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Health Insurance Amendment (Administration) Bill 2020

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2019-2020

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

HEALTH INSURANCE AMENDMENT (ADMINISTRATION) BILL 2020

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Health, the Hon Greg Hunt MP)





HEALTH INSURANCE AMENDMENT (ADMINISTRATION) BILL 2020

 

OUTLINE

The purpose of the Health Insurance Amendment (Administration) Bill 2020 (the Bill) is to make minor administrative changes to the Health Insurance Act 1973 (the Act). These changes relate to Australian Government administrative processes only and do not affect the existing arrangements for patients or health professionals under the Medicare Benefits Schedule (MBS). The Bill:

·          removes the requirement in the Act for the MBS services tables to cease annually; and

·          removes redundant provisions and definitions in the Act.

 

Remove the annual cessation of the MBS services tables

Subsections 4(1), 4AA(1) and 4A(1) of the Act provide that regulations may prescribe tables of medical, diagnostic imaging and pathology services which set out items of services, the fees applicable for each item, and rules for interpreting the tables. These regulations are collectively known as the ‘MBS services tables’, and they provide the legal basis for the $26 billion in Medicare benefits paid each year.

 

The Act provides that the MBS services tables cease to be in force annually. As a result, these regulations need to be remade each year to ensure that Medicare benefits can continue to be available to patients.

 

Repealing and remaking the MBS services tables was previously the simplest way to maintain accurate and up-to-date records, as there was no whole-of-government process of managing legislative instruments at the time.

 

This process is now redundant, as the Legislation Act 2003 requires compilations of all legislative instruments to be published on the Federal Register of Legislation.

 

The requirements in the Act create unnecessary administrative work and create a remote, but catastrophic, risk that if the cessation date is reached, the MBS service tables will cease. This will affect patient access to clinically relevant health services.

 

Parliamentary scrutiny, as set out in the Legislation Act 2003 , of all changes to the MBS service tables will be maintained.

 

Remove redundant provisions and definitions

The Bill removes several provisions from the Act which no longer reflect current administrative practice. This includes:

·          removing references to the Medical Benefits Advisory Committee (MBAC). The Act enables the Minister to seek MBAC’s view on new listings or to preclude payment of benefits in certain circumstances. MBAC has not been active for more than 20 years. The Minister receives advice on listings from non-statutory committees, such as the Medical Services Advisory Committee and the clinician-led MBS Review Taskforce;

·          removing the requirement for optometrists, or employers of optometrists, to enter into an undertaking with the Minister (to become a ‘participating optometrist’) as a condition of rendering an MBS optometry service. These undertakings have not existed since 2016. Medicare benefits are available where certain services are performed by an ‘optometrist’;

·          removing section 18 which formerly dealt with the repayment of Medicare benefits where a person receives compensation or damages for an injury that incurs medical expenses. The Health and Other Services (Compensation) Act 1995 now administers the recovery of Medicare benefits in circumstances where a person receives compensation or damages;

·          removing subsections 16(4) and (5) which specify a redundant calculation for determining Medicare benefits payable for anaesthesia services performed on a patient receiving two or more operations. With the introduction of the Relative Value Guide system for anaesthesia in 2001, the need for this calculation is no longer required; and

·          removing section 10C which required the Minister to establish an independent review of the Extended Medicare Safety Net benefit capping arrangements, and to table that review in Parliament. This section is defunct as the evaluation report was tabled in each House of Parliament on 4 July 2011.



The Bill will also remove definitions in subsection 3(1) which are no longer used in the Act or the regulations.

 

Financial Impact Statement

The Bill has no financial impact.

 



 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

HEALTH INSURANCE AMENDMENT (ADMINISTRATION) BILL 2020

 

The Health Insurance Amendment (Administration) Bill 2020 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Bill

The purpose of the Bill is to make minor administrative changes to the Health Insurance Act 1973 (the Act). These changes relate to Australian Government administrative processes only and do not affect the existing arrangements for patients or health professionals under the Medicare Benefits Schedule (MBS).

 

The Bill removes the requirement in the Act for the MBS services tables to cease annually. These provisions were originally introduced to require an annual remake of each MBS service table to provide an accurate and up-to-date record of the MBS. It is now redundant as the Legislation Act 2003 requires compilations of all legislative instruments to be published on the Federal Register of Legislation.

 

The Bill will also remove several provisions in the Act which no longer reflect current administrative practice. The Bill will also remove definitions in subsection 3(1) which are no longer used in the Act or the regulations.

 

Human rights implications

This Bill engages Articles 9 and 12 of the International Covenant on Economic Social and Cultural Rights (ICESCR), specifically the rights to health and social security.

