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Wednesday, 8 November 2000
Page: 22462

Ms GAMBARO (5:37 PM) —I am very pleased that the member for Shortland finally did come to the bill that we are here to speak about, the National Health Amendment (Improved Monitoring of Entitlements to Pharmaceutical Benefits) Bill 2000. It was commendable that she spoke about Medicare, but she spoke very little about the bill that we are here to address. The government is very committed to Medicare and to bulk-billing, and that is why we have increased the funding for bulk-billing and opened a number of agencies around Australia. But I would like to speak to the National Health Amendment (Improved Monitoring of Entitlements to Pharmaceutical Benefits) Bill 2000.

The pharmaceutical scheme has been in Australia for some 50 years, with the aim of providing the Australian community with a range of medicines that are reliable, cost effective and affordable. The system works by subsidising a broad range of approved pharmaceuticals. By February 1999 this covered 559 drug substances—generic drugs—available in 1,354 forms and strengths and marketed as 1,992 different drug brands or products. In 1998-99 the PBS dealt with 129 million prescriptions, at a cost to the government of $2.8 billion. In the year to 30 June 2000, expenditure on the PBS grew by 14 per cent. The purpose of this bill is to build on the current objectives of part VII of the National Health Act of 1953—to assist patients to receive high quality health care through quality use of medicines, to subsidise the cost of prescribed pharmaceuticals and to provide appropriate accountability and expenditure of public funds. Broadly speaking, it requires the inclusion of Medicare numbers on prescriptions for pharmaceutical benefits, and that will ensure that those persons under part VII of the National Health Act will receive those prescriptions.

The bill is motivated by discrepancies identified by the Auditor-General in his report, The Australian National Audit Office Performance Audit, Pharmaceutical Benefits Scheme, Department of Health and Family Services. The report focused on accountability of the PBS as well as administration by the Health Insurance Commission. In his correspondence with the HIC, the Auditor-General recommended the inclusion of Medicare numbers in the PBS, in order to improve accountability and overcome deficiencies in payments. The PBS operates only in Australia and is available only to Australian residents and visitors from countries that have a reciprocal health care agreement with Australia. Those countries include New Zealand, the UK, Ireland, Italy, Malta, Sweden, Finland and the Netherlands. Under the current PBS, eligible customers fall under one of two categories: general patients or non-cardholders, who pay the first $20.60 for each prescription item; and concessional patients, who hold a health care card—people like pensioners and people with low incomes—who pay $3.30 per prescription item. Overseas visitors from countries without a reciprocal health care agreement are ineligible for the PBS.

When a pharmaceutical benefit has been supplied in accordance with the relevant legislation—part VII of the National Health Act 1953—the dispenser becomes entitled to claim a payment from the Commonwealth which is equal to the difference between the Commonwealth price and the patient contribution. However, a proportion of claims is rejected because they do not comply with statutory requirements. The present legislation provides that dispensers may not supply a pharmaceutical benefit unless they are satisfied that the patient is entitled to a benefit according to section 87(3A) of the National Health Act 1953. However, there are difficulties in pharmacists determining the entitlement status of customers. At the moment, pharmacists routinely ask customers if they have a concession card. If the answer is no, they assume that they are eligible as general patients. However, there is no requirement for those not on a concession card to produce identification to validate their access to the PBS subsidised drug scheme.

When a concessional benefit is obtained under the PBS, the number of the pensioner card, health care card or Commonwealth seniors health card is recorded and included on the dispenser's claim for payment. Copies of card number files are provided by Centrelink to the Health Insurance Commission. In order to identify the person, the HIC attempts to match the cardholder's name and address details on the Centrelink file to the name and address details on its own enrolment file. In a large number of cases, these details cannot be matched. While the holder of a properly issued card is certain to be eligible for Medicare, the lack of reliable matching to HIC enrolment records means that the benefit histories of individual concessional beneficiaries cannot be reliably assembled.

As a consequence of all this, compliance with the rules about the frequency of supply of items cannot be reliably monitored. Non-concessional PBS prescriptions generally do not carry any identifying number for the patient. This lack of an appropriate audit makes it difficult to demonstrate the benefit that has been supplied and the payment that has been made to the dispenser, in accordance with the eligibility requirements of the legislation. Names and addresses supplied on a prescription or concession card are therefore not always the most reliable means to determine a customer's eligibility for the PBS. According to a recent audit by the HIC, there is a significant and increasing degree of insufficient information recorded on prescription forms. The absence of patient detail occurred in 45 per cent of audited prescription forms in 1997-98 and in 72 per cent in 1998-99. In cases where a patient's details do not match HIC enrolment records, the HIC must determine whether the pharmacist is to be reimbursed the subsidised amount, although the pharmacist will not have been in a position to have identified a possible discrepancy in the customer's details.

The proposal of this bill to include a Medicare number on prescriptions will provide a more reliable way of identifying unentitled non-residents and will serve as an effective audit trail of those who may engage in activities that are not fitting with the legislation. It is important that we have a reliable system that has integrity. There have been breaches and abuses in the past. Chemist shoppers have existed for some time. There are people out there who breach the PBS by applying for the maximum number of repeat prescriptions within 21 days, and most of these tend to be older customers who feel that they must have all these prescriptions filled, even though they do not use all of them. There have been cases of chemists having returned to them a large number of drugs which were supplied because older people wanted to have the scripts filled `just in case' but never used them.

The HIC estimates that in 1998-99 a large number of people were involved in this sort of activity. The inclusion of the Medicare number on prescriptions will give a greater ability to verify patient eligibility. It will assist in improving the identification of patients, and it will enable better management of the PBS. I must commend these particular aspects of this bill. The bill is a good instrument which will make sure that those eligible people will be able to use their Medicare card. The opposition has quoted examples of people not having their Medicare card: indigenous Australians in remote areas, minors living on the streets, patients in emergency circumstances and persons covered by reciprocal health agreements. There are provisions in the bill for the minister to determine alternative arrangements to prove eligibility, such as presentation of a passport.

Under sections 135AA and 135AB of the National Health Act, privacy protection is already established, therefore ensuring that Medicare numbers remain private and confidential and are not used for purposes other than to ensure entitlement to pharmaceutical benefits. In a number of committees I have served on—in particular, the inquiry into tax file numbers with the House of Representatives Standing Committee on Economics, Finance and Public Administration—I have seen that strict privacy provisions do exist with Medicare numbers already, so the opposition's concerns about the privacy aspects are well taken care of under these provisions. The PBS claims that the data held by the Commonwealth is protected by stringent secrecy provisions under the National Health Act of 1953 and their binding guidelines issued by the Privacy Commissioner.

This bill is about protecting public moneys through better identification of people obtaining benefits under the PBS. Improved PBS entitlement monitoring will result in savings of $5.7 million in 2000-01, $18 million in 2001-02 and $20.7 million in 2002-03. The use of PBS grew by 14 per cent in the year to June 2000. Given the rate of growth of the PBS expenditure, there is a strong public interest in ensuring its accountability and integrity. The specific objective of this bill is to remedy the deficiency in the accountability for the PBS by demonstrating that benefits have been supplied only to people who are eligible, without breaching legitimate access, while protecting the privacy of the Medicare number which is being used for that purpose. I therefore urge the House to support this bill.