Bills Digest 113 1996-97 Hearing Services Administration Bill 1997


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History

Hearing Services Administration Bill 1997

Date Introduced: 5 February 1997
House: House of Representatives
Portfolio: Health and Family Services
Commencement: Royal Assent

Purpose

To provide for hearing services to be provided to voucher holders by contracted service providers.

Background

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).

Main Provisions

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.

Endnotes

  1. Centre for International Economics, Review of the Hearing Services Program, 1996: ix
  2. Australian Hearing Services, Annual Report 1994–95.
  3. Centre for International Economics, Review of the Hearing Services Program, 1996: 10
  4. Australian Hearing Services: 3
  5. Centre for International Economics, Review of the Hearing Services Program, 1996: vii.
  6. 'Hearing services reform - rationing or rationalisation?', ACROD Newsletter
  7. September / October 1996.
  8. Portfolio Budget Statements 1996–97, Health and Family Services Portfolio, p. 273.
  9. Portfolio Budget Statements 1996–97, Health and Family Services Portfolio, p. 267.

Contact Officer and Copyright Details

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

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

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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