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Wednesday, 14 December 1983
Page: 3727


Senator MACKLIN(11.02) —I wish to address myself to clause 2 basically in which certain operations which were raised by the Senate Standing Committee for the Scrutiny of Bills are made retrospective to 1 January 1975 and 13 December 1974 respectively. The issue which has already been canvassed and replied to by the Minister for Social Security (Senator Grimes) seems to me to be of more concern than to be simply brushed under the table as his reply seemed to suggest. The knowledge of the illegality of the pay under system seems to go back quite some time. Indeed, the relevant legislation, the Health Insurance Act 1973, makes it an offence to present an incorrect account to the Com- monwealth.

I have spent some considerable time to try to get from the Minister for Health (Dr Blewett) information preceding the advent of this Government. The earliest documentation I have been able to get is a memorandum from the Attorney-General' s Department dated 7 March 1983. To the question: 'Are the pay under arrangements described above authorised by the Act'? the answer is no. Reference is made to the memoranda which have been sent I presume under the designation of the Director-General of the Department of Health, on this whole affair. I believe that under the previous Government-possibly under both governments previous to this Government, the Whitlam Government, and the Fraser Government- considerable medical fraud may have resulted directly out of the decision of various members of the Public Service that what the Parliament had done was not correct and it was far better to do it some other way. This is not the only instance where we are likely to find this but in this instance there is serious concern.

As I understand it, basically what happens now is that the pay under item could really leave open the entire field of fraud and overservicing, particularly its detection. Section 129 (3) of the Health Insurance Act makes it possible for a practitioner to argue that she or he could not reasonably have been expected to know that what she or he did was an offence under the legislation. The Minister referred to this matter. As I understand the way the legislation has worked, it is a defence for a practitioner to argue that the word of a departmental officer approving the use of an incorrect item number is a sufficient excuse. If that were the case, it is extremely difficult for the Federal Police, the health insurance fund personnel, the Crown Solicitor or anybody else actually to discover what is going on. The Minister referred to a memorandum from the Deputy Crown Solicitor on 21 September involving a case which could have had fairly wide ramifications-not a small amount of money-and which was really frustrated by the fact that what the doctor said he was doing was already being done by people within the Department.

I question whether the illegality of this activity was not known to senior members of the Department earlier than 7 March. It is almost impossible to accept that that was the case. If it was, it suggests gross incompetence that they did not know that this was occurring or that the Commonwealth was being defrauded of moneys by this method. It is all very well to say, as the Minister has said, that it was an administrative necessity to do it this way. There may be all sorts of administrative necessities, but an administrative necessity which actually turns out to be illegal is not an administrative necessity at all . An illegality in these circumstances which is against the intent of the Parliament could have been reorganised in many other ways. It could have been addressed and solved simply by bringing to the Parliament a legislative amendment, as was suggested by the Attorney-General's Department quite a long time ago, or by actually scheduling numbers for which items could be paid. It seems that the Department, as part of its excuse in the past, has suggested a rather interesting notion of what 'relates to' means in the definition of ' professional service' in section 3 (1) of the Act. The idea that 'relates to' could in fact cover so much is knocked on the head by the Attorney-General's Department saying that it is in the sense of being covered by or corresponding to a particular item in the Act. It is not sufficient in the opinion of the Attorney-General's Department for a service to be merely compatible with an item in the table.

I am quite sure that the Parliament had no intention of simply allowing anybody to come up with items which he felt were compatible with the Act. Rather, the Parliament intended that items raised specifically by this Parliament should be able to be paid-services rendered by medical practitioners to their clients and claimed for specifically under those items, with no legal claim possible for those which fell outside the table. That has now been belatedly accepted, at least by this Government. I do not want to be too harsh on the current Government. After all, it has moved with what one might consider great rapidity on this matter; it has taken only six months. The previous Government did nothing at all in seven years. It is almost impossible to get into this and actually to find out what went on, yet I expect that it has been known for a great period. It may have been the avenue by which a great deal of medical fraud was committed on the revenue. At least there is that possibility. We do not know what has occurred because it is impossible to get hold of information. We are unaware of what has gone on. I do not believe it can be brushed aside quite so easily. It is a serious matter. It ought to be dealt with as a serious matter.

