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FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE
27/05/2010
FINANCE AND DEREGULATION PORTFOLIO
Medicare Australia

CHAIR —Welcome, Ms Briggs. It has been a long wait for you, but I am sure it will be worthwhile. I welcome other officers here tonight. Do you have an opening statement, Ms Briggs?

Ms Briggs —No, I do not have an opening statement.

Senator FIERRAVANTI-WELLS —Medicare Australia, according to the budget papers, will be receiving new funding for the implementation of the hospital plan. Because you are a fee-for-service organisation, I assume you do your estimation of costings depending on the service that you are going to deliver. So presumably you go through a process of assessment of the number of transactions that you are going to undertake?

Ms Briggs —Yes.

Senator FIERRAVANTI-WELLS —And so with this—I notice that on pages 82 to 83 of the Human Services Portfolio paper there is a series of new or existing programs that you will now inherit, and you will go through this process. What are the assumptions that underlie those costings that you have put in there?

Ms Briggs —If I may, I will refer you to Mr Doug Fawns, who is the Acting Head of our Health Programs Division and who is intricately involved in those costings.

Mr Fawns —As with all costings, our agency undertakes robust processes in terms of determining what the assumptions are that we are required to undertake to deliver the policy outcomes.

Senator FIERRAVANTI-WELLS —Do you determine the assumptions?

Mr Fawns —No, we take the policy assumptions and then look at what the implications are for our agency in delivering those policy objectives.

Senator FIERRAVANTI-WELLS —So that is what you have done with the new plans for the hospital network?

Mr Fawns —Yes, that is correct.

Senator FIERRAVANTI-WELLS —When were those assumptions undertaken?

Mr Fawns —Very recently.

Senator FIERRAVANTI-WELLS —As in what date?

Mr Fawns —As in just leading up to the federal budget.

Senator FIERRAVANTI-WELLS —Give me a month. When were you tasked to undertake this?

Mr Fawns —Over a period of time within, I would suggest, the last six months.

Senator FIERRAVANTI-WELLS —When were you first given instructions in relation to this? You must know a precise date. This is a major activity that you are going to be undertaking.

Ms Briggs —If I can perhaps follow up—

Senator FIERRAVANTI-WELLS —You must have had first—

CHAIR —Senator Fierravanti-Wells, you have asked your question. Can you allow the witnesses to attempt to answer.

Ms Briggs —More often than not in the development of policy proposals there is an iterative process that departments go through. They can ask for any number of things to be costed, which can be a broad range of initiatives. Over time they progressively tighten up those approaches. This happens with things like the Fifth Community Pharmacy Agreement and, similarly, the health and hospitals reform package. That is why it is difficult for Mr Fawns to give a precise definition of when that first request might have come in.

Senator FIERRAVANTI-WELLS —I would ask you to go back, have a look and take it on notice. I would like to know when you were first asked in relation to all those matters listed at pages 82 to 83. Please provide me with the date when you were first asked and the assumptions that underlie the costings that you have come up with. You have obviously got a system where, when you have a new program, you go through these procedures et cetera. So you have obviously had a lot of experience with this through PBS and MBS and established procedures?

Ms Briggs —Yes.

Senator FIERRAVANTI-WELLS —In some areas, it is undertaken as best practice. You have just told us that in relation to the hospitals program it could be up to six months. Can you tell us the procedures that preceded the work that you undertook in relation to the Home Insulation Program? Did that receive the same degree of scrutiny that perhaps the hospitals and other projects received?

—I am not in a position to advise you on that. I was not in fact in this position at the time of that decision-making, but I will refer to my Chief Finance Officer, who might be able to help.

Ms O’Brien —The procedures are similar for when we design and cost any new piece of work that we are asked to perform. What typically happens is that we are approached by the policy agency, who would give us some policy outcomes they are looking to deliver. They might talk to us about the types of delivery mechanisms they would like and we would talk about the assumptions: the types of customers, the number of transactions et cetera. We would then work to design what that solution might look like. It might involve the development of an information technology system; it might involve us talking about how much time our staff out in the network might require to undertake particular transactions. We design what this service model will look like and then we go through a process to cost how much it will be to build and implement that service model. A similar approach was adopted for work on the insulation program.

Senator FIERRAVANTI-WELLS —When did that first start?

