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Health Legislation Amendment Bill (No. 4) 1999

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1999

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

HEALTH LEGISLATION AMENDMENT BILL (NO. 4) 1999

 

HEALTH INSURANCE (APPROVED PATHOLOGY SPECIMEN

COLLECTION CENTRES) TAX BILL 1999

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the Minister for Health and Aged Care,

the Hon Dr Wooldridge MP)

 



 

HEALTH LEGISLATION AMENDMENT BILL (NO.4) 1999

 

OUTLINE

 

 

The Health Legislation Amendment Bill (No. 4) 1999 (the Bill) makes a number of amendments to the Health Insurance Act 1973 (the Act).

 

The main items contained in the Bill will:

 

·          provide the legislative framework for the new collection centre arrangements under the MBS which will apply to both public and private sectors from 1 July 2000;

 

·          simplify and clarify the rules relating to temporary resident doctors (TRDs) and overseas trained doctors (OTDs) and the circumstances in which they can access Medicare; and

 

·          remove the 1 January 2002 sunset clause from section 19AA.

 

In addition the Bill makes a number of technical machinery amendments which do not raise significant issues of policy. These include amendments to:

 

·          the definition of “quality assurance activity” in subsection 124W(1) of the Act to include a reference to the Health Care (Appropriation) Act 1998 ;

 

·          the definition of “professional services” in subsection 3 (1) to clarify that a dental practitioner who is able to render a Medicare-payable service (in respect of oral and maxillofacial surgery) must have been approved for this purpose by the Minister in writing .

 

·          the definition of “relevant offence” in section 124B of the Act to include offences under sections 23DR and 23DS; and

 

·          subsection 128A(4) of the Act to delete the reference to section 21 of the Crimes Act 1914 .

 

PATHOLOGY SPECIMEN COLLECTION CENTRES

 

The Bill substantially amends Division 4A of Part IIA of the Act, and related provisions, which deal with the licensed collection centre scheme in relation to the collection of pathology specimens for Medicare purposes.  These amendments give effect to new arrangements for approved collection centres. 

 

Subsection 16A(5AA) of the Act provides that medicare benefit is not payable in respect of a requested pathology service unless the pathology specimen for the service is collected in one of the ways specified.  These include collection at a licensed collection centre by the pathologist who renders or refers the pathology service, or by an employee of the approved pathology authority which is the proprietor of the relevant laboratory.  Such collection would in future need to be undertaken at an approved collection centre. 

 

The present arrangements relating to licensed collection centres would be replaced with simplified arrangements for approved collection centres.  Presently, approved pathology authorities are allocated units of entitlement, in accordance with principles determined under the Act, for a calendar year beginning on 1 February, and must seek the grant of licences for individual specimen collection centres.  Under the new arrangements, approvals will be granted to approved pathology authorities for particular approved collection centres on a financial year basis. 

 

Approval Principles will apply to the granting of approvals.  These may provide for various matters including a system for determining the maximum number of approvals that may be granted to particular approved pathology authorities; application procedures; the giving of undertakings regarding compliance with Collection Centre Guidelines; and review of decisions made under the Principles.  The Collection Centre Guidelines are guidelines relating to quality of practice published by the National Pathology Accreditation Advisory Council.    

 

The restriction that prevents approved pathology authorities constituted by a State or Territory, or a State or Territory authority or undertaking, from operating licensed collection centres will not apply in relation to approved collection centres.  The Bill also clarifies that the collection of pathology specimens “at a recognised hospital” must be at the premises of the hospital where accommodation and nursing care is provided. 

 

The grant of an approval for an approved collection centre would be subject to payment of a tax imposed under the Health Insurance (Approved Pathology Specimen Collection Centres) Tax Act 1999 which would replace the licence fee payable in respect of a licensed collection centre.

 

HEALTH INSURANCE (APPROVED PATHOLOGY SPECIMEN COLLECTION CENTRES) TAX BILL 1999

 

OUTLINE

 

 

The Health Insurance (Approved Pathology Specimen Collection Centres) Tax Bill 1999 (the Tax Bill) provides for the tax which must be paid before the Minister can grant an approval to an approved pathology authority for an eligible collection centre under section 23DNBA of the Act as it would be amended by the Bill. 

 

A Medicare benefit is not presently payable in respect of a pathology service rendered following a request by a treating practitioner or referring approved pathology practitioner unless the pathology specimen for the service has been collected in a licensed collection centre, or as otherwise permitted under the legislation.  However, from 1 July 2000, the legislation will provide in respect of approved collection centres in place of licensed collection centres.

 

The Tax Bill sets the tax payable at the same rate of $1000 for a full year as that presently payable under the Health Insurance (Pathology) (Licence Fee) Act 1991 in respect of the grant of a licence for a licensed collection centre under section 23DNE of Act.  The Health Insurance (Pathology) (Licence Fee) Act 1991 would be repealed with effect from 1 July 2000.

 

FINANCIAL IMPACT STATEMENT

 

The Tax Bill replaces equivalent measures under the Health Insurance (Pathology)(Licence Fee) Act 1991 , with no significant financial impact.

 

Section 19AA of the Health Insurance Act 1973 is an existing savings measure, which was introduced into legislation as part of the Budget of 1996.  The proposed repeal of the current sunset clause in section 19AA, by item 40 of the Health Insurance Legislation Amendment Bill (No.4) 1999, would have a high financial impact upon expenditure under the Medicare Benefits Scheme if it is not passed by Parliament.

