WARNING:
This Digest was prepared for debate. It reflects the legislation as
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CONTENTS
Hearing Services Administration Bill 1997
Date Introduced: 5 February 1997
House: House of Representatives
Portfolio: Health and Family Services
Commencement: Royal Assent
To provide for hearing services to be provided to voucher
holders by contracted service providers.
The Hearing Services Administration Bill 1997 and the
accompanying Hearing Services and AGHS Reform Bill 1997 propose
significant changes to the way in which hearing services are
delivered and the clientele to whom those services are delivered.
The proposals were first outlined in the 1996–97 Budget.The
Bills propose to introduce a greater degree of contestability into
the provision of hearing services and to limit the dominant role of
the Commonwealth Government instrumentality Australian Hearing
Services (AHS).
The proposals in the Bills follow a review of the Hearing
Services Program by the Centre for International Economics which
issued its report in April 1996.A key recommendation of the report
was 'a consumer choice system based on vouchers with provision for
top up for adult clients'.The report also recommended the
establishment of a government agency within the Department of
Health and Family Services to set standards, accredit providers and
administer the voucher system(1).
Who needs hearing services?
Estimates vary on the number of people with a hearing
impairment. For example, Australian Hearing Services (AHS) has
estimated that approximately 10 per cent of the population has some
form of hearing loss or impairment(2), while a study in South
Australia indicated that 'around 18 per cent of males and 12 per
cent of females had difficulty hearing a normal conversation in a
room, indicating quite severe hearing impairment'(3). A survey by
the Australian Bureau of Statistics (ABS) estimated that some 5.7
per cent of the population have a hearing impairment.
The table below indicates the proportion of the Australian
population, by age group, with some form of hearing impairment. It
is apparent from the table that the likelihood of hearing
impairment increases with age.
Proportion of the Australian Population with Hearing
Impairment by Age Group, 1993
Age Groups % of Australian population with
hearing impairment
0 - 4 0.5
5 - 14 1.2
15 - 24 1.2
25 - 34 2.2
35 - 44 3.3
45 - 54 6.2
55 - 59 9.2
60 - 64 12.0
65 - 69 16.4
70 - 74 22.6
75 and Over 31.8
Total 5.7
Source: Australian Bureau of Statistics, Disability, Ageing
and Carers: Hearing Impairment (ABS 4435.0)
What is the current system?
Over 250 000 eligible Australians currently receive free
services through Australian Hearing Services (AHS)(4). (Note that
since 1991, an annual payment of $25 has been required for
maintenance and batteries for hearing aids). Eligible Australians
include children under 21 years, pensioners, veterans, ComCare
clients, members of the defence forces and some Commonwealth
employees. Since the expansion of eligibility in 1993 and 1994,
government subsidised services have been provided to around 75 per
cent of the people requiring hearing services in Australia. AHS has
provided most services but has contracted with private providers to
supply services as demand has increased. AHS has thus performed
three roles: as a provider of services, as a purchaser of services
from private providers and, through setting standards and
monitoring performance, as a regulator of those private
providers(5).
What are the proposed changes?
Changes proposed by these Bills centre on improved choice for
consumers, increased competition for providers and greater
cost-effectiveness of the Hearing Services Program. The Bills
propose to introduce a voucher system for eligible adult recipients
and to create a competitive environment by limiting the dominant
market role played by Australian Hearing Services (AHS). Whereas
the AHS is currently both a provider of services, a purchaser of
services from private providers and a regulator, the Bills propose
to separate these roles by creating a new Office of Hearing
Services within the Department of Health and Family Services to
administer the voucher system and accredit providers of services.
It is expected that these changes will result in greater
competition between service providers (AHS and private) and between
manufacturers of hearing devices, resulting in a more cost
efficient program.
The proposed competitive environment is limited to the provision
of services to eligible adults with a hearing loss. Australian
Hearing Services (AHS) will compete with private service providers
to deliver services to this group, each of whom is to be issued
with vouchers by the new Office of Hearing Services. If they wish,
holders of vouchers will be able to 'top-up' their voucher and
purchase a more expensive hearing aid. In addition to competing for
voucher-holders, the Bills propose that AHS be required to focus on
children and people with complex and special hearing needs such as
Aboriginal and Torres Strait Islander people andpeople in rural and
remote areas and to continue its work in research and hearing loss
prevention.