I do not like this type of legislation which, in the case I am referring to and in the case of the legislation before us, seeks simply by retrospective provisions to fix up some administrative practices. I believe that this type of legislation should never come before this House. If we condone or play down the seriousness of these types of activities on the part of the bureaucracy the Parliament is not carrying out its duty. The Joint Committee of Public Accounts, of course, has undertaken a thorough investigation into this matter. I am not satisfied that the information supplied to that Committee was necessarily always accurate. I do not intend to put this matter aside. I believe that it ought to have been dealt with much more frankly than it has been.

The answers to questions which I have had on notice for some time were expertly drawn; I must admit that. They failed to answer any of the intent of my questions but answered technically every question I put to the Minister. That is a game that a couple of people can play. I certainly will be pursuing the matter . I believe that we need a full and frank disclosure of when first the pay under item was acknowledged by any senior member of the Department of Health to be illegal, who in the Department of Health knew that it was illegal, who condoned the continual operation of the pay-under system with the knowledge that it was illegal, and who failed to respond to either the previous or the current Minister for Health about the illegality of that activity?


Senator Hill —Did you say that a claim should not have been made at all?


Senator MACKLIN —I am not talking about the medical practitioners. I have no knowledge about the medical practitioners because it is not possible to know what the medical practitioners were doing. Indeed, I have just suggested that they probably had a very good reason and a very good escape clause for doing what they were doing. The Act allows them to do that. If the bureaucracy allowed them to claim under a particular item or suggested that they do so, a practitioner cannot be held at fault.


Senator Haines —If an inadequacy is discovered in the schedule, surely the answer is to correct that anomaly.


Senator MACKLIN —Any inadequacy in the Schedule could easily have been fixed up. The suggestion by the Attorney-General's Department was to do so by legislative amendment, which is a relatively painless operation. I do not believe that this House, when confronted with the problems that were said to be of administrative necessity, would have failed to pass such an amendment. I refer to the fact that the situation has been allowed to continue for so long and that something which was known to be illegal was still being done. That is what I am objecting to.


Senator Hill —But if you say the doctors were entitled to make a claim, how could it be illegal?


Senator MACKLIN —It was illegal activity on the part of the bureaucracy. They were paying under items under which they were not entitled to pay. This has been accepted; it has been the case, but I do not believe that a full understanding of that illegal activity has been given to this Parliament.


Senator Watson —Is it illegal?


Senator MACKLIN —I am sorry; I will read the question and answer again. To the question 'Are the pay under arrangements described above authorised by the Act?' , the Attorney-General's answer was 'No'. They are not authorised by the Act. It is a plain and simple answer. The problem as I see it is that it is very difficult for either committees of this Parliament or members of the Parliament itself, if we have such tremendous problems wading through the type of material we get back when we place questions on notice, to fulfil the duties that are imposed on us. We should get full, frank and detailed answers to the types of questions that are raised and the answers ought to be provided much more quickly than in this case, where the material requested was with the Department. I have now been able to get hold of that material, but not in a simple way. The fobbing off and the chasing around that go on in these matters are extraordinary.

If a mistake is made I think it will be readily owned up to. I do not think anybody in this Parliament is interested in going on a witch hunt. I think we want to make sure in future, if any activity undertaken on behalf of anybody in the bureaucracy is discovered to be illegal, that prompt action is taken and that we do not wait for years to find out about it, and then find out only by the actions of a committee of this Parliament, such as the operations in terms of medical fraud of the Joint Committee of Public Accounts which turned up this type of problem. It seems to me that there is an obligation on the bureaucracy and on governments to act and to act rapidly in relation to any such matters.