Bills Digest No. 10, 2022–23
PDF version [479KB]
Leah Ferris
Law and Bills Digest Section
1
September 2022
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Key points
- The Bill is drafted in almost identical terms to a Bill introduced by the previous Government in the 46th Parliament that was not debated and lapsed upon dissolution of the Parliament.
- The Bill proposes to make a number of changes to the Commonwealth’s health provider compliance program to strengthen the ability of the Commonwealth to recover debts owed by health providers who have engaged in inappropriate practice.
- The most significant amendments include new sanctions and increased maximum penalties for body corporates and non-practitioners.
- Overall, the proposed amendments appear to be uncontroversial and unopposed by stakeholders, though stakeholders have continued to raise broader concerns about the complexity of the Medicare system for healthcare providers and the challenges in complying with Medicare obligations.
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Contents
History of the Bill
Purpose and Structure 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
Date introduced: 3
August 2022
House: Senate
Portfolio: Health
and Aged Care
Commencement: The
day after 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 September 2022.
History of
the Bill
The Health
Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021
(the 2021 Bill) was introduced into the House of Representatives on 21 October
2021. The 2021 Bill was not debated and lapsed at the dissolution of the 46th
Parliament on 11 April 2022.[1]
The Health
Legislation Amendment (Medicare Compliance and Other Measures) Bill 2022 was introduced into the House of Representatives on
3 August 2022 and is drafted in almost identical terms to the 2021 Bill. A
Bills Digest was prepared with respect to the 2021 Bill and the majority of the
content in this Bills Digest has been sourced from that earlier one.[2]
Purpose and Structure of the Bill
The Health
Legislation Amendment (Medicare Compliance and Other Measures) Bill 2022
(the Bill) amends the Health Insurance
Act 1973 (HIA), the Dental Benefits Act
2008 (DBA), and the National Health Act
1953 (NHA) to make a number of changes to the Commonwealth’s health
provider compliance program.
The Bill is comprised of one Schedule which is divided
into four Parts:
- Part
1 amends the HIA to provide for a number of amendments to the operation
of the Professional Services Review (PSR) Scheme, including allowing the
Director of PSR to enter into agreements with body corporates
- Part
2 amends the HIA, NHA and DBA to clarify that a person or
body corporate owing a debt to the Commonwealth may only make one application
to the Administrative Appeals Tribunal with respect to a reconsidered
decision/notice of assessment/shared debt determination even where multiple
garnishee notices have been issued in relation to the debt
- Part
3 makes a number of amendments to the HIA, NHA and DBA to
clarify the Commonwealth’s debt recovery arrangements following the passage of
the Health Legislation
Amendment (Improved Medicare Compliance and Other Measures) Act 2018
and
- Part
4 amends the NHA and DBA respectively to replace references in
those Acts to ‘making a false or misleading statement’ with references to the
‘giving of false or misleading information’.
Background
The HIA, NHA and DBA set out a
legislative framework for the provision and claiming of services and benefits
with respect to the three major public health funding schemes: the Medicare
Benefits Schedule (MBS), the Pharmaceutical Benefits Scheme (PBS) and the Child
Dental Benefits Scheme (CDBS).
In the 2018–19 financial year, the combined expenditure of
the three health schemes and the Practice Incentive Program (PIP) was $36.6
billion (which is estimated to have grown to over $42.6 billion in 2020-21),[3]
representing about half of all Australian government expenditure on health.[4]
The 2018–19 expenditure for the relevant public health funding schemes and the
PIP is set out at Table 1 below.
Table 1: Department of Health: health funding schemes and
incentive programs
| Scheme/program |
Purpose |
2018-2019
expenditure |
| MBS |
The MBS, established
under the HIA, is Australia’s national health insurance scheme which
subsidises the cost of selected medical services for eligible patients that
are provided by eligible practitioners. |
$24.1 billion |
| PBS |
The PBS, established
under the NHA, is part of the Australian Government’s broader National
Medicines Policy. Under the PBS, the Australian Government subsidises the
cost of medicine for most medical conditions. |
$11.8 billion |
| CDBS |
The CDBS, established
under Part VAA of the HIA and the DBA, is a Commonwealth funded
dental scheme. The scheme provides benefits for a wide range of dental
services, such as examinations, x-rays and preventive treatments to children
up to 17 years of age whose families receive certain government benefits (eligible
children). |
$352.1 million |
| PIP |
Practice Incentive
Program (PIP) payments support eligible general practices that meet specific
performance criteria designed to encourage quality care, enhanced capacity,
and improved access and health outcomes for patients. Incentive payments
include eHealth, quality improvement, teaching, Indigenous health, after
hours care, procedural activities and loadings for rural locations. |
$321.9 million |
Source: ANAO, Managing Health
Provider Compliance, Auditor-General Report, 17, 2020–21, (Canberra:
ANAO, 2020), 12 and DoH, Health
Provider Compliance Strategy 2021–22, (Canberra: DoH, 2021), 1.
The relevant Acts also provide for post payment compliance
activities to be undertaken by the Government, to identify incorrect claiming
and recover debts in relation to the three schemes and the PIP.
The Provider Benefits Integrity Division (PBID) in the
Department of Health (Health) is responsible for the Commonwealth’s health
provider compliance program.[5]
Services Australia (formerly the Department of Human Services) administers the MBS,
PBS and CDBS on behalf of Health and makes payments. Health is responsible for
the legislation and policy for the schemes and enforcing compliance of provider
billing.
