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Health and Ageing Legislation Amendment Bill 2003 [2004]

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2002-2003

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

SENATE

 

 

 

 

 

 

 

 

 

HEALTH AND AGEING LEGISLATION AMENDMENT BILL 2003

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Health and Ageing,

Senator the Hon Kay Patterson)

 

 



HEALTH AND AGEING LEGISLATION AMENDMENT BILL 2003

 

OUTLINE

 

The Health and Ageing Legislation Amendment Bill 2003 proposes a number of amendments to various Acts within the Health and Ageing portfolio, and a minor consequential amendment to the Veterans’ Entitlements Act 1986 .

 

 

SCHEDULE 1 — AMENDMENTS RELATING TO THE PHARMACEUTICAL BENEFITS SCHEME

 

Part 1 - Pharmaceutical Benefits Advisory Committee Membership

 

The Pharmaceutical Benefits Advisory Committee (PBAC) is a committee of experts that makes recommendations to the Minister as to the drugs and medicinal preparations that are to be subsidised through the PBS.

 

At present the PBAC consists of a Chairperson and eleven other members.  Eight members must be selected from the following groups: consumers, health economists, practising community pharmacists, general practitioners, clinical pharmacologists, and specialists - with at least one member selected from each of these groups.  Members from these groups must be appointed from nominations made from bodies prescribed by the National Health (Pharmaceutical Benefits) Regulations 1960 (the Regulations ) .  The Minister appoints remaining members whom the Minister is satisfied have qualifications or experience in a field relevant to the functions of the Committee, and qualifications or experience that would enable them to contribute meaningfully to the deliberations of the Committee.

 

This Bill provides that the PBAC membership be increased to consist of a Chairperson, with no less than 11 and no more than 15 other members.  In order to retain the current ratio of the number of members nominated by external organisations to the number of members appointed by the Minister, the amendments provide that not less than two-thirds of the members are to be selected from nominations by the organisations prescribed in the Regulations.

 

Part 2 - Special Supply Arrangements

 

Section 100 of the National Health Act 1953 provides an important mechanism to enable special distribution arrangements for pharmaceutical benefits where, in particular circumstances, the normal PBS supply arrangements are not convenient or efficient.

 

These amendments will make it clear that these special arrangements can be used for the funding of particular medicines that are not available through the normal operation of the PBS.

 

Part 3 - Pharmacists Supplying Benefits at or from Other Premises Before Approval

 

The National Health Act 1953 requires that a pharmacist must obtain approval to supply pharmaceutical benefits from particular premises, and must apply for approval to relocate to other premises.  In the occasional instance where a pharmacist relocates without applying for approval, the pharmacist cannot be paid for any pharmaceutical benefits supplied from the unapproved premises.

 

These amendments will give the pharmacist an entitlement to receive the 90% payment or waiver of recovery in such cases, once the relocation is approved, without the need to proceed under the act of grace provisions.

 

Part 4 - PBS Safety Net Provisions

 

Under current arrangements an application for a PBS safety net concession or entitlement card, or for an additional or replacement card, must be made and signed by the applicant.  These amendments to the National Health Act 1953 will allow an agent to make and sign the application on behalf of the applicant.

 

Part 5 - Conditions Applying to Approved Hospitals

 

Amendments to the National Health Act 1953 will provide that determinations of forms, brands, maximum quantities, maximum numbers of repeats and manner of administration of PBS medicines will apply to the supply of pharmaceutical benefits by approved hospital authorities in the same way that they do to pharmaceutical benefits supplied by approved pharmacists and approved medical practitioners.  This has become necessary due to the introduction of new arrangements with some States for the supply of pharmaceutical benefits to public hospital out-patients, day-admitted patients and admitted patients on discharge.

 

Part 6 - Cancellation of Approvals

 

Section 98 of the National Health Act 1953 provides the Secretary with the power to cancel approvals to supply pharmaceutical benefits given to pharmacists and medical practitioners under sections 90 and 92 respectively.  Section 98AA provides the Minister with a similar power in regard to approvals to supply pharmaceutical benefits given to hospital authorities under section 94.

 

It is proposed to amend sections 98 and 98AA by inserting after the word “may”, the words “( at his or her discretion) ” in the following relevant subsections:

 

·          subsections 98(2), (3) and (3A); and

·          subsections 98AA(2) and (3).

 

The proposed amendments will put beyond doubt that the decision-maker has the discretion whether or not to cancel the relevant approvals. 

