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Tuesday, 3 May 1994
Page: 72

Senator CROWLEY (Minister for Family Services) (6.22 p.m.) —I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill. I want to make some extra comments that will assist us in the passage of this legislation.

  Prior to the introduction of this bill last December the then health minister made it clear that it was the government's intention that the bill should be the subject of public comment and possible amendment. The government recognises that the transfer of investigative powers from the Australian Federal Police to the Health Insurance Commission is a serious step; a serious step, as was pointed out in the second reading speech, that we have taken not for lack of confidence in the Australian Federal Police, but for reasons of getting greater effectiveness in the investigation of fraud against Medicare.

  The record on Medicare fraud investigation and prosecution has not been good and has been the subject of much criticism, especially from various parliamentary committees. This bill seeks to redress that shortcoming by giving the Health Insurance Commission the necessary tools to conduct investigations. There is a balance to be struck between the powers of the investigators and the rights of the investigated, especially where the privacy of patients may be intruded upon.

  It was clear from public comment in submissions to the Senate Committee on Constitutional and Legal Affairs that a number of individuals and organisations, including the Australian Medical Association, which has been intimately involved in the development of the proposals for the bill, considered that the balance in the bill was wrong. The principal concerns were two-fold: that the powers to be granted to the Health Insurance Commission were not sufficiently restricted to the investigation of Medicare fraud, and that there was insufficient protection for the privacy of patient records.

  The amendments now proposed deal with those issues. Firstly, the investigative powers in the new part IID proposed to be inserted in the Health Insurance Commission Act may only be used on the personal authorisation of the managing director of the Health Insurance Commission. In practice, investigations using these powers will only be authorised after consideration of each case by the Health Insurance Commission's national case management committee.

  Secondly, the powers in the proposed section 8N of the Health Insurance Commission Act to require information, and in new section 8S of the same act to enter premises, are restricted to where there is a reasonable suspicion of a medical fraud offence. Thirdly, those same powers do not extend to patients' clinical records.

  In addition, the search and seizure power in new division 4 of the Health Insurance Commission Act, which is modelled on the Crimes (Search Warrants and Powers of Arrest) Amendment Bill 1994, which was recently passed by the Senate, have the added requirement that a patient whose clinical record has been searched or seized must be told of that fact if it would not prejudice the investigation, and if he or she can be found on reasonable inquiry.

  The Senate committee, by a majority, was satisfied that the measures contained in the bill are necessary. The committee acknowledged that the investigation of fraud is notoriously difficult and that the Health Insurance Commission is the only agency that adequately understands the technical and legal complexities governing the operation of the medical benefits schedule in the legislation. The committee concluded that the Health Insurance Commission was the only agency which could concentrate its endeavours exclusively on the investigation of Medicare abuse and recommended that the bill be enacted incorporating the amendments that the government has proposed.

  The AMA has confirmed its support for the general thrust of the legislation and indicated that the amendments proposed meet its major concerns with the original bill. I also understand that the Privacy Commissioner has welcomed the changes proposed and indicated that they meet to a significant degree the concerns that he raised.

  In the course of the Senate committee's hearing, two other issues were raised which I should deal with as they have not resulted in government amendments, but they are deserving of comment. Firstly, there was a concern that the Health Insurance Commission should report on its activities under these new provisions. I am happy to give the chamber an undertaking that the Health Insurance Commission's annual report will include material on the use of the powers of investigation, including statistics on the number of authorisations made under new section 8KA of the Health Insurance Commission Act, the number of notices given under new section 8N of the same act, the number of entries made under new section 8S, and the number of warrants sought and executed under new division 4.

  Secondly, there was reference to the joint Australian Federal Police/Law Council of Australia guidelines for the execution of warrants where legal professional privilege might be claimed, and the suggestion that similar guidelines might be put into law in this case. I am happy to ensure that there are consultations between the Health Insurance Commission and the AMA for the purpose of achieving a simulus modus vivendi.

  However, I think it ought to be recognised that documents the subject of a claim for legal professional privilege have been specifically found by the High Court not to be the subject of a search warrant; whereas claims for privilege based on the professional duty of confidence to clients, expressly including doctor/patient confidentiality, have not been found to exclude documents from a search warrant. In addition, the Australian Federal Police/Law Council of Australia guidelines referred to have operated successfully for over seven years without a legislative base, so I see no need for a legislative base here.

  Clause agreed to.