The Australian National Audit Office reported that in the
2018-2019 financial year, 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.[6]
Previous changes to
debt-recovery arrangements
In recent years, the Parliament has passed three Bills
aimed at improving health provider compliance arrangements:
Committee consideration
Senate Standing Committee for
the Selection of Bills
On 4 August 2022, the Senate Selection of Bills Committee
deferred consideration of the Bill to its next meeting.[10]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
has yet to consider this Bill.[11]
The Scrutiny of Bills Committee raised concerns with the 2021 Bill, which are
outlined in the ‘Key issues and provisions’ section of this digest.
Senate Community Affairs Legislation Committee
The Senate Community Affairs Legislation Committee (the
Community Affairs Committee) conducted an inquiry into the 2021 Bill. As part
of the inquiry, the Committee received nine submissions and did not hold a
public inquiry.[12]
The Committee tabled its report on 30 March 2022 and recommended that the Bill
be passed.[13]
In acknowledging some of the ongoing concerns raised by
stakeholders regarding ‘the complexity of the Medicare system, compliance
burdens for practitioners and the adequacy of support to achieve compliance’,
the Committed encouraged the Government ‘to continue stakeholder engagement and
consultation processes to improve the operation of the PSR’.[14]
Policy position of
non-government parties/independents
At the time of writing, non-government parties and
independents have not commented publicly on the Bill.
Position of major interest
groups
In its submission to the Community Affairs Committee on
the 2021 Bill, the Department of Health stated that a range of stakeholders
(including the Australian Medical Association, the Royal Australian College of
General Practitioners, peak groups, and medical defence organisations) were
consulted on the measures contained in the Bill.[15]
The Department advised that while stakeholders were
broadly supportive of the measures, some stakeholders had raised concerns about
the expansion of the ability of the Government to impose sanctions on persons
who are not practitioners and the application of powers to recover debts from
practitioners’ estates.[16]
These concerns are discussed further in the ‘Key issues and provisions’ section
of the digest.
In its report, the Community Affairs Committee noted that
the submissions received by stakeholders were generally supportive of the
measures contained in the Bill.[17]
However, the report also referred to broader concerns raised by stakeholders,[18]
including the need for the Department to prioritise Medicare compliance
education for healthcare practitioners/providers alongside legislative change.[19]
Financial implications
The Explanatory Memorandum states there are no financial
implications arising from the Bill.[20]
By improving debt-recovery arrangements for health
providers, the Bill may increase the amount of money which the Commonwealth can
recover and may lead to a reduction in incorrect claiming by health providers.
Statement of Compatibility
with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011, 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 to the extent there are any
limitations on human rights, these are necessary, reasonable and proportionate
to the legitimate objectives of the Bill.[21]
Potential human rights implications with respect to particular amendments are
discussed further in the ‘Key issues and provisions’ section of this Bills
Digest.
Parliamentary Joint Committee
on Human Rights
At the time of writing, the Parliamentary Joint Committee
on Human Rights has yet to consider this Bill. The Committee had no comments
with respect to the 2021 Bill.[22]
Key issues and provisions
Part 1 - Changes to the
Professional Services Review Scheme
Part VAA of the HIA establishes the PSR Scheme. The
purpose of the PSR Scheme is to review and investigate the provision of
services by a practitioner to determine whether the practitioner has engaged in
inappropriate practice.[23]
Subsection 81(1) of the HIA defines ‘practitioner’
to include medical practitioners, dentists, optometrists, chiropractors,
midwives, nurse practitioners, physiotherapists, podiatrists and osteopaths. Subsection
81(1) also defines ‘service’ to mean rendering or initiating of services under
the MBS, CBDS or a relevant Department of Veterans’ Affairs (DVA) law,[24]
or prescribing under the PBS.
Subsection 82(1) of the HIA defines ‘inappropriate
practice’ as conduct that is such that a PSR Committee could reasonably
conclude that it would be unacceptable to the general body of the members of
the profession in which the practitioner was practising when they rendered
or initiated the services. Subsection 82(1A) provides that subject to
exceptional circumstances, a practitioner engages in inappropriate practice in
rendering or initiating services during a particular period (the relevant
period) if the circumstances in which some or all of the services were rendered
or initiated constitute a prescribed pattern of services.[25]
Paragraph 82(2)(b) provides that a person who is an officer of a body corporate
engages in inappropriate practice where the person knowingly, recklessly or
negligently causes or permits a practitioner employed by the body corporate to
engage in such conduct.
Section 83 of the HIA allows the Minister for
Health and Aged Care (the Minister) to appoint a medical practitioner to be the
Director of PSR (the Director).[26]
The Minister must not appoint a person unless the Australian Medical
Association (AMA) has agreed to the appointment.[27]
The Minister also has the power to appoint medical practitioners as Deputy
Directors of PSR and as members of the PSR Review Panel.[28]
In reviewing and investigating the provision of services
by a practitioner, PSR undertakes a three‑stage process (noting that a
review may be resolved following the first stage):
- the
first stage involves the consideration by the Director of PSR of whether a
practitioner might have engaged in inappropriate practice
- the
second stage is a peer review process by a PSR Committee (constituted under
Division 4 of Part VAA of the HIA) to determine whether the practitioner
did engage in inappropriate practice
- the
third and final stage involves the consideration and determining of an
appropriate outcome by the Determining
Authority (a statutory agency established under Division 5 of Part VAA of
the HIA).[29]
Clarification of the ability
of the CEM to refer matters to the Director of PSR
The Department of Health monitors practitioners' claiming
patterns. Under the HIA, only the Chief Executive of Medicare (CEM) may
refer cases of inappropriate practice to the Director of PSR. There is no
ability for PSR to initiate reviews of practitioners without a referral from
the CEM.
