.

Therapeutic Goods Act 1989: The definition of “eligible pharmaceutical benefit” excludes benefits referred to in Schedule 8 to the current Poisons Standard (controlled drugs). This means that medicines classified as Schedule 8 under state/territory law (as adopted from the Poisons Standard) cannot be supplied through this arrangement. They must be obtained through ordinary prescribing and dispensing channels, which may be more difficult in remote areas.

State and Territory laws: The instrument repeatedly refers to qualifications “under the law of the relevant State or Territory” (sections 9(2)(d), 12(2)(c)). The Aboriginal health service’s employees or contractors must be qualified under local law to supply all eligible pharmaceutical benefits - this goes beyond PBS prescriber status and requires State or Territory authority to possess, supply and administer medicines. This means that a PBS prescriber who holds a national Medicare provider number must also meet local registration and scheduling requirements. The instrument also requires that storage facilities maintain quality (section 9(3)), which would typically be governed by state poisons legislation and professional standards.

Old instrument (PB 107 of 2010): Part 6 provides transitional arrangements. Aboriginal health services registered under the 2010 instrument are automatically deemed approved under this 2017 instrument, with their old DHS approval number becoming their registration number. This preserves continuity but creates no grandfathering of any non-compliance that existed before commencement.

The instrument is PB 107 of 2017, titled the National Health (Remote Area Aboriginal Health Services Program) Special Arrangement 2017. It was made under s100 of the National Health Act 1953. The instrument itself does not contain an amendment history, but its text reveals it replaced the National Health (Remote Aboriginal Health Services Program) Special Arrangements Instrument 2010 (referred to in section 19 as “the old instrument”). That earlier instrument had a similar structure but a slightly different name (note the absence of “Area” in the 2010 name). The 2017 instrument updates the fee structure: the handling fee in section 15(1)(c) is $3.47, and the patient-specific fee is $5.49 (the old instrument had different figures). It also now references the determination under paragraph 98B(1)(a) of the Act for base pricing, with a note that PB 66 of 2020 was the relevant determination at the time of the instrument’s publication.

The instrument is a standalone legislative instrument, not an amending regulation. It has not been amended according to its text. However, any changes to the determination under s98B(1)(a) of the Act (e.g., PB 66 of 2020 or later determinations) will automatically flow through to the payment calculation in section 15(1)(a) and (b). The fixed fees ($3.47 and $5.49) are set in the instrument and would require a formal amendment to change.

There is no mention of amending acts or regulations. The instrument is a “special arrangement” in its own right, not a schedule to another instrument.

The instrument text does not refer to any court cases, and there is no reported litigation mentioned. The instrument is administrative in nature and narrow in scope, which reduces the likelihood of judicial challenge. Potential grounds for litigation could include a dispute over the definition of “remote zone” (the fixed 1994 RRMA classification may be argued to be outdated or ambiguous), a challenge to a refusal of approval by the Health Secretary, or a dispute over payment calculations (e.g., whether a particular medicine is an eligible pharmaceutical benefit given the exclusion of Schedule 8 drugs). A pharmacist might also challenge the inability to claim transport costs, arguing that the Commonwealth’s refusal to pay for cold chain maintenance is unreasonable, but such a challenge would be against the instrument itself, not the Act. Because the instrument is made under s100 of the Act, there is limited scope for merits review unless the Act provides for it. The instrument does not create any private rights of action for patients whose medicines are not supplied.

Given the instrument has been in force since 2017 and replaced an earlier instrument from 2010, the absence of any reported or widely known litigation suggests the arrangement operates without formal legal contest. This may reflect the small number of participants and the consensus-based nature of the program. However, it also means there is no judicial clarification of ambiguous terms, such as what constitutes “adequate supply” for the purpose of section 7, or the exact scope of “supply to a patient” under section 17.

Transport and cold chain costs not recoverable. Section 15(2) expressly states that no additional amount is payable for the cost of transportation or cold chain maintenance. This is a significant cost-shift. For a pharmacist in a remote area supplying to an Aboriginal health service hundreds of kilometres away, the $3.47 handling fee may not cover freight, even if the base price to pharmacists is paid. The Aboriginal health service may have to bear transport costs (which then become an operational cost not covered by any payment), or the pharmacist may simply decline to supply, jeopardising the purpose of the arrangement.

Fixed 1994 RRMA definition. The definition of “remote zone” is locked to the 1991 Census Edition RRMA as in force in November 1994. Later editions of RRMA that reclassify areas (e.g., from remote to very remote, or from remote to outer regional) do not affect eligibility. However, an area that was remote in 1994 but is now classified differently might still qualify; conversely, an area that has grown in population and is no longer considered remote under current classifications might still be eligible. This creates an uneven playing field: some services in areas that have become less isolated continue to benefit, while services in newly opened areas that were not classified remote in 1994 cannot participate even if they are today.

No charge prohibition is absolute. Section 17 prohibits any payment or other valuable consideration for supply of pharmaceutical benefits under this arrangement. There is no exception for voluntary donations, shipping and handling fees, or co-payments. An Aboriginal health service that accepts even a nominal donation for a free medicine would be in breach. There is no de minimis exception. Given the section uses “valuable consideration”, a service receiving any benefit (including in-kind) could be in breach.