Ms Briggs —We will get you a date for that on notice, as I promised for the other initiatives.

Senator FIERRAVANTI-WELLS —Could you also give me the assumptions underlying the costings that you first provided to, I assume, the department of the environment or whatever iteration they were. That is where the request came from for the costings for the program?

Ms Briggs —Yes.

Senator FIERRAVANTI-WELLS —Okay. Not Prime Minister and Cabinet?

Ms Briggs —Not to my knowledge.

Senator FIERRAVANTI-WELLS —Have you had any involvement with Prime Minister and Cabinet in relation to this?

Ms Briggs —I have not personally, no.

Senator FIERRAVANTI-WELLS —Can you take on notice the involvement of Prime Minister and Cabinet or any other department in relation to assumptions pertaining to this project.

Ms Briggs —Yes.

Senator FIERRAVANTI-WELLS —The reason I am very interested in this is that in the introduction to chapter 5, ‘Information Technology’, of your annual report you say that:

… new services were delivered for the Australian Defence Force Family Healthcare program and the Homeowner Insulation Program and Low Emission Assistance Plan for Renters …

Over the page, on page 124, you refer to:

  • the rapid development of an online registration and web claiming components for the Home Insulation project in partnership with the Department of Environment Water Heritage and the Arts to enable payments to commence from 1 July 2009.

Is ‘rapid development’ a quaint term for something that was very rushed and hurried? That is why I would like to understand the time component, Ms Briggs, because you have gone to great lengths to tell me about the time that you have taken for other aspects. What does ‘rapid development’ mean in your annual report?

Ms Briggs —I am more than happy to come back to you with the time we had to prepare that costing, Senator, as part of my response to you. But you are correct: when the government put together the package in response to the global financial crisis there was a great degree of urgency associated with trying to keep people employed within the economy. So one of the reasons that Medicare Australia was in fact asked to perform this work was that we had a capability to pay installers electronically and quickly.

Senator FIERRAVANTI-WELLS —That is fine about the payment, because the annual report is explicit about online registration and web claiming components. I am interested in some further detail about the procedures that you went through for the online registration component of it. You talk about it being a rapid development; what does rapid mean? What procedures were put in place? Can you tell me a bit more about that.

Ms Briggs —Senator, I was serious. I was not in this position at the time that this matter was developed.

Senator FIERRAVANTI-WELLS —Can somebody tell me? I would have thought this had had sufficient publicity for there to be somebody in your area who could assist.

Ms Briggs —Let me see if there is someone who can help.

Mr Jackson —I was involved as part of the group inside Medicare that looked at the development of the home insulation project. As the CEO just mentioned, Medicare was asked to do this in part because of its capability to put a registration process in place very quickly using some technology that we had already developed.

Senator FIERRAVANTI-WELLS —What were the components of the registration? Obviously it included who the payments would go to and where the payments would be made, but what detail did you ask for as part of the online registration?

Mr Jackson —The online registration process identified who was registering to do the installation process and information about where the payments were to go. Information such as ABNs, names and telephone numbers was gathered. I do not have a comprehensive list with me, but it was all the normal process that you go through to establish the identity of the person making the claim.

Senator FIERRAVANTI-WELLS —It is the same concept as the various processes you already have that set out the procedures for doctors—the PBS and the MBS—and that takes four to six weeks or however long it takes. That is my question. Did you do this in one week, two weeks? How long did it take?

Mr Jackson —The development of the registration process?

Senator FIERRAVANTI-WELLS —Yes. It talks about rapid development of the online registration—the web claiming components. How long did it take to put this together?

Mr Jackson —It was a matter of some months. It did not happen overnight. I cannot tell you the exact time, but it was some months.

Senator FIERRAVANTI-WELLS —You did it all online? There was no face to face? I could just come along and register online and be a shonky operator. What checks and balances did you undertake?

Ms Golightly —The checks and balances and qualifications for online registration are decided by the department of the environment as the relevant policy agency. We were asked to build a system to record that. It is about understanding the role that Medicare Australia played and the role the policy department played.

Senator FIERRAVANTI-WELLS —Your instructions for the parameters of the registration came from the department of environment?

Ms Golightly —That is correct.

Senator FIERRAVANTI-WELLS —So they said, ‘We need A, B, C, D, E, F, G information about a particular organisation or installer’ and you build a system for registration that meet that requirement?