 

 

 

REGULATION IMPACT STATEMENT

NEW ACCREDITATION ARRANGEMENTS FOR PATHOLOGY SPECIMEN COLLECTION CENTRES

 

1.       BACKGROUND

 

The sites where pathology specimens are collected are currently regulated under the Health Insurance Act 1973 for the purposes of Medicare benefits payments.

 

Part IIA of the Health Insurance Act 1973 and the Health Insurance (Pathology Licence Fee) Act 1991 set out the current arrangements for the licensing of pathology specimen collection centres for private sector pathology providers under the Licensed Collection Centre (LCC) Scheme.  In order to claim Medicare benefits for pathology services, Approved Pathology Practitioners (APPs) must operate in an Accredited Pathology Laboratory (APL), which is owned by an Approved Pathology Authority (APA).  APAs require a licence for each pathology specimen collection centre they operate.

 

The LCC Scheme was established in February 1992 in response to concerns about a proliferation of collection centres causing inefficiencies in pathology sector and higher costs to Medicare, and the community. It aimed to:

·                 reduce the number of collection centres by limiting the number of LCCs;

·                 increase the efficiency of pathology specimen collection;

·                 ensure that future growth of collection centres occurred in an orderly manner; and

·                 ensure that all collection centres were of a reasonable standard.

 

To a large extent these aims have been achieved:

·                 In February 1992 there were 2,246 collection centres, but by February 1995 there were only 1,037 LCCs.

·                 The rate of growth of expenditure on pathology services under Medicare was reduced from approximately 13% per annum in 1990/91 to an annual average growth rate of 6% in 1998/99.

·                 Increased efficiency in the pathology sector as shown by a simultaneous growth in pathology use and fall in the number of LCCs.

·                 Quality standards of collection centres have been ensured.

 

Eligible APAs are allocated units of entitlement from a fixed pool known as the global entitlement , on the basis of a formula.  One unit of entitlement allows an APA to open one LCC.  The units of entitlement can be converted into licences or held by an APA.  An annual fee of $1,000 applies for each licence.

 

An APA can use one unit of entitlement to operate three centres in rural and remote Australia to encourage the operation of pathology services in these areas.

 

The Government, the Royal College of Pathologists of Australasia (RCPA) and the Australian Association of Pathology Practices (AAPP) entered into a second agreement, the Pathology Quality and Outlays Agreement in May 1999 for the period 1/7/1999 to 30/6/2002.  It sets out a framework for managing growth in pathology expenditure under Medicare, facilitating further structural reform in the pathology sector and improving quality in pathology testing, use and practice.  Possible alternatives to the LCC Scheme were considered and new arrangements for pathology specimen collection centres which have a reduced level of regulation were agreed.

 

The pathology industry in Australia consists of a range of companies, from individual general practitioners who are accredited to undertake simple pathology tests within their consulting rooms, up through small/medium sized businesses to medium/large companies.  A relatively small number of large companies undertake a significant proportion of market activity which reflects the capital intensive nature of pathology arising from the need to establish and maintain laboratories and employ appropriately qualified staff.

 

2.       PROBLEMS

 

A number of problems associated with the operation of the LCC Scheme had been identified:

·                 Application of the formula for allocating units of entitlement would lead to significant changes in entitlements between APAs due to mergers and takeovers, and the entry of privatised public sector service providers and not for profit denominational APAs into the market.  This would result in instability in the market;

·                 Continuing the application of the ‘floor arrangement’ which guaranteed that no APA would lose entitlement resulted in an increase in the global pool of entitlement negating one of the aims of the LCC Scheme, namely to maintain orderly growth in the number of collection centres;

·                 The legislation and administration of the LCC Scheme has proved complex and time consuming for both the industry and government;

·                 The LCC Scheme was identified as needing review under the National Competition Policy; and

·                 The LCC Scheme excluded public sector APAs.

 

One of the major aspects of the LCC Scheme which created the conditions under which these problem emerged was that allocation of units of entitlement is based on:

·                 the size of the global pool of entitlement; and

·                 the total number of APA’s participating in the LCC Scheme.

 

An APA’s share of the global entitlement is relative to the number of participants, rather than being based on the APA’s individual performance.  This has created the potential for the significant shifts in entitlement caused by the entry of new APAs into the LCC Scheme resulting in instability in the market.  Should significant shifts in entitlement occur, currently operating collection centres could be forced to close, whilst replacement collection centres would not be established as quickly.  This could result in a lack of access to services, and also potential risks to quality of service as pressure on remaining collection centres increased.  This is an undesirable environment for the government and the community due to the need to ensure that quality pathology services are available to all Australians.

 

3.       OBJECTIVES

 

During negotiations on the Pathology Quality and Outlays Agreement a framework for new arrangements for pathology specimen collection centres was developed to address these problems identified.  Any new arrangements should:

·                 assure quality of pathology specimen collection services provided in approved pathology collection centres and ensure patient access to pathology specimen collection services;

·                 reduce government regulation of pathology specimen collection centres and restriction on competition;

·                 ensure allocation of collection centres is based on the activity and performance of individual APAs;

·                 achieve a balance between access, cost, and affordability and allow sectoral adjustment to the new arrangements;

·                 be open to public as well as private sector APAs; and

·                 simplify administrative arrangements, promote accountability and transparency.

 

4.       OPTIONS

 

4.1     Option 1

Maintain current level of regulation.

 

4.2     Option 2

Reduced level of government regulation.

 

A national approach to pathology specimen collection centres, which incorporates both the public and private sector APAs under the MBS.  This option is fully consistent with the objectives identified for new arrangements for pathology specimen collection centres and set out in the Pathology Quality and Outlays Agreement .