 

The Right to Social Security

The right to social security is contained in Article 9 of the ICESCR. It requires that a country must, within its maximum available resources, ensure access to a social security scheme that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care. Countries are obliged to demonstrate that every effort has been made to use all resources that are at their disposal in an effort to satisfy, as a matter of priority, this minimum obligation.

 

The Committee reports that there is a strong presumption that retrogressive measures taken in relation to the right to social security are prohibited under ICESCR. In this context, a retrogressive measure would be one taken without adequate justification that had the effect of reducing existing levels of social security benefits, or of denying benefits to persons or groups previously entitled to them. However, it is legitimate for a Government to re-direct its limited resources in ways that it considers to be more effective at meeting the general health needs of all society, particularly the needs of the more disadvantaged members of society.

 

 

The Right to Health

The right to the enjoyment of the highest attainable standard of physical and mental health is contained in Article 12(1) of the ICESCR. The UN Committee on Economic Social and Cultural Rights (the Committee) has stated that the right to health is not a right for each individual to be healthy, but is a right to a system of health protection which provides equality of opportunity for people to enjoy the highest attainable level of health.

 

The Committee reports that the “highest attainable standard of health” takes into account the country’s available resources. This right may be understood as a right of access to a variety of public health and health care facilities, goods, services, programs, and conditions necessary for the realisation of the highest attainable standard of health.

 

The Bill supports continued access to Medicare benefits. The amendments remove the annual risk that services specified in the MBS tables will cease.

 

Analysis

The amendments made by this Bill do not affect persons who are entitled to Medicare benefits, the amount of benefit to which those persons are entitled, or which persons can render Medicare-eligible services. The changes relate to Australian Government administrative processes only.

 

The removal of the provisions in the Act for the MBS services tables to cease to have effect annually will mitigate the remote but catastrophic risk, that an administrative error could affect the right to health and the right to social security. If the MBS services tables were not remade by the cessation date, the relevant MBS services would cease to have effect. Patient access to clinically relevant health services would be affected as there would be no legal authority to pay Medicare benefits.

 

The other amendments simply remove redundant provisions and definitions in the Act, or make consequential changes as a result of those amendments.

 

Conclusion

The Bill is compatible with human rights as it promotes the protection of the human rights contained in Articles 9 and 12 of the ICESCR.

 

 

The Hon Greg Hunt MP, Minister for Health



 

HEALTH INSURANCE AMENDMENT (ADMINISTRATION) BILL 2020

 

NOTES ON CLAUSES

 

Clause 1 - Short Title

This clause provides that the Health Insurance Amendment (Administration) Bill 2020 (the Bill), once enacted, may be cited as the Health Insurance Amendment (Administration) Act 2020.

 

Clause 2 - Commencement

This clause provides that the Bill commences the day after it receives Royal Assent.

 

Clause 3 - Schedules

This clause provides that each Act that is specified in a Schedule to the Bill is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item has effect according to its terms. 

 

The Bill amends the Health Insurance Act 1973 (the Act) and makes consequential amendments to the Health and Other Services (Compensation) Act 1995 (the HOSC Act) and the Veterans' Entitlements Act 1986 .

 

SCHEDULE 1 — AMENDMENTS

 

Health and Other Services (Compensation) Act 1995

 

Items 1 and 2 make consequential amendments to the HOSC Act to remove references to section 18 of the Act, which is being repealed as it is no longer in use for recovery of Medicare benefits for compensation matters. The amendments to the HOSC Actdo not change the existing arrangements for determining the repayment amount of Medicare benefit in relation to medical expenses incurred by a person who is receiving compensation.

 

Item 1 amends the definition of ‘medicare benefit’ in the HOSC Act to remove the reference to section 18 of the Act, which is repealed by item 16 below .

 

Item 2 repeals paragraph 42(1)(e) of the HOSC Act. Section 42 empowers the Chief Executive Medicare or an authorised officer to compel the disclosure of information or documents in certain circumstances that may assist in determining matters relating to compensation claims. Paragraph (1)(e) provides that one such circumstance is where the information or document may be relevant to the question of whether the Minister should make a determination under subsection 18(1) of the Act.  

 

Health Insurance Act 1973

 

Items 3 to 29 make minor administrative changes to improve the operation of the Act. The amendments can be categorised as:



 

Repeal of redundant definitions

Items 3 and 5 repeal the following definitions in subsection 3(1) of the Act:

·          Australian Capital Territory Health Authority;

·          excessive diagnostic imaging service;

·          My Health Record System Operator;

·          Pathology Services Table Committee;

·          registered healthcare recipient; and

·          registered repository operator.

                         

These definitions do not appear elsewhere in the Act and are not used in regulations made under this Act. Item 3 will also remove the definition of participating optometrist (see below).

