2.1
The Human Services Amendment (Photographic Identification and Fraud Prevention) Bill 2019 (bill) seeks to amend the Human Services (Medicare) Act 1973 (Medicare Act) to require that a Medicare card include photographic identification of the person to whom it is issued; and to impose a penalty of 2 years' imprisonment and/or 50 penalty units for fraudulent use of a Medicare card.
2.2
The explanatory memorandum (EM) to the bill sets out that the intent of this measure is to mitigate fraudulent use of Medicare cards by individuals who are not eligible to access Medicare.
2.3
In her second reading speech, the proponent of the bill, Senator Pauline Hanson, stated that 'there is nothing to stop someone from sharing their Medicare card with anyone who hasn't been issued with one, or is not eligible for a card, in order to source medical services at cost to the Government'. Senator Hanson suggested that health providers have no means of verifying that the name on the Medicare card is that of the person they are treating.
2.4
Participants in the inquiry expressed support for maintaining the security and sustainability of the Medicare system. However, they also raised concerns that the bill had the potential to limit access to Medicare services, especially for vulnerable Australians.
2.5
This chapter examines evidence received in relation to the balance between the integrity of the Medicare system and the need for access to Medicare as Australia's universal health care system.
2.6
The chapter also considers whether the bill effectively targets the Medicare fraud that it seeks to address, as well as issues around privacy, cost and implementation of the bill, and current fraud prevention initiatives.
Access to Medicare
2.7
Medicare is Australia's universal health care system; which provides free or subsidised health care services for eligible individuals. The committee received evidence from the majority of participants in the inquiry which cautioned the introduction of any measure that could limit access to Medicare services, particularly for vulnerable Australians.
2.8
Mr Paul Creech, Acting Deputy Secretary, Health and Aged Care Group, Services Australia, emphasised the importance of ensuring access to Medicare for all Australians, explaining:
Increasing the requirement on people when they front up for medical care is only going to impede that or make it more difficult; it's not going to make it easier.
2.9
Mr Creech also highlighted that presentation of a Medicare card is not legally required in order to access health care services; noting that many Australians do not carry their Medicare card with them, and that some may not have a driver's licence either.
Vulnerable Australians
2.10
The Australian Medical Association (AMA) considered that the proposal may limit access to care, and may have inherently discriminatory effects on a range of vulnerable patient groups, including Aboriginal and Torres Strait Islander Australians, the homeless, mentally ill, and low-income earners. AMA explained:
These patient groups often have difficulty accessing identification documentation in order to obtain a Medicare card. Regarding Indigenous Australians, anecdotal evidence suggests there is often an inability to access a birth certificate for several reasons, such as individuals being registered under a different name (as is the case for many members of the stolen generation), or births never being registered. People who are homeless or on low incomes may not hold a driver’s licence or have a utilities bill in their name. While this means a small number of patients may gain access to Medicare funded services that they may not be able to prove they are entitled to, this should not be allowed to overshadow the importance of ensuring timely access to medical care.
2.11
The Northern Territory (NT) Government encouraged the committee to consider the bill's proposal carefully, noting that the introduction of unnecessary administrative barriers to accessing Medicare may give rise to potential equity issues. The NT Government suggested that further limiting access to health care could have disproportionate impacts for disadvantaged Aboriginal patients.
2.12
Dr Harry Nespolon, President of the Royal Australian College of General Practitioners (RACGP) noted that careful consideration must be taken in making changes to requirements for access:
Cultural factors must be taken into account to ensure that certain groups do not delay access to essential treatment due to concerns about excessive monitoring that stem from historical issues relating to lack of trust.
2.13
Mr Simon Blacker from the Pharmacy Guild of Australia noted concerns over any changes that might impede Australians' access to medicines or other pharmacy services. Mr Blacker considered that 'from a health professional's perspective, the patient's need is and should be first and foremost'.