 

Under this option, the number of collection centres an APA could operate would be based on its pathology episode activity in relation to MBS and MBS type services over a specified 12 month period. An APA would be eligible to have one collection centre per designated number of patient episodes conducted.

 

This allows for market activity, in contrast to the existing arrangements whereby allocation of collection centres is based on the relative position of APAs within a global entitlement.

 

The three for one incentive would continue to encourage the retention of pathology collection services in designated areas of rural and remote Australia and would help to ensure equitable and fair provision of pathology services throughout Australia.

 

Allocation of the number of pathology specimen collection centres to APAs on the basis of MBS and MBS type episode activity, and approval of all collection centres according to guidelines developed by the profession.  This would be phased in over four years to allow the pathology sector to adjust to a less regulated environment.

 

This is in line with the aim of any new arrangements to assure quality of pathology specimen collection services provided in approved pathology collection centres.

 

Allocation would occur annually with a four year phase-in period:

·                 Yr1 - existing APAs will be allocated what they have, plus 10% depending on their episode activity (no APAs will have fewer centres) and new APAs will receive an allocation based on episode activity, or 2, which ever is greater;

·                 Yr2 - existing APAs will be eligible for their Yr1 allocation plus 10% (no APAs will have fewer centres), new APAs eligible for allocation based on episode activity, or 2, which ever is greater;

·                 Yr3 - . existing APAs will be eligible for their Yr2 allocation plus or minus 10%, new APAs eligible for allocation based on episode activity, or 2, which ever is greater;

·                 Yr4 - existing APAs will be eligible for their Yr3 allocation plus or minus 10%, new APAs eligible for allocation based on episode activity, or 2, which ever is greater; and

·                 Yr5 and onwards - allocation based on episode activity or 2, which ever is greater.

 

APAs would be required to apply to the HIC annually and approval of collection centres would be based on self-assessment and random audit by the HIC in accordance with the guidelines.

 

Under these arrangements, APAs would be required to continue to pay an annual tax of $1,000, the level of the current licence fee under the LCC Scheme, for each collection centre they operate.  This tax is being reinstated under the Health Insurance (Approved Pathology Specimen Collection Centres) Tax Bill 1999 .

 

Annual public reporting would be undertaken by the Pathology Consultative Committee.  The guidelines for approval of pathology specimen collection centres would be subject to review every 3 to 5 years and the new arrangements would be reviewed as part of the broad review of Commonwealth legislation relating to pathology to be undertaken in 2000.

 

The transition arrangements provide for:

·                 stability in the pathology sector, which is in the interests of all parties concerned;

·                 a gradual move to allocation on the basis of individual activity rather than on relative position within a global pool;

·                 the maintenance of the quality of the pathology services that are provided because of the guidelines on collection centre facilities and operations; and

·                 the distribution of collection centres under this option is far more likely to be able to ensure equity of access to pathology services throughout Australia through the three for one incentive and through a more open and les regulated set of arrangements.

 

This option is consistent with current government policy to reduce regulation and support more competitive markets, while maintaining a level of regulation, which takes account of the government’s public policy interests in managing growth in outlays on pathology under Medicare at an annual average rate of 5%, and ensuring that high quality pathology services are available to Australians.

 

5.       AFFECTED PARTIES

 

Parties affected by the proposed regulation would be:

·                 Pathology industry (including public sector/not for profit providers)

·                 Government

·                 Consumers

 

6.    ASSESSMENT OF IMPACT OF OPTIONS

 

6.1     Option 1

Maintain current regulatory arrangements.

 

6.1.1           Costs

a)              Pathology industry

·                 The number of new entrants into the pathology market has increased demand for units of entitlement.  Under the current arrangements, this would lead to some existing APAs losing units of entitlement despite increasing their activity.  This could result in instability, requiring ongoing intervention such as the floor introduced for the 1999 licensing year.

·                 An APA’s units of entitlement are currently based on its relative position in the market rather than on its own performance.

·                 Administration of the LCC Scheme is complex.

·                 This option would not reduce the level of government regulation of pathology specimen collection centres and so is inconsistent with the objectives agreed for any new system as set out in the Pathology Quality and Outlays Agreement .

·                 Only the private sector can participate in the LCC Scheme.

b)      Government

·                 There is a potential for a negative outcome for some consumers if the current arrangements were maintained as there is potential for:

-                                     a reduction of access to pathology services in rural and remote areas; and

-        a reduction in the total availability of pathology services because some APAs could lose units of entitlement that are currently being utilised should the floor arrangement not be maintained.

·                 The current arrangements are inconsistent with the government’s broader policies regarding regulation and competition as the LCC Scheme is closed to public sector APAs.

·                 The retention of the floor would maintain the current artificial market conditions whereby allocation cannot fall and so put pressure on the expenditure cap:

-                                     the environment created by the LCC Scheme has resulted in units of entitlements taking on a commodity value, with some APAs not converting their units of entitlement into licences but are holding them as capital.

·                 The LCC Scheme as it stands is inconsistent with the aims and underlying principles identified by the government and the pathology industry in the Pathology Quality and Outlays Agreement for new arrangements for pathology specimen collection centres.

c)       Consumers

·                 Instability in the pathology sector arising from unpredictable losses in units of entitlement could lead to the closure of collection centres with a consequent reduction in access for some consumers who would need to travel further distances for the collection of pathology specimens and incur greater costs.

 

6.1.2           Benefits

a)      Pathology industry

·                 The industry would only benefit if the floor arrangement were to continue, as some APAs would retain entitlements for which they would otherwise be ineligible.

