Bills Digest no. 37 2009–10
Health Insurance Amendment (Compliance) Bill
2009
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
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date
introduced: 17
September 2009
House: House of Representatives
Portfolio: Health and Ageing
Commencement:
1 January
2010
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
The Health Insurance Amendment
(Compliance) Bill 2009 (the Bill) proposes to amend the Health
Insurance Act 1973 (the Act) in order to implement the
Increased Medicare Compliance Audits (IMCA) initiative, which was
previously announced in the 2008 09 budget.
The IMCA initiative includes an increase in the
number of Medicare compliance audits undertaken and a proposal to
increase the powers of Medicare Australia (MA) to compel doctors to
present documents to substantiate their Medicare billing
claims.[1]
Medicare expenditure has grown substantially in recent years to
$14 billion per year more than doubling over the last ten
years.[2] Compliance
audits undertaken by Medicare Australia (MA) administrative staff
are an established mechanism for maintaining the integrity of
Medicare through identifying incorrect Medicare claims.[3] The audit process focuses
on identifying incorrect claiming or billing of Medicare items by
health providers through analysis of claiming data. A Medicare
compliance audit has been described as:
an administrative check that ensures the
provider and patient were eligible for the Medicare benefits
already received; the service was provided and that it met the MBS
item requirements which correspond to the claim that has been
made.[4]
Where the audit process raises concerns over a medical
practitioner s clinical practice (such as a clinical practice
considered unacceptable by members of the medical profession), MA
may refer the practitioner to the independently convened
Professional Services Review Board (PSR) for review.
It should be noted that the PSR process is separate to the audit
process which as noted, focuses on inappropriate billing or
claiming. The PSR considers cases of possible inappropriate
clinical practice using a peer review process. In 2007 08, MA
referred 50 matters to the PSR for review.[5]
While the majority of practitioners cooperate with the Medicare
compliance audits, the Government estimates that around 20 per cent
do not by either refusing to cooperate or not responding to any
requests for documents.[6] An Australian National Audit Office (ANAO) report found
that non-compliant Medicare payments equated to around 1.3 to 2.3
per cent of expenditure in 1996 97. Given the subsequent growth in
Medicare expenditure, MA estimates that annual non-compliant
payments range from $170 $300 million per annum.[7] Furthermore, where non-compliance
is identified, only a small portion of incorrect claims are ever
recovered (without sanction) a situation which fails to provide
adequate deterrence.[8]
Unlike the PSR process where examination of clinical records is
authorised,[9] MA
cannot compel doctors to produce documents, such as clinical
records, to substantiate their billing practices.[10]
As part of its Responsible Economic Management policy agenda for
the 2008 09 Budget, the Government announced the IMCA initiative,
including an increase of the number of Medicare compliance audits
undertaken from 500 to 2500 per year. This part of the initiative
commenced in January 2009. The Budget also included an announcement
that the Government proposed to increase the powers of MA to compel
doctors to present documents to substantiate their Medicare billing
practises.[11] In
undertaking this latter proposal, the Government promised a
consultation process with stakeholders would be undertaken during
2008 09.
Subsequently, during the latter half of 2008, consultations with
peak medical and allied health and consumer groups commenced. The
Government also sought advice from the Office of the Privacy
Commissioner. The result of this consultation process was the
formulation of draft legislation in April 2009 and the preparation
of a Privacy Impact Assessment (PIA); both the draft legislation
and the PIA were subsequently referred to a Senate Committee for
inquiry (see below for more details).
The Government has now developed a final legislative package, in
response to stakeholder feedback and the Senate Committee
inquiry.
