Purpose of the Bill

The purpose of the Health Legislation Amendment (Miscellaneous Measures No. 1) Bill 2025 (the Bill) is to:

• amend the Health Insurance Act 1973 (HI Act) to establish the function of allocating Medicare provider numbers (MPNs) under the HI Act. The amendments will allow the Chief Executive Medicare to approve the use of a computer program to allocate MPNs.
• amend the Private Health Insurance Act 2007 (PHI Act) to ensure the Private Health Insurance Rebate Premiums Reduction Scheme registration and claims processes are administered consistently with the requirements of the PHI Act.
• amend the HI Act to remedy minor issues with assignment of Medicare Benefits processes and also amend the Health Insurance Legislation Amendment (Assignment of Medicare Benefits) Act 2024 (the AoB Act) to delay commencement of Schedule 1 of the AoB Act from 9 January 2026 to 1 July 2026.
• amend the HI Act for the purposes of the Bonded Medical Program (BMP) to ensure that the consequences for BMP participants who withdraw from the program or fail to complete their 'return of service obligation' take into consideration both the ‘personal circumstances of the bonded participant with the broader interests of the community’.

Background

Automation of Medicare provider numbers

Overview

To be eligible to provide a Medicare service, health professionals must meet certain criteria. Practitioners eligible to have Medicare benefits payable for their services ‘at the place of practice as well as refer patients to other health professionals for Medicare eligible services, such as pathology and diagnostic imaging from the place of practice’, may apply online or in writing to Services Australia for a MPN for the locations where these services/referrals/requests will be provided.

MPNs are used by health practitioners both ‘as a means of identifying themselves and their place of practice for the purposes of claiming Medicare benefits for eligible services, and as an identifier to support other Medicare-related programs, such as immunisations’ (p. 2). The allocation of MPNs is currently performed as a function of the Chief Executive Medicare (CEM) under the Human Services (Medicare) Regulations 2017.

The independent review of Australia’s regulatory settings for health professionals

In late 2022, National Cabinet announced an independent review of Australia’s regulatory settings for health professionals (the Kruk Review). The Kruk Review examined ‘health practitioner registration, skill and qualification recognition for overseas trained health professionals and international students who have studied in Australia’. As part of the Kruk Review, the process for applying for a MPN was considered, with the final report noting the time to allocate a MPN can delay certain health practitioners from working and rendering Medicare eligible services:

MPNs are requested through Services Australia. While the eligibility requirements are linked to registration or accreditation for most professions, medical practitioners must undertake additional processes to confirm training and qualifications, or seek an exemption from the restrictions set out in the Health Insurance Act 1973 (Cth).

For example, some IQHPs [internationally qualified health practitioners] must be granted a location specific exemption to bill Medicare. Services Australia can apply numerous class exemptions; however, if an application falls outside of this, it is referred to DoHAC [Department of Health and Aged Care] for assessment of an individual exemption.

Services Australia and DoHAC have been working to ensure MPN registrations are processed within 28 days. However, during busy peak periods, IQHPs can wait up to 3 months to have their exemptions processed. During this time, the IQHP is unable to perform Medicare or PBS services, rendering them unable to work. [emphasis added] (p. 45).

The final report recommended that the issuance of MPNs should be automated, removing the need for manual processing and significantly reducing the time to issue MPNs (pp. 45, 47).

The Explanatory Memorandum states that ‘some MPNs have been allocated by use of a computer program rather than by a human delegate of the CEM, without clear legislative support’, since 2009 (p. 7). The Bill will set out new, detailed provisions dealing with the allocation of MPNs to support the recommendation in the Kruk Review and validate previously issued MPNs that were issued by a computer program. The aim of this amendment is to speed up the process of applying for a MPN and allow health practitioners to treat patients sooner.

Private Health Insurance Rebate Premiums Reduction Scheme

Private Health Insurance Rebate

The Australian Government subsidises private health insurance through a rebate to help cover the cost of premiums. This rebate is income tested and applies to hospital, general treatment and ambulance policies provided by Australian registered health insurers.

Income thresholds and rebate levels are published each year from 1 April. The income tiers used for income testing are generally indexed annually but may be revised at other times subject to the passage of legislation. In 2025–26, the Government expects to spend $7.8 billion on the PHI rebate (p. 128).

Individuals eligible for the private health insurance rebate can claim the rebate in two ways:

• As a premium reduction through their private health insurer. Using this option, individuals pay a lower upfront fee to their insurer. Individuals must register with their health insurer to use this option.
• As a tax offset when lodging an annual tax return.

When an individual chooses to claim the rebate via a premium reduction, the private health insurer claims reimbursement for the amount through a system administered by Services Australia. According to the Explanatory Memorandum to the Bill, ‘some elements of the registration and claims processing system for the Premiums Reduction Scheme have been administered inconsistently with the requirements of the [PHI Act] since its introduction’ (p. 48). In particular, ‘it was identified that the PHI Act did not specifically allow for the use of an electronic system as part of the CEM’s decision-making and that not all requirements of those decisions could be met by the existing electronic system’ (p. 49).

