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Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2022

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2022

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

SENATE

 

 

 

 

 

 

 

 

 

 

 

HEALTH LEGISLATION AMENDMENT (MEDICARE COMPLIANCE AND OTHER MEASURES) BILL 2022

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Health and Aged Care, the Hon Mark Butler MP)





 



HEALTH LEGISLATION AMENDMENT (MEDICARE COMPLIANCE AND OTHER MEASURES) BILL 2022

 

OUTLINE

The Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2022 (the Bill) amends the Health Insurance Act 1973 (Health Insurance Act), the National Health Act 1953 (National Health Act) and the Dental Benefits Act 2008 (Dental Benefits Act) to protect the integrity of Medicare.

 

The Bill supports the integrity of the Medicare Benefits Schedule (MBS), the Pharmaceutical Benefits Scheme (PBS) and Child Dental Benefits Schedule (CDBS) by:

·          addressing inappropriate practice , principally by:

o    expanding the options available to the Professional Services Review (PSR) to make agreements with any person under review who acknowledges inappropriate practice, including bodies corporate; and

o    introducing new sanctions for persons who fail to respond to a notice to produce documents to the Director of the PSR (Director) or to a Committee established by the Director under section 93 of the Health Insurance Act (Committee), or fail to appear at a Committee hearing; and

·          protecting payment integrity, encouraging compliance with claiming requirements and supporting consistency specifically by improving recovery arrangements for debts owed to the Commonwealth, aligning the relevant standards and arrangements across the MBS, PBS and CDBS and clarifying the application threshold for administrative penalties within Shared Debt Recovery Scheme arrangements.

 

The ongoing integrity of the MBS, PBS and CDBS is essential to ensure that all Australians continue to have access to a world class health system. In 2019-20, Commonwealth expenditure on these programs amounted to more than $38 billion.

 

While most health practitioners claim benefits under these programs appropriately, a few do not. In some circumstances, claims fail to meet legislative requirements, are fraudulent or relate to inappropriate practice. In other circumstances—where the number of Medicare-funded services per patient may be subject to additional criteria or limits (for example, allied health services for people with chronic conditions and complex care needs)—incorrect claiming by health practitioners may adversely affect individual patients and impede their access to health services.

 

The Government supports practitioners and healthcare organisations to comply with their obligations through a focus on education, as well as ongoing engagement with peak bodies. However, where benefits are incorrectly or fraudulently paid, it is vital to the public interest that Commonwealth expenditure is protected and that debts are recovered to support further investments in health initiatives for Australians. The Government must respond to incorrect claiming and inappropriate practice efficiently and effectively, to ensure that Medicare programs continue to operate for the benefit of the Australian community.

 

The Bill has no adverse impact on health providers practising legitimately.

 

Overview of the Bill

 

Addressing Inappropriate Practice

 

The Bill ensures all types of persons under review by the PSR, including bodies corporate, may enter into written agreements with the Director. The Bill also enables these written agreements with the Director to specify certain additional actions that may take effect in relation to the person under review. Transitional provisions provide the Director with the flexibility to enter into agreements with non-practitioner persons under review who are referred to a Committee in the 18 months prior to commencement of the Bill.

 

The Bill introduces certain sanctions to be applied to persons under review who are not practitioners. In particular, the Bill extends the application of existing criminal offences to all persons (other than persons under review who are practitioners) who fail to produce documents to the Director or to a Committee after receiving a notice. The sanctions include a civil penalty for bodies corporate who do not produce documents or give information when required, and the ability for the Director to seek Court orders requiring the production of documents. The Bill introduces criminal offences where persons under review (other than practitioners) fail to attend and/or give evidence at a Committee hearing pursuant to a notice.

 

The Bill clarifies that the Chief Executive Medicare (CEM) may make a request to the Director to review the provision of services by a person if it appears to the CEM that there is a possibility that a person may have engaged in inappropriate practice. The CEM is not required to objectively determine that a particular person provided the services and/or engaged in inappropriate practice prior to referral to the Director for review. Similarly, while the Director may undertake a review, the Bill clarifies that the Director may refer a person under review to a Committee if it appears to the Director that the person has engaged in inappropriate practice.

 

Protecting Payment Integrity and Consistency in Debt Recovery

 

The Bill includes amendments to update and align the legislative provisions across the Health Insurance Act, the National Health Act and the Dental Benefits Act including to clarify:

·          the recovery of interest payable on certain debts under the Health Insurance Act and the Dental Benefits Act;

·          application of administrative penalties to Shared Debt Recovery Scheme debts;

·          use of the financial information gathering powers in debt recovery;

·          Administrative Appeals Tribunal review arrangements, where one or more garnishee notices are issued in relation to certain debts;

·          the Commonwealth’s ability to recover a debt from a person or the estate of the person.

 

The Bill ensures that both the set off provision in section 129AEF of the Health Insurance Act and the garnishee power in section 129AEG of the Health Insurance Act may be applied to debts owed by a person to the Commonwealth, as a result of a written agreement under section 92 between the person and the Director .

 

Finally, the Bill amends the National Health Act and the Dental Benefits Act to clarify that the Commonwealth may recover an amount as a debt where it should not have been paid due to the provision of false or misleading information, aligning the relevant provisions with equivalent provisions in the Health Insurance Act.

 

Financial Impact Statement

 

Nil.

 



Statement of Compatibility with Human Rights

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

HEALTH LEGISLATION AMENDMENT (MEDICARE COMPLIANCE AND OTHER MEASURES) BILL 2022

This 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 Bill amends the Health Insurance Act 1973 (Health Insurance Act), the National Health Act 1953 (National Health Act) and the Dental Benefits Act 2008 (Dental Benefits Act) to implement measures to protect the integrity of the Medicare Benefits Schedule (MBS), the Pharmaceutical Benefits Scheme (PBS) and the Child Dental Benefits Schedule (CDBS) by:

·          addressing inappropriate practice principally by:

o    adding flexibility to the options available to the Professional Services Review (PSR) to review services and make agreements with any person under review who acknowledges inappropriate practice, including bodies corporate; and

o    introducing new sanctions for persons who fail to respond to a notice to produce documents to the Director of the PSR (Director) or to a Committee established by the Director under section 93 of the Health Insurance Act (Committee), or fail to appear at a Committee hearing; and

·          protecting payment integrity, encouraging compliance with claiming requirements and supporting consistency specifically by improving recovery arrangements for debts owed to the Commonwealth, aligning the relevant standards and arrangements across the MBS, PBS and CDBS and clarifying the application threshold for administrative penalties within Shared Debt Recovery Scheme arrangements.

 

Human rights implications

 

Right to Health

The Bill engages the right to health. Article 12(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR) promotes the right of all individuals to enjoy the highest attainable standard of physical and mental health.

 

The Bill assists with the progressive realisation of the right of all individuals to enjoy the highest attainable standard of physical and mental health by supporting the integrity of Australia’s Medicare programs. The Bill provides mechanisms to support Medicare provider compliance by strengthening how:

·          inappropriate practice may be reviewed, including by expanding the Director’s ability to enter into written agreements with all persons under review; and

·          the Commonwealth may recover incorrect Medicare payments and enforce the recovery of debts.

 

This means that more money will be available to be reinvested in new services and medications, improving the Australian community’s access to Medicare programs.

 

Right to Privacy

The Bill engages the right to privacy, as it provides for the production, disclosure and collection of personal information, including health and financial information. Article 17 of the International Covenant on Civil and Political Rights (ICCPR) provides that no one shall be subjected to arbitrary or unlawful interference with their privacy, family, home, correspondence, nor to unlawful attacks on their honour and reputation. This right to privacy may be limited, however, to achieve a legitimate objective where the limitations are lawful and not arbitrary. In order for an interference with the right to privacy to be permissible, the interference must be authorised by law, be consistent with the ICCPR, be reasonable in the circumstances and proportionate to the objectives sought to be achieved.

 

The Bill contains provisions enabling the sharing of information, including personal information, between the Chief Executive Medicare (CEM) and the Director to encourage compliance with written agreements made between persons under review and the Director. The Bill enables the CEM to notify the Director that the CEM is of the opinion that a person, who has made an agreement with the Director, has not complied with the agreed specified actions. For example, agreements will typically include a requirement that the person under review must repay Medicare or dental benefits, which were paid for services where the person acknowledged inappropriate practice.

 

One of the CEM’s functions relates to the recovery of relevant debts owed to the Commonwealth. If the CEM becomes aware, while performing this function, of a person’s failure to pay the agreed amount, the CEM may notify the Director, which will inform the Director’s further actions, if any. The Bill includes an express procedural fairness requirement that the CEM must provide the person under review with written notice prior to notifying the Director. The notice must set out the reasons why the CEM is of the opinion that the person under review has not complied with the agreement and must give the person an opportunity to make submissions about why the CEM should not notify the Director. 