Broadly, this Bill proposes:
- to enable the Chief Executive Officer (CEO) of MA, where a
reasonable concern exists, to issue a notice to a medical
practitioner (or others) to produce documents within a specified
time, that may include patient medical records, to substantiate
whether a Medicare benefit paid for a professional service exceeded
the proper amount
- that where documents are required to substantiate a Medicare
claim, the CEO must consult with a medical adviser who is an
employee of MA concerning the type of documents required and who is
the only person authorised to view patient clinical details
- that clinical records are not required to be produced unless
these would be necessary to substantiate a claim
- that the CEO give the person issued with a notice to produce
documents a reasonable opportunity to respond
- allows for the imposition of civil penalties where those issued
with a notice on behalf of a medical practitioner, fail to comply,
except where it is beyond their control to do so
- that where documents are produced, they are not admissible in
evidence in criminal or civil proceedings, except in certain cases
relating to false or misleading statements, and the practitioner
cannot claim self-incrimination as a defence against producing
documents
- debt notice and recovery processes with specified time periods
between the notice of a decision and a notice claiming the
debt
- an internal review process of debt decisions, and
- administrative penalty amounts designed to deter non-compliance
and recidivist behaviour
The proposed provisions will apply to Medicare services provided
after 1 January 2010. The Minister s second reading speech
indicates that this will allow time for the promulgation of
guidelines for medical practitioners, to be developed in
conjunction with relevant stakeholders including the Australian
Medical Association (AMA).[12]
The Government estimates the measures contained in the IMCA
initiative, including the proposals contained in the Bill, will
result in total savings of $147.2 million over four years, with
administration costs of $76.9 million, resulting in net savings of
$70.3 million.[13]
As noted above, the Bill proposes to implement a 2008 09 budget
measure as part of the Government s responsible economic management
policy agenda.
The current Bill has not been referred to a Parliamentary
Committee.
However, a draft exposure Bill circulated in April 2009 was
referred to the Senate Community Affairs Legislation Committee (the
Committee) for inquiry, by Senator Ludwig, Minister for Human
Services.[14]
The Committee s inquiry examined the draft legislation and
associated explanatory material, as well as the
PIA.[15]
The Committee received some 25 submissions and took evidence from a
range of peak stakeholder and consumer groups. A number of issues
were raised, including (but not confined to):
- privacy and the doctor/patient relationship a number of medical
and other groups raised concerns that some patients might withhold
information from their doctors if they were aware that their
personal information could be shared with third parties for
purposes other than medical care. In particular, the Australian
Society for HIV Medicine stressed the importance of maintaining
confidentiality, particularly where information is of an intimate
nature.[16] The
Office of the Privacy Commissioner suggested that MA consider the
use of medical advisors in handling clinical information[17]
- lack of clarity concerning access to clinical records and
substantiation of claims some medical groups, such as the
Australian Psychological Society, cited a lack of clarity regarding
the type of documents that might be required. AMA argued that in
most cases clinical records would need to be produced as
administrative records are lacking in sufficient detail[18]
- concerns over patient notification and consent a number of
consumer and medical groups raised concerns over the disclosure of
patient medical records without patient s consent being sought or
notification given. The Private Mental Health Consumer Network
called on MA to develop clear protocols for practitioners. Others
such as the Public Interest Advocacy Centre (PIAC) recognised that
seeking such consent or giving notification may cause unnecessary
stress to patients, and be impractical[19]
- MA staff and protection of confidentiality stakeholders also
expressed concern that administrative staff were not suitably
qualified to interpret medical records or clinical data. The
Australian Privacy Foundation s Dr Roger Clarke noted clinical data
was easy to misinterpret . Further concerns were also raised about
the confidentiality of patient records and the capacity of current
measures to secure such information[20]
- duplication of work undertaken by the PSR a number of groups
suggested the proposed measures may duplicate the review work
already undertaken by the PSR. Civil Liberties Australia expressed
concern over the blurring of lines between the proposed compliance
audit process and the existing PSR process . The Medical Indemnity
Industry Association (MIIA) noted that appropriate accountability
mechanisms already existed [21]
- cost impact on practitioners and complexity a number of
stakeholders pointed to the additional cost and administrative
burden on practitioners, and questioned the accuracy of the cost
estimates contained in the draft explanatory materials. The
Australian College of General Practitioners suggested the
complexity of Medicare and the Pharmaceutical Benefits Scheme
sometimes led to unavoidable errors and that simplification of
these programs combined with education of providers was a better
approach to the problem of non-compliance[22]
- integrity of Medicare and the public interest some stakeholders
supported the proposed changes. The Australian Health Insurance
Association noted they were important to ensuring the integrity of
Medicare in light of the considerable public expenditure on the
program.[23] PIAC
suggested the proposed changes raised two potentially competing
public interest principles that need to be balanced: the principle
of the public interest in the maintenance and integrity of
Australia s universal health scheme and the public interest in the
confidentiality in the doctor/patient relationship [24]
- penalties and appeal processes among the issues of concern
raised by many groups were those regarding the process for appeal.
