Chapter 1Introduction
1.1On 24 May 2023, the Health Insurance Amendment (Professional Services Review Scheme) Bill 2023 (the bill) was introduced into the House of Representatives by the Hon Ged Kearney MP, Assistant Minister for Health and Aged Care.
1.2On 14 June 2023, the Senate referred the bill to the Community Affairs Legislation Committee (the committee) for inquiry and report by 23August2023.
Structure of the report
1.3This report contains two chapters:
This chapter sets out the purpose of the bill, background information on the role of the Professional Services Review (PSR) and the PSR Scheme, key provisions of the bill, and the conduct of the inquiry.
Chapter two canvasses the key issues raised by submitters and witnesses and sets out the committee’s concluding views and recommendation.
Purpose of the bill
1.4As outlined in the explanatory memorandum (EM), the bill would amend the HealthInsurance Act 1973 (the Act) to:
remove the requirement for the Australian Medical Association (AMA) to agree to the appointment of the Director of the PSR;
amend consultation requirements for appointing other statutory office holders of the PSR to enable consultation with relevant peak bodies directly;
establish the new statutory office of Associate Director of the PSR; and
remove the requirement for the Chief Executive Medicare (CEM) to consult with stakeholder groups prior to issuing a notice to produce documents.
1.5The bill seeks to implement changes arising from recommendations of the Independent Review of Medicare Integrity and Compliance undertaken by DrPradeep Philip (Philip Review).
Background
Overview of the Professional Services Review
1.6The PSR Scheme is established under Part VAA of the Act to:
…protect the integrity of the Commonwealth medicare benefits, dental benefits and pharmaceutical benefits programs and, in doing so:
(a)protect patients and the community in general from the risks associated with inappropriate practice; and
(b)protect the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice.
1.7To achieve these objects, the PSR Scheme provides a mechanism for ‘reviewing and investigating the provision of services by a person to determine whether the person has engaged in inappropriate practice’.
1.8Responsibility for administering this scheme and protecting the integrity of the Medicare Benefits Schedule, Pharmaceutical Benefits Scheme, and the Child Dental Benefits Scheme rests with the PSR, an independent statutory agency under the Health and Aged Care portfolio. The PSR is led by the PSR Director (the Director), a statutory office holder under the Act.
1.9A delegate of the Chief Executive Medicare (CEM) refers matters for review to the PSR Director. Upon such requests, the Director may elect to investigate the claim where the occurrence of inappropriate practice can be reasonably concluded.
1.10Further, the CEM conducts audits of benefits and payments made under Medicare, and in doing so, is empowered to issue a notice to produce documents. The CEM may exercise this power where it has:
(a)a reasonable concern of overpayment of a benefit or a payment;
(b)taken into account advice provided by a medical practitioner who is a departmental employee; and
(c)taken reasonable steps to consult with a relevant professional body about the types of documents that contain relevant information.
1.11In 2021-2022, the PSR Director received 108 cases from the CEM to investigate potentially inappropriate billing by practitioners. At the end of the reporting period, a total of 77 cases were concluded, while 154 cases had not been finalised and were in various stages of completion. Of the completed cases, 57negotiated agreements and 13 final determinations came into effect requiring $19 million in repayment orders.
Philip Review
1.12The Philip Review was commissioned by the Minister for Health and Aged Care in November 2022. The final report, which was tabled on 4 April 2023, made several recommendations on governance and structure, operational processes, modernising technology and strengthening legislation.
1.13This bill seeks to implement recommendation 6, which provides:
Remove the veto power of the AMA in the selection process of the Director of the PSR given the breadth of health professions whose registrants could be subject to a review by PSR. Additionally, the appointment of a second in charge or Associate Director could manage conflicts of interest and workloads.
1.14The final report emphasised the importance of the independent appointment of the Director of the PSR:
…the positioning of the AMA as a professional body who can veto the appointment of a PSR Director no longer reflects the fact that there are a range of professionals who will be referred to PSR. Either all professions should be engaged and involved in Director appointment decisions, or no professional bodies should be involved.
1.15It described the present function of the veto power as ‘anachronistic’ and stated that its removal would ‘bring about a measurable enhancement to the perception of the PSR by the sector and any perceived conflicts of interest’.
1.16The final report also commented on the nature of the current consultation requirements in compliance and integrity activities. It endorsed the importance of consultation and connections with professional bodies in ensuring that compliance activities are realistic and appropriate. However, it questioned whether this should remain a requirement within the legislation. It stated:
I do question the extent to which their inclusion in the legislation specifically (and at multiple points) might be restrictive to the compliance activities, burdensome to the professional bodies, and unintentionally increase the timeframes for activities such as audits.
1.17The final report endorsed a ‘more coordinated approach to this (as appropriate across the spectrum of different compliance activities)’, not necessarily forming part of the relevant legislation.
Key provisions of the bill
1.18The bill contains 25 items in one schedule. The key provisions of the bill include:
Item 4, which would remove existing subsection 83(2) which requires the Australian Medical Association (AMA) to agree to the appointment of the Director of the PSR;
Items 6 to 9, 12 and 13, which would align consultation requirements to the positions of Panel members, Deputy Directors and members of the Determining Authority:
Items 6, 8 and 12 would remove the requirement for consultation with the AMA about appointments of this nature; and
Items 7, 9 and 13 would broaden and align consultation requirements for appointing medical practitioners and other health professionals and allow direct consultation with relevant peak bodies regarding these appointment;
Item 5, which would establish the new statutory office of Associate Director of the PSR; and
Item 18, which would remove paragraph 129AAD(1)(c) requiring the CEM to consult with stakeholder groups prior to issuing a notice to produce documents.
Compatibility with human rights
1.19The statement of compatibility with human rights in the bill’s EM states that the bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
1.20Further, the EM considers the bill compatible with the human rights and freedoms recognised or declared by the International Covenant on Economic, Social and Cultural Rights (ICESCR).
1.21The EM highlights the bill’s engagement with the right to health under Article12(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR), and realises the right of all individuals to enjoy the highest attainable standard of physical and mental health by supporting the integrity of Australia’s Medicare program.
1.22The EM anticipates the amendments would ensure the roles performed by the PSR in conjunction with the CEM are able to best address their obligations to public health measures, thus upholding the right to health.
Legislative scrutiny
1.23The bill was considered by the Senate Standing Committee for the Scrutiny of Bills and the Parliamentary Joint Committee on Human Rights. However, neither committee commented on the bill.
Financial impact statement
1.24The EM’s financial impact statement indicated:
The bill implements legislation which was agreed in the 2023-24 Budget process, as a response to the independent Review of Medicare Integrity and compliance. There is no financial impact from the bill.
Conduct of the inquiry
1.25Details of the inquiry were made available on the committee’s website. The committee also contacted a number of organisations and individuals inviting written submissions by 7 July 2023. The committee received 14 submissions, as detailed at Appendix 1.
1.26The committee thanks the organisations and individuals that made submissions for their contributions to the inquiry.