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
© Commonwealth of Australia
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