·                 There is a growing number of public sector APAs that are privatising their services and denominational/not for profit APAs that are changing their status to private and so gaining access to the LCC Scheme.

b)      Government

·                 No benefits to the Commonwealth Government have been identified.

c)       Consumers

·                 No benefits to consumers have been identified from the retention of the LCC Scheme.

 

6.2     Option 2

 

Reduced level of Commonwealth Government regulation.

 

Approval of all collection centres according to agreed professional guidelines and allocation of the number of pathology specimen collection centres to APAs on the basis of their level of MBS and MBS type episode activity.  Details of this option are set out above.

 

6.2.1           Costs

a)      Pathology industry

·                 APAs with less episode activity could see a reduction in the number of specimen collection centres they could operate.

·                 This option would increase competition through allowing all APAs to participate in the new collection centre arrangements, instead of only private sector APAs.

·                 The $1,000 tax will be a new cost to public sector APAs.  This will not be a cost to private sector APAs as this tax reinstates the existing $1,000 licence fee they are required to pay under the LCC Scheme.

b)      Government

·                 HIC would be required to redesign aspects of its administrative arrangements to support the operation of the new arrangements set out under this option.

·                 Should the number of collection centres fall significantly, the revenue from the collection centre tax would be reduced.

c)       Consumers

Consumers could see some increased costs should APAs close collection centres in rural and remote areas on the basis of business decisions, despite the operation of the three for one incentive.

 

6.2.2           Benefits

a)      Pathology industry

·                 Reduction in the level of government regulation of pathology specimen collection centres and simplified administration and reduction of costs to industry and increased flexibility in business decision making;

·                 Ongoing stability in the pathology market by providing for transitional arrangements to assist the pathology industry to make any necessary structural adjustments;

·                 The public sector APAs are included, unlike the LCC Scheme; and

·                 These arrangements are consistent with the principles set out in the objectives for a new system and the policy framework agreed in the Pathology Quality and Outlays Agreement .

b)      Government

·                 The Government would be able to assure the community that the quality and efficiency of the pathology collection centres is being maintained.

·                 The maintenance of incentives, such as the three for one, assist in ensuring equitable and fair provision of services and access to pathology services in rural and remote Australia, consistent with the objectives of any system as set out in the Pathology Quality and Outlays Agreement ;

-        regulation of the allocation of collection centres provides the mechanism through which this incentive operates and has an important role in maintaining access to quality pathology services throughout Australia.

·                 This option is consistent with the governments policy of reducing regulation and supporting competitive markets while maintaining a level of regulation that ensures its public policy responsibilities towards managing outlays on pathology and ensuring quality services are not compromised.

·                 A transitional period is planned between the LCC Scheme and the new arrangements to provide for stability in the pathology market.

·                 Units of entitlement would no longer exist thereby removing the commodification of entitlement that has been occurring within the industry.

·                 Should the number of collection centres increase, there would be an increase in revenue from the collection centre tax.

c)       Consumers

·                 Consumers would benefit from a stable pathology sector that provides the Australian community with access to high quality, affordable services.

·                 The introduction of professionally agreed guidelines would help to ensure the safety and quality of pathology collection services provided to consumers.

 

7.       CONSULTATION

 

One element of the first pathology agreement between the pathology industry and the government was a review of the LCC Scheme.

 

Possible options for addressing the concerns about the LCC Scheme were considered by the government, HIC and representatives of both the public and private sector pathology industries through the Pathology Consultative Committee.  A policy framework for new arrangements was developed within the context of negotiating a second agreement.

 

8.       CONCLUSION AND RECOMMENDED OPTION

 

8.1     Option 1

Both government and the pathology sector do not support the retention of the LCC Scheme for the reasons outlined above.  The Pathology Quality and Outlays Agreement reflects the agreement between the industry and the government on the attributes of the new system.

 

For these reasons, option one is not recommended.

 

8.2     Option 2

This option is entirely consistent with the objectives set out for new arrangements for pathology specimen collection centres.  It reflects the agreement reached between the two principals most affected by the proposed changes, the government and the pathology industry that is set out in the Pathology Quality and Outlays Agreement .  The proposed option addresses the key concerns that have been raised about the LCC Scheme and provides for the allocation of collection centres to be made on the basis of individual business activity and the development of improved quality practices.

 

Option two is therefore recommended.

 

9.       IMPLEMENTATION

 

The Minister for Health and Aged Care, the Hon. Dr Michael Wooldridge, signed the Pathology Quality and Outlays Agreement on 6 May 1999.  Dr Wooldridge wrote to all APAs in June 1999 informing them of the new agreement and its key elements, including the plan to replace the LCC Scheme with new arrangements.

 

A timetable has been developed for interim arrangements for the period 1 February - 30 June 2000, for the LCC Scheme in the lead up to the commencement of the proposed new arrangements.  These would maintain the units of entitlement allocated for 1999 at the same levels.  New entrants to the market would also be accommodated.

 

A separate communication strategy has not been developed as the access to pathology services is not expected to be significantly affected.  Also, the parties directly affected by the proposed regulatory changes negotiated the framework for new arrangements for pathology specimen collection centres.

 

10.     REVIEW

 

The new arrangements will be reviewed regularly by the Department of Health and Aged Care in conjunction with the Pathology Consultative Committee.

 

The agreement includes provision for a review of this new system within the first three years of the system’s operation.

 

A broad review of the Commonwealth legislation relating to pathology is to be conducted during 2000.  This broad review will examine a range of aspects of this regulatory framework, including competition issues.