Ms Golightly —That is correct.

Senator FIERRAVANTI-WELLS —In view of your experience and expertise in the past in relation to other areas, did you offer any expertise in relation to the suggestions that were put to you, about the adequacy of what the department may have been saying to you?

CHAIR —There are a number of questions there. Could we allow the witness to respond before we go on. There just seems to be a lot of rapid questioning.

Ms Golightly —Thank you, chair. Senator, we are not experts in the insulation industry so it was not our place say what needed to be registered or not. We did, I understand, provide advice about what an online system should look like, but that was about the process of registering, not about qualifications or experience.

Senator FIERRAVANTI-WELLS —.I am not asking in that sense. As the organisation has effectively done this for other procedures, did you offer your expertise in relation to the parameters that the department was requesting? Did you simply respond to and provide what Environment wanted or did you lend your expertise from a practical or IT perspective?

Ms Golightly —Certainly from the IT perspective and what an online system might look like—what sorts of bank details and that sort of thing we would need to have. Mr Jackson will correct me if I am wrong, but it was things like being able to uniquely identify ABNs and that sort of thing. Yes, we provided that.

Senator FIERRAVANTI-WELLS —The detail obviously drilled down to where the payments were to be made. What about other details such as where the work was to be undertaken? Was this a one-page form, a two-page form? What form did it take?

Mr Jackson —Those sorts of details were not part of the registration process, because obviously the installations could take place anywhere over a period of time. This was about the firm that was registering to undertake the installation of the insulation over time. So the information that we gathered was to do with the identification of who that might be and where payments might be made.

Senator FIERRAVANTI-WELLS —At page 81 of the human services portfolio budget statement, can you take me through the figures under the heading ‘Third party payments from and on behalf of other agencies’. I assume that the amounts set out there are for the Department of the Environment, Water, Heritage and the Arts and the Department of Climate Change and Energy Efficiency. Can you tell me what the figures $98 million, $582 million and $1.3 billion are for? Are they part of this insulation program?

Ms O’Brien —They are the program payments that were made under the scheme as opposed to the installers.

Senator FIERRAVANTI-WELLS —For that period it was over $2 billion, for which you received—do I understand correctly, Mr Jackson, from reading that—$9.8 million for that service. Is that correct?

Mr Jackson —Yes, I think that is right.

Senator FIERRAVANTI-WELLS —Given the amounts that we are talking about, did that entail extra staff?

Mr Jackson —Yes, we did recruit some extra staff or deploy some staff to that work.

Senator FIERRAVANTI-WELLS —At page 85 of that document, under ‘Program 1.3: delivery of other benefits and services departmental’, is the line ‘Revenues from independent sources’? Could you explain to me why you go from $80 million in 2009 to $33 million in 2010?

Ms O’Brien —Those numbers tend to increase during the course of the year as new work comes into the agency. The most notable difference between the $80 million in 2009-10 and the current estimate for the 2010-11 financial year is that in the 2009-10 financial year we had significant contract revenue with the National eHealth Transition Authority for the development of the Unique Health Identifier. We do not have contract revenue agreed yet for any of that work this year.

Senator FIERRAVANTI-WELLS —So, in other words, that $50 million or so is purely identifier work?

Ms O’Brien —I think $34 million of that relates to the health identifier work.

Senator FIERRAVANTI-WELLS —What about the rest?

Ms O’Brien —Another part is the work that was done last year for Environment that you spoke about. There is another $9 million there that has not come in yet, and the rest is made up of just little bits and pieces of work—

Senator FIERRAVANTI-WELLS —Could you give me a breakdown of that, if you do not mind. In other words, if the moneys have come through and been paid out by Medicare, does it come within your purview to recover those moneys? Is Medicare involved in the recovery of any moneys from installers? There was talk about that.

Ms Golightly —I will check this, Senator, but I am pretty sure that that is a matter for the department of environment. In fact, I am virtually positive it is, unless someone corrects me.

Senator FIERRAVANTI-WELLS —Under the special accounts, I noticed a paragraph about trust moneys. If you were the recovery agent, I wondered whether there might have been some trust money there on behalf of—

Ms Golightly —No.

Senator FIERRAVANTI-WELLS —There is not. You just simply pay it out and it is up to Environment to recover whatever moneys that it undertakes.

