Introductory Info
Date introduced: 4 July 2019
House: House of Representatives
Portfolio: Veterans' Affairs
Commencement: Royal Assent.
History of
the Bill
A Bill by the same name, the Military Rehabilitation and
Compensation Amendment (Single Treatment Pathway) Bill 2019 (the first Bill),
was introduced to the House of Representatives on 14 February 2019.[1]
The Bill was not debated and lapsed when the 45th Parliament was dissolved on
11 April 2019.
The Military Rehabilitation and Compensation Amendment
(Single Treatment Pathway) Bill 2019 (the Bill), was introduced to the House of
Representatives on 4 July 2019. The provisions of the Bill are identical to the
first Bill with the exception of the commencement date. The first Bill’s
proposed commencement was 1 July 2019. The Bill’s commencement date is the
day of Royal Assent.
A Bills Digest was prepared in respect of the first Bill.[2]
This Bills Digest replicates much of the material in the earlier one.
Purpose of the Bill
The purpose of the Bill is to amend the Military
Rehabilitation and Compensation Act 2004 (the MRCA), the Veterans’
Entitlements Act 1986 (the VEA) and the Income Tax
Assessment Act 1997 to replace the two existing medical treatment
pathways with a single treatment pathway. The single treatment pathway will be
aligned with that in the VEA and the Safety, Rehabilitation and
Compensation (Defence-related Claims) Act 1988 (the DRCA). Under the
proposed amendments, medical treatment under the MRCA will be accessed
and provided through a Department of Veterans’ Affairs (DVA) Health Card.
The measure was announced in the 2018–19 Mid-Year
Economic and Fiscal Outlook as part of the Australian Veterans’ Wellbeing
Package and is expected to cost $0.1 million over three years from 2019–20.[3]
Background
There are three main Acts that provide for support and
compensation for veterans and their dependants:
-
the VEA, which primarily provides benefits and
entitlements for those who undertook wartime service, operational service,
peacekeeping service and hazardous military service before
1 July 2004, and/or peacetime military service from 7 December 1972
up to 30 June 1994[4]
- the DRCA, which provides coverage for illness, injury or
death arising from military service undertaken from 3 January 1949 to 30 June
2004; and for certain periods of operational service between 7 April 1994 and
30 June 2004[5]
and
- the MRCA, which provides coverage for illness, injury or
death arising from military service undertaken from 1 July 2004.[6]
Some VEA benefits, such as income support payments,
are not tied to periods of service but rather the type of service (for example,
whether it involved service during wartime in an area where there was danger
from hostile enemy forces). Other benefits, such as compensation payments and
benefits, are tied to periods of service—eligibility under one or more of the
three statutes will be determined by the period of service and the timing of
the event giving rise to compensation (such as an injury or death).
Health treatment
Members of the veteran community can be entitled to health
services and treatments at DVA’s expense under the three Acts described above.
Eligibility for certain treatments can depend upon the type and date of a
person’s military service (or their family member’s service), whether a health
condition or disease has been linked with the person’s service and whether
liability has been accepted under one of the Acts.
In most cases, access to treatment is provided via a DVA
Health Card. The type of card determines what treatments an individual is
eligible for.
The DVA Gold Card provides access to the full range of
medical, hospital, pharmaceutical, dental and allied health services in
Australia funded by DVA.[7]
Medical services are subject to the requirements of the Medicare Benefit
Schedule and prior approval from DVA may be necessary for some treatments.[8]
A patient contribution is required for pharmaceutical services and for nursing
home care. The Gold Card also provides for the costs of transport to access
treatment and medical services. Some recipients may be eligible for a small
fortnightly payment to assist with the costs of medicines, the Veterans
Supplement.
The Gold Card provides access to health treatments and
care for any condition—regardless of whether that condition is related to a
person’s service. Those in receipt of a veterans’ Disability Pension at the
special rate (totally and permanently incapacitated) receive a Gold Card marked
‘Totally and Permanently Incapacitated’.[9]
Other eligible holders would receive a card marked ‘All Conditions’ signifying
that the card can be used for medical treatment for any conditions.
The other health cards issued by DVA are the DVA Health
Card—Specific Conditions (White Card), the DVA Health Card—Pharmaceuticals Only
(Orange Card) and the Commonwealth Seniors Health Card.