Effectiveness in limiting fraud
Level of Medicare fraud
2.14
Noting that the intent of the bill is to mitigate Medicare fraud committed by an individual who is not eligible for Medicare, some submitters noted that neither the bill, nor the EM, provided any detail on how much of this type of fraud is occurring.
2.15
The committee received anecdotal evidence from some submitters who suggested that fraud of this nature was taking place. However, Services Australia advised the committee that the level of such fraud is very low.
2.16
Mr David Weiss, First Assistant Secretary, Medical Benefits Division, Department of Health explained that, in the context of the approximately $25 billion that is spent on Medicare claims each year, this type of fraud does not represent a significant problem.
2.17
Representatives of the Australian Healthcare and Hospitals Association, the RACGP, and the Pharmacy Guild of Australia each commented that they were not aware either through personal experience or through internal reporting within their organisations of this type of Medicare fraud occurring.
2.18
In answers to questions on notice, Services Australia noted that in 2018–19, the agency received 788 Medicare related tip-offs; and qualified that this number represents less than 1 per cent of all tip-offs received in 2018-19. Of those tip-offs, 127 related to potential inappropriate card use.
2.19
Services Australia also noted that the principal type of fraud that they detect through the Medicare claiming channels is 'where an individual submits a false invoice in their own name to obtain a service they did not receive, or an individual submits a false invoice in the name of another person whose identity information they have stolen'.
Effectiveness
2.20
As noted previously, the presentation of a Medicare card is not legally required to access services. Mr Creech from Services Australia confirmed this and acknowledged that it was not always possible to prevent an individual who is ineligible for Medicare from pretending to be someone else in order to gain access to subsidised health care services.
2.21
As a result, participants in the inquiry considered that the addition of photographic identification to Medicare cards would not be effective in limiting Medicare fraud by ineligible individuals.
2.22
A number of organisations pointed to the finding of the Independent Review of Health Providers' Access to Medicare Card Numbers (Shergold review) which suggested that adding a photograph to Medicare cards would not have a lasting effect in terms of reducing Medicare fraud.
2.23
The Australian Privacy Foundation (APF) agreed that photographic identification would not limit fraudulent use of Medicare cards, and rather, suggested that it would 'instead likely […] facilitate the commission of identity offences within and beyond the health system'.
2.24
Dr Harry Nespolon, President of the RACGP concurred, noting that with the introduction of photographs, Medicare cards could become 'de facto ID cards that can be easily forged or obtained for the purposes of fraud'.
Implementation of the bill
Administrative practicalities
2.25
Submitters noted that the EM to the bill did not provide sufficient detail about how the proposal would be implemented. Specifically, who would be required to have a photograph included on their Medicare card, and how this would be rolled out across Australia.
2.26
Some submitters considered that it was unclear whether all Medicare customers, including children, would require photographic identification on their cards.
2.27
Submitters noted the administrative difficulties of attempting to include children's photographs on a parent's Medicare card, or of issuing a separate card for each individual, including children.
2.28
At the public hearing, Senator Hanson confirmed that it was the intent of the proposal that only adults would require photographic identification on their Medicare cards.
2.29
The AMA submitted that if the bill was implemented, the government would need to create new processes for the supply of photographic identification to be included on the Medicare card, similar to those used for driver's licenses.
Privacy concerns
2.30
The APF raised concerns about the risk to Medicare customers' privacy if the bill was implemented. APF noted that if photographic identification was included on the card, this identifier would likely be uploaded into the Health Professional Online Services (HPOS) system or another national database. Noting that HPOS is accessible by a large number of health professions, APF expressed particular concern that the addition of photographic identification to a database was high risk.
2.31
APF also pointed out that photographic identification constitutes a biometric identifier, that is, an individual's photograph belongs uniquely to them and unlike a credit card number or email address, cannot be updated if it is breached.
2.32
Services Australia also noted that proposals consistent with this bill have been considered by the government in the past. In particular, a Medicare smartcard, including photographic identification, was piloted in Tasmania in 2004. This proposal attracted significant public and media interest particularly in relation to privacy concerns, and citizen uptake was minimal. As a result the pilot did not continue.