 

 



 

HEALTH LEGISLATION AMENDMENT BILL (NO. 4) 1999

 

 

NOTES ON CLAUSES

 

Clause 1: Short title

 

This section cites the short title of the proposed legislation as the Health Legislation Amendment Act (No. 4) 1999.

 

Clause 2: Commencement

 

This section provides that, except for the amendments dealing with pathology collection centres and temporary resident doctors, the Act commences on the day on which the legislation receives Royal Assent. 

 

Subclause 2(2) specifies that some of the amendments relating to the new pathology specimen approved collection centre arrangements commence on 1 July 2000 when the new arrangements generally come into effect.  Other amendments relating to these arrangements commence on Royal Assent to allow applications for approval to be dealt with before 1 July 2000.

 

The temporary resident doctor amendments commence on the 90 th day after the day on which the Act receives the Royal Assent.

 

Clause 3: Schedule(s)

 

This section notes that each Act that is specified in the Schedule is to be as set out in the applicable items in the Schedule concerned.

 

Clause 4 - Application and transitional provisions

 

Subclause 4(1) contains transitional provisions relating to the amendment made by Item 2 of the Schedule.  The provision enables the benefit of the Item 2 amendment (in ensuring the Minister’s ability - relying on subsection 33(3) of the Acts Interpretation Act 1901 - to revoke the approval of dental practitioners in appropriate circumstances) to extend to operate also to practitioners who in fact were approved by the Minister in writing before the commencement of Item 2.

 

Subclause 4(2) contains transitional provisions relating to the amendments made by items 3, 8 and 10-14 of the Schedule.  This provision preserves exemptions granted to individuals under section 3J following the repeal of that provision.  Individual exemptions are given for a specified duration.  The transitional provisions do not preserve class exemptions which are open-ended.  The delayed commencement of these amendments will enable the class exemptions to be remade under section 19AB(3).

 

Subclause 4(3)continues the operation of section 23DNAA of the Act until 1 July 2000 for the purposes of section 23DND which provides for applications for the grant of licences for licensed collection centres.  Section 23DNAA, which excludes approved pathology authorities which are State or Territory bodies from making such applications, would be repealed by the Bill.  This repeal would be from Royal Assent to permit applications by such bodies to be dealt with before 1 July 2000.  This transitional provision is required to prevent applications by such bodies for licences under the present arrangements during the interim.

 

Subclause 4(4)prevents the coming into effect before that date of approvals granted in advance of the commencement of the main provisions relating to approved collection centres for pathology specimen collection on 1 July 2000.

 

Subclause 4(5)maintains the eligibility for medicare purposes of pathology services performed after 1 July 2000 but using specimens collected before that date notwithstanding that they were collected at a licensed collection centre or recognised hospital and not, as otherwise required after that date, at an approved collection centre or the premises of a recognised hospital where hospital treatment is provided.

 

Subclause 4(6) permits inspections of licensed collection centres under section 23DNJ of the Act between Royal Assent and 1 July 2000 notwithstanding that the section is amended to refer to approved collection centres with effect from Royal Assent to permit inspections of proposed approved collection centres before 1 July 2000.

 

 

SCHEDULE 1 - AMENDMENTS AND REPEALS

 

Item 1

 

This item repeals the note at the end of the definition of “medical practitioner”.  This amendment is consequential upon the repeal of section 3J (item 3).

 

Item 2

 

This item adds words to the definition of “professional service” in subsection 3(1) to clarify that a dental practitioner who is able to render a Medicare-payable service (in respect of oral and maxillofacial surgery) must have been approved for this purpose by the Minister in writing .  The Medical Benefits (Dental Practitioners) Advisory Committee (the Committee) recommends to the Minister practitioners who should be so approved.

 

The effect of the amendment is to ensure that the Minister, calling on the operation of subsection 33(3) of the Acts Interpretation Act 1901 and acting on a recommendation of the Committee, has the power to revoke the approval of a practitioner in appropriate circumstances (for example, where a practitioner is guilty of fraud, where the practitioner’s name is removed from the State Dental Register, or where a practitioner ceases to work in his or her speciality or retires). 

 

Item 3

 

This item repeals section 3J.  Section 3J excludes temporary residents from the definition of “medical practitioner” unless they have certain qualifications and are granted an exemption under paragraph 3J(1)(d).  Exemptions are generally granted to alleviate medical workforce shortages in rural areas.

 

Following the repeal of section 3J temporary resident doctors will be dealt with under section 19AB which will be amended to include temporary resident doctors.  This will provide a simple streamlined process for overseas trained doctors (both permanent and temporary resident) to access Medicare benefits for work in districts of workforce shortage.  These amendments will also significantly reduce inequities between the treatment of temporary and permanent resident doctors, who often work with the same areas of workforce shortage.

 

Item 4

 

This item repeals section 3K.  Section 3K provides for a reconsideration and review of decisions under section 3J.  This amendment is consequential upon the repeal of section 3J (item 3).

 

Item 5

 

This item replaces the reference to a “licensed collection centre” in subparagraph 16A(5AA)(d)(ii) of the Act by “an approved collection centre”.  Subsection 16A(5AA) sets out the places at which a specimen collection must take place for medicare benefit to be payable in respect of an associated pathology service.  Under the arrangements to apply from 1 July 2000, approved collection centres will replace licensed collection centres.