 

Removal of references to ‘participating optometrist’

Items 3, 4, 6, 7, 18, 21 to 27 and 29 remove references to ‘participating optometrist’. Historically, optometrists (or employers of optometrists) were required to enter into an undertaking with the Minister (to become a ‘participating optometrist’) as a condition of rendering an eligible MBS optometry service.

 

An undertaking put additional requirements on optometrists in comparison to most other Medicare-eligible providers. In particular, an undertaking required that participating optometrists were subject to a charging cap which limited the fees that optometrists could set for their own services.

 

The charging cap was removed on 1 January 2015 to enable optometrists to set their own fees in a similar manner to other health professionals under Medicare. On 1 April 2016, optometry services were removed from the regulations which prescribed medical services and listed under a Health Insurance (Optometric services) Determination 2 016 . When the items were moved to the determination, the rendering provider was changed from a ‘participating optometrist’ as they were in regulations to an ‘optometrist’ per subsection 3(1) of the Act. This enabled optometrists to render Medicare services without entering into an undertaking.

 

Item 3 removes the definition of ‘participating optometrist’ from the Act.

 

Item 4 repeals and substitutes paragraph (c) of the definition of ‘professional service’. The substituted definition:

·          replaces ‘participating optometrist’ with ‘optometrist’;

·          removes services rendered on behalf of participating optometrists, which was only relevant to include optometrists who were employees of participating optometrists; and

·          replaces professional attendance with clinically relevant service, which better reflects the range of services performed by an optometrist.

 

Item 6 repeals subsection 3(4A) which currently requires participating optometrists to provide services of a kind, and at premises, covered by the undertaking for Medicare benefit to be payable.

 

Item 7 amends subsection 3(5) to omit ‘a participating optometrist’ and substitute with ‘an optometrist’. Subsection 3(5) of the Act generally operates so that a Medicare benefit is not payable, for the later service, when a person has received a professional service and subsequently receives a professional attendance service that is necessary for post-operative treatment purposes. The period during which this restriction typically applies is known as the aftercare period.



Item 18 repeals sections 23A, 23B, 23D and 23DAA, which relate to the form of the undertaking to become a ‘participating optometrist’, and set out the process and effect of acceptance or refusal of this undertaking by the Minister.

 

Items 21 to 24 remove references to participating optometrists in Part VAA which relates to the Professional Services Review (PSR) Scheme. In particular, participating optometrists will no longer be:

·          defined as a ‘practitioner’ under paragraph 81(1)(c);

·          liable to have their undertaking revoked (wholly or in part), under paragraph 92(2)(d), as part of an agreement entered into between the Director of the PSR and the participating optometrist; and

·          liable to have their undertaking revoked (wholly or in part), under paragraph 106U(1)(e), as part of a decision taken by the Determining Authority.

 

The amendments will not affect the ability of the PSR to review instances of potential inappropriate practice relating to the provision of MBS optometry services. The PSR can continue to investigate practitioners or persons who employ or engage practitioners. Paragraph 81(1)(d) of the definition of ‘practitioner’ includes optometrists who render MBS and Pharmaceutical Benefits Schedule (PBS) services.



Items 25 to 27 remove references to participating optometrists in Part VB which deals with Medicare Participation Review Committees (MPRCs). In particular, participating optometrists will be removed from the definition of a ‘practitioner’ under paragraph 124B(1)(c) and subsection 124B(3A) will be repealed.

 

The operations of MPRC will not be affected by these amendments. T he MPRC can continue to make determinations in relation to relevant offences or relevant civil contraventions by a practitioner who is an optometrist. Paragraph 124B(1)(d) of the definition of ‘practitioner’ continues to apply to optometrists who render MBS and PBS services.

 

Item 29 will amend section 129A to replace ‘participating optometrist’ with ‘optometrist’ so the Visiting Optometrists Scheme can continue. Section 129A of the Act allows the Minister to enter into special arrangements with participating optometrists to ensure adequate optometric services for persons in isolated areas. This power supports the Visiting Optometrists Scheme, which supports the provision of optometric services in certain regional, rural and remote location where there is an area of need.

 



 

Repeal of provisions relating to Medicare Benefits Advisory Committees

Items 8, 17 and 20 repeal references to the defunct MBAC. These amendments will not limit the Minister’s ability to ask another expert committee for advice, such as the non-statutory Medical Services Advisory Committee, to consider and make recommendations about public funding of services on the MBS.

 

Item 8 repeals subsections 3C(1A) and (1B) of the Act which provide that the Minister can refer questions to MBAC about whether a determination should be made about a health service or a specified class of health services under subsection 3C(1).

 

Item 17 repeals section 19A of the Act. Section 19A provides a regulation-making power to prescribe circumstances where Medicare benefits are not payable, provided the regulations were made in accordance with a recommendation from MBAC (other than pathology services).

 

Item 20 repeals Part V of the Act. Part V provides for the powers, functions and membership of MBAC.

