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Private Health Insurance Bill 2007

Part 6-4 Administration of premiums reduction and incentive payments schemes

Division 276 Introduction

276-1   What this Part is about

Part 2-2 provides for a premiums reduction scheme and an incentives payment scheme. This Part provides:

               (a)     for private health insurers to be reimbursed for premiums that were reduced under the premiums reduction scheme in Division 23; and

              (b)     for the Medicare Australia CEO to supervise that reimbursement and related matters; and

               (c)     for recovery of amounts paid in error; and

              (d)     for various other related administrative matters in relation to the schemes.



 

Division 279 Provisions applying only to premiums reduction scheme

Subdivision 279-A Reimbursement of private health insurers for premiums reduced under scheme

279-1   Participating insurers may claim reimbursement

                   A private health insurer may claim reimbursement from the Medicare Australia CEO in accordance with section 279-10 for each month during which it is a * participating insurer.

279-5   Participating insurers

             (1)  A private health insurer may apply to the Minister, in the * approved form, to become a * participating insurer for the purposes of this Part.

             (2)  If the Minister approves the application, the private health insurer becomes a * participating insurer.

             (3)  The Minister must approve the application, unless:

                     (a)  the insurer’s status as a * participating insurer has previously been revoked under subsection 206-1(1); and

                     (b)  the Minister is satisfied that the insurer is continuing, or will continue, to fail to comply with a provision or condition mentioned in that subsection.

Note:          Rejections of applications are reviewable under Part 6-9.

             (4)  The Minister must notify the applicant, within 28 days after the date of the decision, whether the application has been approved or rejected.

             (5)  If the application is rejected, the Minister must include his or her reasons for rejecting the application in the notice.

279-10   Requirements for claims

             (1)  A claim by a private health insurer in respect of a month must be made to the Medicare Australia CEO, in the * approved form, on or before the seventh day of the following month.

             (2)  If the Medicare Australia CEO decides the claim is correct, the Medicare Australia CEO must pay the insurer, in accordance with section 279-15, the amount payable under that section in respect of the month to which the claim relates.

279-15   Amounts payable to the private health insurer

             (1)  Subject to subsection (2), the amount payable to the private health insurer in respect of the month is the sum of the amounts by which premiums in respect of that month under the * complying private health insurance policies issued by the private health insurer were reduced because of the operation of Division 23.

             (2)  The amount must be paid to the private health insurer within the period of 15 days starting on the first day of the following month.

             (3)  The amount must be paid in the way determined, in writing, by the Medicare Australia CEO.

279-20   Notifying private health insurers if amount is not payable

             (1)  If the Medicare Australia CEO considers that a claim is incorrect, the Medicare Australia CEO may either refuse the claim or pay only such part of the claim as he or she is satisfied is correct.

             (2)  The Medicare Australia CEO must notify a private health insurer if the Medicare Australia CEO makes a decision mentioned in subsection (1).

             (3)  A notice under subsection (2) must include reasons for the decision.

             (4)  The Medicare Australia CEO is taken, for the purposes of this Part, to have decided that a claim is correct if the Medicare Australia CEO does not give notice of his or her decision that the claim is incorrect on or before the day under subsection 279-15(2) on or before which, if the claim were correct, it would have been required to have been paid.

279-25   Additional payment if insurer claims less than entitlement

             (1)  This section applies to a private health insurer in respect of a month if:

                     (a)  the private health insurer is a * participating insurer in respect of the month; and

                     (b)  the private health insurer made a claim in respect of the month under section 279-1; and

                     (c)  the amount claimed by the private health insurer was less than the sum of the amounts by which premiums in respect of the month under the * complying health insurance policies issued by the private health insurer were reduced because of the operation of this Division.

             (2)  The private health insurer may apply to the Medicare Australia CEO for payment of an amount (the additional amount ) not exceeding the difference between:

                     (a)  the sum of the amounts by which premiums in respect of the month under the * complying health insurance policies issued by the private health insurer were reduced because of the operation of this Division; and

                     (b)  the amount already paid to the private health insurer under section 279-1 in respect of the month.

             (3)  An application under subsection (2) may relate to more than one month.

279-30   Additional payment if insurer makes a late claim

             (1)  This section applies to a private health insurer in respect of a month if:

                     (a)  the private health insurer did not make a claim in respect of the month on or before the seventh day of the following month; and

                     (b)  premiums in respect of the month under the * complying health insurance policies issued by the private health insurer were reduced because of the operation of this Division.

             (2)  The private health insurer may apply to the Medicare Australia CEO for payment of an amount (the additional amount ) not exceeding the sum of the amounts by which premiums in respect of the month under the * complying health insurance policies issued by the private health insurer were reduced because of the operation of Division 23.

