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Wednesday, 19 September 2001
Page: 31055


Dr SOUTHCOTT (10:02 AM) —The Health and Other Services (Compensation) Legislation Amendment Bill 2001 was an amendment to the acts which have the objective of preventing double dipping. Double dipping is where claimants receiving Medicare or nursing home benefit with respect to their compensable injuries later receive compensation for medical costs as the successful conclusion to a judgment or settlement of a claim. Double dipping is where they do not repay these benefits to the Commonwealth. The acts are designed to allow the Commonwealth to recover these benefits.

It is not uncommon for local MPs to see problems relating to this act. Sometimes we see people who have received payments and then find that the Health Insurance Commission is claiming it back. A 2001 review of the act by Mr George Pooley found that the legislation was complex and labour-intensive in its requirements. The review opted for a streamlining option which delivers some savings and has unanimous support amongst stakeholders. They looked at three options: retaining the status quo, a streamlining option or applying a levy. This streamlining option, which is the one that they have recommended, has savings of over $25 million over the next four years.

What this bill specifically does is, firstly, allow for removal of the notice of claim prior to judgment or settlement. The reason for this is that many claims never get that far. Secondly, it allows the use of statutory declarations to extend the time frames if no further services were provided. Thirdly, it sets a proposed threshold of $5,000 as opposed to $166.60, and amounts below that threshold will be defined as `small amounts'. This reduces the number of settlements and judgments that the Health Insurance Commission will be interested in. The reason for this is the cost of recovering these small amounts outweighs the revenue that they receive from getting them. Fourthly, it extends the time for validity of the notice of past benefits from three to six months and, fifthly, it reduces the current administrative burden of the compensation recovery program. These amendments together will reduce the administrative burden on the Health Insurance Commission, insurers and claimants.

Looking at the streamlining option, which is the one that is contained in this bill, the cost of this to government will be that there will be a greater reliance on statutory declarations. This means that there will have to be tight fraud controls and audit procedures. There are already some in existence. There will also be reduced total recoveries.

But the benefits will be a decreased number of reported settlements and judgments, a decreased issuing of the notice of past benefits statements, decreased complaints because of the sliding scale that has been used in the advanced payment option, and there will also be a decreased administrative cost of $25 million. Another benefit to the government is that this option had unanimous stakeholder support.

There will be a cost to business: this option still maintains some compliance cost. The benefits to business will be a reduced reporting of claims, reduced administration of reported claims, an ability to use the advance payment option, and there will be reduced costs of $2.9 million.

For individuals, there will still be some compliance costs that have been retained, but there will be benefits. Those who receive compensation of less than $5,000 will no longer be required to comply. Those who have claims greater than $5,000 will be able to give a statutory declaration if there was no Commonwealth benefit received. There will also be a decreased need for a notice of past benefit. We estimate that individuals who come under this will be $11.3 million better off.

This bill represents an improvement. It is workable and acceptable to all. It does involve a net recovery of $19.9 million, which is better than what we currently have but less than what would have occurred under the levy. I have noted that the opposition supports this bill. This bill essentially has technical amendments, which will involve streamlining the act and preventing double dipping.