Chapter 2Views on the bill
2.1Submitters were broadly supportive of the bill’s provisions and expressed support for its intent to strengthen the integrity of Medicare. This chapter outlines the key views of submitters, specifically regarding:
the reduced claims timeframe during which bulk-billed Medicare and dental services claims can be made;
the new investigative powers related to fraud offences;
the new streamlined pharmacy approval processes;
the removal of some restrictions on the admission of evidence;
the amendments related to administrative inquiries and the recovery ofoverpayments;
changes to the Therapeutic Goods Act 1989 (Therapeutic Goods Act) and the Public Health (Tobacco and Other Products) Act 2023 (Tobacco Act);and
ways to educate prescribers and consumers about the new amendments.
2.2The chapter concludes with the committee’s view and recommendation on thebill.
Reduced claims timeframe
2.3As discussed in Chapter 1, the bill would amend the maximum timeframe during which bulk-billed Medicare and dental services claims can be made from two years to one year.
2.4Most submitters who discussed the reduced claims timeframe were supportive of the change. The Australian College of Nurse Practitioners (ACNP) stated that the new timeframe aligns with current practice, with most claims being submitted within one year. It also noted that the Minister and Chief Executive Medicare have the discretion to extend the period beyond one year.
2.5Additionally, the Royal Australian College of General Practitioners (RACGP) acknowledged that this change is ‘designed to enable quicker responses to Medicare fraud and non-compliance’ and noted that 12 months should still allow sufficient time for practices to submit claims.
2.6However, Dr Margaret Faux, Chief Executive Officer of the medical billing service Synapse Medical Services, and who has a PhD on Medicare claiming and compliance, raised concerns about the shortened timeframe.
2.7Whilst Dr Faux stated her support for reducing the timeframe for submitting claims, she argued that there is a lack of evidence to suggest that changing the claims timeframe from two years to one year would reduce fraud.
2.8Dr Faux discussed the model used in the United States for bulk billed claims as a potential alternative model. She explained that this system uses a 90-day timeframe for the first submission of claims, and noted that the adoption of this system could result in several possible advantages for Australia.
2.9Conversely, the Australian Medical Association (AMA) considered this change to be a reasonable measure to minimise incorrect and fraudulent claims, which would also enable recourse within a more appropriate timeframe.
2.10In its submission, the Department of Health and Aged Care (the Department) advised that the reduced timeframe is consistent with the recommendations of the Independent Review of Medicare Integrity and Compliance (the PhilipReview).
2.11It also noted that it is likely to have minimal impact on practitioners and patients, as most claims are already made within one year, and that there would be capacity to accept genuine claims outside of this timeframe ‘to ensure patients and practitioners are not disadvantaged’.
Investigative powers related to fraud offences
2.12As discussed in Chapter 1, the current investigative powers in Part IID of the Human Services (Medicare) Act 1973 apply inconsistently due to the definition of ‘relevant offence’ under section 3A of that Act.
2.13This bill would amend the definition of ‘relevant offence’, which would enable a consistent suite of powers for authorised officers to investigate Medicare fraudoffences.
2.14Submitters had mixed views regarding the new investigative powers related to fraud offences. The AMA acknowledged that the bill intends to balance these new powers with appropriate safeguards, such as restrictions on when warrants may be issued and guidelines on officer conduct.
2.15However, the AMA contended that the bill had not achieved an appropriate balance, and emphasised that these powers should only be used when the Chief Executive Medicare has formed a strong view that fraud or non-compliance may have occurred:
The amendments support the extension of investigatory powers without providing sufficient limitations to the circumstances and persons to which collected evidence may be employed. It is essential these powers should only be exercised when Chief Executive Medicare has formed a strong view noncompliance or fraud may have occurred, with strict application within the scope of that individual case.
2.16Other submitters were supportive of the powers, including the ACNP, which stated that ‘the timely detection and resolution of fraudulent activities are crucial to preventing further financial loss and safeguarding funds’.
2.17It elaborated that enhancing investigative capabilities can lead to improved accountability and minimise the risk of continued fraudulent behaviour, thereby protecting the integrity of the system and the allocation of funds.
2.18RACGP noted that it did not oppose the amended definition to enable a single, consistent suite of powers in relation to Medicare fraud offences. It also noted that the changes will not render conduct that was previously not an offence asunlawful.
2.19The Department noted that these changes would address gaps and inconsistencies in current application of the provisions and would improve the use of the investigative powers. Further, it submitted that the changes align with recommendations made in the Philip Review and would result in greater scope to investigate and efficiently respond to potential non-compliance and fraud.
Pharmacy approval processes
2.20Changes to the pharmacist approval processes drew some commentary from submitters, including the ACNP, which was supportive of the new single stage process over four months in which the Minister uses their discretionary power under section 90A.
2.21However, the ACNP raised that attention should be given to loopholes on the relocation of pharmacy services, citing concerns about corporate monopolies in certain geographical areas.