As such, the Bill will make several amendments to ensure that registration and claims processes are administered in accordance with the requirements of the PHI Act:

Amendments made by the Bill will ensure the validity of registrations and claims for payment under Parts 2-2 and 6-4 of the PHI Act respectively by:

• Better aligning the registration process with Service Australia’s electronic system requirements.
• Providing for self-assessment by participating insurers of the amount of rebate required to be reimbursed according to the requirements of the PHI Act.
• Requiring an insurer to provide information or documents to support their claim.
• Ensuring over-payments can be recovered despite any unintended system or process defects.
• Allowing for computer assisted decision-making and the approval of forms and systems by the Chief Executive Medicare (Services Australia).

The amendments will support the existing registration and claims processes for the Premiums Reduction Scheme in such a way that there will be minimal impacts on consumers and private health insurers (p. 3).

Health Insurance Legislation Amendment (Assignment of Medicare Benefits) Act 2024

The Health Insurance Legislation Amendment (Assignment of Medicare Benefits) Act 2024 (the AoB Act), which received Royal Assent on 9 July 2024, will amend the HI Act to ‘modernise and strengthen the ‘assignment of Medicare benefit’ requirements for bulk billed and simplified billing services’ (p. 1). The assignment of benefit process enables eligible persons to assign their right to a Medicare benefit to a medical provider, meaning the patient does not pay anything out-of-pocket for the service. Under the AoB Act, existing paper-based processes for the assignment of benefit will be replaced by electronic options.

The Health Insurance Legislation Amendment (Assignment of Medicare Benefits) Bill 2024 was introduced following extensive consultation with stakeholders and its passage through Parliament was welcomed by stakeholders including the Australian Medical Association and Royal Australian College of General Practitioners.

The changes to assignment benefits in Schedule 1 of the AoB Act were intended to commence 18 months from the day the Act received Royal Assent, to allow time for appropriate consultation, new processes to be developed and for IT systems to be updated. Currently, the latest possible date for commencement of Schedule 1 of the AoB Act is 9 January 2026. As outlined in the Explanatory Memorandum for the Bill:

During the course of drafting subordinate legislation to support the operation of the AoB Act, it was identified that the HI Act and the AoB Act had limitations that prevent regulations from fulfilling the intended scope and effectiveness of new assignment processes. As part of external consultation, stakeholders also indicated that a longer implementation period will enable them to better comply with and integrate assignment requirements into existing systems and develop digital assignment options. (p. 3)

As a result, the Bill will amend the AoB Act, before its amendments to the HI Act take effect, to ensure the new assignment arrangements will not commence until 1 July 2026.

Bonded Medical Program

The Bonded Medical Programs[1], established in 2001, expanded in 2004 and updated in 2020, provide students with a Commonwealth supported place (CSP) in a medical course at an Australian university in return for a commitment to work in an eligible regional, rural or remote area for a specified period of time following completion of their degree and specialist training. The aim of the Bonded Medical Programs is to increase the number of doctors working in regional, rural or remote areas, which are currently underserviced by medical professionals.

The requirement to work in a regional, rural or remote area under the Bonded Medical Programs is referred to as the return of service obligation (RoSO) or return of service period. Under the current and legacy schemes, the RoSO period varies between one and six years depending on which scheme a participant is in and the time at which they entered it. Legacy scheme participants can voluntarily ‘opt-in’ to the current program, which allows for a potential reduction in RoSO and more flexible program conditions.

Participants in the Bonded Medical Programs that breach their RoSO conditions may be liable for financial penalties, such as repayment of their scholarship or CSP fees. In addition, former Medical Rural Bonded Scholarship Scheme participants receive a six-year disqualification from billing Medicare Benefits Schedule (MBS) items (a Medicare ban). This Bill seeks to amend these penalties to achieve a balance between the ‘personal circumstances of the bonded participant with the broader interests of the community’.

Policy position of non-government parties/independents

At the time of writing, non-government parties and independents do not appear to have commented on the Bill.

Key issues and provisions

Automation of Medicare provider numbers

Schedule 1 of the Bill contains amendments to the HI Act to streamline the administrative processes for certain cohorts of health practitioners applying for an MPN.

Item 2 inserts new Part IIAA – Provider numbers into the HI Act. Proposed section 22C provides a simplified outline of new Part IIAA:

The Chief Executive Medicare is able, upon application, to allocate unique provider numbers to various health professionals for places of practice.

There are also provisions dealing with the following:

1. the day on which the allocation of a provider number takes effect (including changing this day);
2. revoking the allocation of a provider number;
3. suspending the allocation of a provider number, changing the day on which the suspension takes effect and lifting the suspension;
4. reconsideration and review of decisions.

The Chief Executive Medicare is able to arrange for the use of computer programs to make certain decisions under this Part. There are oversight and safeguards provisions about the use of computer programs.

Proposed subsection 22D(1) sets out the types of health professionals that can apply for a MPN for a place of practice; while proposed subsection 22D(7) provides that the Minister may, by legislative instrument, specify additional categories of health professionals to be allocated a MPN.