 

Item 6

 

This item qualifies the existing reference to a “recognised hospital” in subparagraph 16A(5AA)(d)(iii) as a place at which, for medicare benefit to be payable in respect of an associated pathology service, a pathology specimen can be collected.  Collection under the amended provision will need to be at premises of a recognised hospital at which hospital treatment is provided.  Subsection 3(1) of the Act defines “hospital treatment” as “accommodation and nursing care, whether provided for the purpose of permitting the provision of professional attention or, in the case of a nursing-home type patient, as an end in itself”.  This amendment is intended to remove doubt about the premises, which could be considered to be part of the recognised hospital for the purposes of this provision.  In particular, it is directed at preventing claims that pathology specimen collection centres established in locations having little or no geographical connection with the principal premises of a recognised hospital are nevertheless part of that hospital.  It is expected that approved pathology authorities conducting such collection centres will seek approval for them as approved collection centres under the new arrangements put in place by the Bill.

 

Item 7, 9

 

These items amend section 19AA to remove the 1 January 2002 sunset on the operation of section 19AA.

 

Section 19AA requires all medical practitioners who first became medical practitioners after 1 November 1996 (regardless of their citizenship or migration status) to meet certain minimum proficiency requirements before they can participate in Medicare.  This section provides an incentive to doctors to seek adequate training before moving out of the public hospital system and into unsupervised private practice.  The amendment to section 19AA will have the effect of extending this restriction beyond 1 January 2002.

 

Items 8 and 10

 

These items substitute a new subparagraphs 19AA(1)(b)(v) and 19AA(2)(b)(v) respectively. 

Paragraphs 19AA(1)(b)(v) and 19AA(2)(b)(v) currently exempt temporary residents who have been granted an exemption under section 3J from satisfying the minimum proficiency requirements contained in section 19AA.

 

Following the repeal of section 3J temporary residents will require an exemption under subsection 19AB(3) in order to be exempt from the minimum proficiency requirements contained in section 19AA where they seek access to Medicare benefits, other than assistance at operations and refer and prescribe services. which are not restricted by sections 19AA and 19AB. 

 

Item 11 and 13

 

These items repeal paragraphs 19AB(1)(c) and 19AB(2)(c).  Paragraphs 19AB(1)(c) and 19AB(2)(c) provide an exemption from the 10 year moratorium applying to overseas trained doctors and former overseas medical students for temporary resident doctors who have been granted exemptions under section 3J.  These amendments are consequential upon the repeal of section 3J (item 3).

 

Items 12 and 14

 

These items repeal paragraphs 19AB(1)(d) and 19AB(2)(d) and substitutes new paragraphs 19AB(1)(d)-(f) and 19AB(2)(d)-(f).

 

The effect of these amendments will be to provide a transitional arrangement for medical practitioners currently within the scope of the restriction on provider numbers in section 19AB(1)(d).  Currently, permanent residents who were recognised as a medical practitioner whilst still a temporary resident would deem the 10 year period for the moratorium on access to Medicare benefits to have commenced from first receipt of an exemption under section 3J(1)(d).  This is an unintended effect of the legislation given that temporary residents who did not hold a section 3J exemption prior to 1 January 1997 are only able to access Medicare benefits for the ten years after changing residency status to permanent residency.

 

Item 15

 

This item inserts new subsections 19AB(4A)-(4D).  The effect of these provisions is to require the Minister (or his or her delegate) to comply with statutory guidelines in exercising powers under subsections 19AB(3) and (4).

 

Subsection 19AB(3) empowers the Minister to grant exemptions from the operation of subsections 19AB(1) and (2).  Subsection 19AB(4) empowers the Minister to impose conditions on an exemption.  Exemptions are granted to alleviate medical workforce shortages in rural areas.

 

At present, the exercise of this discretion is informed by non-statutory guidelines.  This amendment will make the current non-statutory guidelines disallowable instruments and legally binding on decision-makers.

 

Item 16

 

This item inserts a definition of “permanent Australian” into subsection 19AB(7).

 

Item 17

 

This item inserts in subsection 23DA(1) for the purposes of Part IIA a definition of “approval”  - an approval granted under new section 23DNBA to an approved pathology authority in respect of an eligible collection centre.

 

Item 18

 

This item inserts in subsection 23DA(1) for the purposes of Part IIA a definition of  “Approval Principles” - principles determined by the Minister under section 23DNBA that apply to the granting of approvals for eligible collection centres.

 

Item 19

 

This item inserts in subsection 23DA(1) for the purposes of Part IIA a definition of   “approved collection centre” - a specimen collection centre for which an approval is in force under section 23DNBA.

 

Item 20

 

This item inserts in subsection 23DA(1) for the purposes of Part IIA a definition of   “Collection Centre Guidelines” - the Guidelines for Approved Pathology Collection Centres published by the National Pathology Accreditation Advisory Council as in force from time to time.

 

Item 21

 

This item inserts in subsection 23DA(1) for the purposes of Part IIA a definition of “eligible collection centre” in subsection 23DA(1) - a specimen collection centre on premises owned, leased, or sub-leased by an approved pathology authority that is the sole proprietor of at least one eligible pathology laboratory (see definition below).

 

Item 22

 

This item inserts in subsection 23DA(1) for the purposes of Part IIA a definition of   “eligible pathology laboratory” - a pathology laboratory approved as an accredited laboratory under section 23DN which is in a category (as specified in the approval) determined by the Minister under new section 23DBA for the purposes of this definition.

 



Items 23-25

 

These items repeal the existing definitions of “licence”, “licence fee”, and “licence collection centre” in subsection 23DA(1) which are redundant as a result of amendments made by the Bill.

 

Item 26

 

This item makes a minor drafting revision to the definition of “specimen collection centre” in subsection 23DA(1).

 

Item 27

 

This item defines the term “tax”, with a reference to the Health Insurance (Approved Pathology Collection Centres) Tax Bill 1999.

