Bills Digest No.
37, 2020–21
PDF version [320KB]
Melanie Conn
Social Policy Section
8
December 2020
Contents
Purpose of
the Bill
Background
Committee
consideration
Policy
position of non-government parties/independents
Position of
major interest groups
Financial
implications
Statement of
Compatibility with Human Rights
Key issues
and provisions
Concluding
comments
Date introduced: 29
October 2020
House: House of
Representatives
Portfolio: Health
Commencement: The
day after the Act receives the Royal Assent
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at December 2020.
Purpose of
the Bill
The purpose of the Health
Insurance Amendment (Compliance Administration) Bill 2020 (the Bill) is to
amend the Health
Insurance Act 1973 to clarify the circumstances in which the
Commonwealth can recover a Medicare benefit or payment where it has been
provided on the basis of false or misleading information—regardless of the form
in which that information is provided.
Background
About Medicare
Medicare is Australia’s national health insurance scheme
which subsidises the cost of many medical and allied health services. It is
governed by the Health Insurance Act and related regulations. Medicare
operates by paying a specified benefit (in the form of a rebate) for an
eligible health or medical service for which a claim is submitted.
The Health Insurance Act includes provisions for
the Commonwealth to recover amounts paid that were overpaid or should not have
been paid.[1]
This could arise as a result of incorrect claiming, inappropriate practice or fraud
by health care providers.
The Bill continues efforts to protect the integrity and
financial viability of Medicare, which helps to meet the cost of hundreds of
millions of services each year. In 2018–19, Medicare paid benefits totalling
$24 billion for 424 million services.[2]
That year, the Department of Health recovered $49.3 million in claims
which should not have been paid, and reported $123.4 million in estimated
savings through changes in claiming behaviour of providers.[3]
Previous changes to debt recovery
The Bill follows a more substantive legislative change
aimed at improving health provider compliance arrangements which was contained
in the Health
Legislation Amendment (Improved Medicare Compliance and Other Measures) Act
2018 (2018 Act). Those changes came into effect on 1 July 2018.[4]
The 2018 Act contained improvements which were
intended to ‘strengthen debt recovery powers, including compulsory setoffs and
garnishee processes’. According to the Explanatory Memorandum to the
originating Bill:
When this legislation was announced in the 2017–18 Budget,
only 20 per cent of Medicare debts raised were being recovered. While the debt
recovery rate is now around 40 per cent, stronger powers are needed so that the
Government can recover more of the funds that have been overpaid due to
incorrect claiming, inappropriate practice and fraud.[5]
The enactment of the 2018 Act was expected to
generate net savings of $103.8 million over four years.[6]
Committee
consideration
Senate Community Affairs
Legislation Committee
The Bill was referred to the Senate Community Affairs
Legislation Committee (Community Affairs Committee) for inquiry and report by 2
December 2020.[7]
The inquiry received five submissions, four from stakeholder groups and one
from the Department of Health.
The Community Affairs Committee recommended that the Bill
be passed. As explained in the Committee’s report:
The Health Insurance Amendment (Compliance Administration)
Bill 2020 updates Medicare compliance provisions to address technological
advancements in claiming technologies over the past 30 years. The new
provisions will mean that the Department of Health can recover overpaid
Medicare subsidies which were paid based on false or misleading information in
a claim, regardless of whether that claim is made in an electronic or manual
form. The amendments do not make any changes to the Commonwealth’s Medicare
compliance policy or processes, and are supported by health practitioners. The
committee is of the view that the bill will play a vital role in protecting the
integrity and financial viability of the Medicare system, which provides
millions of health care services to Australians each year.[8]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
had no comment on the Bill.[9]
Policy
position of non-government parties/independents
In requesting scrutiny of the Bill by the Community
Affairs Committee, Australian Greens Senator Rachel Siewert asked that ‘the
impact debt recovery will have on people who have accessed Medicare’ be
considered, ‘especially in light of the robodebt program’.[10]
At the time of writing, no further comments from
non-government parties/independents on this Bill had been identified.