Scope of qualified employees. The approval condition in section 9(2)(d) requires that one or more employees or contractors are “qualified under the law of the relevant State or Territory to supply all eligible pharmaceutical benefits.” This is an all-or-nothing condition: the qualified person must be able to supply all items in the eligible list, not just their scope of practice. A nurse who is only authorised to supply a subset of PBS items may not satisfy the condition. The instrument does not define “supply” - it could mean physical supply (handing over) or clinical authority (prescribing). Combined with section 12(2)(c) requiring the prescriber also to be qualified to supply all eligible pharmaceutical benefits, the instrument effectively requires the Aboriginal health service to have at least one employee or contractor with unrestricted authority to supply any PBS medicine that falls outside the exclusions. This may be a medical practitioner, which can be difficult to retain in remote areas.

Prescription requirements are strict. Section 12(1) lists nine elements that a remote area Aboriginal health service prescription must contain. If any element is missing (e.g., the dose or route of administration), the prescription is not a valid remote area Aboriginal health service prescription. If a pharmacist dispenses against it, the supply may not be “under this special arrangement” and the pharmacist may not be entitled to payment. The form of the prescription, if approved by the Health Secretary, must be used; a different format may be invalid.

Claims must be in writing in an approved form. Section 16(2) states the claim must be in writing and in the form (if any) approved under subsection (3). Subsection (4) disapplies subsections 99AAA(2), (4) and (5) of the Act. This means the pharmacist cannot rely on the ordinary electronic PBS claiming process. The Chief Executive Medicare may approve a form; if no form has been approved, the claim must be in writing but without specified format - which creates uncertainty about what is sufficient. There is no time limit for claims in the instrument, but the disapplication of the Act’s time limits may mean no time limit applies, or the general law governs.

Exclusion of Schedule 8 drugs. The definition of eligible pharmaceutical benefit in section 6 excludes benefits referred to in Schedule 8 to the current Poisons Standard. These are controlled drugs requiring special storage, prescribing and record-keeping. They cannot be obtained through this arrangement, so Aboriginal health services must arrange alternate supply for patients needing these medicines, possibly through a community pharmacy under normal PBS. This may create gaps in treatment for patients in remote areas who cannot easily access a community pharmacy.

For an Aboriginal health service seeking approval:

1. Ensure the entity has a primary function of meeting Aboriginal and Torres Strait Islander health care needs (section 9(2)(a)).
2. Confirm each clinic that will supply medicines is within a remote zone as defined by the November 1994 RRMA classification. Obtain a map or classification document to verify.
3. Verify the entity is not an approved pharmacist or approved hospital authority (section 9(2)(c)). If it holds such approval, it cannot participate; it may need to surrender that approval.
4. Employ or contract at least one health professional (a medical practitioner, nurse practitioner, or other authorised PBS prescriber) who is qualified under the relevant State or Territory law to supply all eligible pharmaceutical benefits. This means the person must have unrestricted authority to supply any PBS medicine that is not Schedule 8 and not limited to special arrangements. Retain evidence of their qualifications and scope of practice.
5. Prepare storage facilities that prevent unauthorised access, maintain chemical and biological stability and sterility, and comply with manufacturer conditions (section 9(3)). This includes temperature-controlled storage where required by product labels.
6. Submit a written application in the form approved by the Health Secretary (if any) (section 8). The form may require details about the service, its clinics, staff, storage, and procedures.
7. After approval, the Chief Executive Medicare will issue a registration number. This number must appear on all prescriptions and orders.

For an approved Aboriginal health service maintaining compliance:

• Only order eligible pharmaceutical benefits using an eligible order (section 11) - in writing, in the approved form if any, directly to an approved pharmacist or hospital authority.
• When a patient requires a medicine on a patient-specific basis, issue a remote area Aboriginal health service prescription that meets all the requirements of section 12. Ensure the prescriber is a PBS prescriber and employee/contractor and is State/Territory qualified to supply all eligible benefits. Include the registration number.
• Do not charge the patient any fee, co-payment, handling charge, or accept any donation or other valuable consideration for the medicine (section 17). This means the service absorbs the cost entirely; if the service operates on a fee-for-service model for consultations, the medicine component must be separate and free.
• Store medicines properly, keep stock records, and ensure only qualified employees or contractors supply medicines to patients (section 9(2)(e)).

For an approved pharmacist or approved hospital authority wishing to supply:

• Accept eligible orders from approved Aboriginal health services. Verify the service’s approval status and registration number.
• Supply only eligible pharmaceutical benefits (not Schedule 8 or prescriber bag items) in pack quantities.
• If the supply is in response to a remote area Aboriginal health service prescription, prepare and label the medicine in accordance with that prescription (section 13(2)). The preparation must be patient-specific.
• For each supply, calculate the payment claim. The amount is the price to pharmacists plus administration, handling and infrastructure fee (from the current determination under s98B(1)(a) of the Act) plus $3.47 handling fee, plus $5.49 if patient-specific. Do not include transport or cold chain costs.
• Make a claim for payment in writing to the Chief Executive Medicare, in the approved form if any (section 16). Keep a copy of the claim and supporting documents (eligible order and prescription where applicable). Do not use the ordinary PBS electronic claiming system for these supplies (section 16(4)).
• Note that the Conditions for Approved Pharmacists Determination 2017 does not apply to these supplies (section 18), but all other relevant laws (Poison Acts, storage requirements, privacy laws) still apply. The pharmacist should maintain a separate system to track that these supplies are not subject to the ordinary conditions.

General record-keeping: The instrument does not prescribe record retention periods, but prudent practice is to retain records for at least seven years (consistent with Commonwealth record-keeping requirements and the Act’s limitation period for payments). Records should include copies of eligible orders, remote area Aboriginal health service prescriptions (if any), proof of delivery to the Aboriginal health service, and copies of payment claims.