Proposed section 22E provides that the CEM must allocate a MPN where the relevant criteria have been met. Proposed subsection 22E(6) provides that the Minister can specify criteria by legislative instrument. The Explanatory Memorandum states that the reason for using a legislative instrument is that the specified criteria will differ depending on the kind of health professional and what the health professional intends to do at the practice location (p. 19). Given the range of criteria that apply for different health professionals, this approach is reasonable.

Use of computer programs

Proposed subsection 22R(1) provides that the CEM may arrange, in writing, for a computer program to take administrative action (making, or refusing or failing to make, a decision) in relating to the following decisions over which the CEM has oversight:

• decision to allocate a MPN to a health professional for a place of practice, at the request of the health professional (proposed subsection 22E(1))
• decision to suspend the allocation of a MPN for a place of practice, at the request of the health professional (proposed subsection 22K(1))
• decision to change the date the suspension of the allocation of a MPN for a place of practice takes effect, at the request of the health professional (proposed subsection 22N(1)) or
• decision to lift the suspension of the allocation of a MPN for a place of practice, at the request of the health professional (proposed subsection 22Q(1)).

Proposed subsection 22R(1) will not enable the CEM to arrange for the use of a computer program to take administrative action where discretionary decisions are required, or to make decisions that would involve refusing to grant a request to allocate a MPN. It will also not allow a computer program to make decisions in relation to suspensions of a MPN.

According to the Explanatory Memorandum, the allocation of MPNs by use of a computer program will be introduced in a staged approach:

The allocation of MPNs by use of a computer program will initially apply to the following cohorts:

• medical practitioners who are interns, and are not intending to render Medicare-eligible services at the requested location; and
• medical practitioners and non-medical health professionals who already have a MPN for a practice location and are seeking a provider number for a subsequent location (and are not seeking to have Services Australia recognise in their systems that they have moved from only being able to refer a patient to another health professional to being able to render Medicare-eligible services in their own name).

In future, if new health practitioner types become eligible for a MPN, legislative instrument updates will need to be progressed to ensure there is legislative authority for the automated issuance of MPNs for these new cohorts.

To give effect to the Kruk Review recommendation to streamline the processing of applications for MPNs for internationally qualified health practitioners, it is intended that the allocation of an initial MPN to [Overseas Trained Doctors] and [Foreign Graduates of an Accredited Medical School] covered by certain class exemptions under s 19AB(3) of the HIA will be automated as soon as practicable. [link added] (p. 21)

Proposed section 22S will provide oversight and safeguards for the automation of administrative action. These include requirements to notify both individuals and the public where computer programs have been used to make decisions about MPNs, and a power for the ‘CEM to make substitute decisions where they are satisfied that a decision made by operation of a computer program is incorrect’ (p. 7).

Changes to penalties for Bonded Medical Program participants

Schedule 4 of the Bill contains amendments to Part VD of the HI Act which alter or remove penalties for Bonded Medical Program Participants who do not meet their RoSO conditions.

Item 3 repeals and replaces subsection 124ZH(1), to extend the grace period under which students can withdraw from their degree without repaying CSP fees. Currently, students can withdraw from the bonded medical program, without consequence, up to the HECS Census date in their second year of study. The amendment will allow students to withdraw from their medical studies, without penalty, up until the award of the degree. Item 6 provides that item 3 applies to breaches that occur before, on or after commencement, meaning that a bonded participant will not be liable for the repayment of their education costs, regardless of when they withdrew from their course of study in medicine(p. 68). Item 13 allows the Minister to amend the Health Insurance (Bonded Medical Program) Rule 2020 to make such people ‘eligible for a refund of any amount paid or to the waiver of any amounts owing pursuant to the provisions of section 124ZH’ (pp. 70–71).

Items 10 and 11 repeal section 124ZJ and subsections 124ZQ(3) to (5), respectively, which has the effect of removing the Medicare ban for ex-MRBS Scheme bonded participants who withdraw from the program or breach their RoSO conditions. The removal of the ban makes the consequences of withdrawing from the Bonded Medical Program more consistent for all bonded participants.

In a recent article published in The Medical Republic, the president of the Australian Medical Students Association (AMSA) was quoted as saying that ‘We [AMSA]…commend the extension of the grace period for students who withdraw from medicine, recognising that lots of students who leave medicine don’t do this for trivial reasons’; however, it was further noted that the changes ‘are unlikely to have a big positive or negative impact on rural communities’. According to an article published in June 2025, only 13% of the nearly 17,000 participants in the Bonded Medical Programs have completed their return of service. The article also included renewed calls from the AMSA to review the Bonded Medical Programs. AMSA has previously called for a review of Bonded Medical Programs, highlighting concerns about the number of people completing the program and its effectiveness in attracting and retaining medical graduates in regional, rural and remote areas.

Concluding comments

The Bill makes several amendments to the HI Act and the PHI Act to address administrative issues across a number of policies and programs. The amendments are well described, in line with existing practice, broadly supported by stakeholders (where relevant) and unlikely to be controversial.