Ms Golightly —Yes.

Senator FIERRAVANTI-WELLS —Having gone through the experience with pink batts, we now move to the hospital system. I guess to some extent we have learnt from those processes. In relation to some of the work that you are now going to undertake with the national hospital system, are there any similarities there that you will have learnt from experience?

Ms Briggs —We try and learn constantly from experience. I could point out in this context that health has been our mainstream business for a good while. There are tried and true practices and, more often than not, we are building on existing programs which we are quite familiar with.

Senator FIERRAVANTI-WELLS —You have obviously been given new work as part of hospitals. A lot of aged-care payments go through Medicare as well. Does that mean that you will do the one-stop shop as well?

Ms Briggs —It is not my anticipation that we will, no.

Senator FIERRAVANTI-WELLS —You are not? Mr Fawns, can you shed some light on that? You are not going to be doing that?

Mr Fawns —No, that is not the current indication that we have got from the Department of Health and Ageing. They are still considering how they will implement and undertake that, and I would suggest that would be a question to ask the Department of Health and Ageing.

Senator FIERRAVANTI-WELLS —You have not been approached at all in relation to it?

Mr Fawns —No.

Senator FIERRAVANTI-WELLS —That is interesting. Perhaps some other department has similar expertise. Perhaps this might even be run through Health and Ageing or the Prime Minister’s department.

CHAIR —Do you have another question, Senator?

Senator FIERRAVANTI-WELLS —I do have some more questions. I refer to pages 47 and 48 of your annual report. You talk about an expansion of aged-care forms—an extra 14 added during the year. Could you tell me, just out of interest, how many aged-care web forms you do have on your system?

Mr Hancock —We have been working with the aged-care sector for the last couple of years to put in place a number of online claiming web forms. For the residential side we have in place web forms that allow us to do admissions, departure events, claiming events and other extra services that are required. So we have put in place electronic transmissions that work with aged-care services to be able to finalise a claim.

Senator FIERRAVANTI-WELLS —In the interests of time, I will put some more questions about that on notice. I notice that you have information lines for people to ring in about the immunisation services incentive payments and program.

Ms Golightly —Yes.

Senator FIERRAVANTI-WELLS —I thought that program had been abolished, but you have still got an information line in relation to it.

Mr Czabania —As far as I am aware, the information line has not been abolished for the childhood immunisation register.

Senator FIERRAVANTI-WELLS —But I notice budget papers for 2008-09 say the practice incentive program, removal of general practice immunisation service incentive payment, was abolished, so perhaps you might like to just check. If the program is abolished I am interested to see that the information line is still there and I wonder whether a fee is still being paid in relation to that. Please take that on notice.

Ms Golightly —I think there may be a difference between an incentive program for immunisation and the immunisation program. We will take it on notice.

Senator FIERRAVANTI-WELLS —Where in your program do you look at Medicare fraud and fraud in relation to Medicare cards? Is that something that you deal with?

Ms Golightly —Yes, we have our compliance area that looks at things like that.

Senator FIERRAVANTI-WELLS —Where is that listed?

Ms Golightly —It is not a program; it is in admin services.

Senator FIERRAVANTI-WELLS —You have said you investigate evidence of fraudulent use. How many cases have been investigated? Can you give me some statistics on that?

Mr Bridge —We do around 3½ thousand audit cases per annum. In that there would be about 130 fraud investigations. Fraud is really focused on the criminal element of fraud.

Senator FIERRAVANTI-WELLS —What about instances of non-Australian citizens fraudulently using Medicare cards? Are you aware of that? Does that come within any of the matters that you have investigated?

Mr Bridge —Our investigations go to claims against the Medicare programs. If those cards have been used for fraud in other arenas, they would be outside our ambit.

Senator FIERRAVANTI-WELLS —Let me give you an instance. I notice that you do some work for Immigration as well, so perhaps this might form part of that. This is an instance where women of a particular overseas background are coming to Australia to give birth—

Senator CAMERON —They aren’t refugees, are they? No wonder Malcolm Fraser gave you the flick.

Senator FIERRAVANTI-WELLS —Senator Cameron, I know it is five to 11.

CHAIR —Senator Cameron, order! Senator Fierravanti-Wells has the call.