2.22Additionally, the Pharmacy Guild of Australia (PGA), who supported the multiple measures related to the community pharmacy approval process, observed that the bill’s amended timeframe in which the Minister may exercise their discretionary power intends to reduce administrative burden on staff resources and provide the community with more timely access to pharmaceutical benefits.
2.23Further, the PGA noted that the bill would increase the Australian Community Pharmacy Authority’s membership term from two years to three years. It commented that the current process for seeking nominations and endorsement of nominees places administrative burden on nominating organisations and the Australian Government. It concluded that the increased membership term would reduce this burden and provide greater stability to the Australian Community Pharmacy Authority.
2.24Additionally, the Department echoed that changes to pharmacy approval processes would streamline the pharmacist approval process, therefore reducing the administrative burden on public resources.
Removal of some restrictions on admission of evidence
2.25As discussed in Chapter 1, the bill would make amendments to section 106ZPQ to the Health Insurance Act 1973 (Health Insurance Act) in relation to use and derivative use immunity. The Department explained that the bill would ‘remove restrictions on the admission of information obtained under the Professional Services Review’s notice to produce powers as evidence in someproceedings’.
2.26The Australian Health Practitioner Regulation Agency (Ahpra) was supportive of the changes that would:
(1)insert a new subsection which would allow certain information shared with Ahpra to be admitted in evidence in proceedings under the National Law or to address a significant threat to a person’s life or health, and
(2)insert a new subsection to clarify that a documents or things obtained or created as a result of information shared by the Commonwealth under the Act may be admitted as evidence in legal proceedings (derivativeuse).
2.27Ahpra noted that the amendments would remove any doubts that protected information which is shared with Ahpra can be used in legal proceedings. Ahpra explained that this would improve its and the National Boards’ capacity to address public safety risks that may be evidenced in information collected under the Health Insurance Act.
2.28The AMA raised some concerns regarding the amendments to section 106ZPQ. It argued that the changes ‘substantially expand the circumstances in which a person (other than an individual [person under review]) can be compulsorily required to produce the evidence that is used to convict them or otherwise pursuethem’.
2.29As such, it stressed that a ‘careful balance’ must be struck to ensure that imposed limits are necessary and demonstrate proportionality in maintaining both the integrity of the Medicare Benefits Schedule system and ensuring patient safety.
2.30In its submission, the Department emphasised that these amendments are intended to ensure that regulatory bodies can respond to significant threats to life or health, or non-compliance with professional standards. It submitted that the roles of these bodies would be frustrated if they could not act on information that raised patient harm risks.
2.31The Department also highlighted that these amendments align with recommendations from the Philip Review, as they protect the public interest by ensuring patient safety in health services.
Amendments relating to administrative inquiries and recovery ofoverpayments
2.32As outlined in Chapter 1, the bill amends provisions in the Health Insurance Act related to administrative inquiries and the recovery of overpayments. The Department explained that these changes would ‘broaden powers to obtain information about Medicare services and increase capability to identify potential non-compliance with the Health Insurance Act’. Further, the amendments would enable the recovery of payments where they did not meet relevant requirements. These measures are discussed below.
Administrative inquiries
2.33The AMA highlighted concerns regarding proposed section 129AACA, which it explained would provide the Chief Executive Medicare with the power to issue a written notice requiring any person to provide relevant material within a specifiedperiod.
2.34The AMA outlined that unlike the existing provision, there is no limit on who a notice can be given to. It also noted that failure to comply would result in a strict liability offence with a maximum penalty of 30 penalty units.
2.35Whilst the AMA understood that the power is intended to improve the Department’s ability to obtain information about potential fraud and support cost-recovery, it noted that this information will ‘invariably include personalinformation’.
2.36The AMA stressed the need for the Department to implement processes to ensure this power is used appropriately, and that a direction to produce personal information should only occur where the Department believes that the information is relevant to an investigation.
2.37Conversely, Dr Faux acknowledged that these new provisions would ‘certainly facilitate law enforcement efforts around accessing information’ but raised that it would do ‘little to improve Medicare payment integrity’.
2.38Dr Faux outlined that fraud within the system is difficult to detect due to the nature of Medicare:
A unique feature of fee-for-service payment systems such as our Medicare is that they transact very high volumes of low value claims. This fact is precisely what sets these systems apart from other industries and why fraud and abuse is so hard to detect. The reality is that, as long as a health practitioner bills their lies correctly and doesn’t get too greedy, they are unlikely to be caught absent a tip-off. Two or three fraudulent claims per day will usually not raise any red flags and will go unnoticed.
2.39As such, Dr Faux instead suggested that a ‘quick justice model’ could be effective, which would require a national education campaign and for the intention of the offender to be made completely irrelevant.
2.40However, the Department noted that these provisions would broaden powers to obtain information about Medicare services and increase the capability to identify potential non-compliance with the Health Insurance Act.
2.41As such, the Department advised that these changes ensure that decision-makers have sufficient information to consider appropriate action to address non-compliance.
Recovery of overpayments
2.42Amendments concerning the recovery of overpayments drew some commentary from submitters. The Department explained that current recovery mechanisms generally rely on outdated claiming processes and requests for hard copy documents, which limits the Department’s ability to ensure that incorrectly paid amounts are appropriately responded to.