             (3)  An application under subsection (2) may relate to more than one month.

279-35   Content and timing of application

             (1)  An application by a private health insurer under section 279-25 or 279-30 for payment of an additional amount must be in the * approved form.

             (2)  The application must be made:

                     (a)  if the application relates to only one month—within 3 years of the end of that month; or

                     (b)  if the application relates to more than one month—within 3 years of the end of the first of those months.

279-40   Decision on application

             (1)  If a private health insurer makes an application under section 279-25 or 279-30 for payment of an additional amount, the Medicare Australia CEO must pay the additional amount sought if the Medicare Australia CEO is satisfied:

                     (a)  that the additional amount sought is correct; and

                     (b)  that it would be reasonable to grant the application .

             (2)  The Medicare Australia CEO may refuse the application, or decide to pay only part of the additional amount sought, if the Medicare Australia CEO is satisfied:

                     (a)  that the additional amount sought is incorrect; or

                     (b)  that it would not be reasonable to grant the application.

             (3)  The Medicare Australia CEO must notify the private health insurer of the Medicare Australia CEO’s decision on the application.

             (4)  A notice under subsection (3) must include reasons for the decision.

             (5)  The Medicare Australia CEO is taken, for the purposes of this Part, to have decided that:

                     (a)  the additional amount sought is correct; and

                     (b)  that it would be reasonable to grant the application;

if the Medicare Australia CEO does not give notice of his or her decision that the additional amount sought is incorrect, or that it would not be reasonable to grant the application, within the period of 3 months after the application was received by the Medicare Australia CEO.

             (6)  If the Medicare Australia CEO is taken to have made a decision under subsection (5) in respect of a private health insurer, the Medicare Australia CEO is taken to have given notice of that decision to the private health insurer.

279-45   Reconsideration of decisions

             (1)  A private health insurer that has been given a notice under subsection 279-20(2) or 279-40(3) may request the Medicare Australia CEO to reconsider the decision.

             (2)  The request must:

                     (a)  set out the reasons for the request; and

                     (b)  be made within the period of 28 days after the day on which the Medicare Australia CEO gave the notice.

             (3)  As soon as practicable after receiving the request, the Medicare Australia CEO must reconsider the decision and:

                     (a)  affirm it; or

                     (b)  vary it; or

                     (c)  revoke it and make a fresh decision.

Note:          Decisions on reconsideration are reviewable under Part 6-9.

             (4)  If the Medicare Australia CEO varies the decision or revokes the decision and makes a fresh decision, the decision as varied, or the fresh decision, as the case may be, has effect according to its terms and is taken always to have had that effect from the time when the original decision was made.

             (5)  The Medicare Australia CEO must notify the private health insurer stating the Medicare Australia CEO’s decision on the reconsideration together with a statement of his or her reasons for the decision.

             (6)  The Medicare Australia CEO is taken, for the purposes of this Part, to have revoked the decision if the Medicare Australia CEO does not notify the private health insurer of his or her decision on the reconsideration within 28 days after receiving the request.

Subdivision 279-B Powers of Medicare Australia CEO in relation to participating insurers

279-50   Audits by Medicare Australia CEO

             (1)  The Medicare Australia CEO may, at any time, audit the accounts and records of a private health insurer that is, or has been, a * participating insurer.

             (2)  An audit under subsection (1) must relate only to the accounts and records of the private health insurer to the extent that they deal with:

                     (a)  participation by persons in the * premiums reduction scheme; or

                     (b)  reductions of premium payable under * complying private health insurance policies under the premiums reduction scheme; or

                     (c)  receipt of money from the Medicare Australia CEO under this Division.

             (3)  The Medicare Australia CEO must not carry out an audit unless he or she has given notice to the private health insurer concerned stating that an audit is to be carried out.

             (4)  The private health insurer must ensure that the Medicare Australia CEO has full and free access to all accounts, records, documents and papers of the private health insurer that are relevant to the audit.

             (5)  The person carrying out the audit may make copies of, or take extracts from, such accounts, records, documents or papers for use in the audit.

             (6)  Without limiting the powers of the Medicare Australia CEO under this section, the Medicare Australia CEO may, by notice given to a private health insurer, require the insurer to give to the Medicare Australia CEO, within a period specified in the notice beginning at the end of a financial year, a certificate in writing by a registered company auditor as to the correctness of the accounts and records of the insurer for that year to the extent that those accounts and records deal with matters mentioned in paragraphs (2)(a), (b) and (c).

279-55   Medicare Australia CEO may require production of applications

             (1)  The Medicare Australia CEO may, by notice given to a private health insurer, require the private health insurer:

                     (a)  to produce to the Medicare Australia CEO, within the period and in the manner specified in the notice, applications retained under section 23-45; or

                     (b)  to make copies of any such applications and give them to the Medicare Australia CEO within the period and in the manner specified in the notice.