The Bills also limit eligibility for subsidised hearing
services. The age limit for eligibility of children is to be
reduced from 21 to 18 years of age and holders of Commonwealth
Seniors Health Cards will no longer be eligible for free hearing
services. The peak lobby group for disabled people, ACROD, has
raised concerns about the proposed reduction in eligibility for AHS
services from 21 years to 18 years. ACROD has pointed out that
'many young deaf people are still at school beyond the age of 18
due to their learning needs and they will be significantly
disadvantaged'. ACROD has also cautioned that an unintended
consequence of this decision could be to increase the number of
young deaf people and their families 'choosing to apply for
pensions once Child Disability Allowance ceases at age 16, thereby
increasing the overall budget costs for the Government'(6).
Holders of a Commonwealth Seniors Health Card have been eligible
for free hearing services since 1994. To be eligible for a
Commonwealth Seniors Health Card a single person must have an
income of less than $20 841.60 per year and a couple an income of
less than $34 798.40 per year. Following the cessation of the
Commonwealth Dental Health Program, holders of the Commonwealth
Seniors Health Card are now eligible only for concessional rate
pharmaceuticals under the Pharmaceutical Benefits Scheme (PBS).
Note that the Bills also propose that both groups affected by the
changes in eligibility will retain rights to free maintenance
services for their hearing aids for a further 5 years.
In addition, the Bills propose that Australian Hearing Services
(AHS) will continue as a statutory authority, but is to adopt full
commercial practices. The Government has flagged its intention that
AHS will move to become a Government Business Enterprise on or
before 30 June 1998.
Financial Impact
It is anticipated that the changes proposed in these Bills will
be implemented at no cost to the taxpayer. The Budget Papers
indicate that after initial costs of $0.4 million in 1996–97,
savings of $12.1 million can be expected over the three years from
1997–98(7).
Australian Government Health Service
The Hearing Services and AGHS Reform Bill 1997 also proposes
that the Australian Government Health Service (AGHS) is to become a
Government Business Enterprise (GBE) on or before 30 June 1997. The
decision to corporatise AGHS was announced in the 1996–97
Budget.
The Australian Government Health Service (AGHS) provides
services to three distinct groups of clients. It provides migrant
health assessments, medical examinations of applicants for
disability and sickness benefits and medical checks for
Commonwealth personnel. AGHS currently operates as a business unit
within the Department of Health and Family Services and has
operated on a full cost recovery basis since 1994.
The Budget Papers indicate that the proposed changes are
expected to result in savings of $1.2 million over the 4 years from
1996–97(8).
The Voucher System
(a) Who is eligible?
Clause 13 provides the Minister with power to
determine, subject to disallowance by Parliament, the classes of
eligible persons who are to be regarded as participants in the
voucher system and specify what hearing services are available to
them. The specification of a hearing service may, subject to
disallowance by Parliament, be subject to such conditions as the
Minister determines The term eligible person is defined in
clause 5 to mean a person who is 18 years or
older, is an Australian citizen or permanent resident, and falls
within certain specified categories. The categories include:
- Pensioner Concession Card holders;
- Health Care Card holders;
- Repatriation Health Card holders;
- certain dependants of the above card holders;
- members of the Australian Defence Force;
- certain rehabilitation services recipients; and
- subject to disallowance by Parliament, persons determined by
the Minister as eligible persons.
(b) Voucher rules
The Minister, subject to disallowance by Parliament, is provided
with power by clause 11 to make rules relating to
vouchers. The rules may provide for the duration of vouchers and
their replacement.
(c) When will vouchers be effective from?
Clause 12 provides that a voucher will not have
effect before 1 July 1997.
Contracted Hearing Service Providers
(a) Contracted service providers
Clause 20 provides the Minister with power to
contract, on behalf of the Commonwealth, with an accredited service
provider (what such a body is and the rules relating to such a body
are outlined in (b) below) to provide hearing services to voucher
holders. The terms and conditions of the contractual arrangement
are to set out in the contract and must be consistent with the
accreditation scheme and the rules of conduct. Each condition of
accreditation is taken to be a condition of the contract. Where
accreditation is cancelled, the service provider will not be
entitled to compensation or damages. The Minister may contract with
Australian Hearing Services to provide hearing services after the
commencement of clause 20. Under clause 21,
provision is made for payments to be made by the Commonwealth to a
contracted service provider. It is an offence, punishable by a
maximum term of imprisonment of 12 months, for a contracted service
provider to make a false or misleading statement relating to a
claim for a payment from the Commonwealth (clause
22).
The term 'hearing service' is defined by clause
4 to mean:
- goods or services relating to hearing rehabilitation;
- assessment of hearing; or
- hearing loss prevention.