 

The Bill expands the circumstances in which the possibility of publication of certain personal information may occur. The information will include the person’s name, address and profession, as well as the nature of the acknowledged inappropriate practice and specified actions agreed with the Director. The publication may occur in circumstances where a person under review has entered into an agreement acknowledging inappropriate practice, but has not taken action specified in the agreement that is necessary to give effect to the agreement, or action has been taken in a court for the purposes of enforcing the agreement. The CEM may notify the Director if any of these circumstances arise.

 

The sharing of information in this context is between Commonwealth agencies and other relevant privacy and secrecy laws, and their associated safeguards, will continue to apply. In this instance, the legitimate objective to be achieved is the repayment of incorrectly paid Medicare benefits by the person under review, in circumstances where the person under review has agreed to do so. Given Medicare benefits are paid by the Commonwealth, the sharing of limited information between Commonwealth agencies is proportional to the objective of protecting the integrity of Medicare.

 

Similarly, the ability of the Director to publish particulars on the failure to comply with an agreement provides an incentive for persons under review to meet the actions specified in their agreement. To date, agreements have been confidential but, unfortunately, some persons have not complied with the terms of their agreement. The publication measure signals that, where a person enters into an agreement with the Director, there is an expectation that the agreement will be honoured and failure to comply may result in reputational consequences. The Bill therefore protects the integrity of the PSR agreement process.

 

As a result, any limitations on the right to privacy are necessary, reasonable and proportionate to the legitimate objectives of the Bill.

 

Civil Penalties

The Bill extends the application of existing civil penalty provisions, where persons fail to notify the CEM of an address for the giving of documents relating to a debt owed to the Commonwealth.

 

It should be noted that the extension would engage the criminal process rights under Article 14 of the ICCPR if the civil penalties are considered to be “criminal penalties” under international human rights law. Determining whether the penalties are considered to be criminal under international human rights law requires consideration of the classification of the penalty provisions under Australian domestic law, the nature and purpose of the penalties, and the severity of the penalties.

 

The penalty provisions proposed by the Bill expressly characterise the penalties as civil penalties. These provisions create solely pecuniary penalties in the form of a debt payable to the Commonwealth. The purpose of the penalties is to support Medicare provider compliance by encouraging the provision of address details within the time period required by the legislation.

 

Given the significant Commonwealth expenditure on Medicare programs, it is both reasonable and important to encourage the prompt provision of address details when a debt is owed to the Commonwealth. This minimises the use of financial information gathering powers purely to obtain contact details, which should be ordinarily provided by the debtor.

 

The civil penalty provisions will not impose criminal liability and will not lead to the creation of a criminal record. The penalties will only apply to persons who have a debt due to the Commonwealth under related Medicare program legislation, rather than to the public in general. Further, the imposition of the civil penalties is not dependent on a finding of criminal guilt. These factors all indicate that the civil penalties included in the Bill are civil rather than criminal in nature.

 

In terms of severity, the civil penalties are not sufficiently severe that they could be considered criminal penalties for the purposes of Australia’s human rights obligations. Accordingly, the criminal process rights provided in Article 14 of the ICCPR will not be engaged by the amendments relating to civil penalties.

 

The Bill similarly imposes civil penalties for bodies corporate who fail to comply with notices to produce information. The provisions do not engage criminal process rights as the ICCPR does not afford such rights to bodies corporate.

 

Criminal Offences

Careful consideration has been given to the need for criminal offences, and the conduct that should be subject to a criminal offence. The Bill extends the application of existing criminal offences in the Health Insurance Act for failing to produce documents or give information when required. All offences included in the Bill relate to the PSR scheme, and their inclusion is intended to promote compliance with the regulatory scheme.

 

The underlying purpose of the PSR’s legislative functions is to protect the integrity of Commonwealth-funded Medicare programs and prevent inappropriate practice, which may have both cost and patient safety implications. The PSR requires access to relevant documents and/or information to undertake its functions, including reviewing potential cases of inappropriate practice. The current sanctions available for failing to produce documents are disqualification from Medicare for persons under review who are practitioners, or a criminal offence which applies to persons other than a person under review. There are currently no consequences for a failure to comply for persons under review who are not practitioners.

 

The provision of requested information is very important to progressing the review of a person. Encouraging compliance with a notice is necessary to ensure that the PSR is able to carry out its core functions. By amending the offence that deals with a failure to produce documents to apply to all persons (other than a person under review who is a practitioner), this will ensure that appropriate consequences exist for all persons who do not produce documents when required. The offence applies where the relevant person is required by a notice to produce documents or give information to the Director or a Committee and intentionally refuses or fails to comply with that requirement. The maximum penalty does not include imprisonment and is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers issued by the Attorney-General’s Department (the Guide). The offence is proportionate to achieving the objective of ensuring that a person cannot subvert the PSR scheme by intentionally failing to produce documents . The inclusion of criminal offences is therefore reasonable and proportionate to support the PSR scheme, with the ultimate aim to protect the integrity of Medicare programs.

 

Strict liability offences

The Bill engages the right to the presumption of innocence in Article 14(2) of the ICCPR by introducing a strict liability offence for a failure to attend a Committee hearing or a failure to give evidence or answer a question from a Committee member. Article 14(2) of the ICCPR provides that a person charged with a criminal offence has a right “to be presumed innocent until proven guilty according to law”. Strict liability offences engage article 14(2) because, where strict liability is applied to an offence, the requirement for the prosecution to prove fault is removed. Strict liability provisions will not violate the presumption of innocence so long as the provisions are reasonable in the circumstances and maintain rights of defence.

 

The strict liability offences that will be introduced by the Bill will not be inconsistent with the presumption of innocence because they are reasonable, necessary and proportionate in the pursuit of a legitimate objective. The offences will support the functions of the PSR to investigate whether a person engaged in inappropriate practice, specifically in requiring a person under review to attend a hearing so that the person may answer questions about the provision of services. This offence provides a consequence for failure to comply with a notice to attend a hearing or a failure to answer questions at a hearing, regardless of whether that failure is intentional.

 

The maximum penalties for these offences are in line with the Guide and do not include imprisonment. Although a provision for “reasonable excuse” has not been included, there is a specific exception for circumstances involving a medical condition which prevents a person from attending a hearing. In addition, all persons maintain the defences of general application contained in Part 2.3 of the Criminal Code Act 1995 . Defences of mistake of fact and intervening conduct or event are available specifically in relation to strict liability offences.

 

For these reasons, the strict liability offences are not inconsistent with the presumption of innocence and are reasonable, necessary and proportionate in pursuit of a legitimate objective.

 

Conclusion

To the extent that there are any limitations on human rights, these are necessary, reasonable and proportionate to the legitimate objective of the Bill.

 

 

The Hon Mark Butler MP, Minister for Health and Aged Care

Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2022

 

NOTES ON CLAUSES

 

Clause 1 - Short Title

Clause 1 provides that the short title of the Act is the Health Legislation Amendment (Medicare Compliance and Other Measures) Act 2022 .

 

Clause 2 - Commencement

This clause provides that the Act 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. This is a technical provision which gives operational effect to the amendments contained in the Schedules.

 

SCHEDULE 1 AMENDMENTS

 

Part 1 - Professional Services Review scheme

 

Background

 

The Professional Services Review (PSR) scheme, set out in Part VAA of the Health Insurance Act 1973 (Health Insurance Act), is a peer review process for examining cases of possible inappropriate practice by a person following a request for review by the Chief Executive Medicare (CEM). Once a person is referred to the PSR, the Director of the PSR (Director)must make a preliminary decision whether to undertake a review. The Director must undertake a review if, based on the information gathered by the Director, it appears that there is a possibility that the person has engaged in inappropriate practice in providing services during the review period. Having decided to undertake a review, the Director may take no further action, refer the person under review to a Committee established by the Director under section 93 of the Health Insurance Act (Committee), or enter into a written agreement with the person under review.

 

Historically, health provider compliance has concentrated on the behaviour of individual practitioners. Although the PSR scheme allows for review of persons (including bodies corporate) who employ or otherwise engage practitioners, certain provisions only apply in circumstances where the person under review is a practitioner. These provisions include the power for the Director to enter into a written agreement with the person under review, as well as certain sanctions for failing to produce documents or attend hearings when required. In the changing Medicare environment, where non-practitioner entities are increasingly influencing the provision of health care services, adjustments to certain compliance arrangements are required to ensure the continued integrity of the Medicare compliance framework. As a result, a need has been identified to extend the relevant provisions to non-practitioner persons.

 

Item 1 - Subsection 81(1)

This item inserts a definition of “executive officer” of a body corporate into subsection 81(1). The definition of an executive officer of a body corporate is “a person, by whatever name called and whether or not a director of the body, who is concerned in, or takes part in, the management of the body”. Section 81 provides that definitions in that section apply only to terms used in Part VAA of the Health Insurance Act, which sets out the PSR scheme. The definition inserted into subsection 81(1) is consistent with the definition of “executive officer”, which appears in Part IIBA of the Health Insurance Act.