Currently, the CEM has the discretion to decide whether or
not to request the Director review the provision of services by a practitioner
unless the services rendered or initiated by the practitioner constitute a prescribed
pattern of services, in which case the CEM must refer the practitioner
to the Director.[30]
Items 3 and 4 of the Bill amend subsection
86(1) of the HIA to clarify that the CEM may request that the Director
review the provision of services by a person where it appears to the CEM that there
is a possibility that the person may have:
- provided
services during the period and
- engaged
in inappropriate practice in the provision of services.
The Explanatory Memorandum provides that these amendments
are intended to clarify ‘that there is no requirement for the CEM to undertake
an investigation to objectively determine that a particular person provided
services and/or engaged in inappropriate practice, prior to making a request to
the Director’.[31]
Senator Katy Gallagher’s second reading speech on the Bill
clarified this point:
Following recent observations of the Federal Court regarding
jurisdictional fact, the Bill also clarifies that a referral to the PSR may be
made where it appears that there is the possibility that a person may have
engaged in inappropriate practice in the provision of services. Under the PSR
scheme, it is ultimately a matter for the PSR to investigate whether a person
has provided services, and whether the conduct of the person under review in
relation to the rendering or initiation of those services amounts to
inappropriate practice.[32]
The proposed amendments also clarify that in reviewing the
provision of services by a person, the Director of PSR may also examine whether
the services were provided by that person or another person. The Explanatory
Memorandum notes that these changes are intended to ‘further explain’ what a
review conducted by the Director of PSR may entail.[33]
New power for the Director of
PSR to enter into agreements with corporate entities
Upon completing a review of the provision of services by a
practitioner, the Director of PSR can decide not to take further action, enter
into an agreement with the practitioner, or refer the matter to the relevant
PSR Committee.[34]
Currently if the person under review is a practitioner,
the Director and the person may enter into a written agreement under which:
- the
person acknowledges that the person engaged in inappropriate practice in
connection with rendering or initiating specified services during the review
period and
- specified action in relation to the person is
to take effect.[35]
Subsection 92(2) of the HIA specifies the kind of
actions that may be taken, including the person being reprimanded or
disqualified or having to repay the Commonwealth where a benefit has been paid
as a result of inappropriate practice. An agreement between a practitioner and
the Director of PSR does not take effect unless it is ratified by the
Determining Authority.[36]
Items 7, 9, 11, 13, 14 and 18 of the Bill amend
section 92 of the HIA to allow the Director of PSR to enter into
agreements with any person, including non-practitioners and body corporates.
The Explanatory Memorandum states that these amendments will give PSR ‘the
flexibility to deal with non-practitioner persons under review in a timely and
cost-effective manner and avoid the lengthier and more resource-intensive
process of review by a [PSR] Committee’.[37]
Item 18 amends subsection 92(7) to define an associated
person, in relation to a person under review, to mean:
- an employee of the person under review or
- a person otherwise engaged by the person under
review or
- an employee of a body corporate of which the
person under review is an officer or
- a
person otherwise engaged by a body corporate of which the person under review
is an officer.[38]
Item 6 repeals and replaces subsection 92(1) to
allow any person to enter into an agreement with the Director acknowledging
that they have engaged in inappropriate practice in connection with the provision
of specified services during the review period and agreeing on the specified actions
to be taken.
It does not matter whether the person rendered or
initiated the services, or they were instead rendered or initiated by an
associated person (such as a receptionist or office manager). Rather, the focus
is on whether the person themselves engaged in inappropriate practice in
connection with the provision of the service, which would include where an
officer of a body corporate has allowed a practitioner under their employ to
engage in such conduct.[39]
As each referral to PSR is separate, each agreement will
only deal with the specific person/body corporate subject to review, even if
the inappropriate practice relates to services rendered or initiated by
associated persons. Further, the Explanatory Memorandum provides that ‘a body
corporate’s acknowledgement of inappropriate practice will not prejudice the
position of any individual practitioners it employs or otherwise engages’.[40]
Item 49 of the Bill provides that where a person
other than a practitioner has been referred to a PSR Committee in the 18 months
prior to the commencement of the Bill, the Director of PSR may notify the
relevant Committee within six months of the Bill commencing that it would be
desirable to enter into an agreement with that person.
The Royal Australian College of General Practitioners
(RACGP), Australia’s largest professional general practice organisation, raised
concerns about the impact these amendments will have on smaller practices,
particularly in rural areas, ‘with less capacity to continue providing high-quality
care to patients while under investigation’.[41]
The RACGP also recommended that the Government ‘clarify the role and
obligations of individual practitioners during an investigation with dual lines
of inquiry’ (for example, where an individual has been referred to PSR but a
corporate entity may have also engaged in inappropriate practice) ‘to avoid
confusion and concerns regarding culpability’.[42]
MIGA, a medical defence organisation and healthcare
professional indemnity insurer, submitted that there is a need to legislate to
ensure that individuals are not prejudiced by the outcomes of a corporate PSR
matter.[43]
Changes to the types of specified actions which can be
taken under an agreement
Items 8 and 10 of the Bill amend subsection
92(2) to introduce new forms of action that may be agreed between the person under
review and the Director of PSR.
Item 8 inserts new paragraph 92(2)(aa) which
allows the Director, or a nominee of the Director, to counsel the person under
review. Counselling focuses on education for the person under review and is
intended to prevent future inappropriate practice by ensuring that the person
is aware of what is expected of them and how to correct past behaviour.[44]
Item 10 inserts new paragraph 92(2)(d) which
provides for a new action where the services the subject of the review were
rendered or initiated by an associated person, as opposed to the person under
review.