 

Item 28

 

This item repeals the definition of “temporary collection centre” in subsection 23DA(1).  This definition was made redundant by earlier amendments of the Act.

 

Item 29

 

This item inserts new section 23DBA (Categories of eligible pathology laboratories) into the Act.  This permits the Minister to determine in a disallowable instrument the categories of laboratory of which an approved pathology authority must be the sole proprietor for the purposes of the definition of “eligible pathology laboratory”.  The categories referred to are categories specified in an approval under section 23DN of the Act of premises as an accredited laboratory.  A determination may refer to the categories provided for in principles under section 23DNA as in force from time to time.  This is intended to overcome the limitation otherwise presented by section 49A of the Acts Interpretation Act 1901 .

 

Item 30

 

This item repeals section 23DNAA which presently limits the meaning of “approved pathology authority” to exclude from the licensed collection centre arrangements a State or Territory; an authority that is a corporation established by a law of the Commonwealth, of a State, or of an internal Territory; or an undertaking that is partly owned or partly operated by any of these.  These bodies if approved pathology authorities will be eligible under the amended Act to apply for approvals for eligible collection centres.

 

Item 31

 

This item repeals section 23DNB which provides for the granting of units of entitlement to operate licensed collection centres and would be redundant under the new arrangements.

 

Item 32

 

This item inserts new sections 23DNBA and 23DNBB into the Act.

 

Section 23DNBA (Grant of approval for collection centre) is the core provision of the new arrangements in providing for the Minister to grant an approval to an approved pathology authority for an “eligible collection centre” conducted on premises of which the authority is the owner, lessee or sub-lessee ( subsection 23DNBA (1) ).  A “specimen collection centre” for which such an approval is granted is an “approved collection centre”.  The Minister must not grant an approval unless the tax imposed by the proposed Health Insurance (Approved Pathology Specimen Collection Centres) Tax Act 1999 has been paid ( subsection 23DNBA(2) ).  The Minister in exercising the power of approval must comply with the Approval Principles determined under subsection 23DNBA (4) ( subsection 23DNBA(3) ).  Subsection 23DNBA(4) empowers the determination of the Approval Principles.  This determination is a disallowable instrument ( subsection 23DNBA(6) ).

 

Subsection 23DNBA(5) sets out some of the matters with which the Approval Principles can deal.  These matters include a system for determining the maximum number of approvals that may be granted to a particular approved pathology authority in respect of a financial year; applications for approvals; the giving of undertakings regarding compliance with Collection Centre Guidelines; the duration of approvals; and the review of decisions made under the Approval Principles.  It is intended that the Approval Principles be able to deal comprehensively with the matters set out in the subsection for the purposes of giving effect to the proposed new arrangements.

 

Section 23DNBB (Identification Number) provides for the allocation of an identification number to each approved collection centre when an approval is granted.  The identification number must be included on any document issued by, or on behalf, an approved pathology authority operating the approved collection centre and relating to the collection of a specimen at the centre, or the sending of a specimen to an approved pathology practitioner.  This provision is similar to existing section 23DNF in relation to specimen collection centres.  Failure to comply with section 23DNBB will be a ground for revocation of approval under new section 23DNG.

 

Item 33

 

This item repeals section 23DND, which relates to applications for the grant of a licence for a licensed collection centre, and would be redundant under the new arrangements.

 

Item 34

 

This item repeals section 23DNE, which relates to the granting by the Minister of a licence for a licensed collection centre, and would be redundant under the new arrangements.

 

Item 35

 

This item repeals section 23DNF, which provides for the specification of identification numbers for licensed collection centres, and would be redundant under the new arrangements.

 

Item 36

 

This item repeals section 23DNG which provides for revocation of a licence for a licensed collection centre and substitutes new section 23DNG (Revocation of approval) which provides in respect of revocation of approvals for an approved collection centre.  Revocation can occur if the Minister is satisfied as to one or more of the grounds set out.  These involve the centre ceasing to be an eligible collection centre; the centre not complying with the Collection Centre Guidelines; failing to specify the Centre’s identification number on documents as required (section 23DNBB); failing to display a notice that the centre is approved (section 23DNK); breaching an undertaking given under the Approval Principles; and misusing the Centre’s identification number in connection with a specimen collected at another specimen collection centre.

 

The misuse referred to in the latter ground is intended to include the use of an approved collection centre’s identification number on a document so as to indicate that a pathology specimen was collected at that centre and not at a specimen collection centre where it was actually collected.  It is also intended to include the display of an approved collection centre’s identification in relation to another specimen collection centre so as to indicate that it is the identification number of that specimen collection centre.

 

The Minister is required to give written notice to an approved pathology authority of a revocation decision, specifying its date of effect.

 

Item 37

 

This item repeals section 23DNH, which deals with cancellation of a licence at the request of an approved pathology authority, and substitutes new section 23DNH (Cancellation of approval) which provides similarly in relation to approvals for approved collection centres.

 

Item 38  

 

This item repeals section 23DNI, which deals with the partial refund of the licence fee where a licence for a licensed collection centre is cancelled, and substitutes new section 23DNI (Partial refund of tax for early cancellation of approval) which provides similarly in relation to partial refund in respect of tax paid on the grant of an approval for an approved collection centre.

 

Items 39, 40

 

These items amend section 23DNJ, which deals with the inspection of specimen collection centres, to refer to “approval” and “approved collection centre” in place of “licence” and “licensed collection centre”.

 

Items 41, 42

 

These items amend section 23DNK, which imposes a requirement to display a notice at a specimen collection centre that it is licensed, to refer to an “approved collection centre” that is “approved”.