 

Item 2 - Subsection 81(1) (paragraph (b) of the definition of service )

This item replaces the word “dispensing” with the word “supply” in relation to pharmaceutical benefits, as part of the definition of “service” set out in subsection 81(1). This amendment is to ensure consistency in terminology between the Health Insurance Act and legislation that provides for the supply of pharmaceutical benefits, the National Health Act 1953 (National Health Act).

 

Items 3 and 4 - Subsection 86(1) and subsection 86(1) (note)

These items amend subsection 86(1) and insert a new note in that subsection to clarify the basis on which the CEM may make a written request for the Director to review the provision of services by a person. This amendment provides that the CEM may make a request if it appears to the CEM that there is a possibility that the person may have:

(a)    provided services during the period; and

(b)    engaged in inappropriate practice in the provision of those services.

 

This amendment clarifies that there is no requirement for the CEM to undertake an investigation to objectively determine that a particular person provided services and/or engaged in inappropriate practice, prior to making a request to the Director. The CEM has no compulsory powers that would enable the undertaking of this type of investigation. The CEM makes requests to the Director based on Medicare claiming information, open source material and any information volunteered by practitioners before a request for review is sent to the Director.

 

The insertion of new Note 2 is intended to further explain that the Director’s review of the provision of services by a person during a period may include reviewing whether particular services were provided during the period by the person or another person. New Note 1 replicates the current note under subsection 86(1) ( which refers the reader to the definition of ‘provides services’ in subsection 81(2)) .

 

Item 5 - Subsection 89B(5)

This item makes a minor change to streamline the language of subsection 89B(5) and reflects the inclusion of new section 106ZPNA (see item 41). As amended by Part 1 of this Bill, the subsection will require the Director to set out the terms (where applicable) of section 106ZPM, subsection 106ZPN(1), subsection 106ZPN(2) or section 106ZPNA in a notice to produce documents. This ensures that a notice recipient is aware of all the possible consequences for failing to comply with the notice.

 

Item 6 - Subsection 92(1)

This item repeals the existing subsection 92(1) and replaces it with a new subsection 92(1). The new subsection 92(1) provides that a person under review and the Director may enter into a written agreement under which the person under review acknowledges that the person has engaged in inappropriate practice in connection with the provision of services during the review period, and that specified action in relation to the person under review is to take effect. The actions that may be specified are described in subsection 92(2), which is amended by items 7 to 18 below .

 

The new subsection 92(1) enables any person under review, including non-practitioner persons and bodies corporate, to acknowledge inappropriate practice and enter into a written agreement with the Director.

 

This amendment provides equal treatment for corporate entities and other non-practitioner persons under review, allowing them the same access to a written agreement with the Director as practitioners. It also gives the PSR the flexibility to deal with non-practitioner persons under review in a timely and cost-effective manner as an alternative to the lengthier and more resource-intensive process of review by a Committee. Feedback from stakeholders indicates that PSR reviews would proceed more effectively and efficiently if all persons under review had the same opportunity to negotiate agreements with the Director.

 

As the person under review may be a body corporate, the body corporate will not have provided the specified services personally. The services may have been rendered or initiated by an associated person (see item 18 below for a definition of associated person). It is intended that any action specified in the agreement will be directed only to the person under review, even if the inappropriate practice related to services rendered or initiated by associated persons.

 

When a body corporate is reviewed, individual practitioners may or may not also be subject to review. However, each referral to the PSR is separate. It is important to note that a body corporate’s acknowledgment of inappropriate practice will not prejudice the position of any individual practitioners it employs or otherwise engages. In addition, individual practitioners will not be named in agreements with bodies corporate or other persons who employ or otherwise engage practitioners (and such agreements are themselves confidential, subject to new paragraph 92(4)(da) and amendments to section 106ZPR (see items 15 and 42-47 below).

 

Item 7 - Paragraph 92(2)(a)

This item inserts the words ‘under review’ after the words ‘the person’. This item is the first of a number of consequential amendments resulting from the expansion of the scope of section 92 to allow for written agreements between the Director and any person under review, notwithstanding whether the person is a practitioner, a non-practitioner or a body corporate.

 

Item 8 - After paragraph 92(2)(a)

This item inserts new paragraph 92(2)(aa) as a new action that may be specified in an agreement under subsection 92(1), namely that the Director, or a nominee of the Director, is to counsel the person under review. Counselling is intended to prevent future inappropriate practice by ensuring that the person under review is aware of what is expected of them and the steps that may be taken to correct any aberrant behaviour, which has led or may lead to inappropriate practice. Counselling focuses on education for the person under review, to support them in complying with their obligations. Adding counselling to the suite of specified actions that may be included in a written agreement is consistent with existing section 106U, which enables counselling to be included in a final determination, made by the Determining Authority, following a finding of inappropriate practice by a Committee.

 

Item 9 - Paragraphs 92(2)(b) and (ca)

This item makes a consequential amendment, resulting from the expansion of the scope of section 92, to allow for written agreements between the Director and any person under review (whether the person is a practitioner, a non-practitioner or a body corporate).

 

Item 10 - After paragraph 92(2)(cb)

This item inserts new paragraph 92(2)(d) which provides for a new action that may be specified in a written agreement made under subsection 92(1). If any services under review were rendered or initiated by an associated person (discussed in item 18 below), the person under review must give specified classes of associated persons specified information about the appropriate provision of services, or that is relevant to preventing inappropriate practice in the provision of services, in a specified form within a specified period, and must also provide the CEM with evidence that they have undertaken such action.

 

The provision ensures persons under review, who have associated persons render or initiate services, take responsibility for providing correct information to staff they employ or otherwise engage (such as practitioners or billing staff), to prevent future inappropriate practice. It enables written agreements with persons under review to require the provision of educational information to associated persons (of specified classes) by the person under review in relation to the provision of services and inappropriate practice. Where this specified action is applied, the written agreement between the person under review and the Director will specify:

·          the information to be provided;

·          the classes of associated persons to which the information is to be provided;

·          the form of the information to be provided (if any);

·          the time period in which the information must be provided; and

·          the evidence to be provided to the CEM that the information has been provided as specified.

 

This provision complements the specified action of counselling a person under review (see item 8 above) by focusing on education for associated persons. It ensures that where the person under review has acknowledged inappropriate practice in relation to services rendered by associated persons, the associated persons will receive information about what is expected of them and the actions required to correct any aberrant behaviour that either led to past, or might lead to future, inappropriate practice.

 

Item 11 - Paragraphs 92(2)(da), (db) and (e)

This item makes a consequential amendment resulting from the expansion of the scope of section 92 to allow for written agreements between the Director and any person under review (whether the person is a practitioner, a non-practitioner or a body corporate).

 

Item 12 - Paragraph 92(2)(e)

This item replaces the word “dispensing” with the word “supplying” in relation to pharmaceutical benefits. This is amendment is to ensure consistency in terminology between the Health Insurance Act and the National Health Act.

 

Item 13 - Paragraphs 92(2)(f) and (g)

This item amends paragraphs 92(2)(f) and (g) to ensure that the specified actions set out in those paragraphs may be applied only to persons under review who are practitioners. These paragraphs relate to disqualification, which is relevant only to individual practitioners and not to non-practitioner persons under review.

 

Item 14 - Paragraph 92(2A)(a)

This item clarifies that the “person” referred to in paragraph 92(2A)(a) is the person under review and is a consequential amendment resulting from the amendments to subsection 92(1) made by Part 1 of this Bill (which extend its operation to allow for agreements with non-practitioner persons including bodies corporate).

 

Item 15 - After paragraph 92(4)(d)

This item inserts new paragraph 92(4)(da) which provides that, if the CEM is of the opinion that the person under review has not taken action specified in the written agreement that is necessary to give effect to the agreement, the CEM may notify the Director, in writing, of the CEM’s opinion and reasons for that opinion. This would generally only occur following a series of procedural fairness steps to ensure that the person is aware of their obligations.

 

For example, written agreements will typically include a requirement that the person under review must repay Medicare or dental benefits that were paid for the services acknowledged by the person under review as inappropriate practice. The CEM is responsible for collecting repayments of these amounts. If, for example, the person under review does not pay the agreed amount and persistently refuses to respond to communications as part of the debt recovery process, the CEM may have cause to notify the Director that the person is likely to be in breach of the agreement. The Director will then have a discretion under section 106ZPR to publish the name of the person under review and details of the inappropriate practice that was the subject of the written agreement (see also items 42-47 below).