The AMA was concerned over a lack of procedural fairness with the
scope and application of the proposed penalties. The MIIA argued in
favour of an external merits review, while the Commonwealth
Ombudsman raised concerns over the automatic nature of the penalty
regime and noted that changes in medical practice and terminology
could lead to cases of genuine confusion .[25]
In its concluding comments, the Committee s report was broadly
supportive of the draft legislation and the PIA. It considered that
the draft legislation achieved a good balance between the two
competing public interest principles that is, the interest of
patients to have their medical records kept confidential and the
interest of taxpayers who are entitled to expect reasonable checks
are made to ensure public funds are spent appropriately.[26] However, the Committee
expressed some sympathy for concerns about penalties and appeals,
and regarded arguments supporting a multi-stage audit process as
persuasive .[27] It
also agreed with a proposal made by the AMA that recordkeeping
requirements be clarified.[28]
The Committee recommended that specific measures be detailed in
regulations to the effect that patient clinical records are only
required to be accessed where necessary.[29]
The substance of the Committee s recommendation was accepted by
the Government, with the modification that it be addressed in the
primary legislation, which this Bill now proposes.[30]
In a minority report, Opposition Senators broadly supported
efforts to enhance and expand the audit process, but disagreed with
the majority view that the draft legislation had achieved the right
balance between patient privacy and ensuring public funds are
appropriated properly. They made four recommendations: that a
training and information program for GPs be developed, the Medicare
Benefits Schedule be simplified, protocols for the protection of
patient privacy be developed and that reviews of practitioners
requiring patient records be referred to the PSR.[31] The Greens supported greater
safeguards for patient privacy, including oversight by medical
advisers and the making of a Privacy Impact Assessment.[32]
As noted, the development of the current Bill has been the
result of an extensive consultation process, including the
development of draft legislation and PIA; and referral of these to
a Senate Committee. Notwithstanding the considerable debate that
occurred around the draft legislation, there has been minimal
commentary regarding the current Bill. Generally, comments that
have been made are more positive than those made about the draft
legislation.
The AMA has commended the Government for addressing concerns
raised by the AMA in regards to the original Bill , such as
ensuring that only medical practitioners employed by MA can view
patient records, thus protecting patient privacy. In addition, the
AMA welcomed the internal review provisions of the current Bill and
new arrangements that ensure that audits will only be undertaken
where a reasonable concern exists.
While the Opposition and minor parties expressed some criticism
of the draft legislation (see above), they are yet to comment on
the proposed provisions contained in the current Bill.[33]
The Government estimates that overall, the ICMA measure will
result in total savings of $147.2 million over four years, and
administration costs of $76.9 million, resulting in a net saving of
$70.3 million.[34]
Modest savings of $6.9 million are forecast for 2008 09, the first
year of the ICMA initiative, with larger savings forecast over the
forward years, reflecting the ramping up of the compliance audits.
The cost estimates also allow for one-off related capital cost of
$6.2 million presumably to allow MA to purchase new equipment in
order to implement the measure.
It should be noted that the forecast costs and savings remain
unchanged from those contained in the draft legislation and
announced in the 2008 09 Budget. This is despite the fact that the
Bill contains new provisions that propose utilising medical
advisors and allowing for an internal appeals process, measures
which could be expected to have some cost impacts on MA.
Item 2 of the Bill proposes to insert
new sections 129AAD 129AAJ into the Act. These proposed
amendments effectively enable MA to enforce requirements on medical
practitioners to produce certain documents during compliance
audits.
