Chapter 2Key issues
2.1Submitters to this inquiry were largely supportive of the amendments to the Health Insurance Act 1973 (the Act) as proposed by the bill. This chapter will discuss the views of submitters, including:
support for the bill;
proposals to amend existing consultation requirements; and
professional eligibility requirements for practitioners that may be appointed to various positions within the Professional Services Review (PSR).
2.2This chapter concludes by providing the committee’s views and recommendation on the bill.
Support for the bill
2.3In outlining the rationale for the proposed amendments, the Department of Health and Aged Care (the department) emphasised:
The measures in the Bill will improve public confidence in the integrity of Medicare by strengthening the operation of the PSR and allowing for continuity of proceedings, removing any perception of inappropriate influence over the professional review process, and improving the effectiveness of the current process for the auditing of payments relating to Medicare services.
2.4The committee received several submissions from peak bodies in support of the bill. These stakeholders provided positive feedback for the proposed changes and expressed enthusiasm to continue a collaborative relationship with the PSR.
2.5The creation of a new office of Associate Director of the PSR received significant support from inquiry participants. The Australian College of Midwives (ACM) stated that the provision is ‘sensible’, would ‘ensure good governance’, and ‘expedite the PSR process’.
Implementation of the Philip Review recommendations
2.6Stakeholders commended the bill’s implementation of aspects of the findings and recommendations of the Independent Review of Medicare Integrity and Compliance (Philip Review), and widely supported ‘efforts to strengthen the fairness and transparency of the Professional Services Review (PSR) process’.
2.7While remaining supportive of the bill’s provisions, some submitters noted the importance of balancing the proposed recommendations from the Philip Review with an appropriate level of consideration for the impact to practitioners.
2.8One submitter, the Australian College of Rural and Remote Medicine (ACRRM), raised concerns that the bill may ‘overstep’ the recommendations of the Philip Review and risk placing public confidence in the system at a higher priority than the rights and confidence of practitioners undergoing review.
Consultation
2.9As described in Chapter 1, the bill seeks to alter or remove a number of existing consultation requirements. These concerns arose in the context of the proposed amendments to:
alter consultation requirements on appointments to various positions on the PSR, including the removal of the requirement to consult the AMA on appointments to the role of director; and
remove consultation requirements prior to the issuing of a notice to produce documents by the Chief Executive Medicare (CEM).
2.10While few submissions presented outright objections to the changes, most emphasised the need for ongoing consultation should the bill pass.
2.11The following paragraphs discuss these concerns.
Removal of the AMA ‘veto power’ on Director appointments
2.12Reflecting the general support received for the bill in submissions, the proposal to remove the requirement to consult the AMA on appointments to the Directorship of the PSR received support amongst the majority of submissions. However, some concerns were raised that this change could have an impact on confidence in the PSR within the medical profession.
2.13The Council of Procedural Specialists (COPS) explained that the historical impetus for consultation with the AMA ‘was to ensure that whoever was appointed as PSR Director had the confidence of a significant body of medical practitioners in good standing’. It added that it is ‘essential that the appointment of a PSR Director be undertaken carefully, since misuse or abuse of this authority could result in the unnecessary and unjust destruction of a professional reputation’.
2.14The ACRRM cautioned that removal of this requirement may have some impact on confidence in the PSR amongst the medical profession. Similarly, COPS opined that:
…in order to maintain effectiveness of Medicare as a rebate system, it will be essential for proposed legislation to allow for due process at all levels and for the PSR Director to maintain close consultation with the AMA, recognised medical groups and medical practitioners individually and have their confidence.
2.15The department explained that the requirement to engage with the AMA arose out of the key role of the AMA in the ‘preparation of the legislation that established the PSR Scheme’. The department explained that it ‘was intended to represent the medical profession of the time, and other health practitioners did not yet have access to Medicare’.
2.16In their submission, the department also stated that the current arrangements effectively give the AMA a ‘veto power’ on the appointment of the Director. The department suggested that the current arrangements may undermine public confidence in the role of the PSR as a regulator and is inconsistent with public expectations regarding its independence. It explained:
Given the potential conflict between the PSR’s objective to safeguard Medicare and the AMA’s role in representing the interests of medical practitioners who may be subject to PSR review, it is appropriate for the veto power to be removed.
2.17Private Healthcare Australia expressed a similar view, stating that ‘it should be unambiguously up to the government of the day to make such decisions in the public interest’.