(b) Accreditation of contracted hearing service providers
Clause 15 requires the Minister, subject to
disallowance by Parliament, to establish a scheme for the
accreditation of entities (eg. an individual, corporation, or
Commonwealth, State or Territory department). The scheme must
provide the Minister with power to make decisions accrediting
entities and cancelling accreditation. In addition, the scheme may
provide for fees to charged for applications under the scheme and
must provide for the keeping of a register of accredited entities.
The scheme may provide the Minister with power to make a decision
cancelling accreditation where a condition of accreditation is
breached (subclause 16(2)).
(c) Rules of conduct for the provision of hearing services
Clause 17 requires the Minister, subject to
disallowance by Parliament, to make rules of conduct relating to
the provision of hearing services to voucher holders. The rules of
conduct may prohibit or regulate the charging of fees or other
consideration payable by a voucher holder in relation to a hearing
service provided by an accredited service provider. The rules of
conduct may also require an accredited service provider to take
reasonable steps to ensure employees hold such qualifications as
are required by the rules, and tells the Minister the names and
qualifications of such employees. It is a condition of
accreditation that an entity comply with the rules of conduct
(clause 18).
Clause 19 prohibits the Minister accrediting
certain individuals (eg a director of a corporation or a person who
is concerned in, or takes part in, the management of a
corporation), partnerships and corporations who are disqualified
persons. Basically, a 'disqualified person' is a person who has
been convicted of an offence for fraud or dishonesty, or made a
false or misleading statement in relation to a claim for payment
for a hearing service. The clause also requires the Minister to
cancel the accreditation of an accredited service provider where a
conviction has occurred after accreditation.
Complaints Handling Mechanism
Clause 26 requires the Minister to take
reasonable steps to provide arrangements whereby voucher holders
can make a complaint about hearing services provided to them by a
contracted service provider. Where a complaint is made it must
considered and dealt with within 90 days of it being made.
Delegation
Clause 27 provides that the Minister may
delegate all or any of his or her functions and powers to the
Secretary or any other officer of the Department, except powers
to:
- determine that a specified person is an eligible person;
- make voucher rules;
- determine the classes of eligible persons who are to be
regarded as participants in the voucher system and specify what
hearing services are available to them;
- establish a scheme for the accreditation of entities; or
- establish rules of conduct relating to the provision of hearing
services to voucher holders.
Review Of Decisions
Part 5 of the Bill (clauses 28-35) provides a
two tier review process of certain decisions. The decisions
include:
- a decision by the Minister refusing to issue a voucher to a
participant in the voucher system;
- a decision made by the Minister under the voucher rules;
- a decision made by the Minister under the accreditation
scheme;
- a decision made by the Minister under a condition of
accreditation;
- a decision made by the Minister under the rules of conduct;
and
- a decision of the Minister under clause 19 (see above).
The first tier of review is review by the Minister. On receipt
of an application for review, the Minister must make his or her
decision on reconsideration within 90 days of receipt of the
application. Notification that a decision has been affirmed or
changed must include a statement that a person whose interests are
affected by the reviewed decision may apply to the Administrative
Appeals Tribunal for a review of the decision.
The second tier of review is review by the Administrative
Appeals Tribunal of the Minister's review decision.
- Centre for International Economics, Review of the Hearing
Services Program, 1996: ix
- Australian Hearing Services, Annual Report 1994–95.
- Centre for International Economics, Review of the Hearing
Services Program, 1996: 10
- Australian Hearing Services: 3
- Centre for International Economics, Review of the Hearing
Services Program, 1996: vii.
- 'Hearing services reform - rationing or rationalisation?',
ACROD Newsletter
- September / October 1996.
- Portfolio Budget Statements 1996–97, Health and Family
Services Portfolio, p. 273.
- Portfolio Budget Statements 1996–97, Health and Family
Services Portfolio, p. 267.
Paul Mackey (Digest Background)
Ian Ireland (Digest Purpose and Main
Provisions)
11 March 1997
Bills Digest Service
Information and Research Services
This Digest does not have any official legal status. Other
sources should be consulted to determine whether the Bill has been
enacted and, if so, whether the subsequent Act reflects further
amendments.
IRS staff are available to discuss the paper's contents
with Senators and Members and their staff but not with members of
the public.
ISSN 1323-9031
Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library,
1997.
This page was prepared by the Parliamentary Library,
Commonwealth of Australia
Last updated: 9 April 1997
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