 

Item 16 - At the end of subsection 92(4)

This item adds a note, which provides a cross-reference to section 106ZPR to make clear that if the CEM notifies the Director under new paragraph 92(4)(da) that the person is likely to be in breach of the agreement (see item 15 above), the Director may cause certain particulars to be published under section 106ZPR (see items 42-47 below).

 

Item 17 - After subsection 92(4)

This item inserts new subsection 92(4A), which provides for steps that must be taken by the CEM before notifying the Director under paragraph 92(4)(da) of the CEM’s opinion that the person under review has not taken action specified in the written agreement that is necessary to give effect to the agreement. The CEM must give the person under review a written notice that sets out the reasons why the CEM is of the opinion that the person has not taken action specified in the agreement that is necessary to give effect to the agreement, and invites the person to make written submissions to the CEM (within a specified period of not less than 14 days after the notice is given) about why the CEM should not notify the Director under paragraph 92(4)(da). The CEM must consider any submissions made as mentioned in subparagraph 92(4)(a)(ii). This provision ensures that the person under review has an opportunity to make submissions as to whether that person has taken action specified in the written agreement prior to the CEM notifying their opinion to the Director.

 

Item 18 - Subsection 92(7)

This provision inserts the definition of associated person, in relation to the person under review, for the purposes of section 92. This definition has the meaning given by subsection 106U(5), namely that an associated person is: an employee of, or person otherwise engaged by, the person under review; or an employee of, or a person otherwise engaged by, a body corporate of which the person under review is an officer.

 

Item 19 - Before subsection 93(1)

This item inserts new subsection 93(1A). This provision states that section 93 applies if it appears to the Director that the person under review may have:

(a)    provided services during the review period; and

(b)    engaged in inappropriate practice in the provision of the services.

 

This amendment clarifies the conditions and circumstances supporting a referral by the Director to a Committee under section 93. The Director enters into an agreement with a person under review only if the person is prepared to acknowledge their inappropriate practice. Where a written agreement is not reached, the Director, who is able to issue compulsory notices to produce, may have evidence suggesting inappropriate practice. However, it has never been part of the PSR scheme that the Director must make any findings in relation to inappropriate practice before referring a matter to a Committee. It is properly a matter for a Committee to investigate and make any findings of inappropriate practice. A Committee is supported in this function by its ability to: issue notices to produce documents, require the person under review to attend a hearing and give evidence, and to summons witnesses.

 

Item 20 - At the end of subsection 93(1)

This item includes a note in subsection 93(1), which clarifies that a Committee investigating whether a person under review engaged in inappropriate practice in providing the services may investigate whether the services were provided by the person or another person.

 

Item 21 - Paragraph 93(6)(a)

This item is a consequential amendment to item 19 to align the language of paragraph 93(6)(a) with the language used in new subsection 93(1A).

 

Item 22 - Subsection 102(4)

Section 102 provides for a Committee to give the person under review a notice advising that the Committee proposes to hold a hearing and requiring the person under review to appear and give evidence. This item amends subsection 102(4) to reflect that this subsection applies when the person under review is an individual and a notice is issued to the individual requiring them to appear at the hearing and give evidence. New subsection 102(5) has also been inserted (by item 23 below) and that new subsection applies where the person under review is a body corporate.

 

Item 23 - At the end of section 102

This item adds subsection 102(5), which reflects that the person under review may be a body corporate, in which case a notice of hearing under section 102 may require the body corporate to cause an executive officer to appear at a hearing and give evidence on its behalf. The term “executive officer” of a body corporate is defined in section 81(1) (see item 1).

 

Items 24, 25, 26 and 27 - Section 103 (heading), subsection 103(1), paragraph 103(1)(c), paragraph 103(1)(d)

Section 103 sets out the rights of persons under review at Committee hearings. These items do not change the rights available to persons under review. Rather, these items amend the terms used throughout section 103 to reflect that the section now only applies to persons under review who are individuals. New section 103A (see item 28) sets out the rights of persons under review who are bodies corporate.

 

Item 28 - After section 103

This item adds new section 103A, which sets out the rights of persons under review at Committee hearings, where the person under review is a body corporate. The rights of the body corporate are broadly equivalent to the rights for an individual in section 103 and are able to be exercised by an executive officer of the body corporate acting on its behalf. One main difference is that, as a body corporate does not have a “character”, there is no restriction in paragraph 103A(1)(c) as to what kind of evidence a witness can give and paragraph 103(1)(d), which allows for written character statements, has not been replicated in section 103A.

 

It is important to note that, should the executive officer be asked a question by a Committee member in the course of the hearing, and is unable to answer, then the executive officer may call a witness and put the question to the witness. If the witness answers the question, the executive officer is taken to have answered the Committee’s question. This is to reflect the fact that bodies corporate may not have one executive officer who is able to answer all questions that may be put to the executive officer by the Committee. It is intended that other individuals may be able to assist the executive officer to answer questions and that new sections 104A and 105AA (see items 32 and 34) are not intended to apply if the executive officer cannot answer questions personally but is co-operating with the hearing process and another person answers the question for them.

 

Items 29 and 30 - Section 104 (heading) and paragraph 104(1)(a)

These items amend the heading of section 104 and paragraph 104(1)(a) to reflect that section 104 applies to set out the consequences of a failure to appear at a Committee hearing or give evidence or answer questions at a hearing where the person under review is an individual (whether or not a practitioner). These are consequential amendments reflecting the insertion of new section 104A, which applies where the person under review is a body corporate (see item 32 below).

 

Item 31 - Paragraph 104(4)(e)

This item clarifies that paragraph 104(4)(e), under which the Committee must inform the Director that the person has appeared and given evidence and answered questions (as required), applies only where the person under review is a practitioner. This is because paragraph 104(4)(e) links to subsection 105(2), which provides for revoking a disqualification from the ability to bill Medicare and is therefore only relevant to practitioners.

 

Item 32 - After section 104

This item inserts new section 104A, which applies when a notice under section 102 requires a person under review that is a body corporate to cause an executive officer to appear at a Committee hearing and to give evidence, but the executive officer either fails to appear or refuses or fails to give evidence or to answer questions.

 

Subsection 104A(2) provides that, in these circumstances, the Committee may proceed with the hearing in any case (see paragraph 104A(2)(a)), or hold another hearing (see paragraph 104A(2)(b)). Subsection 104A(3) provides that if an executive officer of the body corporate then appears at the hearing, gives evidence as required and answers every question that the executive officer is asked by a Committee member in the course of the hearing , paragraph 104A(2)(a) ceases to apply. Subsection 104A(4) provides that paragraph 104A(2)(a) does not apply if: the body corporate has only one executive officer; before the hearing takes place the executive officer notifies the Committee that the executive officer has a medical condition preventing them from appearing or from giving evidence or answering questions; the executive officer has complied with any reasonable requirement of the Committee that the executive officer undergo a medical examination; and the results indicate that the executive officer has a medical condition preventing them from appearing or from giving evidence or answering questions.

 

Item 33 - Section 105 (heading)

This item replaces the heading of section 105 to reflect that section 105 relates to disqualification for practitioners in circumstances were a practitioner fails to appear at a Committee hearing, give evidence or answer a question when required.

 

Item 34 - After section 105

This item inserts new section 105AA. Subsection 105AA(1) provides that a person under review who is an individual (and not a practitioner) commits an offence if the person is given a notice under section 102 requiring that the person appears at a hearing and give evidence to a Committee, and person fails to appear at the hearing, or appears at the hearing but refuses or fails to give evidence or to answer questions. The maximum penalty is 30 penalty units (currently $6,660). This maximum penalty is in line with the maximum penalty set out in paragraph 9.4.1 of the Attorney-General’s Department’s Guide for Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide).

 

Subsection 105AA(2) provides that subsection 105AA(1) does not apply if paragraphs 104(5)(a), 104(5)(b) and 104(5)(c) apply to the individual. These provisions may apply when, before a Committee hearing takes place, the individual notifies the PSR Committee that the individual has a medical condition preventing them from appearing or from giving evidence or answering questions; the individual has complied with any reasonable requirement of the Committee that the individual undergo a medical examination; and the results indicate that the individual has a medical condition preventing them from appearing or from giving evidence or answering questions.

 

Subsection 105AA(2) provides an offence-specific defence, which is appropriate in this case, in accordance with the Guide, as it relates to matters peculiarly within the knowledge of the defendant.

 

Although the prosecution is likely to have knowledge of one aspect of the offence-specific defence, that is, whether the defendant notified the Committee as required, information relating to the medical condition of the defendant and the results of any medical examination(s) would not be available to the prosecution in all cases. Details as to the existence and extent of a medical condition would therefore be matters peculiarly within the knowledge of the defendant. Conversely, it would be difficult for the prosecution to prove, in all cases, that the defendant did not have a medical condition preventing them from appearing at a hearing or giving evidence as required.