             (2)  A period specified under subsection (1) must not be less than one month.

             (3)  A private health insurer is entitled to be paid by the Medicare Australia CEO reasonable compensation for complying with paragraph (1)(b).



 

Division 282 Provisions applying to premiums reduction scheme and incentive payments scheme

Subdivision 282-A When and how payments can be recovered

282-1   Recovery of payments

             (1)  The following amounts are recoverable as debts due to the Commonwealth:

                     (a)  a payment made to a person under Subdivision 26-B to which the person was not entitled;

                     (b)  a payment made to a person under Subdivision 26-B in respect of a premium that was afterwards refunded;

                     (c)  a payment made to a person under Subdivision 26-B in respect of a claim that has been withdrawn under section 26-15;

                     (d)  so much of a payment made under section 279-15 or 279-40 as relates to a * complying health insurance policy that covers a person who was:

                              (i)  a * participant in the premiums reduction scheme for the financial year concerned in respect of the policy; and

                             (ii)  not eligible to participate in that scheme in respect of that policy;

                     (e)  so much of a payment made under section 279-15 or 279-40 as relates to a premium for which a reduction was not allowable under section 23-1;

                      (f)  150% of so much of a payment made under section 279-15 or 279-40 as:

                              (i)  is not reflected in reductions in premiums payable under complying private health insurance policies issued by the private health insurer concerned; or

                             (ii)  relates to a person whose application under subsection 23-15(1) has not been retained by the private health insurer as required by section 23-45; or

                            (iii)  relates to a person whose application under subsection 23-15(1) has been so retained, but has not been produced to the Medicare Australia CEO by the private health insurer in accordance with a requirement made by the Medicare Australia CEO under section 279-55;

                     (g)  so much of a payment purportedly made under section 279-15 or 279-40 as was not payable under that section;

                     (h)  interest payable under subsection 282-5(2).

             (2)  The amounts are recoverable from:

                     (a)  if paragraph (1)(a), (b) or (c) applies—the person referred to in that paragraph or that person’s estate; or

                     (b)  if paragraph (1)(d), (e), (f) or (g) applies—the private health insurer to which the payment concerned was made; or

                     (c)  if paragraph (1)(h) applies:

                              (i)  if the payment was made to a private health insurer—that insurer; or

                             (ii)  if the payment was made to an individual—the individual or his or her estate.

             (3)  An amount recoverable under subsection (1) is recoverable whether or not any person has been convicted of an offence relating to the payment.

282-5   Interest on amounts recoverable

             (1)  If the Medicare Australia CEO has served, on an individual from whom an amount is recoverable or the legal personal representative of such an individual, or on a private health insurer from which an amount is recoverable, under subsection 282-1(1) a notice claiming an amount as a debt due to the Commonwealth and:

                     (a)  an arrangement for the repayment of the amount has been entered into between the Medicare Australia CEO and the individual or the individual’s legal personal representative, or the private health insurer, as the case may be, within the period referred to in subsection (3), and there has been a default in payment of an amount required to be paid under the arrangement; or

                     (b)  at the end of the period such an arrangement has not been entered into and all or part of the amount remains unpaid;

then, from and including the day after the end of the period, interest becomes payable on so much of the amount as from time to time remains unpaid.

             (2)  Interest is payable:

                     (a)  at the rate of 15% per annum; or

                     (b)  if a lower rate is specified in the Private Health Insurance (Incentives) Rules for the purposes of this paragraph—that rate.

             (3)  The period for entering into an arrangement under paragraph (1)(a) is the period of 3 months following the service of the notice under subsection (1), or such longer period as the Medicare Australia CEO allows.

             (4)  Despite subsection (1), in any proceedings instituted by the Commonwealth for the recovery of an amount due under paragraph 282-1(1)(h), the court may order that the interest payable under that paragraph is, and is taken to have been, so payable from and including a day later than the day referred to in subsection (1).

282-10   Medicare Australia CEO may set off debts against amounts payable

             (1)  Despite any other provision of Part 2-2 or this Part, if:

                     (a)  except for this section, an amount would be payable by the Medicare Australia CEO to a person or his or her estate, or to a private health insurer, under Part 2-2 or this Part; and

                     (b)  an amount is recoverable under section 282-1 by the Commonwealth from the person or his or her estate, or from the insurer, as the case may be;

the Medicare Australia CEO may set off the whole or a part of the amount referred to in paragraph (b) against the amount referred to in paragraph (a).