Position of
major interest groups
The Australian Medical Association and Royal Australian
College of General Practitioners (RACGP) expressed no concerns about the Bill
in their submissions to the Community Affairs Committee.[11]
The RACGP stated:
We have been advised by the Department of Health (the
Department) that the proposed amendments do not influence the scope or
frequency of debt recovery activities, nor increase the debt recovery powers of
the Department. We understand the Bill will not expand the capacity of the
Department to undertake compliance activities or increase the administrative
burden for general practitioners (GPs) in the event of any compliance activity.
The Department has confirmed that the retrospective application does not apply
to existing court cases which have not yet been the subject of finally
determined proceedings, or proceedings in which judgement is reserved. As such,
we have no immediate concerns about the passage of the Bill.[12]
Medical indemnity insurance provider MIGA endorses the
need to maintain Medicare system integrity and ensure the system remains fit
for purpose amidst technological change. MIGA objected to the retrospective
recovery of Medicare claims under the proposed changes, which could permit
recovery relating to compliance processes already underway or completed prior
to commencement of the changes, unless already heard by a court.[13]
The Royal Australasian College of Surgeons supported the
context and need for improved Medicare compliance but expressed concern about whether
the amendments would affect procedural fairness.[14]
The Department of Health in its submission to the Community Affairs Committee
outlined the arrangements affording procedural fairness to a practitioner that
will continue to apply.[15]
Financial
implications
The Explanatory Memorandum states there is no financial
impact from this Bill.[16]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed
the Bill’s compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[17]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights had no
comment on the Bill.[18]
Key issues
and provisions
Section 129AC of the Health Insurance Act relates
to recovery of amounts overpaid and administrative penalties. Subsection
129AC(1) provides that where, as a result of a false or misleading statement, an
amount of benefit or a payment made under the Health Insurance Act
exceeds the amount that should have been paid, the excess is recoverable as a
debt due to the Commonwealth.
Items 1–4 of the Bill amend subsection 129AC(1) to
replace references to ‘making a false or misleading statement’ with references
to the ‘giving of false or misleading information’.
Items 6, 8 and 9 make equivalent amendments to
subsection 129ACA, which provides for a shared debt recovery scheme.[19]
Items 5 and 7 insert proposed subsections 129AC(1AAA)
and 129ACA(1A) respectively to make clear that the form in which the
false or misleading information is given is immaterial. This provides
flexibility in the form in which information may be provided and can be
regarded as modernising the circumstances in which debt can be recovered.
Existing subsection 129AC(1) has been unchanged since
added to the Health Insurance Act by the Health Legislation
Amendment Act (No. 2) 1985.[20]
Medicare claims have changed significantly since that time, with many claims
today processed electronically, either in the doctor’s office or by submitting
a claim through a Medicare online account or the Medicare mobile app.[21]
Speaking in relation to the
Bill, Minister for Population, Cities and Urban Infrastructure, Alan Tudge
stated:
It is worth recalling that the
provisions for recovery of amounts overpaid were first enacted more than three
decades ago, that is – in digital technology timeframes, at least – eons ago. Technological
advances in Medicare claiming may be easily accommodated because of the
stipulation that it is the giving of information, regardless of its form,
rather than the making of a statement that will be the basis for a claim for
Medicare payment.[22]
These amendments are also intended to clarify that
recovery of Medicare payments is permitted where incorrect information is
provided, whether intentionally or unintentionally. As outlined by the Minister:
The Bill corrects a possible misunderstanding about the
operation of the Act. Medicare benefits are recoverable if incorrect
information provided in connection with a claim leads to an overpayment, even
if the information was not intentionally incorrect [emphasis added]. [23]
Item 10 provides that the amendments will apply
retrospectively, except in relation to proceedings where judgment has been
reserved or the matter has been finalised by a court.