 

In circumstances where a defendant notifies the Committee that the defendant has a medical condition preventing them from appearing at a hearing and then does not provide any evidence that the defendant has undergone a medical examination, the defendant would be the only person with any evidence of such medical examination and the results of the examination. If the defendant is then prosecuted under subsection 105AA(1), it would only be the defendant that holds the evidence necessary to successfully raise the offence-specific defence in subsection 105AA(2).

 

As stated in the note after subsection 105AA(2), the defendant bears an evidential burden in relation to these matters but not a legal burden as it is not expressed to do so. This is in line with the principle in the Guide and the default position in section 13.3 of the Criminal Code Act 1995 (the Criminal Code).

 

Subsection 105AA(3) provides that an offence under subsection 105AA(1) is an offence of strict liability.

 

Subsection 105AA(4) provides that a person under review who is a body corporate commits an offence if the body corporate is given a hearing notice under section 102 requiring that an executive officer appear at a hearing and give evidence to a Committee, and the body corporate fails to cause an executive officer to appear at the hearing, to give evidence or to answer questions. The penalty for a body corporate is 150 penalty units (currently $33,300).

 

Subsection 105AA(5) provides that subsection 105AA(4) does not apply if the body corporate has only one executive officer and paragraphs 104A(4)(b), 104A(4)(c) and 104A(4)(d) apply to this executive officer. These provisions relate to when the executive officer may have a medical condition preventing the executive officer from appearing or from giving evidence or answering questions, as set out above in item 32.

 

Subsection 105AA(5) provides an offence-specific defence, which is also appropriate in this case, in accordance with the Guide, as the body corporate is a sole director company and details of the medical condition of the sole executive officer would be peculiarly within the knowledge of the defendant.

 

As stated in the note after subsection 105AA(5), the defendant bears an evidential burden in relation to these matters but not a legal burden as it is not expressed to do so. This is in line with the principle in the Guide and the default position in section 13.3 of the Criminal Code.

 

Subsection 105AA(6) provides that an offence under subsection 105AA(3) is an offence of strict liability.

 

These criminal offences are necessary to prevent a person under review seeking to obstruct the Committee’s investigation by failing to appear at a hearing or failing to give evidence or answer questions where required.

 

Importantly, section 105AA does not place any limitations on a person under review who is an individual relying on the common law privilege against self-incrimination when giving evidence or answering a question at a Committee hearing.

 

In addition, all persons maintain the defences of general application contained in Part 2.3 of the Criminal Code , and defences of mistake of fact and intervening conduct or event are available specifically in relation to strict liability offences. Inclusion of offence-specific defences in subsections 105AA(2) and 105AA(5) addresses specific stakeholder concerns by providing a medical exemption that mirrors the application of subsection 104(5) as this is a situation not completely covered by existing defences in the Criminal Code.

 

Item 35 - Subsection 105A(5)

This item makes a minor change to streamline the language of subsection 105A(5) and to reflect the inclusion of new section 106ZPNA (see item 41). As amended by Part 1 of this Bill, the subsection will now require the Director to include a copy of section 106ZPM, subsection 106ZPN(1), subsection 106ZPN(2) or section 106ZPNA (whichever is applicable) with a notice to produce documents. This is so a notice recipient is aware of all the possible consequences for failing to comply with the notice.

 

Item 36 - Section 106B

This item amends section 106B, which enables a Committee member to summons a person (other than the person under review) to appear at a Committee hearing. The amendment excludes an executive officer of a body corporate from being summonsed, if the person under review is a body corporate with only a single executive officer. This recognises that, if the person under review is a body corporate with only a single executive officer, the executive officer cannot be summonsed under section 106B as they would already be subject to a notice under section 102 to appear at the hearing on behalf of the body corporate.

 

Item 37 - Paragraph 106U(1)(f)

This item substitutes “dispensing” with “supplying” in paragraph 106U(1)(f). This amendment is to ensure consistency in terminology between the Health Insurance Act and the National Health Act.

 

Item 38 - Subsection 106U(2)

This item repeals subsection 106U(2). Subsection 106U(2) currently provides that paragraphs 106U(1)(a) and 106U(1)(b) do not apply if the person under review is a body corporate. Paragraphs 106U(1)(a) and 106U(1)(b) provide, respectively, that a draft or final determination made by the PSR Determining Authority may contain a direction that the Director, or their nominee, reprimand the person under review, and counsel the person under review. Repeal of subsection 106U(2) ensures these reprimand and counselling directions may be included in a draft determination or a final determination made by the Determining Authority (established by section 106Q of the Health Insurance Act) if the person under review is a body corporate (not just if the person under review is an individual, as is currently the case).

 

Item 39 - Paragraphs 106ZPA(2)(e) and (f)

This item repeals paragraphs 106ZPA(2)(e) and 106ZPA(2)(f) and substitutes a new paragraph 106ZPA(2)(e). Section 106ZPA sets out the requirements for the constitution of the Determining Authority, which has two functions: ratifying agreements made between a person under review and the Director, and making determinations relating to a person under review after a Committee has prepared a report finding the person engaged in inappropriate practice. This item amends the composition of the Determining Authority so that the other member(s) must be in the same professions as the person or persons who rendered or initiated the services to which the agreement or report relates. This provision applies regardless of whether the person under review personally rendered or initiated the services and will ensure that the Determining Authority for each case includes relevant practitioners.

 

Item 40 - Section 106ZPM (heading)

This item amends the heading of section 106ZPM as a result of the insertion of a new section 106ZPN and new section 106ZPNA by item 41. As sections 106ZPN and 106ZPNA introduce different consequences for failure to produce documents or give information, the heading of section 106ZPM is being amended to clarify that it also provides consequences of failure to produce documents or give information (i.e. benefits not payable, disqualification etc). This item does not change any other aspect of section 106ZPM.

 

Item 41 - Section 106ZPN

This item repeals section 106ZPN. This section currently provides for an offence with a maximum penalty of 20 penalty units that applies to a person (other than a person under review) who intentionally refuses or fails to produce documents or give information required in response to a notice under subsection 89B(2) (from the Director) or 105A(2) (from a Committee).

 

This item inserts a new section 106ZPN as well as inserting a new section 106ZPNA. The new sections set out the consequences for a failure to produce documents or give information required under subsection 89B(2) or 105A(2). The provision of certain information required by the Director or a Committee is critical to the review of inappropriate practice, so these amendments include consequences for the non-provision of information to promote compliance and ensure that the PSR can access the information it needs to undertake its functions.

 

New section 106ZPN does this by replacing the current offence in section 106ZPN with a new offence provision that covers all persons (other than persons under review who are practitioners) and has a maximum penalty of 30 penalty units (see subsection 106ZPN(1)). This new offence applies where a person (other than a person under review who is a practitioner) refuses or fails to comply with a requirement to produce a document or give information under subsection 89B(2) or 105A(2). Rather than being subject to this offence, persons under review who are practitioners are liable to disqualification for failure to produce documents.

 

The offence is subject to the defences in the Criminal Code, including sudden and extraordinary emergency, which applies to offences generally.

 

New section 106ZPN also inserts a new civil penalty provision for bodies corporate. Subsection 106ZPN(2) states that a body corporate refusing or failing to comply with a requirement to produce a document or give information under subsection 89B(2) or 105A(2) is liable for a civil penalty. The civil penalty is 30 penalty units (currently $6,660). Subsection 106ZPN(3) provides for a separate contravention of subsection 106ZPN(2) for each day on which a body corporate refuses or fails to comply after the deadline in the notice has passed; so companies that are persistently recalcitrant will be subject to larger maximum penalties.

 

In determining the amount of pecuniary penalty, section 125A of the Health Insurance Act requires the Court to have regard to all relevant matters, including: the nature and extent of the contravention; the nature and extent of any loss or damage suffered as a result of the contravention; the circumstances in which the contravention took place; and whether the person has previously been found by the Court in proceedings under the Health Insurance Act to have engaged in any similar conduct.

 

A civil penalty provision provides additional flexibility in the deterrents that may be invoked to ensure the PSR’s access to information necessary to perform its functions and appropriate co-operation by bodies corporate. Civil penalties require proof to the civil standard i.e. on the balance of probabilities. The provision is intended to provide a strong incentive for a body corporate to co-operate with the PSR process rather than writing off financial penalties as the “cost of doing business”.  

 

This item also inserts new section 106ZPNA allowing the Director to apply for a court order to compel the production of documents or giving of information. Subsection 106ZPNA(1) states that the section applies if the Director is satisfied that a body corporate has refused or failed to comply with a requirement to produce a document or give information under subsection 89B(2) or subsection 105A(2). Subsection 106ZPNA(2) provides that the Director may, by writing, certify the failure (to comply with the requirement to produce a document or give information) to the Federal Court of Australia. Subsection 106ZPNA(3) provides that if the Director does so, the Federal Court of Australia may inquire into the case and may order the body corporate to comply with the requirement as specified in the order.