The White Card provides access to health treatments and
care at DVA’s expense for disabilities and conditions accepted as war or
service related. ADF members and former members can also access treatments for
some specific conditions whether they are service related or not (known as
non-liability health care), including: cancer (malignant neoplasm), pulmonary
tuberculosis and any mental health condition.[10]
The Orange Card is issued to certain Commonwealth and
allied veterans and mariners and provides access to subsidised medicines under
the Repatriation Pharmaceutical Benefits Scheme (RPBS).[11]
The Commonwealth Seniors Health Card is available to those
over pension age who do not receive an income support pension from DVA or a
payment from Centrelink and who meet an income test.[12]
It provides access to subsidised medicines under the Pharmaceutical Benefits
Scheme.
Treatment under the MRCA
Treatment under the MRCA is defined as:
treatment provided, or action taken, with a view to:
a) restoring
a person to physical or mental health or maintaining a person in physical or
mental health; or
b) alleviating
a person’s suffering; or
c) ensuring
a person’s social well‑being.[13]
Treatments include:
a) providing
accommodation in a hospital or other institution, or providing medical
procedures, nursing care, social or domestic assistance or transport; and
b) supplying,
renewing, maintaining and repairing artificial replacements, medical aids and
other aids and appliances; and
c) providing
diagnostic and counselling services.[14]
Treatment pathways in the MRCA
The MRCA offers two different health treatment pathways
for former ADF members: compensation for the cost of reasonable medical
treatment (known as Treatment Pathway 1) and the Health Card system described
in the previous section (known as Treatment Pathway 2). Treatment Pathway 1 is
intended as the pathway for short-term conditions while Treatment Pathway 2 is
intended for those with a permanent condition which may require treatment in
the future.[15]
DVA must make an assessment as to which treatment pathway
is appropriate unless a person is entitled to a Gold Card (in which case they
are granted a Gold Card). Eligibility for a Gold Card is determined primarily
by an individual’s war or defence service (or their deceased partner’s/parent’s
service in the case of dependants) or by a service-related impairment that
qualifies the person for a certain rate of Disability Pension.[16]
Generally, a person whose treatment needs are assessed as
short-term or who is in the acute phase of treatment will be allocated to
Treatment Pathway 1 and provided with a Treatment Authority letter.[17]
This letter sets out a specified authority for treatment of the conditions for
which liability is accepted—that is, the treatments that are approved and the
costs of which will be reimbursed by DVA. The principles guiding the approval
of medical treatments are that the treatment:
- be
necessary to improve any conditions for which liability has been accepted
- do
no harm
- be
of reasonable cost in the context of the Medical Benefits Schedule (MBS), the Pharmaceutical
Benefits Scheme (PBS) and the Repatriation Medical Fee Schedule
- be
clinically effective (considering the available evidence) and
- be
accepted clinical practice.[18]
Some specific treatments—including hospitalisation,
surgery, most dental work and non-core allied health treatments—will require
prior approval before admission or the procedures commence.[19]
Treatment Pathway 2 is intended for chronic and permanent
conditions. Gold Cards are issued where a person has 60 or more impairment
points (as assessed under the MRCA) or where they become eligible for
the Special Rate Disability Pension.[20]
In other cases, individuals are issued with a DVA White Card. Treatment Pathway
2 is governed by three legislative instruments made under section 286 of the MRCA:
Preference for Treatment Pathway 2
DVA’s policy guide states: ‘Delegates should note that it
is Departmental Policy to issue a Repatriation Health Card [a DVA Health Card],
rather than provide treatment via Treatment Pathway 1, wherever practical’.[21]
The 2011 Review of Military Compensation Arrangements had
found there were a number of advantages to Treatment Pathway 2 compared to
Pathway 1:
- Pathway
2’s treatment principles provide automatic approval for most medical treatment
required because of a service injury or disease while under Pathway 1, a person
must obtain prior approval on each occasion they require treatment—this
requires a delegate of the Military Rehabilitation and Compensation Commission
(MRCC) to make a decision about a requested mode of treatment.[22]
- Treatments
provided via the DVA health card system are governed by DVA’s schedule of fees
(which are aligned with the Medicare Benefits Schedule) and represent better
value for money than charges by medical and allied health providers in workers’
compensation schemes. The system is also streamlined with electronic invoicing
which is more efficient than providers sending invoices to DVA, MRCC delegates
having to assess the invoice and manually enter the payment details.[23]
The MRCA Private Patient Principles used by Pathway 2 also provide for
automatic prior approval for hospital admissions within a contracted fee
schedule.