In this scenario, the agreement can require the person
under review to:
- give
specified classes of associated persons specified information about the
appropriate provision of services, or that is relevant to preventing
inappropriate practice in the provision of services, in a specified form within
a specified period and
- give
the CEM evidence they have undertaken this action.
The Explanatory Memorandum states that where this
specified action is applied, the written agreement between the person under
review and the Director will specify:
- the
information to be provided
- the
classes of associated persons to which the information is to be provided
- the
form of the information to be provided (if any)
- the
time period in which the information must be provided and
- the
evidence to be provided to the CEM that the information has been provided as
specified.[45]
Item 38 of the Bill repeals subsection 106U(2) to
also allow for a draft or final determination made by the Determining Authority
with respect to a body corporate to include a direction that the Director, or
their nominee, reprimand the body corporate under review, or counsel the body
corporate under review.
Changes to the process for
monitoring a person’s compliance under their agreement with the Director
Following ratification of the agreement by the Determining
Authority, the Director must notify the CEM in writing of the making and
ratification of the agreement and ensure that any actions specified in the
agreement are taken by the person subject to the agreement.[46]
Item 15 of the Bill inserts proposed paragraph 92(4)(da)
which allows the CEM to notify the Director in writing where the CEM is of the
opinion that the person under review has not taken the required action under
the agreement, along with the CEM’s reasons for thinking that the person is
likely to be in breach of their agreement.
Item 17 inserts proposed subsection 92(4A)
which provides that before notifying the Director, the CEM must give the person
a written notice that:
- sets
out the reasons why the CEM is of the opinion that the person has not taken
action specified in the agreement that is necessary to give effect to the
agreement and
- invites
the person to make written submissions to the CEM (within a specified period of
not less than 14 days after the notice is given) about why the CEM should not
notify the Director
and consider any submissions provided by the person.
If the CEM proceeds with notifying the Director under proposed
paragraph 94(4)(da), the Director may publish certain particulars about the
person (see further below).[47]
Clarification of the ability
of the Director to refer a person to a PSR Committee
Upon completing a review of the provision of services by a
practitioner, the Director of PSR can refer the matter to the relevant PSR
Committee to investigate whether the person under review engaged in
inappropriate practice in providing the services specified in the referral.[48]
Similar to the proposed changes in items 3 and 4
of the Bill, items 19 and 20 insert proposed subsection 93(1A)
and a Note under subsection 93(1) to clarify that the Director may make a
referral to a PSR Committee where it appears to the Director that the person
under review may have:
- provided
services during the review period and
- engaged
in inappropriate practice in the provision of services.
The Explanatory Memorandum provides that these amendments
are intended to clarify ‘that it has never been part of the PSR scheme that the
Director makes any findings in relation to inappropriate practice before
referring a matter to a PSR Committee’.[49]
Issuing notices to bodies
corporates to appear at PSR Committee hearings
Section 102 of the HIA provides for a PSR Committee
to give the person under review a notice advising that the Committee proposes
to hold a hearing, which may require the person under review to appear and give
evidence.
Item 1 of the Bill amends subsection 81(1) to
define an executive officer of a body corporate to mean ‘a
person, by whatever name called and whether or not a director of the body, who
is concerned in, or takes part in, the management of the body corporate’.
Item 23 of the Bill inserts proposed subsection
102(5) to allow the PSR Committee to issue a notice requiring an executive
officer of a body corporate to appear at a hearing and give evidence.
Item 28 inserts proposed section 103A which
sets out the rights of a body corporate at a hearing. These are broadly similar
to the rights provided to an individual in section 103 of the HIA,
though as a body corporate does not have a ‘character’, the right to produce
statements as to one’s character has been removed. Proposed subsection
103A(2) also allows an executive offer to call a witness on their behalf to
respond to a question put by the PSR Committee, noting that if the witness
answers the question then the executive officer is taken to have answered the
question.
Item 32 inserts proposed section 104A which
clarifies how a hearing will proceed where the executive officer of a body
corporate has failed to appear at a hearing, give evidence, or answer a
question.
Item 34 inserts proposed section 105AA which
makes it an offence of strict liability for a person under review (other than a
practitioner) to fail to either appear at a hearing, give evidence at a
hearing, or answer questions. The maximum penalty is 30 penalty units ($6,660)
for an individual and 150 penalty units for a body corporate ($33,000).[50]
The Explanatory Memorandum notes that the maximum penalty
is in line with the maximum penalty recommended for non-compliance offences by
the Attorney-General’s Department A Guide to
Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.[51]
While no penalties apply for practitioners who fail to either appear at a
hearing, give evidence at a hearing, or answer questions, practitioners may instead
be disqualified under section 105 of the HIA.