 

Section 106ZPNA applies only to bodies corporate (whether or not those bodies are the person under review) and does not apply to individuals. This provision allows a streamlined process for the Director to bring a matter involving non-compliance with a notice to produce documents to Court for adjudication and, ultimately, provides the Court with the power to order a corporation to produce the documents required. The provision is similar to section 70 of the Australian Securities and Investments Commission Act 2001 .

 

Item 42 - Section 106ZPR (heading)                      

This item amends the heading of section 106ZPR to reflect amendments to section 106ZPR and that it now relates to agreements made under section 92.

 

Item 43 - Before subsection 106ZPR(1)

This item inserts new subsection 106ZPR(1A) before subsection 106ZPR(1). New subsection 106ZPR(1A) provides that the Director may cause to be published, in such way as the Director thinks most appropriate, the particulars mentioned in subsection 106ZPR(1), if the circumstances set out in subsection 106ZPR(1A) exist. The particulars are, in brief, the name and address of the person under review, their profession or specialty (or if the person is not a practitioner, the profession or speciality of the person that rendered or initiated the relevant services), and the nature of the conduct and actions specified or directions given in relation to the relevant written agreement or final determination.

 

The amendments expand the circumstances in which the Director may cause particulars to be published essentially by adding the scenarios where a person has not fulfilled their obligations under a section 92 written agreement. The Director has the discretion to publish where:

·          the CEM has notified the Director of the CEM’s opinion that the person under review has not taken the actions specified as part of their written agreement; and/or

·          action has been undertaken in a court for the purposes of enforcing the agreement (including to recover a debt due by the person to the Commonwealth under paragraphs 92(4)(e) or (f)); or

·          a final determination by the Determining Authority under section 106TA has come into effect.

 

This provision is directed towards persons under review who do not fulfil their agreement/s entered into with the Director. This is intended to provide a strong behavioural incentive for compliance with written agreements, by signalling the potential for visible reputational consequences and loss of public goodwill. The PSR maintains a publicly available policy regarding publication of case particulars.

 

Item 44 - Subsection 106ZPR(1)

This item substitutes wording in subsection 106ZPR(1). This amendment is consequential to the new subsection 106ZPR(1A) inserted by item 43, which now outlines the circumstances in which the Director may publish the particulars in subsection 106ZPR(1) (summarised above in relation to item 43). Subsection 106ZPR(1) now only has the effect of setting out the particulars that can be published under section 106ZPR.

 

Item 45 - Paragraph 106ZPR(1)(b)

This item repeals paragraph 106ZPR(1)(b) and substitutes new paragraphs 106ZPR(1)(b) and 106ZPR(1)(ba). This is to reflect that section 106ZPR may apply to bodies corporate, which do not have a profession or specialty in the same way practitioners do. In this case, it is appropriate that the relevant information published when the person under review is a person other than a practitioner relates to the profession or specialty of the person or persons who rendered or initiated the services to which the written agreement or final determination relates.

 

Item 46 - Paragraphs 106ZPR(1)(c) and (d)

This item repeals paragraphs 106ZPR(1)(c) and 106ZPR(d) and substitutes new paragraphs to reflect the scenarios in new subsection 106ZPR(1A). If new paragraph 106ZPR(1A)(a) applies, the particulars are the nature of the conduct of the person under review in respect of which the person acknowledged under the written agreement that the person engaged in inappropriate practice and the specified actions in the agreement. If paragraph (1A)(b) applies, the particulars are the nature of the conduct of the person under review in respect of which the Committee found that the person had engaged in inappropriate practice and the directions in the determination.

 

Item 47 - Subsection 106ZPR(3)

This item omits the wording “subsection (1)” and substitutes with “this section” as a consequential amendment to the earlier amendments to section 106ZPR.

 

Item 48 - Application and savings provisions

This item sets out the application and savings provisions for the amendments in Part 1.

 

The amendments to section 86 apply in relation to a request made under subsection 86(1) on or after the commencement of the Act (whether the services to which the request relates were rendered or initiated before, on or after commencement).

 

The amendments to subsections 89B(5) and 105A(5) apply in relation to a notice given on or after the commencement of the Act (whether the relevant request under subsection 86(1) or referral under subsection 93(1) is made before, on or after commencement).

 

The amendments to section 92 apply in relation to agreements under that section, which are entered into on or after the commencement of the Act (whether the relevant request under subsection 86(1) is made, or the services to which the agreement relates were rendered or initiated, before, on or after commencement).

 

The repeal of subsection 92(1) by Part 1 does not affect an agreement entered into under that subsection before the commencement of the Act.

 

The amendments to section 93 apply in relation to a referral to a Committee made on or after the commencement of the Act (whether the services to which the referral under section 93(1) relates were rendered or initiated before, on or after commencement).

 

The amendments to sections 103, 103A, 104, 104A and 105AA apply in relation to a notice given under section 102 on or after the commencement of the Act (whether the relevant referral under subsection 93(1) was made before, on or after commencement).

 

The amendments to section 106U apply in relation to the making of a draft determination under section 106T on or after commencement. The amendments to section 106U also apply in relation to the making of a final determination under section 106TA on or after the commencement of the Act (provided the relevant draft determination is made under section 106T on or after that commencement). The amendments will apply to these final and draft determinations whether the referral under subsection 93(1) was made before, on or after commencement.

 

The amendments to subsection 106ZPA(2) apply in relation to an agreement entered into under section 92 on or after the commencement of the Act (whether the request under subsection 86(1) is made or the services to which the agreement relates are rendered or initiated before, on or after commencement).

 

New sections 106ZPN and 106ZPNA apply in relation to notices given under subsection 89B(2) or 105A(2) on or after the commencement of the Act (whether the request under subsection 86(1), or the referral under subsection 93(1), is made before, on or after that commencement).

 

The amendments to section 106ZPR apply in relation to written agreements entered into under section 92 on or after the commencement of the Act, and to final determinations under section 106TA that come into effect on or after commencement.

 

It is in the public interest that requests and referrals may be made, and written agreements may be entered into, regarding services provided before the commencement of the Act. Obligations in relation to the provision of services have not changed and the changes only relate to how inappropriate practice may be reviewed and addressed by the PSR in a manner that provides greater flexibility for both the PSR and persons under review.

 

Item 49 - Transitional provisions - entering into section 92 agreements with persons under review (other than practitioners) referred to Committee in 18 months before commencement

This item sets out transitional provisions enabling persons under review, who are not practitioners, to access the new arrangements for entering into a written agreement with the Director. The transitional provisions apply to persons who are referred to a Committee, established under section 93, in the 18 months immediately before the commencement of the Act. These provisions are necessary to allow a non-practitioner person under review (including a body corporate), who has a review in progress when these amendments take effect, to enter into an agreement with the Director. The transitional arrangements enable an expedient resolution for any persons who are willing to acknowledge inappropriate practice, in lieu of having to engage in the lengthy and onerous process of review by a Committee.

 

This item provides the Director the option to enter into a written agreement with a person under review by notifying the Committee within 6 months of the commencement of the Act. Once notified, the Committee must suspend its consideration of the referral, unless it has already provided the person under review with a copy of a draft or final report setting out its findings in relation to inappropriate practice.

 

The suspension of a Committee review process under these transitional provisions ends if one of the following occurs:

  • the Director enters into an agreement with the person under review, which is ratified by the Determining Authority within 6 months of the suspension starting, in which case Division 4 of Part VAA of the Health Insurance Act ceases to have effect and the Committee process ends;
  • the Director notifies the Committee that it is no longer desirable or not possible to enter into an agreement with the person under review; or
  • a period of 6 months has passed from the day suspension starts.

 

In the latter two scenarios, once the suspension ends, the Committee’s consideration of the referral continues in accordance with the standard process established in Division 4 of Part VAA. A period of suspension enabled by these provisions will extend the period of 6 months for the Committee to give a final report to the Determining Authority as required by section 106G.

 

Part 2 - Review of certain debt-recovery decisions

 

Background

 

Garnishee arrangements provide an avenue of debt recovery for persons that owe a debt to the Commonwealth and a disincentive to practitioners who seek to avoid set off arrangements by reducing or stopping bulk-billed services. Garnishee arrangements are generally an option of last resort and are subject to strict legislative requirements set out in the Health Insurance Act, National Health Act and Dental Benefits Act. A garnishee arrangement allows the Commonwealth to recover a debt from a debtor by recovering the debt from a third party (e.g. a bank or employer) in circumstances where that third party owes, or may later owe, money to the debtor.