 

For example, the Secretary might decide not to cancel an approval where an approved pharmacist has ceased to trade temporarily through illness or other unanticipated circumstances.  If the discretion were not available the Secretary would be obliged to cancel the approval in such circumstances and there would be a requirement for the pharmacist to reapply for a new approval, which may not be appropriate in all cases.

 

The amended section 98AA will make the Minister’s discretion whether or not to cancel an approval given to a hospital authority similarly explicit.

 

SCHEDULE 2 — NEW HIC CLAIMING MODEL

 

HIC Simplified Billing Model

 

The Health Insurance Commission (HIC) is implementing an electronic simplified claiming process using an electronic business solution.  The proposed simplified claiming process involves a provider of medical services sending a claim to the Health Insurance Commission directly rather than to a registered health benefits organisation. 

 

The Medicare rebate covers 75% of the Medical Benefits Schedule (MBS) fee for in-hospital medical expenses while private health insurance, through a Registered Health Benefits Organisation (RHBO), covers the remaining 25%.  The "gap" is the difference, paid by the policy-holder, between fees charged by doctors for in-hospital medical services and the combined health insurance benefit and Medicare benefit.

 

The current legislation allows the gap to be covered only in circumstances where the service is rendered by or on behalf of a medical practitioner:

-           with whom the RHBO has a medical purchaser-provider agreement (MPPA), or

-           who has a practitioner agreement that applies to the professional service provided, with the hospital where treatment occurred, and that hospital has a hospital purchaser-provider agreement (HPPA),  with the RHBO, or

-           where the practitioner elects to participate in a Gap Cover Scheme conducted by a RHBO and approved under the Act, Division 4A.

 

Where a service is provided as part of a MPPA the existing paragraph 73BDA(2)(a) of the Act requires that the provider of medical services forward all accounts to the RHBO.  If this provision is not complied with the registered organisation is prevented from paying benefits in excess of 25% of the MBS fee.  The Bill repeals this paragraph thereby removing this requirement.

 

This requirement establishes an anomaly as between MPPA arrangements and other gap cover arrangements, which functions to the detriment of consumers.  There is a preference by some practitioners to present the account directly to the RHBO member for forwarding to the RHBO.  If the member is not aware of the above anomaly and claims the Medicare Rebate prior to lodging the claim with the RHBO, the benefit payable by the RHBO is limited to 25% of the MBS fee.  The RHBO is prohibited from extending coverage to any gap that may exist, and the member is left with an unexpected out-of-pocket expense.

 

The amendment is necessary because the HIC will be implementing an electronic medical claiming model using an electronic business solution.  In brief, the proposal would involve the medical provider sending the claim to the HIC rather than to a health fund.  This arrangement also facilitates eligibility checking for Medicare and RHBO Benefits and enhances the obtaining of informed financial consent by providers of medical services from the consumer.

 

The proposal is in line with the HIC’s electronic commerce strategic direction and the Commonwealth Government’s On-Line strategy, and will include stringent confidentiality and privacy requirements.

 

The system proposed by the HIC will be “fee free” to users.  Enhanced data flow, data collection and administrative offsets are expected make the project cost neutral for the HIC.

 

SCHEDULE 3 — RESTORING SPECIALIST RECOGNITION

 

Restoring Specialist Recognition

 

An unintended consequence of the Health Legislation Amendment Act (No.2) 2001 is that those medical practitioners who had been recognised as specialists for the purposes of the Health Insurance Act 1973 under the former section 3D were not captured under the new sections 3D-3DC.  The important implication is that as a result of the Health Legislation Amendment Act (No.2) 2001 a number of medical practitioners who were recognised as specialists prior to 28 June 2001 are no longer so recognised. 

 

The transitional provision in Schedule 3 captures those specialists and restores their specialist recognition, whilst retaining appropriate revocation provisions for the new deemed specialist recognition.

 

SCHEDULE 4 — MEDICARE BENEFITS AND OVERSEAS DOCTORS ETC

 

Overseas Trained Doctors

 

Before the commencement of the Health Legislation Amendment (Medical Practitioners Qualifications and Other Measures) Act 2001, the professional services of overseas trained doctors (as defined by subsection 19AB(7)) were not eligible for the payment of a Medicare benefit unless the overseas trained doctor was the holder of an exemption under subsection 19AB(3).  An unintended consequence of the 2001 amendment (which relied on the definition of ‘professional service’ in section 19AA) was that all overseas trained doctors became eligible to assist at operations without any need for an exemption under subsection 19AB(3).