2.43The AMA agreed that it is fair to recover amounts from the practitioner in cases where the practitioner is responsible for non-compliance, but explained that it is concerned about the ability to recover from a practitioner ‘purely on the basis that they were identified in the claim form as having rendered the service’.
2.44It explained the possibility that the named practitioner may have left the practice or could be the victim of fraud. The AMA stated that it is therefore important for the legislation to allow and support efforts to clarify whether the owner of the provider number with an instance of fraud was in fact the beneficiary ofoverpayment.
2.45The Department advised that these amendments would improve powers to address incorrect claiming and recover monies and that they directly respond to recommendations from the Philip Review.
Changes to the Therapeutic Goods Act and the Tobacco Act
2.46Some evidence to the committee acknowledged changes to the Therapeutic Goods Act and the Tobacco Act.For instance, the ANCP expressed its support for the proposed amendments to these Acts.
2.47In relation to the Therapeutic Goods Act, the RACGP was supportive of the proposed broader circumstances where goods can be seized and the strengthened provisions to enter and search premises. It underlined that this is important as illegal vapes continue to be sold.
2.48The RACGP called for clarity for prescribers about which vaping goods comply with the Therapeutic Goods Administration’s standards, and on responses to vaping products at a state level. It also stressed the need for consumer information and education on what is legal.
2.49Similarly, while Osteopathy Australia submitted that it has no material objections to the bill, it did call for a strong communication and education campaign to ensure practitioner understanding and compliance with anychanges.
Committee view
2.50The committee thanks all people and organisations which made submissions to the inquiry and notes that submitters were largely supportive of the bill.
2.51Importantly, the committee recognises that the bill responds to various recommendations made by the Philip Review, which was commissioned by the Australian Government to respond to concerns about the Medicare system. Its passage would be an important step in protecting and strengthening Medicare, as it would improve the compliance framework that ensures the integrity of Medicarerebates.
Claims timeframe
2.52The committee acknowledges that some submitters held concerns about the efficacy of the new timeframe. However, the committee is of the view that the changes are likely to have a minimal impact on patients and practitioners alike, as most claims are already made within one year, and that there is capacity to accept genuine claims on a discretionary basis outside of this timeframe to ensure that patients and practitioners are not disadvantaged. It notes that most submitters supported this approach.
2.53The committee also notes that the bill would make these changes in response to the Philip Review, and that the reduced timeframe would improve payment integrity and reduce the number of incorrect or fraudulent claims. Further, the committee notes that the reduced claims timeframe was announced as a measure in the 2024–25Budget.
Investigative powers
2.54The committee is of the view that the provisions related to investigative powers are crucial to protecting the integrity of Medicare, and that existing arrangements are inconsistent.
2.55Whilst the committee acknowledges that some concerns were raised about the use of these investigative powers, it notes that these provisions will enable the health portfolio to efficiently respond to potential non-compliance and fraud, in line with the recommendations made by the Philip Review.
2.56Thus, the committee judges these new investigative powers are proportionate to ensuring that Medicare’s integrity is protected so that individuals can continue to access safe and high-quality services.
Pharmacy approvals
2.57The committee notes that submitters were largely supportive of the amendments to the pharmacy approval processes. The committee understands that these provisions would reduce the administrative burden on public resources, and the increased membership terms for the Australian Community Pharmacy Authority would result in increased stability.
Removal of restrictions on the admission of some evidence
2.58The committee recognises that the bill would remove restrictions on the admission of information, obtained under the Professional Services Review’s notice to produce powers, as evidence in some proceedings.
2.59The committee acknowledges that submitters held mixed views on these amendments, but is of the view that the amendments would ultimately address the need to support the accessibility, quality and safety of health services, as identified in the Philip Review.
Administrative inquiries and recovery of overpayments
2.60Evidence to the committee discussed the provisions that relate to administrative inquiries and recovery of overpayments. The committee notes that some submitters raised additional processes or potential alternatives to theseprovisions.
2.61However, the committee deems that these provisions would effectively respond to the findings of the Philip Review, which highlighted the need for a more flexible compliance framework.
2.62The committee acknowledges that these provisions would increase the capability to identify potential non-compliance, and to recover payments that did not meet relevant requirements, therefore bolstering the integrity of Medicaresystem.
Therapeutic Goods Act and the Tobacco Act
2.63The committee notes the strong support from submitters for the amendments to the Therapeutic Goods Act and the Tobacco Act.
2.64The committee is of the view that these amendments are crucial to supporting the implementation of the Australian Government’s world-leading tobacco and vapingreforms.
Strengthening Medicare integrity
2.65The committee believes that the bill is a significant milestone in strengthening Medicare’s integrity, noting that it is a continuation of the implementation of the Philip Review’s findings, with two Acts already having made priorityamendments.
2.66The committee is of the view that this bill will contribute to ensuring Australians can continue to reap the benefits of this world-class scheme.
2.67The committee recommends that the Senate pass the bill.
Senator Marielle Smith
Chair