 

Currently, when a garnishee notice is issued under the Health Insurance Act, the person owing the debt to the Commonwealth (the debtor) may apply to the Administrative Appeals Tribunal (AAT) for review of:

·          a reconsidered debt decision (i.e. a debt decision that has already been internally reconsidered by a delegate of the CEM under section 129AAJ or section 129ACB of the Health Insurance Act and a new decision made);

·          an assessment by the CEM of the debtor’s liability to pay an administrative penalty; and

·          the decision to issue the garnishee notice.

 

Applications for review must be made within the timeframes set out in the Health Insurance Act.

 

Amendments set out in Part 2 are intended to prevent a debtor from lodging multiple applications for review in the AAT, where multiple garnishee notices are required to recover a single debt. For example, where there are insufficient funds in one account to recover the full debt amount, a second garnishee notice is required to recover the remaining debt amount. Similarly, the amendments clarify that a debtor may lodge only one application for AAT review of an assessment of the debtor’s liability to pay administrative penalties.

 

The intended outcome of these amendments is that the AAT is not required to review the same debt decision more than once, to improve efficiencies and timeliness of debt recovery.

 

The changes amend the relevant provisions across the Health Insurance Act, National Health Act and Dental Benefits Act to ensure consistency.

 

Dental Benefits Act 2008

 

Item 50 - Subsections 56D(8) and (9)

This item repeals subsections 56D(8) and 56D(9) and substitutes new subsections. This item amends the circumstances in which applications may be made to the AAT under subsection 56D(7) for review of a reconsidered decision to claim an amount as a debt. Subsection 56D(8) provides that an application under subsection 56D(7) may be made only if the applicant has been given notice of the reconsidered decision, and one or more garnishee notices have been given under subsection 58AA(2) in relation to the debt to which the reconsidered decision relates.

 

Subsection 56D(9) provides that an application under subsection 56D(7) must be made within 28 days after the day the first garnishee notice is given.

 

Item 51 - Subsections 56G(3) to (5)

This item repeals subsections 56G(3), 56G(4) and 56G(5) and substitutes new subsections. This amends the circumstances in which applications to the AAT may be made to seek review of assessments by the CEM of liability to pay administrative penalties for which a garnishee notice has been issued under subsection 58AA(2).

 

Subsection 56G(4) now provides that an application under subsection 56G(3) may be made only if the applicant has been given notice that the person is liable for an administrative penalty, the decision to claim the debt to which the administrative penalty relates is a reconsidered decision, and one or more garnishee notices have been issued in relation to that debt. Subsection 56G(5) now provides that an application under subsection 56G(3) must be made within 28 days after the day the first garnishee notice is given.

 

Health Insurance Act 1973

 

Item 52 - Subsections 129AAJ(8) and (9)

This item repeals subsections 129AAJ(8) and 129AAJ(9) and substitutes new subsections. This item amends the circumstances in which applications may be made under subsection 129AAJ(7) to the AAT for review of a reconsidered decision to claim an amount as a debt. Subsection 129AAJ(8) now provides that an application under subsection 129AAJ(7) may be made only if the applicant has been given notice of the reconsidered decision under subsection 129AAJ(5), and one or more garnishee notices have been issued under subsection 129AEG(1) in relation to the debt to which the reconsidered decision relates. Subsection 129AAJ(9) now provides that an application under subsection 129AAJ(7) must be made within 28 days after the day the first garnishee notice is given.

 

Item 53 - Subsections 129ACB(8) and (9)

This item repeals subsections 129ACB(8) and 129ACB(9) and substitutes new subsections. This amends the circumstances in which applications to the AAT may be made to seek review of reconsidered decisions relating to shared debt determinations. Subsection 129ACB(8) now provides that an application under subsection 129ACB(7) may be made only if the applicant has been given notice of the reconsidered decision, and one or more garnishee notices have been given under subsection 129AEG(1) in relation to the debt to which the reconsidered decision relates. Subsection 129ACB(9) now provides that an application under subsection 129ACB(7) must be made within 28 days after the day the first garnishee notice is given.

 

Item 54 - Subsections 129AEC(2) to (4)

This item repeals subsections 129AEC(2), 129AEC(3) and 129AEC(4) and substitutes new subsections. This item amends the circumstances in which applications to the AAT may be made to seek review of assessments by the CEM of liability to pay administrative penalties for which notice has been given under subsection 129AEC(1). Subsection 129AEC(3) now provides that an application under subsection 129AEC(2) may be made only if the applicant has been given notice that the person is liable for an administrative penalty, the decision to claim the debt to which the administrative penalty relates is a reconsidered decision, and one or more garnishee notices have been given in relation to that debt. Subsection 129AEC(4) now provides that an application under subsection 129AEC(2) must be made within 28 days after the day the first garnishee notice is given.

 

National Health Act 1953

 

Item 55 - Subsections 99ABD(8) to (10)

This item repeals subsections 99ABD(8), 99ABD(9) and 99ABD(10) and substitutes new subsections. This amends the circumstances in which applications may be made under subsection 99ABD(8) to the AAT for review of a reconsidered decision to claim an amount as a debt. Subsection 99ABD(9) now provides that an application under subsection 99ABD(8) may be made only if the applicant has been given notice of the reconsidered decision under subsection 99ABD(6), and one or more garnishee notices have been given under subsection 99ABJ(2) in relation to the debt to which the reconsidered decision relates. Subsection 99ABD(10) now provides that an application under subsection 99ABD(8) must be made within 28 days after the day the first garnishee notice is given.

 

Item 56 - Subsections 99ABG(4) to (6)

This item repeals subsections 99ABG(4), 99ABG(5) and 99ABG(6) and substitutes new subsections. This amends the circumstances in which applications to the AAT may be made to seek review of decisions relating to liability for administrative penalties. Subsection 99ABG(5) now provides that an application under subsection 99ABG(4) may be made only if the applicant has been given notice that the person is liable for an administrative penalty, the decision to claim the debt to which the administrative penalty relates is a reconsidered decision, and one or more garnishee notices have been given in relation to that debt. Subsection 99ABG(6) now provides that an application under subsection 99ABG(4) must be made within 28 days after the day the first garnishee notice is given.

 

Item 57 - Application provisions

This item sets out the application provisions for the amendments in Part 2.

 

The amendments to subsections 56D(8) and 56D(9) of the Dental Benefits Act, subsections 129AAJ(8), 129AAJ(9), 129ACB(8) and 129ACB(9) of the Health Insurance Act, and subsections 99ABD(8), 99ABD(9) and 99ABD(10) of the National Health Act in relation to the AAT review of decisions claiming debts and shared debt determinations apply in relation to the making of an application for AAT review on or after the commencement of the Act (whether the debt to which the reconsidered decision relates becomes due to the Commonwealth, or the reconsidered decision is made, before, on or after commencement of the Act).

 

The amendments to subsections 56G(3), 56G(4) and 56G(5) of the Dental Benefits Act, subsections 129AEC(2), 129AEC(3) and 129AEC(4) of the Health Insurance Act, and subsections 99ABG(4), 99ABG(5) and 99ABG(6) of the National Health Act in relation to the AAT review of administrative penalties apply in relation to the making of an application for AAT review on or after the commencement of the Act (whether the debt that gives rise to the administrative penalty becomes due, the person becomes liable for an administrative penalty or the assessment of the administrative penalty is made before, on or after commencement of the Act).

 

Part 3 - Miscellaneous debt-recovery amendments

 

Background

 

Amendments as part of the Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Act 2018 introduced measures to strengthen recovery powers for Medicare debts owed to the Commonwealth. This legislation provided the Commonwealth with: 

·          the ability to set off Medicare payments in order to recover a debt owing to the Commonwealth;

·          the power to garnishee certain funds so that debts owed to the Commonwealth under the MBS, PBS and CDBS may be repaid; and

·          the power to issue a notice to obtain information or documents about the financial situation or location of a person (or their estate) who owes a debt to the Commonwealth (financial information gathering powers).

 

The amendments in Part 3 ensure consistency in the application of the set off, garnishee and financial information gathering powers .

 

Dental Benefits Act 2008

 

Item 58 - Subsection 56G(1)

This item inserts the wording “or the person’s estate” in subsection 56G(1) after the wording “liable for an administrative penalty”. This item provides that where the CEM gives written notice to a person who is liable for an administrative penalty, the notice may be given to the person’s estate (in cases where the person has died).

 

Item 59 - Before subsection 56H(1)

This item inserts new subsection 56H(1A) before subsection 56H(1). The new subsection 56H(1A) provides that section 56H applies in relation to an amount (a recoverable amount) that is recoverable from a person, or from the estate of a person, as a debt to the Commonwealth, if the amount is an amount for which notice has been served as mentioned in subsection 56C(4), or an amount of interest under subsection 57(5). This subsection extends the operation of section 56H (the power to obtain information relating to a debt) to amounts recoverable from a person or the estate of a person. It also extends the operation of the section to recoverable amounts of interest.