 

SCHEDULE 5 — TECHNICAL AMENDMENTS

 

The items in Schedule 5 correct formal errors in the Aged Care Act 1997 that either existed at the time the Act was passed or have since been introduced into the Act by amending legislation.  The kinds of errors being corrected in this Schedule are typographic errors, punctuation errors, incorrect cross-references and other minor consequential changes.

 

None of the amendments proposed in the Schedule will alter the content of the law.  The notes on clauses explain how some items that may appear to be altering the content of the law are not in fact doing so.

 

 

FINANCIAL IMPACT STATEMENT

 

The increase in the size of the Pharmaceutical Benefits Advisory Committee is estimated to increase departmental expenditure by approximately $13,500 per year for each additional member.

 

The other amendments have no financial impact.



HEALTH AND AGEING LEGISLATION AMENDMENT BILL 2003

 

NOTES ON CLAUSES

 

Clause 1 - Short title

 

This is a formal provision that specifies the short title of the Bill as the Health and Ageing Legislation Amendment Act 2003 .

 

Clause 2 - Commencement

 

Sub-clause 2(1) provides that the various provisions take effect on Royal Assent or as specified in the table.

 

Clause 3 - Schedules

 

This clause provides that various Acts are amended or repealed in accordance with the applicable items in the Schedules.

 

 

SCHEDULE 1 — AMENDMENTS RELATING TO THE PHARMACEUTICAL BENEFITS SCHEME

 

Part 1 — Pharmaceutical Benefits Advisory Committee Membership

 

Item 1 amends subsection 100A(2) to provide that the membership of the PBAC is to be increased, from the Chairperson and 11 other members currently, to the Chairperson and at least 11, but not more than 15, other members.

 

Item 2 amends subsection 100A(3) to provide that the number of members selected from specified interests or professions, as nominated by organisations prescribed in the Regulations, must be maintained at a minimum of two-thirds of the total number of members of the enlarged Committee.

 

Item 3 amends subsection 100A(4) to allow for a situation in which all the members have been selected from the interests or professions specified in subsection 100A(3).

 

Item 4 amends subsection 100B(3) to provide that, where the membership falls below the minimum number of 12 for a period not exceeding 6 months, the PBAC is still able to perform its functions and exercise its powers during that period.  Section 100B sets out the manner in which the members of the PBAC are to be appointed.

 

Part 2 — Special Supply Arrangements

 

Items 5 and 6 amend subsection 81(1) of the Health Insurance Act 1973 and subsection 3(1) of the Health Insurance Commission Act 1973 to include a special pharmaceutical product, as provided for by item 9, within the meaning of “pharmaceutical benefit” for the purpose of the Professional Services Review Scheme and the powers and functions of the Health Insurance Commission respectively.

 

Item 7 amends subsection 84(1) by inserting a definition of “special pharmaceutical product”, to have the same meaning given by subsection 100AA(1), as provided for by item 9.

 

Item 8 adds a note to subsection 85(1) to provide that drug subsidy may also be provided in respect of medicines covered by subsection 100AA(1), that is, special pharmaceutical products.

 

Item 9 repeals section 100 and substitutes new sections 100 and 100AA.  Subsection 100(1) makes it clear that special arrangements may be made by the Minister for the supply of medicines, including medicines that are not otherwise available through the normal PBS supply arrangements, to provide an adequate supply of medicines.  Subsection (2) gives the Minister the power to vary or revoke special arrangements made under subsection (1).

 

Subsection (3) provides that Part VII of the Act has effect subject to any special arrangements made under subsection (1).  That is, special arrangements made under section 100 may be inconsistent with some of the provisions governing the normal operation of the PBS.

 

Subsection 100AA(1) provides a definition of “special pharmaceutical product”, to mean a drug or medicinal preparation specifically made available for the purposes of this section, or a medicine composed of one or more such drugs combined with one or more additives and made available for the purposes of this section, or a pharmaceutical benefit declared as such under subsection 85(2).

 

Subsection (2) enables the Minister to declare in writing the drugs and medicinal preparations that are to be made available only under special arrangements, and not through normal PBS supply arrangements.  Subsection (3) enables the Minister to vary or revoke in writing a declaration made under subsection (2).

 

Subsection (4) provides that, the Minister may not declare a drug or medicinal preparation to be added to the list of medicines made available only under special arrangements unless the PBAC has so recommended.  Subsection (5) provides that the Minister must obtain the written advice of the PBAC before removing a medicine from this list.  These provisions are consistent with those governing the addition and deletion of pharmaceutical benefits.