- DVA
Health Card holders can access medicines through the Repatriation
Pharmaceutical Benefit Scheme (RPBS) which includes all items on the general
Pharmaceutical Benefits Scheme and some additional items. Requests for
medicines outside the RPBS are individually assessed by qualified DVA
pharmacists. The report found that under Treatment Pathway 1, ‘requests are
frequently received for over-the-counter medicines, such as vitamin
supplements, that may or may not be of therapeutic benefit. It can be complex
for a delegate to investigate and decide on these requests’.[24]
- Rehabilitation
aids and appliances need to be individually assessed and approved by delegates
under Pathway 1 while Pathway 2 provides access to the Rehabilitation
Appliances Program which includes a schedule of equipment that can be provided
and includes contractual arrangements for professional assessments and
provision of aids.[25]
- Similarly,
Pathway 2 provides access to DVA’s Community Nursing Program while Pathway 1
requires individual arrangements to be made for nursing services, which can be
more expensive.[26]
Review of Military Compensation’s findings
The 2011 Review of Military Compensation considered
whether there should only be one pathway. It suggested that Pathway 1 could be
abolished if delegates were reluctant to move people onto Treatment Pathway 2,
and that it would remove the complexity of having two pathways. However, the
Review acknowledged that a reimbursement model was often used in covering
medical expenses incurred from the period between the onset of the
condition/the person’s claim and the issuing of a DVA Health Card.
The Review suggested that there was insufficient data to
determine the question of a single pathway at the time, and recommended that
the question should be reviewed again in three years.[27]
The Review stated that costs ‘should be manageable in the intervening period
through assessment of needs and management of the transfer to Treatment Pathway
2’.[28]
In its response to the Review, the then Labor Government
accepted the recommendation to review the issue in three years after more data
was gathered to determine the implications of a single treatment pathway.[29]
No further review of the treatment pathways has been
published to date and it is unclear if any such review was undertaken.
Committee consideration
Senate Standing Committee for the Selection of Bills
In its second report of 2019, the Senate Selection of
Bills Committee deferred consideration of the Bill to its next meeting.[30]
Senate Standing Committee for the Scrutiny of Bills
At the time of writing, the Senate Scrutiny of Bills
Committee had not considered the Bill. The Committee had no comments on the
first Bill.[31]
Policy position of non-government parties/independents
At the time of writing the non-government parties and
independents had not stated a position on the Bill nor did they state a
position on the first Bill.
Position of major interest groups
At the time of writing, none of the major ex-service
organisations appear to have commented directly on the Bill or the first Bill.
In 2012, the Australian Peacekeeper and Peacemaker
Veterans’ Association (APPVA) responded to the Australian Government response
to the Review of Military Compensation Arrangements. The APPVA rejected the
Government’s response to the recommendation regarding a further review of the
single treatment pathway option:
We insist that both Treatment pathways remain as treatment
cards do not allow for extra treatment required for some veterans.
In other words there exists a cap or treatment schedule
within the VEA, which has in some instances become arduous to a veteran who
requires high-end treatment.
The Provisions within MRCA Chapter 6 (Treatment for Injuries
and Diseases) must be retained to allow such flexibility of treatment options
to the veteran.[32]
Financial implications
According to the Explanatory Memorandum, the amendments
proposed in the Bill will cost $91,000 over the forward estimates.[33]
The first Bill’s financial impact was estimated at $69,000.[34]
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.[35]
Parliamentary Joint Committee on Human Rights
At the time of writing, the Parliamentary Joint Committee
on Human Rights had not considered the Bill. The Committee considered the first
Bill and found that it did not raise any human rights concerns.[36]
Key issues and provisions
The Bill will simplify the current provision of health
treatments under the MRCA so that all clients will access treatment via
a DVA Health Card rather than through two different ‘pathways’: one where a DVA
Health Card is issued and used to access treatments at DVA’s expense, and one
where treatment costs are reimbursed. The proposed single pathway model will be
easier for DVA to administer and will also reduce the requirement for some
veterans to meet the upfront costs of certain treatments before being
reimbursed by DVA.