Proposed section 129AAD would enable the CEO to
give a written notice to produce documents to substantiate whether
a Medicare benefit or payment that had been paid in respect of a
particular professional service should actually have been paid. The
notice to produce would be issued to either the practitioner who
had provided the professional service in question or someone who
has custody, control or possession of the relevant documents.
Importantly, the CEO may only give a person such a notice if he
or she has given that person a reasonable opportunity to respond to
an earlier request (not under proposed section
129AAD) to produce the documents. This would ensure
that:
practitioners are provided with an opportunity
to cooperate with Medicare Australia prior to a formal notice under
the Act being issued. It means that practitioners who choose to
voluntarily tell Medicare Australia that they have received a
benefit that exceeds the amount they should have been paid still
receive discounts on any financial penalty that may apply.[35]
In addition, the CEO may only issue such notice if he or she
believes on reasonable grounds that:
- someone who had provided the professional service(s) in respect
of which the amount the subject of the CEO s concern was paid; or
on whose behalf the professional services was provided, or
- another person (not the patient nor anyone else who incurred
expenses in respect of the professional services provided),
has possession, custody or control of documents relevant to
substantiating the Medicare benefit or payment made in respect of
the professional service(s).
It is noted that the purpose of including another person with
possession, custody or control of documents relevant to
substantiating the Medicare benefit is to cater for corporate
practices and hospitals contracting out to practitioners.[36] In addition:
It aims to encourage third parties to cooperate
with an audit request so that practitioners who do not control the
relevant documents are able to substantiate services. It is also
intended to discourage practitioners from establishing corporate
structures in order to avoid compliance with a notice to produce
documents issued under this legislation.[37]
The notice to produce documents is restricted to professional
services given in a two year period immediately before the notice
is issued and must give the person at least 21 days to comply.
However, the effect of both items 3 and
10 of the Bill would, arguably, preclude any
retrospective application of this provision. The effect of
item 3 is that proposed section
129AAD would not apply in relation to professional
services provided before the commencement of this provision 1
January 2010.[38]
In addition, under item 10, the penalty provisions
of proposed sections 129AEA 129AEC (see below)
would not apply to professional services provided before 1 January
2010.
It is noted that under proposed subsections
129AAD(5) and (6), whereas the notice may
require production of relevant documents or extracts of documents
(or copies thereof) to the CEO or an MA employee, if the documents
in question contains clinical details of an individual, the person
to whom the notice was issued only has to produce those documents
to an MA employee who is a medical practitioner. The Government
assures that:
Medicare Australia will have qualified medical
practitioners available to receive documents in all audits.[39]
In addition, the Government states that:
All medical practitioners employed by Medicare
Australia are subject to the provisions of the Public Service
Act 1999 and the secrecy provisions in the Health
Insurance Act 1973.[40]
It is also noted that only documents (or extracts thereof) which
are relevant to the purpose of substantiating the Medicare
benefit or payment made in relation to the specified service(s)
need be produced. According to the Government:
The relevancy test operates to ensure that once
the person has provided information which substantiates the
service, no further documents can be sought. This means that
practitioners will not have to produce all parts of a document, or
all documents relating to a service, and only need to produce
enough information to address the CEOs concern and substantiate the
service.[41]
It is also noted that proposed subsection
129AAD(8) stipulates that the notice must explicitly state
that the person to whom the notice is given would not have to
produce a document, extract or copy containing an individual s
clinical details unless it is necessary to substantiate an amount
paid for a professional service.
Proposed subsection 129AAD(9) states that
documents to be produced may also be documents containing health
information as defined by section 6 of the Privacy Act
1988 (the Privacy Act) as information about:
- the health or a disability (at any time) of an individual;
or
- an individual s expressed wishes about the future provision of
health services to him or her; or
- a health service provided, or to be provided, to an
individual;
that is also personal information; or
- other personal information collected to provide, or in
providing, a health service; or
- other personal information about an individual collected in
connection with the donation, or intended donation, by the
individual of his or her body parts, organs or body substances;
or
- genetic information about an individual in a form that is, or
could be, predictive of the health of the individual or a genetic
relative of the individual.