Proposed subsections 105AA(2) and (5)
provide that an individual/body corporate has not committed an offence where
before the hearing takes place, the individual or the executive officer of the
body corporate (where the body corporate only has one executive officer)[52]:
- notifies
the PSR Committee that they have a medical condition preventing them from
appearing or from giving evidence or answering questions and
- the
person has complied with any reasonable requirements of the Committee that he
or she undergo medical examination to establish the existence and extent of the
medical condition and
- the
results of the medical examination indicate that the person has a medical
condition preventing him or her from appearing or from giving evidence or
answering questions.[53]
The Bill provides that in order to rely on the above
exceptions the defendant bears the evidential burden of proof.[54]
In its report on the 2021 Bill, the Scrutiny of Bills Committee noted that 'it
is ordinarily the duty of the prosecution to prove all elements of an offence’
and expressed concerns regarding this ‘reversal’ of the evidential burden.[55]
Given the explanatory materials to the 2021 Bill did not address this issue,
the Committee requested the Minister’s advice as to why the 2021 Bill required
the defendant to bear the evidential burden of proof in these circumstances.[56]
On 8 February 2022, the then Minister for Health, Greg
Hunt, wrote to the Committee advising that the reversal of the burden of proof
was appropriate as the exceptions provided for in proposed subsections
105AA(2) and (5) ‘relate to matters peculiarly within the knowledge
of the defendant’.[57]
The Scrutiny of Bills Committee noted the Minister’s
advice and requested ‘that an addendum to the explanatory memorandum containing
the key information provided by the minister be tabled in the Parliament as
soon as practicable’.[58]
The Explanatory Memorandum to the current Bill includes this information.[59]
Increased penalties for the
refusal or failure to produce documents or information
Section 106ZPN of the HIA currently makes it an
offence for a person (other than a person under review) to intentionally refuse
or fail to produce documents or give information requested in a notice issued
by either the Director of PSR or a PSR Committee. The maximum penalty is
currently 20 penalty units ($4,440).
Item 41 of the Bill repeals and replaces section 106ZPN
to expand its application to all persons (other than persons under review who
are practitioners) and to increase the maximum penalty to 30 penalty units
($6,660). While practitioners will no longer be subject to this offence,
section 106ZPM provides that practitioners may be disqualified for failing to
produce documents.
Proposed subsection 106ZPN(2) also introduces a
civil penalty provision for body corporates with a maximum penalty of 30
penalty units (currently $6,660). Proposed subsection 106ZPN(3) provides
for separate contraventions of proposed subsection 106ZPN(2) for each day that a
body corporate fails to produce the documents.[60]
Item 41 also inserts proposed section 106ZPNA
which allows for the Director of PSR to apply to the Federal Court of Australia
for a court order compelling a body corporate to produce documents or give
information. The Explanatory Memorandum notes that this provision is similar to
section 70 of the Australian
Securities and Investments Commission Act 2001.[61]
In its submission, the Department of Health noted that
stakeholders had ‘expressed concerns regarding the sanctions against persons
under review who failed to comply with PSR requests for information’.[62]
The RACGP suggested that the Community Affairs Committee ‘may wish to consider
the effect that increasing penalties for refusal or failure to produce
documents or information as part of an investigation will have on the broader
profession’.[63]
It noted that the ‘increase in sanctions suggests a focus on cost recovery and
punitive approaches to compliance, which may exacerbate existing concerns
amongst the profession about the intent of compliance activities’.[64]
Expansion of the power of the
Director to publish information about a person
Following a final determination by the Determining
Authority coming into effect, subsection 106ZPR(1) of the HIA allows the
Director of PSR to publish, in a manner he or she thinks is most appropriate:
- the
name and address of the person under review
- the
profession or specialty of the person under review
- the
nature of the conduct of the person under review in respect of which the PSR
Committee found that the person had engaged in inappropriate practice and
- the
directions contained in the final determination.
Item 43 of the Bill inserts proposed subsection
106ZPR(1A) which expands the circumstances in which the Director may
publish the particulars of a person to include where a person has not fulfilled
their obligations under an agreement made under section 92 of the HIA (discussed
above).
The Explanatory Memorandum states that this change ‘is
intended to provide a strong behavioural incentive for compliance with written
agreements, by signalling the potential for visible reputational consequences
and loss of public goodwill’.[65]
While acknowledging that these amendments limit a person’s
rights to privacy, as set out in Article 17 of the International
Covenant on Civil and Political Rights (ICCPR),[66]
the Government argues that these amendments are a necessary limitation to this
right in order to ‘protect the integrity of the PSR agreement process’.[67]
The RACGP has stated that it ‘believes that publishing the
particulars of a person who has not fulfilled their obligations under a section
92 agreement is an unreasonable breach of privacy’.[68]
The RACGP argues that there is no evidence the publication of details will
result in behavioural change and instead supports an educational approach for ensuring
compliance with section 92 agreements.[69]
Proposed subsection 106ZPR(1A) also reflects
that, following the enactment of the Bill, the Director of PSR will now be able
to enter into agreements with bodies corporate and the Director will be able to
publish the particulars with respect to body corporates who do not fulfil their
obligations under their agreements. Items 44, 45 and 46 of the
Bill amend subsection 106ZPR(1) to clarify the types of particulars that can be
published by the Director of PSR.
Part 2 – Review of certain
debt-recovery decisions
The Health Legislation
Amendment (Improved Medicare Compliance and Other Measures) Act 2018
(the Improved Medicare Compliance Act) introduced new debt-recovery
powers for Medicare debts owed to the Commonwealth, including:
- allowing
Medicare to withhold up to 20 percent of payments under the MBS to pay off
debts owed by practitioners to the Commonwealth
- allowing
for shared debt arrangements between practitioners and their employers with
respect to debts owed to the Commonwealth under the MBS and
- the
power to garnishee certain funds so that debts owed to the Commonwealth under
the MBS, PBS and CBDS can be recovered from money owed to the practitioner by a
third party.[70]
The amendments also allowed a person owing a debt to the
Commonwealth (the debtor) with respect to the MBS, PBS or CDBS to apply to the
Administrative Appeal Tribunal (AAT) for a review of:
- a
reconsidered debt decision (where a decision has already been reviewed by the
CEM)[71]
- an
assessment by the CEM of the debtor’s liability to pay an administrative
penalty[72]
and
- the
decision to issue a garnishee notice.[73]
The Improved Medicare Compliance Act amended the HIA
to allow for the AAT to undertake reviews relating to shared debt
determinations made by the CEM (shared debt determinations cannot be made with
respect to the PBS or CDBS).[74]
Items 50–57 of the Bill amend the HIA, NHA
and DBA to alter the circumstances in which the debtor can make an
application to the AAT to seek a review of:
- a
reconsidered debt decision
- an
assessment by the CEM of the debtor’s liability to pay an administrative
penalty or
- a
shared debt determination under the HIA.