 

Item 43

 

This item amends section 23DNL, which deals with the operation of an unlicensed collection centre, to refer instead to a specimen collection that is not an approved collection centre.  The approved pathology authority of such a centre must inform persons before collection of a specimen for the rendering of a pathology service that a medicare benefit would not be payable in respect of the service.

 

Item 44

 

This item amends section 23DO, which provides for the review of certain decisions

under Part IIA of the Act, by the insertion of new subsections 23DO(2DA) and (2DB) to provide for reconsideration by the Minister on application within 28 days by an approved pathology authority of a decision not to grant an approval for an approved collection centre under new section 23DNBA.

 

Item 45

 

This item repeals subsection 23DO(2E) and (2F) which provide for reconsideration of decisions not to grant a licence for a licensed collection centre and would be redundant following other amendments by the Bill.

 

Item 46

 

This item amends subsection 23DO(2G), which provides for reconsideration of a decision to revoke a licence for a licensed collection centre, to refer to a decision to revoke an approval for an approved collection centre.

 

Items 47, 48

 

These items amend subsection 23DO(5), which provides for applications to the Administrative Appeals Tribunal following reconsideration of decisions by the Minister, to refer to reconsidered decisions under subsection 23DO(2DB) in relation to approvals for approved collection centres and to delete the redundant reference to repealed subsection 23DO(2F).

 

Item 49

 

This item inserts an additional paragraph (ab) in the subsection 124B(1) definition of “relevant offence”.  This additional paragraph (ab) refers to offences against section 23DR or 23DS committed after the commencement of the item.

 

The provisions of section 23DR are intended to compel a medical practitioner, who has rendered an R-type diagnostic imaging service, to retain the written request for a period of 18 months, and if requested by the Managing Director of the Health Insurance Commission (HIC) to produce that request to an officer of the HIC.  Likewise, section 23DS relates to retention and production of other records of diagnostic imaging services.  Commission of an offence under both provisions carries a maximum penalty of $1,000  : this may be significantly less than the potential financial gain to an offending practitioner who - by avoiding production of records - escapes audit and possible recovery of Medicare benefits or prosecution for more serious offences.  Inclusion of these offences as “relevant offences” will give the Medicare Participation Review Committee an ability to make a determination against an offending practitioner, which should provide greater deterrence value.

 

Item 50

 

This item amends the definition of “quality assurance activity” in subsection 124W(1) of the Health Insurance Act 1973 (the Act) to include a reference to the Health Care (Appropriation) Act 1998.  

 

Currently, a part of the definition of “quality assurance activity” refers to services in respect of which payments were made, or that are or would be eligible for payments under Part III of the Act.  Part III of the Act deals with the funding of hospital services.  As of 30 June 1998, Part III ceased to be used to fund the States for hospital services.  Part III has, for the purposes of hospital funding by the Commonwealth, been replaced by the Health Care (Appropriation) Act 1998.  This amendment is consequential upon the changes in hospital funding arrangements.

 

Item 51

 

This item addresses the anomaly in subsection 128A(4) by deleting the now-superfluous reference to section 21 of the Crimes Act 1914 .

 

Item 52

 

This item revises references to a licensed collection centre in subsection 129AAA(3A) to refer to an approved collection centre.  Subsection 129AAA(3A) relates to arrangements entered into by an approved pathology practitioner with a practitioner or medical entrepreneur for the use of premises not wholly used for the activities of the approved pathology practitioner.

 

Items 53, 54

 

These items insert a definition of “approved collection centre” (which is otherwise only defined for the purposes of Part IIA of the Act) in subsection 129AAA(9) for the purposes of section 129AAA, and repeal the redundant definition of licensed collection centre.

 

Item 55

 

This items repeals the Health Insurance (Pathology) (Licence Fee) Act 1991 which specifies the fee payable in respect of the grant of a licence for a licensed collection centre.  The tax payable in respect of the grant of approval for an approved collection centre will be specified in the proposed Health Insurance (Approved Pathology Specimen Collection Centres) Tax Bill 1999 .

 



 

HEALTH INSURANCE (APPROVED PATHOLOGY

SPECIMEN COLLECION CENTRES) BILL 1999

 

NOTES ON CLAUSES

 

 

Clause 1 - Short Title

 

This clause formally provides for the short title of the Health Insurance (Approved Pathology Specimen Collection Centres) Tax Act 1999 .

 

Clause 2 - Commencement

 

This clause provides for the Act to commence upon Royal Assent.  This is necessary because although the new approved collection centre arrangements under the Health Insurance Act 1973 do not begin until 1 July 2000, applications for, and grants of, approval can occur before that date.

 

Clause 3 - Definitions

 

This clause defines the terms “approval” and “approved pathology authority”.  An approval is the approval granted for a specimen collection centre under proposed new section 23DNA of the Health Insurance Act 1973 .  The term approved pathology authority has the same meaning as in that Act.

 

Clause 4 - External Territories

 

This clause extends the operation of the Act to the external Territories of Cocos (Keeling) Islands and Christmas Island.  This coincides with the operation of the Health Insurance Act 1973 .  

 

Clause 5 - Imposition of tax

 

This clause imposes a tax for the grant of an approval to an approved pathology authority for an approved collection centre.  The tax for 1 year is $1000 and the amount for lesser periods is pro rata.  It is payable by the approved pathology authority which applied for the approval and is payable before the approval is granted.

 

Proposed subsection 23DNI of the Health Insurance Act 1973 will provide for the making of partial refunds of tax in the event of early cancellation of an approval at the request of the approved pathology authority to which it relates.