2.1
Submissions to this inquiry were broadly supportive of the changes proposed to be made by the Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021 (bill).
2.2
Some submitters raised broader concerns about enhanced Medicare compliance measures, the support available to practitioners to assist them in achieving compliance and ensuring the powers of the Professional Services Review (PSR) operate with appropriate safeguards and are directed towards deliberate non‑compliance.
2.3
This chapter explores these issues.
Support for the bill
2.4
As outlined in Chapter 1, the bill is intended to strengthen the compliance powers of the PSR and its ability to address inappropriate practice by bodies corporate in an environment ‘where non−practitioner entities are increasingly influencing the provision of health care services’.
2.5
The provisions of the bill would ensure that all persons under review, including corporate entities, who acknowledge inappropriate practice are able to enter into written agreements with the Director. This amendment responds to stakeholder feedback that ‘PSR reviews would proceed more effectively and efficiently if all persons under review had the same opportunity to negotiate agreements with the Director.’
2.6
The bill also introduces new sanctions and increases maximum penalties for bodies corporate and non-practitioners.
2.7
Several submitters have welcomed these proposed changes, recognising the need to ‘reinforce the existing powers of the PSR’ and broaden compliance accountability to third-party non-practitioners. Submitters have also raised some concerns about Medicare compliance and the PSR. These issues are explored below.
Balancing expanded powers with enhanced protections
2.8
Several submitters expressed reservations about the power of the PSR and raised the need for further protections for persons under review, especially individual practitioners and smaller bodies corporate. For example, the Medical Defence Association of South Australia (MIGA) referred to ‘perceptions of “coercion” and “unfairness” that can exist in the healthcare profession around the PSR process. The Royal Australasian College of Surgeons (RACS) described the PSR as a ‘heavy instrument’ that leads ‘doctors [to] “fight vigorously” to defend their reputation’.
2.9
MIGA submitted that there should be no requirement for a person under review to acknowledge inappropriate practice as a pre-condition for negotiating a written agreement. In support of this position, MIGA noted that inappropriate practice ‘goes beyond Medicare claiming patterns, to cover broader concepts of what is unacceptable to peers or the broader profession’, and that healthcare providers may be willing to agree that a repayment should be made, even though they are unwilling to accept there has been inappropriate practice. Similar concerns were raised by RACS.
2.10
The Department of Health (department) submitted that:
…the amendments are not intended to be punitive but rather aim to encourage co-operation with the PSR process, in order to enable the provision of information and evidence to enable the PSR to undertake its functions.
2.11
The department has also stated its view that ‘the Bill does not burden compliant practitioners but does increase the flexibility and strength of the Government’s compliance activities.’
2.12
Submitters have suggested consideration be given to further protections for persons under review, including:
removing restrictions on the scope of legal representation before a PSR committee;
ensuring written communications are less confrontational and more constructive;
development of guidelines for recovery of funds from deceased estates; and
including ‘reasonable excuse’ provisions as a defence for strict liability offences.
Department of Health’s review of written agreements
2.13
Several submitters referred to a review by the department of written agreements made under section 92 of the Health Insurance Act 1973 (HIA). Although the review does not appear to be included in the department’s list of public consultation processes, the Australian Medical Association has said that:
The review will undertake an assessment of how section 92 of the Act is operationalised by the PSR to ensure PURs [persons under review] are treated fairly and have access to clear, transparent and comprehensive information about how the PSR Director’s review process and section 92 agreement negotiation phase operates.
2.14
MIGA noted in its submission that it has recommended several changes to the process for making written agreements in the course of this review. These include more clearly defining the criteria for making and ratifying written agreements; removing the requirement for the person under review to acknowledge inappropriate practice; procedural improvements; and, improved communication about the reasons for decisions about the content of written agreements.
2.15
The Royal Australian College of General Practitioners (RACGP) has suggested ‘the outcomes of the review must be considered in the assessment of amendments to the bill.’
Protections for smaller practices
2.16
The RACGP has suggested there is a need to develop approaches that recognise the differing capacity of bodies corporate to respond to issues of potential inappropriate practice referred to the PSR. In particular, the RACGP has referred to the ‘risk of an increased compliance burden on smaller practices, particularly in rural areas, with less capacity to continue providing high-quality care to patients while under investigation.’
2.17
The department indicated that safeguards, such as extending medical exemptions from attending hearings, have been included to recognise the needs of small corporate entities, including sole practitioners using an incorporated structure. It also acknowledged the potential impact of the amendments on smaller businesses while emphasising that:
…condign sanctions for non-compliance are necessary if persons under review are to be encouraged to co-operate and engage with the PSR process so that inappropriate practice may be reviewed fairly and efficiently.
Privacy considerations
2.18
The RACGP has indicated that it does not support the proposal to publish information about a person who has not performed the actions necessary to give effect to a written agreement, stating that to do so would be ‘an unreasonable breach of privacy’.
2.19
According to the explanatory memorandum, the proposed amendments would only permit such publication if the Chief Executive Medicare (CEM) is of the opinion that the person under review has not taken the actions necessary to give effect to a written agreement. This, along with the reasons for that opinion, must be communicated in writing to the Director, and would ‘generally only occur following a series of procedural fairness steps to ensure that the person is aware of their obligations.’ The Director’s power to publish the name of the person under review and details of the inappropriate practice is discretionary.
2.20
The explanatory memorandum also notes that the Director is already able to publish such information where action is being taken in court for the purpose of enforcing a written agreement or where a final determination under section 106TA has come into effect.