             (2)  If the Medicare Australia CEO decides to make such a set-off in respect of a person or his or her estate, the Medicare Australia CEO must serve on the person or his or her legal personal representative or the legal personal representative of his or her estate a notice of the decision.

             (3)  If the Medicare Australia CEO makes such a set-off:

                     (a)  the Medicare Australia CEO is liable to pay to the person or his or her estate, or to the insurer, only the amount remaining after the set-off; and

                     (b)  the amount referred to in paragraph (1)(b) is reduced by the amount set off.

282-15   Reconsideration of certain decisions under this Division

             (1)  A person (the applicant ) may apply to the Medicare Australia CEO for the Medicare Australia CEO to reconsider the following decisions:

                     (a)  a decision that an amount is recoverable as a debt due to the Commonwealth under:

                              (i)  paragraph 282-1(1)(a) or (b); or

                             (ii)  paragraph 282-1(1)(h) in respect of a payment made to an individual; or

                     (b)  a decision under subsection 282-10(1) to set off a debt against an amount otherwise payable to a person (other than a private health insurer) or his or her estate.

             (2)  The application must:

                     (a)  be in writing; and

                     (b)  set out the reasons for the application.

             (3)  The application must be made within:

                     (a)  28 days after the day on which the applicant is notified of the decision; or

                     (b)  if, either before or after the end of that period of 28 days, the Medicare Australia CEO extends the period within which the application may be made—the extended period for making the application.

             (4)  Upon receiving such an application, the Medicare Australia CEO must:

                     (a)  reconsider the decision; and

                     (b)  either affirm or revoke the decision.

Note:          Decisions affirming an original decision of the Medicare Australia CEO are reviewable under Part 6-9.

             (5)  If the Medicare Australia CEO revokes the decision, the revocation is taken to be a decision:

                     (a)  in the case of a decision mentioned in paragraph (1)(a)—to waive the debt; or

                     (b)  in the case of a decision mentioned in paragraph (1)(b)—not to set off a debt against an otherwise payable amount.

             (6)  The Medicare Australia CEO must give the applicant a notice stating his or her decision on the reconsideration together with a statement of his or her reasons for the decision.

             (7)  The Medicare Australia CEO must make his or her decision on the reconsideration within 28 days after the day on which he or she received the application for the reconsideration.

             (8)  The Medicare Australia CEO is taken, for the purposes of this Subdivision, to have made a decision confirming the original decision if the Medicare Australia CEO has not told the applicant of his or her decision on the reconsideration before the end of the period of 28 days.

Subdivision 282-B Miscellaneous

282-20   Notification requirements—private health insurers

             (1)  The Medicare Australia CEO may, by notice given to a private health insurer, require the insurer, within the period specified in the notice, to provide information specified in the notice about a person who:

                     (a)  is covered at any time during a financial year specified in the notice by a * complying health insurance policy issued by the insurer; or

                     (b)  paid premiums under such a policy.

             (2)  The information must be given in the * approved form.

             (3)  A private health insurer commits an offence if:

                     (a)  the insurer is required by a notice under subsection (1) to provide information within a specified period about a person or matter; and

                     (b)  the insurer fails to comply with the requirement.

Penalty:  20 penalty units.

Note:          The obligation to provide information in response to a notice under subsection (1) is a continuing obligation and a private health insurer commits an offence for each day, after the period specified in the notice, until the information is provided (see section 4K of the Crimes Act 1914 ).

             (4)  Strict liability applies to subsection (3).

Note:          For strict liability , see section 6.1 of the Criminal Code .

282-25   Use etc. of information relating to another person

                   A person commits an offence if:

                     (a)  the person uses, makes a record of, or discloses or communicates to any person, any information that relates to the affairs of another person and was acquired under or for the purposes of Part 2-2 or this Part; and

                     (b)  the use, making of the record, disclosure or communication was not carried out in the performance of a function or obligation, or the exercise of a power, under Part 2-2 or this Part.

Penalty:  Imprisonment for 1 year.

282-30   Information to be provided to the Commissioner of Taxation

             (1)  The Medicare Australia CEO must, within 120 days after the end of each financial year, give to the Commissioner of Taxation the information that the Commissioner of Taxation, by legislative instrument, determines.

             (2)  A determination under subsection (1) must not require the Medicare Australia CEO to give:

                     (a)  the * tax file number of any person; or

                     (b)  information about the physical, psychological or emotional health of any person.

282-35   Delegation

                   The Medicare Australia CEO may, by writing, delegate all or any of his or her powers under Part 2-2 or this Part to an employee of Medicare Australia.

Note:          The Minister may also delegate his or her powers under Part 2-2 or this Part (see section 333-5).

282-40   Appropriation

                   The Consolidated Revenue Fund is appropriated for the purpose of making payments under Part 2-2 and this Part.