2.18Several submissions suggested that this amendment would support broader representation across health professions. The ACM stated that current legislation ‘allows a veto power for one stakeholder group, which represents a singular health profession’, while the Australian Psychological Society stated that the amendment would ‘ensure that all professions are represented equally’.
2.19The department further reiterated that the Philip Review recommended collaboration with various stakeholders to ‘bolster the integrity and compliance of the Medicare system’ and while continued engagement with the AMA will occur, it is important to encourage ‘engaging with other stakeholders across the sector’.
Appointment of other statutory office holders to the PSR
2.20Stakeholders generally expressed support for the proposed alteration to the consultation requirements for appointments to the positions of the Deputy Director, Panel members and members of the Determining Authority, which would remove the express requirement to consult the AMA and enable direct consultation with relevant peak bodies. The ACM welcomed this change, stating that it would create ‘transparency…and remove any perceived conflict of interest’.
2.21Some submissions from medical associations, while not expressing objection to the measure, emphasised the need for ongoing consultation should the bill be enacted. In expressing this sentiment, the ACRRM noted in particular that consultation going forward should include rural voices.
2.22The department reiterated that the ‘Minister should not be constrained by the current legislative requirement for consultation with specific organisations’, and thus removal would ensure ‘impartiality and independence’ across the PSR review process.
2.23In addition, the department confirmed that:
…[i]f this Bill is passed, the department will continue to consult closely with professional bodies and stakeholder groups to better understand and address causes of non-compliance.
Response from the AMA
2.24In response to the proposed changes to consultation requirements outlined above, the AMA noted its contributions to the PSR have ‘widely [been] seen as essential, particularly in helping to ensure confidence in the PSR among the profession’.
2.25The AMA advised that it ‘will not oppose the Bill nor offer any amendments’, noting that its support:
…is dependent on the government formalising arrangements with the AMA as the peak body representing all medical practitioners around the consultation requirements referred to in [the] Act and on the administration and functioning of the PSR.
2.26The department reiterated its commitment to maintaining avenues of consultation throughout its submission, stating that ‘engagement with the health profession would remain an integral part of the PSR appointment process’. It explained:
…the Government intends to formalise strategic agreements with key health stakeholders, including the AMA. These agreements will encourage collaboration and enable the Government and health sector stakeholders to work together during ongoing integrity reforms.
Chief Executive Medicare
2.27Submitters also commented on the bill’s proposal to remove a further consultation requirement upon the CEM. At present, subsection129AAD(1)(c) of the Act requires the CEM to have taken reasonable steps to consult with a relevant professional body about the types of documents that may indicate whether a benefit or payment made under the Act has exceeded the amount that should have been paid. This serves as a prerequisite to issuing a notice to produce such documents under subsection 129AAD(2) in circumstances where the CEM has a reasonable concern that such an overpayment may have occurred.
2.28As mentioned earlier in this report, while it did not make a recommendation on this matter, the Philip Review reinforced the importance of consultation and connections with professional bodies in ensuring that compliance activities are realistic and appropriate, but questioned the need for such a requirement to be included in the legislation.
2.29The department submitted that the current provision is unusual, and ‘is not found in most regulatory settings’. It stated that this amendment will ‘streamline the audit process without limiting the documents or other information that a person may provide’. Additionally, the amendment:
…will allow the department to take more timely action to audit potential incorrect claiming undermining the integrity of Medicare and in doing so, protect the Commonwealth from expenditure that does not improve health outcomes for Australians.
2.30While submissions remained largely supportive of the bill, a number of concerns were raised about this proposal, including:
the impact of removing consultation; and
providing fairness to a person the subject of an audit.
Impact of removing consultation
2.31The ACRRM was concerned about the possible impact of removing consultation with peak bodies should this amendment come into effect. It was particularly concerned that the remaining mechanism by which the CEM will obtain advice prior to the issuance of a notice is through a departmental employee. It emphasised the importance of securing an understanding of rural and remote contexts and stated that ‘[i]t is imperative that their involvement is not lost to the process’.
2.32The Australian Psychological Society (APS) suggested that this change may have an impact on the flow of information to professional bodies, and thus constrain these bodies’ capacity to support and educate their members. While preferring that the provision remain unchanged, if the amendment were enacted, the APS ‘strongly’ suggested that ‘other, non-legislative processes be implemented to ensure that peak bodies will continue to be informed about non‑compliance issues and concerns for their profession’.
2.33The department reiterated that ‘engagement with the health profession would remain an integral part of the…departmental compliance program’ and stated that ‘stakeholder groups would continue to be consulted as necessary to inform compliance activities’.