2.21
RACS also raised concerns about potential conflict between existing obligations under the Privacy Act 1988 and new powers for the PSR to compel the production of documents.
2.22
Referring to stakeholder concerns about new penalties for failing to produce documents and powers for the Director to seek court orders to compel production, the department explained that:
…the provision of this information is critical to the PSR’s functions… The PSR would be unable to undertake reviews if information were not provided, and the existing sanctions are not always appropriate for corporate entities.
Threshold for referral to the PSR
2.23
Items 3 and 4 of the bill would amend provisions of the HIA that enable the CEM to request the Director PSR to review the provision of healthcare services by a person. MIGA suggested that the CEM should be required to satisfy a ‘reasonable belief’ threshold on the basis that this will ensure ’proper investigation and careful consideration of a person’s Medicare claiming before making a PSR referral’.
2.24
The department has submitted that these functions are not part of the CEM’s role in this process:
In making the referral, the CEM is not required to objectively determine that a particular person provided the services and/or engaged in inappropriate practice. The CEM does not have any compulsory powers which would enable them to make such determinations…It has never been part of the PSR scheme for the CEM to have made any findings prior to referring a person’s provision of services to the Director...
2.25
Submissions to this inquiry also indicated that different health sectors may experience different levels of compliance activity that does not appear to be proportionate to the underlying level of inappropriate practice in that sector.
Parallel review processes
2.26
The explanatory memorandum notes that ‘[w]hen a body corporate is reviewed, individual practitioners may or may not also be subject to review’. Submitters have sought clarity about how separate review processes interact, and the role and obligations of persons who are participating in these reviews.
2.27
For example, the RACGP has suggested ‘clarifying the role and obligations of individual practitioners during an investigation with dual lines of inquiry (individuals and corporates) to avoid confusion and concerns regarding culpability.’ MIGA has suggested the inclusion of a provision to clearly state that any acknowledgement of inappropriate practice by a person under review will not prejudice the position of an associated person, should they become a person under review.
2.28
The explanatory memorandum provides the following response to these concerns:
…each referral to the PSR is separate. It is important to note that a body corporate’s acknowledgment of inappropriate practice will not prejudice the position of any individual practitioners it employs or otherwise engages. In addition, individual practitioners will not be named in agreements with bodies corporate or other persons who employ or otherwise engage practitioners…
Broader concerns about Medicare compliance
2.29
In addition to the issues discussed above, submitters raised general concerns about Medicare compliance. These include concerns about:
the overall complexity of Medicare billing and resulting compliance burdens for practitioners; and
the adequacy of support provided by the department to assist health care service providers to achieve compliance.
Medicare complexity and compliance burdens
2.30
Submitters have expressed concern that achieving compliance with Medicare rules is complex, and that practitioners may struggle to correctly apply these rules, despite their best efforts and intentions. The RACGP submitted that ‘increased Medicare compliance activities and the fear of being audited is distracting GPs from their primary focus of delivering high‑quality patient‑centred care.’
2.31
The PSR has also referred to this issue in its submission, saying that allowing non-practitioners and bodies corporate to enter into written agreements would benefit the person under review ‘whose focus may be diverted from the appropriate provision of services’.
2.32
The department has indicated that the bill does not expand the scope of existing compliance powers. Instead, the bill:
strengthens the Government’s ability to undertake its existing compliance enforcement responsibilities and give the PSR greater flexibility to manage corporate entities
Adequacy of support to achieve compliance
2.33
Submitters raised concerns about the adequacy of education and other support available to health service providers to assist them in meeting their obligations. For example, MIGA has indicated that it ‘does not see the Medicare compliance process as being focused sufficiently on education’.
2.34
Referring to items in the bill that propose to increase sanctions for non‑compliance, the RACGP suggested that:
…the increase in sanctions and broader debt-collecting powers suggest a focus on cost recovery and punitive approaches to compliance, rather than an educative focus that supports practitioners to bill correctly.
2.35
The department has observed that the vast majority of practitioners claim benefits appropriately and correctly, and that it therefore:
…provides a responsive and proportionate approach to its compliance activities. Most of these activities centre on fostering voluntary compliance through a strong focus on education, engagement with professional colleges and other peak bodies, and letters targeted to practitioners with unusual or unexpected patterns in claiming payments or requesting diagnostic services.
Committee View
2.36
The Medicare Benefits Schedule, the Pharmaceutical Benefits Scheme and the Child Dental Benefits Schedule provide a range of essential health services to eligible people in Australia. These significant government programs delivered $41.7 billion in benefits in 2020‑21.
2.37
There is a legitimate role for government in ensuring the integrity of these payments and the bill serves an important purpose in improving the capacity of the Government to respond to inappropriate practice and ensure that Medicare programs continue to operate for the benefit of the Australian community.
2.38
The committee acknowledges that submitters to this inquiry were generally supportive of the purpose of the bill; however, raised some broader issues about the complexity of the Medicare system, compliance burdens for practitioners and the adequacy of support to achieve compliance.
2.39
The committee notes that the bill is part of an ongoing process to improve compliance and integrity measures, including in response to continuing changes in the delivery of healthcare services. Submitters to this inquiry have put forward a range of suggested measures that may improve processes and safeguards for persons under review.
2.40
The committee encourages the Government to continue stakeholder engagement and consultation processes to improve the operation of the PSR, which performs an essential role in ensuring the ongoing sustainability of Medicare.
2.41
The committee recommends that the bill be passed.
Chair