 

Repeal of annual cessation of the tables

Items 9, 11 and 13 repeal the subsections which specify the sunset period for the regulations which contain the tables of medical (section 4), diagnostic imaging (section 4AA) and pathology (section 4A) services. The regulations are repealed on the day after the 15th sitting day of the House of Representatives after the end of a period of 12 months beginning on the day on which the regulations are notified in the Gazette.

 

The regulations are legislative instruments and are subject to the standard sunset provisions in Part 4 of Chapter 3 of the Legislation Act 2003 . Sunsetting ensures that legislative instruments are regularly reviewed and only remain operative if they continue to be relevant.



Items 10 and 12 make consequential numbering amendments in sections 4AA and 4A of the Act as a result of repealing the annual cessation requirement of the diagnostic imaging and pathology services regulations.

 

Repeal of redundant provisions

Items 14, 15, 16 and 28 repeal redundant provisions relating to the treatment of Medicare benefits for persons receiving compensation, the calculation of Medicare benefits for anaesthesia services where multiple operations are performed, and the requirement for the Minister to table a report into the operation of the Extended Medicare Safety Net benefit caps. These provisions are defunct and have no operation. 

 

Item 14 repeals section 10C of the Act. Section 10C required the Minister to cause an independent evaluation to be conducted of the impact and operation of determinations made under section 10B in 2011 and to table the evaluation in Parliament. The report of the evaluation was tabled before each House of Parliament on 4 July 2011.

Item 15 repeals subsections 16(4) and (5) of the Act. Prior to November 2001, the Medicare benefit for an anaesthesia service was prescribed in regulations made under Section 4 of the Act and was calculated from two components:

·          basic units (known as “B” units), which represented the skill and responsibility exercised by the anaesthetist; and

·          time units (known as “T” units), which represented the average anaesthetic time taken for each service without regard to the type of anaesthetic technique employed.

 

Where anaesthesia was administered in connection with two or more operations performed on a patient on the one occasion, subsections 16(4) and 16(5) of the Act specified the fees for the administration of anaesthetic (other than the item with the highest schedule fee) would be reduced as prescribed. These amounts were prescribed in the Health Insurance Regulations 1975 under section 9.

 

On November 2001, the anaesthesia arrangements changed to a new structure known as the Relative Value Guide (RVG). The RVG is contained in the regulations prescribed under section 4 of the Act, and the schedule fee calculates the Medicare benefit for an anaesthesia service from three components:

·          basic units which represented the skill and responsibility exercised by the anaesthetist relative to anatomical site and physiological impact of the surgery;

·          time units which represented the actual time taken; and

·          modifying units for monitoring and therapeutic components when performed in association with the administration of anaesthesia, and other modifiers to reflect added complexities (such as patient risk factors or services performed after hours).

 

Under the RVG, the anaesthesia calculation for multiple operations per subsections 16(4) and (5) of the Act does not apply as the anaesthesia service is deemed to be one service. The calculation in the Act does not apply as there cannot be more than one anaesthesia service associated with an operation/operations performed on a patient on a single occasion, and subsections 16(4) and (5) could only prescribe a reduction in the fee for the item(s) other than the greater or greatest of those amounts.



Item 16 repeals section 18. Section 18 provides that a Medicare benefit is reduced (or not paid) where a person receives compensation or damages in relation to an injury, and the Minister determines that whole or part of the payment shall be deemed as related to medical expense in respect of the injury. This section has no current operation following commencement of the Health and Other Services (Compensation) Act 1995 on 1 February 1996. The payment and repayment of Medicare benefits in circumstances where a person receives compensation or damages is now governed by that Act.

 

Section 18 was not repealed when the Health and Other Services (Compensation) Act 1995 commenced because settlements and judgments made prior to 1 February 1996 continued to be processed under that section. Subsection 18(4A) prevented the Minister making directions about the payment of Medicare benefits under that section after the commencement of the Health and Other Services (Compensation) Act 1995 . All cases which pre-date the commencement of the Health and Other Services (Compensation) Act 1995 have now been finalised, so section 18 can be repealed.

 

Item 28 makes consequential amendments to subsections 126(1) and (2) to remove references to repealed section 18 (see item 16 ).

 

Other amendments

Item 19 amends subsection 23DZA(4) to correct a drafting error. This item removes the words ‘under subsection (4)’, which have no meaningful effect.

 

Veterans' Entitlements Act 1986

 

Item 30 - Subsection 93D(1) (definition of pathology service)

Item 30makes a consequential amendment to the definition of ‘pathology service’ in subsection 93D(1) of the Veterans’ Entitlements Act 1986 to omit ‘subsection 4A(1)’ and replace it with the renumbered provision, ‘section 4A’ in the Health Insurance Act 1973 .