Fairness
2.34The question of fairness to the individual being audited was also discussed. The RANZCP commented that ‘the current process suggests an implied assumption of guilt which may be exacerbated by this change’. It stated:
Clear information is required on what alternative provision will be put in place to reassure practitioners that engagement with the medical profession remains an integral part of the compliance program before this requirement is removed.
2.35The ACRRM argued that the relevant professional body is better placed than departmental employees to comment on the types of documents that may contain relevant information. A similar view was put forward by the Australian Dental Association (ADA) who suggested that ‘the breadth of understanding as they [relate] to different areas of practice will not be well understood by the PSR or the staff assisting them’. For that reason, the ADA considered that seeking input from relevant professional bodies would assist. It added that ‘[a]ny concerns about this process delaying Medicare compliance functions could surely by mitigated through adequate communication’.
2.36The department explained that the amendments will have no impact on procedural fairness requirements during an audit. It stated that opportunities to make submissions and provide information or documents considered relevant will remain for persons being audited. The department suggested that the streamlined process may benefit persons under audit due to the shortened timeframes.
2.37The department also identified that at present the requirement ‘is of limited practical benefit as there is a general understanding with the health profession as to the range of documents that may be provided’.
Professional eligibility requirements for positions in the PSR
2.38The oversight of the PSR applies to a range of health providers and practitioners. A number of submitters raised the issue of whether eligibility for the appointment to the PSR Director and Associate Director, as well as positions of Deputy Director, Panel Members and members of the Determining Authority should be limited to medical practitioners or expanded to consider non-medical practitioners.
2.39Currently, legislation stipulates that persons appointed to the positions of Director must be a medical practitioner. Proposed amendments would mirror this requirement for the new position of Associate Director. In contrast, the positions of Deputy Director, Panel members and members of the Determining Authority may be filled by ‘practitioners’. Subsection 81(1) of the Act defines ‘practitioner’ as:
(a)a medical practitioner; or
(b)a dental practitioner; or
(c)an optometrist; or
(d)a midwife; or
(e)a nurse practitioner; or
(f)a chiropractor; or
(g)a physiotherapist; or
(h)a podiatrist; or
(i)an osteopath; or
(j)a health professional of a kind determined by the Minister under subsection (1A) to be a practitioner for the purposes of this Part.
2.40Peak body representatives from the nursing profession unanimously called for amendments to be made that would allow senior nurses and other appropriate nursing representatives to be considered for leadership roles within the PSR. The Australian College of Nursing recommended that a review of current representation for non-medical health professions be undertaken to ensure consistency with the oversight of the PSR.
2.41Similar considerations were raised in relation to the eligibility requirements for the role of Associate Director, which, under the bill, would be required to be a medical practitioner.
2.42The ACRRM submitted that legislation should uphold the requirements for a medical practitioner to be appointed as an Associate Director of the PSR. COPS emphasised that ‘it is critical that whoever fulfils this…role have the confidence of a significant body of medical practitioners and a clear understanding of the complexities of medical practice and the MBS system itself’.
2.43In contrast, the ACM expressed favour with the appointment of non-medical practitioners into this position ‘as appropriate’. It explained:
The expansion of Medicare access to a range of non-medical practitioners means additional expertise is required to review and audit practitioners. We recognise the importance of confidence from the entire health workforce and the public in the audit of Medicare and that role that the Associate Director will play in supporting this review.
Committee view
2.44The committee supports reforms which promote the health provider compliance framework, including the PSR Scheme, to support the integrity of Australia’s health programs.
2.45The committee considers that the bill contains priority measures arising from the Independent Review of Medicare Integrity and Compliance which will support the effectiveness of the Medicare Benefits Scheme. By amending the consultation requirements for the appointment of a number of positions, and the requirements to request the production of documents from the Chief Executive Medicare, the bill will enhance public perception of the PSR and improve the independent functioning of the PSR Scheme.
2.46The committee acknowledges the concerns raised by peak health professional bodies to the inquiry but is reassured by the department’s advice that consultation with stakeholders will remain a priority for the PSR.
2.47The committee expresses no view on the professional eligibility requirements for appointments to positions within the PSR, other than to reinforce the view that it is imperative that the public and the professions within the responsibility of the PSR can hold confidence in its regulatory activities. The committee encourages the government to revisit this issue if necessary.
Recommendation 1
The committee recommends that the Senate pass the bill.
Senator Marielle Smith
Chair