Under the Privacy Act, health information about a person is
regarded as sensitive information and subject to National Privacy
Principles (NPPs), relating to the collection and disclosure of
such information.[42]
Under proposed subsection 129AAD(1),
proposed section 129AAD would only apply if the
CEO:
- has reasonable concern that a benefit or payment had
been made under the Act in respect of one or more professional
services, which may exceed an amount that should have been paid (if
anything at all), and
- has considered advice from a Medicare employee who is a medical
practitioner about what types of documents contain information
relevant to substantiating that benefit or payment.
According to the Government:
The requirement for the CEO to have a
reasonable concern is included to ensure that compliance audits are
not conducted on a random basis. Medicare Australia will use a
range of sophisticated data analysis techniques as well as
gathering information that is provided by members of the public in
order to identify potential risks to the integrity of the Medicare
scheme. The reasonable concern developed by the CEO is based on
this analysis work.[43]
It is also noted that the CEO may have a reasonable concern
about benefits or payments made relating to professional services
provided by individual practitioners or by particular kinds of
practitioners, as well as relating to the provision of services to
which specific items or groups of items relate
(note to proposed subsection
129AAD(1)). According to the Government, by way of
explanation:
the use of a particular Medicare Benefits
Schedule item may have grown so significantly or unexpectedly that
the CEO can have a reasonable concern about the provision of any
service associated with that item number. The CEO may also have a
concern about a professional service if it has been provided by a
person who is a particular type of practitioner and the CEO has a
concern about that specific group of practitioners.[44]
As proposed subsection 129AAD(1) does not
specify the type of documents to be provided in response to a
notice, it would be up to individual practitioners to decide what
documents they have that could substantiate the particular service.
According to the Government:
Medicare Australia is working with relevant
stakeholders, including the Australian Medical Association, to
develop guidelines for practitioners on the kinds of information
that will substantiate particular services or groups of services.
These guidelines will be publicly available and will emphasise that
clinical information is not to be provided unless it is absolutely
necessary to substantiate the service.
The provisions in this Bill do not commence
until 1 January 2010 in order to allow for the development and
publication of these guidelines.[45]
Under proposed subsection 129AAE(1), failure to
comply with such notice to produce documents would result in civil
penalties being imposed. The penalty for individuals would be 20
penalty units or $2200 and the penalty for bodies corporate would
be 100 penalty units or $11 000.[46] However, under proposed subsection
129AAE(2), it would be a defence if the defendant could
prove that failure to comply was attributed to something over which
he or she had no control and against which he or she could not
reasonably be expected to guard.
Proposed section 129AAF relates to self
incrimination. Whereas the person would not be excused from
producing documents subject to a notice under proposed
section 129AAD on the grounds that doing so would
incriminate him or her or expose him or her to a penalty, it is
also proposed that documents produced and information obtained as a
consequence of producing the documents would be inadmissible as
evidence against the person in other criminal proceedings (other
than for certain offences relating to false or misleading
information or documents), as well as civil proceedings (other than
those arising under Part VIA of the Act - Civil Penalties ).
Proposed section 129AAG sets out what MA may do
with documents, extracts or copies produced under notice, in
substantiating Medicare benefits or payments made. This includes
inspecting documents, extracts or copies; making copies of or
taking extracts from a document, extract or copy; or retaining the
document, extract or copy for such reasonable time as the CEO or MA
employee thinks fit.