Specifically, the proposed amendments clarify that a
debtor may only make one application to the AAT with respect to a reconsidered
decision/notice of assessment/shared debt determination even where multiple
garnishee notices have been issued in relation to the debt. The Explanatory
Memorandum provides that the purpose of these amendments is to ensure that the
AAT is not required to review the same debt decision more than once, ‘to
improve efficiencies and timeliness of debt recovery’.[75]
Part 3 – Miscellaneous
debt-recovery amendments
Following the enactment of the Improved Medicare
Compliance Act, Part 3 of the Bill amends the HIA, NHA
and DBA to make a number of minor amendments to the debt-recovery
provisions in those Acts.
These include amendments which:
- expand
the situations in which the Commonwealth can seek to recover payment from a
deceased person’s estate through allowing the CEM to issue notices for the
repayment of an administrative penalty and/or to issue shared debt
determinations to a person’s estate[76]
- clarify
that, for shared debt determinations, administrative penalties apply where the
sum of the recoverable amounts to which a determination relates is more than
$2,500 or if a higher amount is prescribed by the Regulations – that higher
amount (currently administrative penalties only arise with respect to shared
debt determinations where the cost of an individual service (rather than the
total for all relevant services) exceeds $2,500)[77]
- expand
the application of existing financial information gathering powers in the HIA
to a wider range of scenarios[78]
and
- provide
for the Commonwealth to recover the interest payable on debts through allowing
Medicare to withhold payments where interest is owed, or by allowing the
Commonwealth to recover the interest payable by way of a garnishee arrangement.[79]
In its submission on the 2021 Bill, the Department noted
that stakeholders had raised questions ‘regarding the application of powers to
recover debts from practitioners’ estates’, as they were ‘concerned about a
perceived lack of checks and balances on the Government’s actions’.[80]
For example, MIGA argued that there are circumstances where pursing recovery
against a person’s estate may not be appropriate and recommended that the
Department develop guidelines around when pursuing an estate would be
considered inappropriate, or should at least be delayed.[81]
The Department has argued that the ability to recover debts against a person’s
estate ‘follows the rationale that debts to the Commonwealth, particularly
those due because of identified non-compliant or inappropriate actions, as set
out in legislative and regulatory arrangements, are not discharged on death’.[82]
Extension of civil penalty provisions where a person has
failed to notify the CEM of change in their address
Currently, under the HIA, NHA and DBA,
a person who has been served a notice informing them they owe a debt to the
Commonwealth has an obligation to notify the CEM of their address, for the
purposes of giving the person documents relating to their debt, within 14 days
of either having received a notice or following a subsequent change of address.[83]
A person who fails to notify the CEM of their change in address incurs a maximum
civil penalty of 20 penalty units ($4,440).
Part 3 of the Bill extends the application of
existing civil penalty provisions in the HIA, NHA and DBA to
body corporates, with a maximum penalty of 100 civil penalty units ($22,200).[84]
Item 82 of the Bill amends the HIA to also expand the
circumstances in which a person or body corporate is required to notify the CEM
of a change in their address to cover a wider range of Medicare debts.
Expansion of garnishee
arrangements
As discussed above, the Improved Medicare Compliance
Act amended the HIA, NHA and DBA to allow the
Commonwealth to issue garnishee notices with respect to debts owed to the
Commonwealth under the MBS, PBS and CDBS.
Items 85 and 86 of the Bill operate to extend the
power of the CEM to issue garnishee notices to allow for the recovery of
interest debts arising under subsection 129AC(2).
Item 87 of the Bill inserts proposed subsection
129AEG(1A) which provides that the CEM can only issue a garnishee notice in
relation to an agreement under section 92 where the person/body corporate has
defaulted in repaying their debt as required under the agreement, or where the
end of the relevant period has expired, an amount remains unpaid and the person
has not entered into an arrangement with the CEM to repay to the amount. Item
87 also inserts proposed subsection 129AEG(1B) which defines relevant
period to mean:
- the
period of three months beginning on the day the agreement under section 92
takes effect or
- such
longer period as the CEM allows.
The Department noted that it had considered stakeholder
concerns regarding the expansion of garnishee powers to debts raised from
section 92 agreements in developing the Bill, which is reflected by the
inclusion of proposed subsection 129AEG(1A).[85]
Part 4 – False or misleading
information
In December 2020, the Health Insurance
Amendment (Compliance Administration) Act 2020 commenced. This Act
amended the HIA 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.[86]
Specifically, subsections 129AC(1) and 129ACA(1) of the HIA
were amended to replace references to ‘making a false or misleading statement’
with references to the ‘giving of false or misleading information’. The Health Insurance
Amendment (Compliance Administration) Act 2020 also inserted
subsections 129AC(1AAA) and 129ACA(1A) into the HIA to clarify that it is
immaterial what form the information is provided in.
The Government states that these amendments:
… reflected the fact that the design parameters of electronic
claiming mechanisms are built to achieve efficiencies and therefore may no
longer support the inclusion of a specific statement or declaration being made
by a person in relation to a Medicare claim which is submitted electronically.
The intent was to ensure that post-payment compliance activities are not
constrained by technological advances with electronic Medicare claiming
mechanisms, by capturing broad circumstances in which false or misleading
information may be given, regardless of whether a person makes manual or
electronic Medicare claims.[87]
However, while the Health Insurance
Amendment (Compliance Administration) Act 2020 amended the HIA,
the NHA and DBA continued to retain references to ‘false or
misleading statements’.