Senator FIERRAVANTI-WELLS —These are instances where women are temporarily in Australia giving birth to children. The reason I ask is that I have one example at a hospital; a particular practitioner has provided this information. When they checked the system, they found that a particular woman with the same address and the same Medicare details had given birth five weeks before another woman. Do you understand the scenario? I do not want to go into the details. A woman gives birth, and then five weeks later another woman comes in and gives birth using the same Medicare details. Is that the sort of thing that—

Mr Bridge —If that went to a Medicare claim or a pharmaceutical benefits claim, we would be very interested in investigating that matter.

Senator FIERRAVANTI-WELLS —Can you take on notice the instances where you have had claims in relation to using the same Medicare details.

Mr Bridge —I will take it on notice.

Senator FIERRAVANTI-WELLS —Thank you. Could you tell me the expected cost of fraudulent use of Medicare cards by non-citizens. Is that something that—

Mr Bridge —It is not something that I can put a figure on.

Senator FIERRAVANTI-WELLS —Could you take that on notice.

Senator Ludwig —Just to be clear, what is the officer taking on notice.

Senator FIERRAVANTI-WELLS —I have asked for information in relation to non-Australian citizens. Are there instances of fraudulent use of Medicare cards that the officer is aware of? If some do exist, could he provide me with some statistics and some details in relation to that. If so, what is the cost of fraudulent use of Medicare cards, if an issue does exist—if it is one or two or three or 10? What is the cost of that? I have tried to use an example that does not—

Senator Ludwig —I was making sure the officer understood what he was taking on notice.

Senator CAMERON —Could you give us some costings for fraud involving Australian citizens as well.

Mr Bridge —I can give you information in relation to the actual cases that we may have had in those areas; that is all. We obviously would not have any information beyond that.

Senator FIERRAVANTI-WELLS —My initial question was: does Medicare investigate evidence of fraudulent use of Medicare cards? How many cases have been investigated? What are the grounds for that misuse? That was the beginning of my questioning, and then I went on to ask specific questions about non-Australian citizens.

CHAIR —We are running out of time, Senator Fierravanti-Wells, so rather than repeat the question—

Senator CAMERON —She dog-whistles on big-time.

CHAIR —Senator Cameron, it is getting very late in the evening and you are holding up proceedings.

Senator FIERRAVANTI-WELLS —In terms of the health identifiers, what sort of work are you doing? Given that the legislation has not yet passed the Senate, what is the nature of the work that you are doing at the moment?

Ms Bird —We are completing work on behalf of the NEHTA, the National E-Health Transition Authority, to build computer systems and to design processes and operational activities so that, should the legislation be passed to give effect to the healthcare identifier, Medicare Australia would be in a position to deliver that service.

Senator FIERRAVANTI-WELLS —Could you take on notice how much work Medicare Australia has done since the concept of e-health was first introduced, going back to the previous government as well. Could you take on notice the amount that has been expended on this project to date.

Ms Bird —Certainly.

Senator FIERRAVANTI-WELLS —Thank you. I have one last question. We canvassed this in the identifiers. What is the issue in relation to staff that have left over the last financial year in relation to breach-of-privacy issues?

Ms Briggs —I do not understand the question.

Senator FIERRAVANTI-WELLS —Over the last financial year, how many staff have either left or in any way been disciplined? Have there been breaches, or alleged breaches, of privacy matters in relation to inappropriate access to Medicare information?

Ms Briggs —If you can bear with me, I will just find the results for the last year. Up to the end of December—so over the first six months of the financial year—50 people have been subject to breaching arrangements.

Senator FIERRAVANTI-WELLS —What ultimately happened? Are any of those people still with the department? Can you give me the breakdown of—

Ms Briggs —Can I take that on notice.

Senator FIERRAVANTI-WELLS —Yes, please. Please give me a breakdown of what has happened with the 50. Thank you.

Ms Briggs —Sure.

CHAIR —Before we conclude this evening, I remind committee members that questions on notice must be received by the secretariat by the close of business on Monday, 31 May. That is for questions that committee members want to place on notice. I take the opportunity to thank Hansard for recording these proceedings. I thank the secretariat and those acting on behalf of the secretary. I thank Mr Pratt, Ms Briggs, the minister and officers. Travel home safely, and we will see you next estimates.

Committee adjourned at 11.02 pm