 

Subsection (6) provides that an instrument made under subsection (2) or (3) is a disallowable instrument, and, in the case of an instrument that removes a drug from the list made available only under special arrangements, the written advice of the PBAC provided under subsection (5) must be tabled with the relevant instrument.

 

Item 10 is a savings provision which provides that an arrangement in effect under section 100 before the date of effect of these amendments, will be taken to be in force on or after the date of effect of these amendments.

 

Item 11 amends section 101 to provide that the functions of the PBAC also apply to special pharmaceutical products as provided for by item 9.

 



Items 12 and 13 amend sections 114 and 116 so that the power of the Federal and State Pharmaceutical Services Committees of Inquiry respectively to inquire into the conduct of approved pharmacists in connection with the supply of pharmaceutical benefits applies also to the supply of special pharmaceutical products.

 

Item 14 amends subsection 133(1) so that the power of the Secretary to suspend an approval or authority, if a medical practitioner, participating dental practitioner or approved pharmacist is charged with an offence relating to the supply of pharmaceutical benefits, applies also in the case of an offence relating to the supply of special pharmaceutical products.

 

Item 15 amends section 134 (as amended by item 44) so that the offences relating to the writing of prescriptions by a prescriber whose authority to do so has been suspended or revoked, or the supply of pharmaceutical benefits on such prescriptions by approved pharmacists and other approved suppliers, apply also to prescriptions for the supply of special pharmaceutical products.

 

Items 16 to 20 amend subsections 135A(5A), (5C) and (8) so that the provisions of these sections, relating to circumstances in which information relating to pharmaceutical benefits may be released, apply also to information relating to special pharmaceutical products. 

 

Item 21 amends subsection 135A(24) by inserting a definition of “special pharmaceutical product”, to have the same meaning as provided for by item 9.

 

Item 22 amends subsection 135AA(11) to include special pharmaceutical products within the definition of “Pharmaceutical Benefits Program”, for the purpose of the privacy guidelines made by the Privacy Commissioner to ensure functional separation between claims information relating to the Pharmaceutical Benefits Program and the Medicare Benefits Program.

 

Item 23 amends the definition of “pharmaceutical benefit” in subsection 118K(7) of the Veterans’ Entitlements Act 1986 to include a special pharmaceutical product, as provided for by item 9, for the purpose of counting expenditure on medicines by a person claiming an advance pharmaceutical allowance under subsection 118K(6) of that Act.

 

Part 3 — Pharmacists Supplying Benefits at or from Other Premises Before Approval

 

Item 24 adds a note after paragraph 84C(4)(a) to provide that the supply of a pharmaceutical benefit may be counted towards the safety net if it was supplied at or from a relocated pharmacy where the approval of a pharmacist in respect of the pharmacy had not been granted at the time of supply, but has been subsequently obtained.

 

Item 25 adds a note after paragraph 89(a) to provide that the entitlement of a person to receive a pharmaceutical benefit remains if it was supplied at or from a relocated pharmacy where the approval of a pharmacist in respect of the pharmacy had not been granted at the time of supply, but has been subsequently obtained.

 

Item 26 inserts subsection 99(3A) to provide for payment and/or waiver of recovery of 90% of the value of pharmaceutical benefits supplied from an unapproved relocated pharmacy where the pharmacist subsequently has applied for and obtained approval in respect of the relocated pharmacy.

 

It also inserts subsection (3B) to provide that where a pharmacist has subsequently obtained approval in respect of an unapproved relocation of a pharmacy and becomes entitled to a payment under subsection (3A), pharmaceutical benefits supplied before the approval are taken to have been supplied in accordance with the Act as it applies to the entitlement of persons to receive pharmaceutical benefits and to have such supplies counted towards the safety net.

 

Part 4 — Safety Net Provisions

 

Items 27 to 32 amend these sections to provide that an application for a safety net concession card or pharmaceutical benefits entitlement card, or an additional or replacement safety net concession card or pharmaceutical benefits entitlement card, may be made and signed by the applicant’s agent.  Under sections 84DA and 84E of the Act an application for a safety net concession card or a pharmaceutical benefits entitlement card respectively must by made and signed by the applicant.

 

Part 5 — Approved Hospital Authorities

 

Item 33 repeals subsection 94(5C), a now obsolete provision relating to the revocation of such an approval. Under section 94 a hospital authority must be approved by the Minister to enable the supply of pharmaceutical benefits by the hospital authority.