Cost
2.33
The bill's EM does not set out a cost for implementation of the proposal. APF considered the lack of detail in relation to costing was particularly problematic:
The lack of estimates regarding ongoing support and maintenance costs here mean that this initiative has significant financial and other, as yet unknown, consequences which have not been properly examined. In a project as big as this, and one with such sensitive social and political implications, this neglect of preparation and analysis is dangerous.
2.34
Mr Paul Creech from Services Australia, noted that the agency had previously costed a similar project at $500 million. Mr Creech highlighted that this estimate was produced over 5 years ago and was only for the initial implementation and did not include any ongoing costs.
2.35
Some submitters questioned whether the cost of implementing this proposal would be worthwhile given the potentially small amount of fraud it is intended to address.
Fraud prevention
2.36
The government has a number of fraud prevention practices in place in relation to Medicare cards. Since 2011, Medicare cards have been verifiable though the Documentation Verification Service (DVS). In its submission, Services Australia explained:
The DVS is a national online system that allows organisations to take information from a person's identity document, such as a Medicare Card, with their consent, and compare this against the corresponding record of the document issuing agency. These checks are conducted in real time to inform decisions that rely upon the confirmation of a person's identity. The DVS is a key tool to assist organisations to prevent individuals from using fraudulent identities.
2.37
Services Australia also noted that it is working to enhance government service delivery and is 'working closely with [its] partner agencies across government to progress opportunities for broader approaches to management of identity'.
2.38
In addition to this, the Department of Home Affairs is currently undertaking a review of Australia's national identity system, which aims to enhance the national identity system to better protect Australians from the theft or misuse of their identity information, assist people to recover from the impacts of identity crime and improve processes that support the detection and prevention of identity crime.
2.39
Further, the Commonwealth Director of Public Prosecutions prosecutes frauds against the federal government, including Medicare fraud.
2.40
As noted in chapter 1, the Shergold review recommended that health professionals take reasonable steps to confirm the identity of their patients when they are first treated. In supporting the implementation of this recommendation, the AMA noted that it has included a section in its List of Medical Services and Fees, providing guidance as to what constitutes 'reasonable steps' for practice staff to take in verifying a patient’s identity and eligibility for Medicare.
2.41
APF considered that the government has appropriate fraud prevention initiatives in place:
The Foundation notes that the national government has a major and longstanding investment in systems for the interrogation of health and other welfare databases to detect fraudulent behaviour by service providers such as clinicians, third parties and recipients of services. The existence of those systems, and their constant iteration and refinement, raises questions about whether the proposed amendments are necessary.
2.42
Services Australia noted that suspected fraud can be reported via the tip-off line, and has advised that they continue to monitor activity on the dark web, and to date there has been no further instance of attempted Medicare card number sales.
Committee view
2.43
Medicare is Australia's universal health care system, and the government has a responsibility to ensure that there are limited barriers to access these services for all Australians.
2.44
The committee agrees with Senator Hanson, the proponent of the bill, that ensuring the security and sustainability of Medicare is important. The committee also considers, however, that these factors need to be balanced with the need for access to services.
2.45
The committee believes that access to Medicare is important to all Australians and agrees with submitters that any new requirements for access have the potential to disadvantage vulnerable Australians in particular.
2.46
Noting that a Medicare card is not legally required in order to access health care services and that the level of Medicare fraud by ineligible individuals is very low, the committee does not consider that the proposal would effectively target this type of fraud.
2.47
The committee also notes the finding of the Shergold review that 'while adding a photograph or other security feature such as a hologram might have a short term beneficial impact on the illegal reproduction of Medicare cards, such changes are not likely to have a lasting effect'.
2.48
The committee is satisfied that the government's current fraud prevention initiatives are sufficient and that the measures in this bill will not significantly enhance the security of the Medicare system.
2.49
The committee recommends that the bill not be passed.
Senator Wendy Askew
Chair