It is noted that the Government assures that:
Documents produced under section 129AAD will be
viewed by a limited number of specially trained and authorised
staff; including medical practitioners employed by Medicare
Australia who will be available to receive documents contain
clinical details. These authorised staff will be located in
National and State or Territory offices. Medicare Australia already
has a conflict of interest policy that prohibits staff from being
involved in compliance activities when they are acquainted with an
individual connected to the audit. Information will be stored in
accordance with relevant legislation, current policies and
Government requirements that safeguard personal information
including the Privacy Guidelines for the Medicare Benefits and
Pharmaceutical Benefits Programs issued by the Privacy
Commissioner under section 135AA of the National Health Act. Those
safeguards prevent and detect unauthorised access and cover all
facets of personnel security, physical security and IT
security.[47]
Proposed sections 129AAH and
129AAI relates to notices of decision given by the
CEO where either no amounts are recoverable as payments or benefits
were substantiated and where amounts are recoverable.
Under proposed section 129AAH, the CEO must
give a notice of any decision made to the relevant person that the
documents produced under proposed section 129AAD
do substantiate the Medicare payment or benefit originally
paid.
Notices of the CEO s decision must also be given where:
- the CEO is satisfied for the purposes of proposed
subsections 129AC(1B) or (1D) of the Act
that circumstances beyond a person s control exist, and
- the CEO is satisfied for the purposes of proposed
subsection 129AC(1F) of the Act that circumstances beyond
the control of both the person from whom the amount concerned is
recoverable and the recipient of the notice exist.
Where amounts are recoverable, under subsection 129AC(1),
proposed subsections 129AC(1A), 129AC(1C) or
129AC(1E) from a person or that person s estate, the CEO
must give written notice to the person or the estate of:
- the decision to claim the amount as a debt
- the reasons for that decision, and
- the person or estate s right to seek an internal review of that
decision under proposed subsection 129AAJ(1).
Under proposed subsection 128AAI(4), the CEO
cannot serve a notice claiming the debt until after at least 28
days have passed since the notice of the decision had been given to
the person or estate, which means that the person or estate has 28
days in which to apply for an internal review of that decision.
While it is noted that proposed subsection
129AAI(3) provides that the validity of such decision is
not affected if the person is not advised in writing of that
decision, it is noted that the CEO cannot serve the notice claiming
the debt until the person is advised that the CEO intends to claim
an amount as a debt (see proposed subsection
128AAI(4) above).
Proposed section 129AAJ provides for internal
review of decisions to claim amounts as debts. The CEO must give
written notice of the decision on review within 28 days of
receiving the application for review.
According to the Government:
In practice the power to make decisions under
the provisions in this Bill will be delegated to senior officers
within Medicare Australia. This means that the internal review
powers under section 129AAJ will be exercised by the CEO or a
delegate who will be a senior officer of Medicare Australia who is
not involved in the compliance audit activity.[48]It is noted that a
decision to claim an amount as a debt under this proposed section
may only be reviewed once.
The Bill does not provide for further avenues of merits review
of such decisions proposed by the Bill and the Explanatory
Memorandum is silent as to why this is so. In addition, it is noted
that while the Act itself does provide for merits review of other
decisions made under the Act, such review is limited to the types
of decisions specified in the legislation and would not extend to
decisions proposed in the Bill. [49]
Item 4 of the Bill proposes to insert
new subsections 129AC(1A) (1H) into the Act. Section 129AC
relates to the recovery of amounts paid because of false
statements.
Proposed subsection 129AC(1A) provides that if
a person must comply with the notice to produce documents in
respect of a professional service under proposed section
129AAD and fails to do so within the specified timeframe
and if that person does not satisfy the CEO that his or her
non-compliance is due to circumstances outside of his or her
control, the amount of Medicare benefit or payment made in respect
of that professional service is recoverable as a debt due to the
Commonwealth from the person or that person s estate. This is
irrespective of whether the amount had been paid to the person. In
other words:
For example, if a person receives a notice to
produce under new section 129AAD and the notice specifies 20
services, but the person only provides documents in relation to 12
services, then the Medicare benefit amount which has been paid in
relation to the remaining 8 services becomes a debt which is
recoverable from the person or their estate.[50]
Proposed subsections 129AC(1C)
129AC(1F) provide for a situation where following
compliance with the notice to produce documents in respect of a
professional service under proposed section
129AAD:
- the information contained in what was produced does not fully
substantiate the amount of Medicare benefit or payment made in
respect of that professional service, and
- the person from whom the amount is recoverable does not satisfy
the CEO that the reason the information does not substantiate the
amount is due to circumstances outside of his or her control or the
control of the notice recipient (as the case may be).