 

Item 33 also repeals subsection 94(6), so that determinations made under sections 85 and 85A of the forms, brands, maximum quantities, maximum numbers of repeats and manner of administration of PBS medicines apply to the supply of pharmaceutical benefits by approved hospitals in the same way that they do to pharmaceutical benefits supplied by approved pharmacists and approved medical practitioners.  This has become necessary due to the introduction of new arrangements with some States for the supply of pharmaceutical benefits to public hospital out-patients, day-admitted patients and admitted patients on discharge.

 

Part 6 — Cancellation of Approvals

 

Item 34 inserts the words “(at his or her discretion)” after the word “may” in subsections 98(2), (3) and (3A) and subsections 98AA(2) and (3) of the National Health Act 1953 .  These amendments expressly provide the Secretary, in the case of decisions under subsections 98(2), (3) and (3A), and the Minister, in the case of decisions under subsections 98AA(2) and (3), with the discretion whether or not to cancel the relevant approval. 

 

Item 35 is an application provision.  It provides for the amendments made by item 34 to apply to cancellation for stopping, after the commencement of this item (that is, after the date of Royal Assent), the carrying on of a business, or a practice, or the conduct of a hospital. 

 

 



SCHEDULE 2 — NEW HIC CLAIMING MODEL

 

Item 1 repeals paragraph 73BDA(2)(a) of the National Health Act 1953 . This amendment will enable a medical provider to send the claim to the HIC instead of to a health fund.  This change facilitates a simpler payment process, making it consumer and doctor friendly, and allows a consolidated payment incorporating both Medicare and private insurance benefits to be made to the provider of medical services.

 

Item 2 makes a minor amendment to 73BDA(2)(b) to reflect the repeal of paragraph 73BDA(2)(a).

 

SCHEDULE 3 — RESTORING SPECIALIST RECOGNITION

 

Item 1(1) identifies the medical practitioners captured by this transitional provision as those who were recognised as a specialist pursuant to paragraph 3D(1)(c) of the Act immediately prior to the amendments effected by the Health Legislation Amendment Act (No. 2) 2001

 

Item 1(2) provides that a Ministerial Determination under paragraph 3DB(4)(a) of the Act is deemed to have been made in relation to those medical practitioners identified in Item 1, so that their previous specialist recognition under the repealed paragraph 3D(1)(c) can continue under the new paragraph 3DB(4)(a).

 

Item 1(3) specifies that the Ministerial Determination is deemed to have been made on the date of the changes effected by the Health Legislation Amendment Act (No. 2) 2001 , and that the deemed determination has effect from the date of the original determination under paragraph 3D(1)(c) of the old Act.

 

Item 1(4) provides that the deemed determination created by this transitional provision can cease or be revoked, just the same as any ordinary determination under paragraph 3DB(4)(a).

 

Item 1(5) differentiates the Act before and after the amendments effected by the Health Legislation Amendment Act (No. 2) 2001 for the purposes of identifying those specialists captured by this transitional provision.

 

Item 2 makes it clear that the recognition of a specialist by virtue of the transitional provision will not cease by operation of subsection 3DA(3).

 

 

SCHEDULE 4 — MEDICARE BENEFITS AND OVERSEAS DOCTORS ETC

 

Item 1 inserts a self-contained definition of “professional service” in subsection 19AB(7) with the result that no Medicare benefit will be payable for the professional services of an overseas trained doctor who assists at an operation unless the doctor is the holder of an exemption that has been granted under subsection 19AB(3).

 

 



SCHEDULE 5 — TECHNICAL AMENDMENTS

 

Item 1 provides that tables of Divisions and Subdivisions do not form part of this Act.  Subsection 13(1) of the Acts Interpretation Act 1901 provides that the headings of the Parts, Divisions and Subdivisions of any Act are deemed to form part of the Act.  However, the Acts Interpretation Act 1901 is silent on the treatment of the treatment of tables of Divisions and tables of Subdivisions.  The Aged Care Act 1997 contains many such tables - an example of a table of Divisions can be found below section 41-1 and an example of a table of Subdivisions can be found below section 44-1.

 

Items 2-17 correct minor typographical errors.

 

Items 18 and 19 provide an improvement to the clarity of the provisions.  They do not represent any change in the content of the cells.

 

Items 20, 21 and 22 correct minor typographical errors.

 

Items 23, 24 and 31 replace the word "speciality" with "specialty" in the Health Insurance Act 1973 .  These technical amendments have been made to improve consistency within the Health Insurance Act 1973 .

 

Items 25 - 30 improve the grammar of paragraphs 19AB(1) and 19AB(2) of the Health Insurance Act 1973.