Under the proposed single pathway model, reimbursement of
treatments obtained prior to a claim determination being made will still be
available, where the MRCC considers that it was reasonable for the person to
obtain the treatment.
Numbers affected
According to a statement by the DVA Secretary, Liz Cosson,
around 4,000 veterans will have access to a White Card as a result of the
Bill’s amendments:
The changes to legislation administered by DVA are not
designed to remove any entitlements, or lower the benefits for clients, but to
simplify treatment arrangements. Importantly, it provides veterans with an
easier way to gain access to treatment which is not compromised by their
ability to afford treatment.[37]
Provision for treatments outside the principles
As noted above, the APPVA raised concerns in 2012 around
the proposed single treatment pathway and whether it would prevent some
veterans accessing high-end treatments not provided for under the DVA Health
Card model.[38]
The Bill includes provisions which will allow for the
payment of compensation for health treatments in special circumstances. One of
these provisions allows for compensation to be paid where the MRCC is satisfied
that special circumstances exist in relation to the person and the treatment
obtained.[39]
The Explanatory Memorandum states that this is intended to cover those with
‘complex-high needs who may require treatment outside of the MRCA Treatment
Principles’.[40]
Key provisions
Military Rehabilitation and Compensation Act 2004
Item 1 amends section 269 of the MRCA
to substitute a new simplified outline of Chapter 6—Treatment for injuries and
diseases. The new simplified outline has removed references to compensation for
the cost of treatment (reimbursement) currently provided for in Part 2 of the
Chapter.
Item 2 repeals Part 2 of Chapter 6 which is
the section providing for the payment of compensation for the cost of
treatment—known as Treatment Pathway 1.
Item 16 inserts new Division 1A of Part 4 of
Chapter 6 which will provide for the payment of compensation of treatment
in special circumstances. Special circumstances include treatments reasonably
obtained before the MRCC has made a determination that the person is entitled
to the treatment (new section 288A); treatments obtained prior to a
person’s death, where the death is considered service-related and the MRCC has
accepted liability (new section 288B); and where the MRCC is satisfied
that special circumstances exist in relation to the person and the treatment
obtained (new section 288C). In all cases, a claim for compensation in
respect of the person must have been made under section 319 of the MRCA.
The Explanatory Memorandum states that new section 288C is
intended to cover a small number of individuals ‘with complex-high needs who
may require treatment outside of the MRCA Treatment Principles’.[41]
New section 288D provides that compensation is not
payable under proposed sections 288A, 288B and 288C where the
Commonwealth is liable to pay compensation in respect of the treatment under a
section in another chapter of the Act. New section 288E provides that no
compensation is payable for the cost of treatment obtained for an aggravated
injury or disease if, at the time of the treatment, the aggravation or material
contribution had ceased.
New section 288F provides for the MRCC to determine
the amount of compensation payable under proposed sections 288A, 288B and
288C—the amount must be reasonable for the cost of the treatment and must not
be more than the amount actually incurred in obtaining the treatment (and
disregarding any increases in the cost of a particular treatment after that
treatment has been obtained).
Item 20 amends section 318 to remove
references to the two treatment pathways. Section 318 is a simplified outline
to Part 1 of Chapter 7 which provides for claims to be made under MRCA.
The simplified outline currently refers to the MRCC deciding, under section
327, whether a person should be paid compensation under Part 2 of Chapter 6
(Treatment Pathway 1) or whether the person should be provided with treatment
under Part 3 of Chapter 6.
Item 23 repeals section 327. Section 327
sets out the current assessment and determination process for the two treatment
pathways. By repealing this section, all future treatments provided to those
with an accepted MRCA claim would be through the DVA Health Card
(Treatment Pathway 2) model provided for under Part 3 of Chapter 6 of the Act.
Item 30 contains transitional provisions and
provides that claims for compensation under current subsection 271(2) (relating
to treatments provided prior to a person’s service death) or section 273
(relating to treatments provided prior to a determination being made) which had
been made but not determined before commencement of the amendments in this
Bill, are to be taken as claims for compensation under new sections 288B or
288A, respectively. The transitional provisions also provide for all
existing Treatment Pathway 1 clients to be considered Treatment Pathway 2
clients from the commencement date of the amendments in the Bill.