Report on reconvened hearing into MRI issues

May 2000

ISSN 1323-375

View the report as a single document - (PDF 1506KB)

Membership of the committee

Senator Sue Knowles, Chairman	LP, Western Australia
Senator Lyn Allison, Deputy Chair	AD, Victoria
Senator Kay Denman	ALP, Tasmania
Senator Chris Evans	ALP, Western Australia
Senator Brett Mason	LP, Queensland
Senator Tsebin Tchen	LP, Victoria

Substitute Member

Senator Ray to replace Senator Denman for the consideration, in accordance with the order of the Senate of 10 April 2000, of additional estimates relating to magnetic resonance imaging scanner installations

ALP, Victoria

Additional estimates 1999-2000

Report on reconvened hearing into MRI issues

Introduction

1.1 On Monday, 10 April 2000, the Senate passed the following resolution:

That the Senate -

notes the failure of the Minister representing the Minister for Health and Aged Care (Senator Herron) to comply in full with the order of the Senate of 21 October 1999 for the production of documents relating to magnetic resonance imaging;

orders the Minister to comply in full with the order by 6.30 pm on Monday, 10 April;

in the event that the Minister fails to comply in full with the order by the time specified, instructs the Community Affairs Legislation Committee to reconvene for the consideration of additional estimates on 11 April 2000, at 8 pm until no later than midnight, to hear further evidence from the Minister representing the Minister for Health and Aged Care and relevant officers concerning the investigations into magnetic resonance imaging scanner installations and to report to the Senate on the results of that hearing; and

directs the Minister to ensure that the relevant officers appear before the Committee at that hearing for that purpose.

1.2 Later that day the Minister, Senator Herron, wrote to the Acting President, Senator West, indicating that he was unable to provide any documents in compliance with the order by the time specified. The original order of 21 October 1999 for the production of documents is at Appendix 2. A copy of the Minister’s letter, tabled in the Senate on 10 April, is at Appendix 3.

1.3 In accordance with the instruction from the Senate, the Legislation Committee reconvened on 11 April 2000 for the consideration of additional estimates to hear further evidence from the Minister representing the Minister for Health and Aged Care and relevant officers concerning the investigations into magnetic resonance imaging (MRI) scanner installations. Pursuant to the direction in the resolution, the Minister ensured that relevant officers appeared at this hearing. Details of the public hearing are referred to in Appendix 1.

1.4 A variety of issues including the purchase and installation of MRI scanners, the negotiations surrounding the extension of a Medicare rebate for MRI services, the parliamentary procedures to have documents relevant to these issues tabled in the Senate, and the actions of departmental officers and ministerial staff, were discussed in detail at the hearing. The Hansard transcript of the proceedings of the hearing will be tabled in the Senate and is also available on the Internet at: www.aph.gov.au/hansard.

Background

1.5 On 12 May 1998 the Government announced in its Budget for 1998-99 that approval for the payment of Medicare benefits for MRI services would be allowed or the first time from 1 September 1998. In order to ensure that the supply of MRI could be managed, conditions of eligibility for machines and practitioners under which Medicare benefits would be paid were announced subsequently by the Department of Health and Aged Care.

1.6 The Health Insurance Commission (HIC) was responsible for processing the documentation for eligible machines and eligible practitioners, including statutory declarations from radiologists and copies of contracts or leases purported to have been signed prior to the Budget announcement on 12 May 1998. In December 1998, following receipt of a specific complaint of irregularity in which it was alleged that statutory declarations lodged with the HIC may be false, an investigation commenced in the HIC’s central office. In February 1999 the investigation was broadened, eventually including all scanners that were uninstalled as at the time of the Budget announcement. The HIC reported on 22 December 1999, resulting in cases involving 19 scanners being referred to the Director of Public Prosecutions (DPP). A copy of this report was sent to the President of the Senate on 23 December and tabled on 15 February 2000.

1.7 The HIC is currently working with the DPP to prepare formal briefs of evidence from the material gathered during the HIC investigation. The HIC is also continuing to investigate eight cases where it did not believe that there was sufficient evidence to go to the DPP, but where it believed that civil action was warranted.[1]

1.8 A further issue arose as to whether or not people involved in consultations on the proposed Budget measure had used information to gain a commercial advantage and access to Medicare benefits to which they were not entitled. This issue is currently the subject of an inquiry by the Auditor-General. Details of the scope of the Auditor-General’s inquiry were contained in correspondence tabled at the hearing (see Appendix 5). The Committee was advised that the Auditor-General has provided a draft report and sought responses from the relevant department and others. It was expected that the final report would be tabled in May, subject to any further discussions or drafting by the Auditor-General.[2]

Parliamentary action

1.9 Questions relating to the issues surrounding the MRI scanners were asked in Parliament and at Senate estimates hearings during 1999. These culminated in the order of the Senate on 21 October 1999 for the tabling of specific documents. The Department confirmed at the hearing that the relevant documents include minutes to the Minister, briefing notes, draft cabinet submissions and proposals, and draft letters around those proposals.[3]

1.10 On 29 November 1999 the Minister, Senator Herron, wrote to the Clerk of the Senate in response to the order. The letter included reference to certain public interest considerations and was based on internal legal advice and advice from the Australian Government Solicitor.[4] A copy of the Minister’s letter is at Appendix 3. At the request of Senator Chris Evans and in response to the Minister’s letter and the answers to questions in the Senate concerning the withholding of information about the purchases of the MRI scanners, the Clerk provided written advice relating to public interest immunity on 26 and 29 November. The Clerk’s advice is at Appendix 4.

1.11 The Minister, Senator Herron, then wrote to the President of the Senate, Senator Reid, on 23 December 1999 in reference to the order of 21 October and attached a copy of the report of the HIC investigation (subsequently tabled on 15 February 2000). Senator Herron noted in the letter that the Minister for Health and Aged Care, Dr Wooldridge, expected to complete a review of certain documents covered in the order ‘in the very near future’ when an appropriate response would be forwarded to the President. A copy of this letter is also at Appendix 3.

1.12 With no further response being received the Senate agreed to the resolution of 10 April 2000 which resulted in the hearing on 11 April.

MRI and the Budget decision

1.13 The background to the purchase and installation of MRI scanners, the lead up to the budget decision and events following the budget decision, are outlined in the HIC report.

1.14 On 10 February 1998 negotiations commenced between the College of Radiologists and the Department on the management of diagnostic imaging and the expanded funding of MRI. This process involved the development of an agreement between the College and the Government. On 6 May 1998 at a meeting attended by the Minister, the College of Radiologists, a ministerial staffer and a departmental officer, it was confirmed that agreement had been reached. Formal acceptance of the agreement was contained in an exchange of letters between the Minister and the College on 12 and 15 May.[5] Copies of these letters were tabled at the hearing (see Appendix 5).

1.15 Considerable debate during the hearing centred around the creation and maintenance by the Department of written and electronic records of meetings, especially during the negotiations prior to the Budget and of questioning about the potential leak of the budget decision.[6] A number of administrative deficiencies were identified, about which the Secretary conceded ‘I think it is fair to say that our records management in this area has not been as good as it ought to be. That is something we are certainly conscious of and taking action on’.[7]

Senator Sue Knowles

Chairman
May 2000