In those circumstances, the amount of Medicare benefit or
payment made in respect of the professional service in question is
recoverable as a debt due to the Commonwealth from the person who
provided the professional service or on whose behalf such service
was provided; or that person s estate, to the extent that it was
not substantiated. This is irrespective of whether the amount had
been paid to the person.
Proposed subsection 129AC(1G) provides that
where a person is given a notice of his or her liability to pay an
administrative penalty under proposed section
129AEC and fails to do so within the specified timeframe,
the amount set out in that notice is recoverable as a debt due to
the Commonwealth from the person or that person s estate.
Importantly, under subsection 129AC(1H),
amounts paid as Medicare benefits or payments can only be recovered
once.
Items 5 6 propose consequential amendments to
subsection 129AC(2) of the Act in relation to interest on amounts
recoverable under proposed subsections 129AC(1A),
(1C), (1E) and
(1G).
Item 7 proposes to substitute
subsection 129AC(4) in the Act so that where an amount is
recoverable from a person under subsection 129AC(1); or
proposed subsections 129AC(1A),
(1C), (1E) or
(1G); and an amount of Medicare benefit or payment
subsequently becomes payable to that person, the CEO may set off
all or part of the recoverable amount against all or part of the
subsequent amount payable, with the person s agreement.
Item 9 proposes to insert new sections
129AEA 129AEC into the Act in relation to liability,
amount and notice of the administrative penalty.
Proposed section 129AEA in general, provides
for an administrative penalty to be payable in circumstances when a
person, who has provided a professional service or who has had a
professional service provided on his or her behalf, has a total
amount recoverable under subsection 129AC(1); as well as
proposed subsections 129AC(1A),
(1C) and (1E), amounting to more
than $2500 or a higher amount where prescribed by regulations.
According to the Government:
An analysis of Medicare Australia data
indicates that this threshold reflects the point at which mistaken
claims may become routine, or reflective of poor administration or
decision making. In 2008-09, only 22% of practitioners who were
found to have made incorrect claims were asked to make repayments
of more than $2,500.[51]
Proposed section 129AEB provides for how to
calculate administrative penalties. Base administrative penalties
may be decreased or increased, depending on the person s conduct
with respect to the compliance audit process.
The base penalty amount is 20 percent of recoverable amounts
under proposed paragraphs 129AEA(1)(b),
129AEA(2)(e) and 129AEA(3)(e).
The base penalty amount may be reduced by 25 100 percent depending
on when the person concerned informs Medicare that he or she has
been paid too much and whether that person does so
voluntarily.[52]
The base penalty amount may also be increased according to the
person s degree of non-compliance with notices to produce
documents, any previous history of owing recoverable amounts over
the preceding two year period and where the total sum of
recoverable amounts and base penalty amounts is either $30 000 or a
higher amount as prescribed in the regulations.[53]
Under proposed section 129AEC, the CEO must
give a person liable to an administrative penalty written notice of
particular information relating to that penalty, such as:
- the professional service to which each penalty relates
- for more than one professional service the total of
administrative penalties, and
- the day when payment of the penalty is due (at least 14 days
after the notice is given).
The notice may also deal with a debt arising under section 129AC
in relation to the professional service.
Concluding comments
The proposed amendments in the Bill will enable MA to enforce
compliance to co-operate with notices to produce documents during
the compliance audit process, in an attempt to substantiate
Medicare benefits and payments made where MA is concerned about
overpayment.
Although the Government consulted widely in the development of
this legislation, not all issues raised by stakeholders have been
fully resolved. In particular, the issue relating to external
reviews of proposed decisions made by the CEO in relation to
claiming amounts as debts remains to be fully addressed.[54]
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2514.
Amanda Biggs
Sharon Scully
15 October 2009
Bills Digest Service
Parliamentary Library
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