Items 98-101 and 103-106 of the Bill amend
the NHA and DBA respectively to replace references in those Acts
to ‘making a false or misleading statement’ with references to the ‘giving of
false or misleading information’. Items 102 and 107 of the Bill
amend the NHA and DBA to clarify that it is immaterial what form
the information is provided in.
[1]. Australian
Parliament, Health
Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021
homepage.
[2]. For
the Bills Digest on the 2021 Bill, see Leah Ferris, ‘Health
Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021’, Bills
Digest, 31, 2021–2022, (Canberra: Parliamentary Library, 2021).
[3]. Australian
National Audit Office (ANAO), Managing Health
Provider Compliance, Auditor-General Report, 17, 2020–21, (Canberra:
ANAO, 2020), 12.
[4]. Department
of Health (DoH), Health
Provider Compliance Strategy 2021–22, (Canberra: DoH, 2021), 1.
[5]. Following
the Government’s
Healthier Medicare Initiative announcement in April 2015, the Administrative
Arrangements Order on 30 September 2015, transferred responsibility for
Medicare provider compliance from the then Department of Human Services to the
Department of Health.
[6]. ANAO,
Managing
Health Provider Compliance, 6.
[7]. For
further information, see Kaushik Ramesh, ‘Health
Legislation Amendment (Improved Medicare Compliance and Other Measures) Bill
2018’, Bills Digest, 124, 2017–18, (Canberra: Parliamentary Library,
2018).
[8]. For
further information, see Jennifer Phillips, ‘Health
Legislation Amendment (Data-matching and Other Matters) Bill 2019’, Bills
Digest, 66, 2019–20, (Canberra: Parliamentary Library, 2019).
[9]. For
further information, see Melanie Conn, ‘Health
Insurance Amendment (Compliance Administration) Bill 2020’, Bills
Digest, 37, 2020–21, (Canberra: Parliamentary Library, 2020).
[10]. Senate
Standing Committee for the Selection of Bills, Report,
3, 2022, 4 August 2022.
[11]. Senate
Standing Committee for the Scrutiny of Bills, Index
of bills considered by the committee, 31 March 2022.
[12]. Information
about the inquiry can be located on the Committee’s homepage, Senate Community
Affairs Legislation Committee, Health
Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021
[Provisions].
[13]. Senate
Community Affairs Legislation Committee, Health
Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021
[Provisions], (Canberra: Senate, March 2022), 16.
[14]. Community Affairs Committee, Health
Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021
[Provisions], 15–16.
[15]. Department
of Health (DoH), Submission
to Senate Community Affairs Legislation Committee, Health Legislation
Amendment (Medicare Compliance and Other Measures) Bill 2021, [Submission
8], 18 February 2022, 6.
[16]. DoH,
Submission,
6–7.
[17]. Community
Affairs Committee, Health
Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021
[Provisions], 9.
[18]. Community
Affairs Committee, Health
Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021
[Provisions], 9.
[19]. See
MIGA, Submission
to the Senate Community Affairs Legislation Committee, Health Legislation
Amendment (Medicare Compliance and Other Measures) Bill 2021, [Submission no.
1], 2 February 2022, 1–2; Royal Australian College of General Practitioners
(RACGP), Submission
to the Senate Community Affairs Legislation Committee, Health Legislation
Amendment (Medicare Compliance and Other Measures) Bill 2021, [Submission no.
3], 4 February 2022, [3]; Royal Australasian College of Surgeons, Submission
to the Senate Community Affairs Legislation Committee, Health Legislation
Amendment (Medicare Compliance and Other Measures) Bill 2021, [Submission no.
9], 24 February 2022, [2]. See also Matt Woodley, ‘How
concerned should GPs be about proposed PSR changes?’, RACPG, News GP,
11 August 2022.
[20]. Explanatory
Memorandum, Health Legislation Amendment (Medicare Compliance and Other
Measures) Bill 2022, 3.
[21]. The
Statement of Compatibility with Human Rights can be found at pages 4–8 of the Explanatory
Memorandum to the Bill.
[22]. Parliamentary
Joint Committee on Human Rights, Human
Rights Scrutiny Report, 13, 2021, 10 November 2021: 32.
[23]. Subsection
80(2) of the Health
Insurance Act 1973 (HIA).
[24]. Subsection 81(1) of the HIA defines relevant
DVA law to mean any of the following:
(a) the Australian
Participants in British Nuclear Tests and British Commonwealth Occupation Force
(Treatment) Act 2006
(b) Chapter 6 of the Military
Rehabilitation and Compensation Act 2004
(c) the Safety,
Rehabilitation and Compensation (Defence‑related
Claims) Act 1988
(d) the Treatment Benefits
(Special Access) Act 2019
(e) Part V of the Veterans’
Entitlements Act 1986
(f) any other Commonwealth law prescribed
by the regulations for the purposes of this paragraph.
[25]. Section
82A of the HIA provides that the circumstances in which services are
rendered or initiated by a practitioner constitute a prescribed pattern
of services if they are circumstances prescribed by the Regulations.
Section 8 of the Health
Insurance (Professional Services Review Scheme) Regulations 2019 provides
that these circumstances are that the medical practitioner renders or initiates
80 or more relevant services on each of 20 or more days in a 12 month period.
[26]. Administrative
Arrangements Order 23/06/2022.
[27]. HIA,
subsection 83(2).
[28]. HIA,
sections 85 and 84.