The Bill makes no change to other provisions in the Health
Insurance Act relating to debt recovery processes.
Concluding comments
The Bill modernises the terminology around the
circumstances in which the Commonwealth may recover a Medicare payment,
replacing ‘statement’ with ‘information’. It is intended to recognise that
electronic claiming (and potential future developments) alters the way in which
claims are made, and therefore, how the false or misleading basis for a claim
may occur.
[1]. Health
Insurance Act 1973, sections 129AC and 129ACA.
[2]. A
Tudge, ‘Second
reading speech: Health Insurance Amendment (Compliance Administration) Bill 2020’,
House of Representatives, Debates, (proof), 29 October 2020, p. 2.
[3]. Australian
National Audit Office (ANAO), Managing health
provider compliance: Department of Health, Report, 17, 2020–21, ANAO,
Canberra, 2020, p. 6.
[4]. For
information about the measures in the originating Bill see K Ramesh, Health
Legislation Amendment (Improved Medicare Compliance and Other Measures) Bill
2018, Bills digest, 124, 2017–18, Parliamentary Library, Canberra,
2018.
[5]. Explanatory
Memorandum, Health Legislation Amendment (Improved Medicare Compliance and
Other Measures) Bill 2018, p. 1.
[6]. Ibid.,
p. 2.
[7]. The
terms of reference for the inquiry, submissions to the Senate Community Affairs
Legislation Committee and the Committee’s final report are available in the inquiry
homepage.
[8]. Senate
Community Affairs Legislation Committee, Health
Insurance Amendment (Compliance Administration) Bill 2020 [Provisions],
The Senate, Canberra, December 2020, p. 8.
[9]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 16, 2020, 20 November 2020, p. 29.
[10]. Senate
Standing Committee for the Selection of Bills, Report,
10, 2020, The Senate, Canberra, 12 November 2020.
[11]. Australian
Medical Association (AMA), Submission
to the Senate Community Affairs Legislation Committee, Inquiry into the
Health Insurance Amendment (Compliance Administration) Bill 2020,
[Submission no. 3], 24 November 2020.
[12]. Royal
Australian College of General Practitioners (RACGP), Submission
to the Senate Community Affairs Legislation Committee, Inquiry into the
Health Insurance Amendment (Compliance Administration) Bill 2020,
[Submission no. 2], 23 November 2020.
[13]. MIGA,
Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Health
Insurance Amendment (Compliance Administration) Bill 2020, [Submission no.
1], 22 November 2020.
[14]. Royal
Australasian College of Surgeons, Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Health
Insurance Amendment (Compliance Administration) Bill 2020, [Submission no.
4], 27 November 2020.
[15]. Department
of Health, Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Health
Insurance Amendment (Compliance Administration) Bill 2020, [Submission no.
5], November 2020.
[16]. Replacement
Explanatory Memorandum, Health Insurance Amendment (Compliance Administration)
Bill 2020, p. 4. The Replacement Explanatory Memorandum replaced the
original Explanatory
Memorandum tabled on 29 October 2020. That original Explanatory Memorandum
contained errors in referring to amendments that were not actually included in
the Bill.
[17]. The
Statement of Compatibility with Human Rights can be found at page 5 of the Replacement
Explanatory Memorandum to the Bill.
[18]. Parliamentary
Joint Committee on Human Rights, Human
rights scrutiny report, 14, 2020, 26 November 2020, p. 56.
[19]. Where
contractual or other arrangements exist between a practitioner and an employer
or corporate entity, both may be held responsible for the repayment of a
compliance debt.
[20]. Inserted
by item 52 of the Health Legislation
Amendment Act (No. 2) 1985.
[21]. Services
Australia, ‘Medicare
claims’, Services Australia website, last updated 21 February 2020.
[22]. Tudge,
‘Second
reading speech’, op. cit., p. 2.
[23]. Ibid.
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