[29]. ‘About the PSR Scheme’,
Professional Services Review (PSR) website, n.d. For further information about
the Determining Authority, see ‘Determining
Authority consideration’, PSR website, n.d.
[30]. HIA,
section 86. See footnote 25 for more information on prescribed pattern of
services.
[31]. Explanatory
Memorandum, 10.
[32]. Katy
Gallagher, Second
Reading Speech: Health Legislation Amendment (Medicare Compliance and Other
Measures) Bill 2022, Senate, Debates, 3 August 2022, 410. See, for
example, I-MED Radiology Network Limited v The Director of Professional
Services Review, [2020]
FCA 1645 (13 November 2020). A jurisdictional fact is a criterion,
satisfaction of which enlivens the exercise of a statutory power or discretion:
Thomson Reuters, The Laws of Australia (at 1 March 2014) 2. Administrative
Law, ‘2.4. Judicial Review of Administrative Action: Reviewable Decisions,
Conduct and Powers and General Grounds’ [2.4.2170].
[33]. Explanatory
Memorandum, 10.
[34]. HIA,
subsection 89C(2).
[35]. HIA,
subsection 92(1).
[36]. HIA,
subsection 92(3).
[37]. Explanatory
Memorandum, 11.
[38]. This
picks up the current definition of associated person in
subsection 106U(5) of the HIA.
[39]. HIA,
paragraph 82(2)(b).
[40]. Explanatory
Memorandum, 11.
[41]. RACGP,
Submission,
[2].
[42]. RACGP,
Submission,
[2].
[43]. MIGA,
Submission,
3.
[44]. Explanatory
Memorandum, 12.
[45]. Explanatory
Memorandum, 12.
[46]. HIA,
paragraphs 92(4)(c) and (d).
[47]. HIA,
item 16, proposed Note following subsection 92(4).
[48]. HIA,
subsection 93(1).
[49]. Explanatory
Memorandum, 14. See footnote 32 and accompanying text for further
information.
[50]. Crimes Act 1914,
section 4AA and the Notice
of Indexation of the Penalty Unit Amount made under that section set the
current value of a penalty unit at $222.
[51]. Explanatory
Memorandum, 16. Attorney-General’s Department (AGD), A Guide to
Framing Commonwealth Offences, Infringement Notices and Enforcement Powers
(Guide to Framing Commonwealth Offences), (Canberra: AGD, 2011), 93.
The maximum penalty for body corporates is also in line with the maximum
penalty recommended in the Guide to Framing Commonwealth Offences (see
page 40).
[52]. Proposed
paragraph 104A(4)(a) (at item 32) of the HIA.
[53]. See
paragraphs 104(5)(a), (b) and (c) and proposed paragraphs 104A(4)(b), (c) and
(d) (at item 32) of the HIA.
[54]. See
Notes to proposed subsections 105AA(2) and (5), at
item 34 of the Bill.
[55]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
Digest, 17, 2021, 24 November 2021: 25–26.
[56]. Scrutiny
Digest, 17,2021: 26.
[57]. Scrutiny
of Bills Committee, Scrutiny
Digest, 2, 2022, 18 March 2022: 83–85.
[58]. Scrutiny
Digest, 2, 2022: 85–86.
[59]. Explanatory
Memorandum, 17–18.
[60]. In
determining the pecuniary penalty for contravening the civil penalty provision,
section 125A of the HIA sets out the list of factors that the Court must
take into consideration.
[61]. Explanatory
Memorandum, 21.
[62]. DoH,
Submission,
6.
[63]. RACGP,
Submission,
[2].
[64]. RACGP,
Submission,
[2].
[65]. Explanatory
Memorandum, 21.
[66]. International
Covenant on Civil and Political Rights, done in New York on 16 December
1966, [1980] ATS 23 (entered into force for Australia (except Art. 41) on 13
November 1980; Art. 41 came into force for Australia on 28 January 1994).
[67]. Explanatory
Memorandum, 6.
[68]. RACGP,
Submission,
[2].
[69]. RACGP,
Submission,
[2].
[70]. Explanatory
Memorandum, 24.
[71]. HIA,
subsection 129AAJ(7); NHA, subsection 99ABD(8); and DBA,
subsection 56D(7).
[72]. HIA,
subsection 129AEC(2); NHA, subsection 99ABG(4); and DBA,
subsection 56G(3).
[73]. HIA,
subsection 129AEG(13); NHA, subsection 99ABJ(14); and DBA,
subsection 58AA(14).
[74]. HIA,
subsection 129ACB(7).
[75]. Explanatory
Memorandum, 25.
[76]. Items
58–62, 64–67, 71–75, 77, 79–81, 83–84, 88–92, 94–96 of the Bill.
[77]. Item
76 of the Bill amends the HIA to repeal and replace paragraphs
129AEA(4)(b) and 129AEA(4)(c) with proposed paragraphs 129AEA(4)b),
129AEA(4)(c) and 129AEA(4)(d).
[78]. Item
78 of the Bill amends the HIA to insert proposed subsection
129AECA(1A).
[79]. Items
68–70, 85 and 86 of the Bill amend the DBA and HIA.
[80]. DoH,
Submission,
7.
[81]. MIGA,
Submission,
4.
[82]. DoH,
Submission,
7.
[83]. HIA,
subsections 129AECA(2) and (3); NHA, subsections 99ABH(2) and (3); and DBA,
subsections 56H(2) and (3).
[84]. See
items 63, 82 and 93 of the Bill.
[85]. DoH,
Submission,
7.
[86]. For
further information, see: Melanie Conn, Health
Insurance Amendment (Compliance Administration) Bill 2020.
[87]. Explanatory
Memorandum, 36.
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