 

Item 60 - Subsection 56H(1)

This item omits “a person who owes a debt to the Commonwealth for which notice has been served as mentioned in subsection 56C(4), require the person” and substitutes “the person or estate, require the person or estate”. This is consequential to the amendment in item 59 and ensures that written notice may be given to a person’s estate.

 

Item 61 - Paragraph 56H(1)(a)

This item substitutes “person’s financial situation” with “financial situation of the person or estate” in paragraph 56H(1)(a). This is consequential to the amendment in item 59 and ensures that written notice may be given to a person’s estate seeking information in writing that is relevant to the estate’s financial situation.

 

Item 62 - Paragraph 56H(1)(b)

This item clarifies that where documents (relevant to the financial situation of the estate) are in the custody or under the control of the estate, the estate may be required to produce these documents when a written notice is given by the CEM.

 

Item 63 - Subsections 56H(2) and (3)

This item repeals subsections 56H(2) and 56H(3) and replaces these with new subsections. The purpose of the amendment is to create consistency across the Dental Benefits Act, Health Insurance Act and National Health Act in relation to the requirement for a debtor to provide up-to-date address information for the purposes of enabling the CEM to provide documents relating to the debt to the debtor.

 

The subsections provide that, once a person (whether an individual or a body corporate) has been notified of a debt due to the Commonwealth, the person has an obligation to notify the CEM of the address for the purposes of receiving documents relating to the debt and to notify the CEM if that address changes. Civil penalties apply for individuals and bodies corporate that do not comply with this requirement.

 

The provision allows the CEM to maintain contact with the debtors and aims to reduce the need to use the section 56H financial information gathering power to obtain contact information.

 

Item 64 - Paragraph 56H(4)(a)

This item amends the wording in paragraph 56H(4)(a) to clarify that a recoverable amount may be recovered from a person or estate, and allows the CEM to issue a notice to a third party requesting information about a debtor that is an estate.

 

Item 65 - Paragraphs 56H(5)(a) and (b)

This item is consequential to amendments to subsection 56H(1) (items 60-62) and subsection 56H(4) (item 64), which provide for the issuing of notices to an estate in relation to a debt.

 

Items 66 and 67 - Subsection 58(1) and paragraph 58(1)(b)

Item 66 inserts the words “, or the estate of that person,” after “a person” in subsection 58(1). Item 67 inserts the words “or from the estate of the person” after “person” in paragraph 58(1)(b). These amendments enable recovery of amounts from a person or their estate by way of reductions to future payments under the Dental Benefits Act.

 

Items 68, 69 and 70 - Paragraphs 58(1)(b) and 58(4)(b) and 58AA(1)(a)

Items 68 and 70 amend these paragraphs to insert references to subsection 57(5), and item 69 is a consequential amendment to item 70. These amendments enable recovery of interest payable on a debt (under subsection 57(5)) by way of reductions to future payments under the Dental Benefits Act or a garnishee notice.

 

Health Insurance Act 1973

 

Item 71 - Paragraph 129ACA(2)(a)

This item omits the words “primary debtor and the secondary debtor”, and substitutes “primary debtor, or estate, and the secondary debtor, or estate,”. The intention is to enable the CEM to make a written shared debt determination, in relation to a person or their estate where a notice has been given under subsection 129ACA(7).

 

Items 72 and 73 - Subsection 129ACA(8) and paragraphs 129ACA(8)(a) and (b)

These items add references to an estate in subsection 129ACA(8) where it currently refers to a person. The intention is to provide the estate the same procedural fairness as a person. Subsection 129ACA(8) (as amended by these items) will provide that, where the CEM has given a notice to an estate under subsection 129ACA(7) (notice of the CEM’s intention to make a shared debt determination under subsection 129ACA(2)), the estate has 14 days to provide a response to the CEM as to why a shared debt determination should or should not be made under subsection 129ACA(2) and what percentage of the debt should be recoverable from the estate.

 

Item 74 - Paragraph 129ACA(10)(a)

This item adds the words “or estate” before “in relation to a professional service:” The intention is to maintain the notification to State and Territory Health Departments where an estate receives a shared debt determination under subsection 129ACA(2) or a notice mentioned in subsection 129ACA(5); and the professional service was rendered, or purportedly rendered, in or at a hospital.

 

Item 75 - Subsection 129ACB(6)

This item adds the words “or estate” after “person”. The intention is that within the Shared Debt Recovery Scheme the estate is provided the same rights as a person. This item ensures that following the review of a decision related to a shared debt determination, the estate will be provided with a written notice of the reconsidered decision.

 

Item 76 - Paragraphs 129AEA(4)(b) and (c)

This item repeals paragraphs 129AEA(4)(b) and 129AEA(4)(c) and substitutes new paragraphs 129AEA(4)(b), 129AEA(4)(c) and 129AEA(4)(d).

 

This item clarifies that, for shared debt determinations, administrative penalties apply where the sum of the recoverable amounts to which a determination relates is more than $2,500; or if a higher amount is prescribed by the regulations—that higher amount. This corrects an issue with the current provision that administrative penalties apply where a recoverable amount in respect of a professional service is greater than $2,500, which would rarely apply as this is higher than the benefit amount for most items on the Medicare Benefits Schedule.

 

Item 77 - Subsection 129AEC(1)

This item inserts “or the person’s estate,” after “liable to an administrative penalty,”. The intention of this item is to ensure that the CEM must provide to the person or estate of the person, notification in writing of the assessment and liability for an administrative penalty.

 

Item 78 - Before subsection 129AECA(1)

This item inserts new subsection 129AECA(1A), which specifies that the power to obtain information relating to a debt (financial information gathering powers) applies to a debt if it relates to one of the following:

·          a written agreement with the Director under section 92;

·          an amount for which a notice has been served as mentioned in subsection 129AAI(4) (including in relation to a debt claimed as the result of a person giving of false or misleading information);

·          a shared debt determination;

·          administrative penalties under subsection 129AC(1G);

·          interest payable under subsection 129AC(2);

·          a section 129AD debt (including a debt arising from final determination by the Determining Authority under section 106TA) (where the Commonwealth is the payee for the debt).

 

This expands the existing financial information gathering powers that currently apply only to recoverable amounts for which a notice has been served as mentioned in subsection 129AAI(4) and shared debt determinations.

 

Item 79 - Subsection 129AECA(1)

This item amends subsection 129AECA(1) to omit the words “a person or estate who owes a debt to the Commonwealth for which notice has been served as mentioned in subsection 129AAI(4) or 129ACA(5)” and substitute the words “the person or estate”. This is a consequential amendment resulting from the insertion of subsection 129AECA(1A), which now specifies the debts to which the financial information gathering powers in section 129AECA apply.

 

Item 80 - Paragraph 129AECA(1)(a)

This item clarifies that a person or estate is required to give information in writing relevant to the financial situation of the person or estate. Subsection 129AECA(1) applies to the person or the estate and this amendment maintains the intention of subsection 129AECA(1).

 

Item 81 - Paragraph 129AECA(1)(b)

This item clarifies that where documents (relevant to the financial situation of the estate) are in the custody or under the control of the estate, these documents may be required to be produced to the CEM.

 

Item 82 - Subsections 129AECA(2) and (3)

This item repeals subsections 129AECA(2) and 129AECA(3) and replaces these with new subsections. Subsection 129AECA(2) provides that a person may also be required to provide the CEM or a Departmental employee (within the meaning of the Human Services (Medicare) Act 1973 ) with an address for the purpose of giving documents to the person relating to the debt within 14 days after the day the relevant event mentioned in paragraphs 129AECA(2)(a) to (e) occurs. The start date and end date of this 14-day period will depend on the type of debt at issue. Subsection 129AECA(3) requires a person who has a debt and has provided their address to update their address within 14 days of changing that address.

 

The amendments expand the application of subsection 129AECA(2) from a person with a debt relating to an amount for which a notice is served as mentioned in subsection 129AAI(4) or relating to a shared debt determination, to a person who has a debt mentioned in new subsection 129AECA(1A) (see item 78). New subsection 129AECA(2) provides that a person (whether an individual or a body corporate) must notify the CEM or a departmental employee of their address for the purposes of receiving documents in relation to a debt that falls into the expanded list of debts in subsection 129AECA(1A). New subsection 129AECA(3) provides that they must then also notify the CEM if that address changes. Civil penalties apply for individuals and bodies corporate that do not comply with the notification requirement.

 

This provision allows the CEM to maintain contact with the debtors and aims to reduce the need to use the section 129AECA financial information gathering powers to obtain contact information.

 

Item 83 - Paragraph 129AECA(4)(a)

This item is a consequential amendment to maintain consistency with the expanded list of debts in subsection 129AECA(1A). Subsection 129AECA(4) also clarifies that a recoverable amount may be recovered from a person or estate and allows the CEM to issue a notice to a third party requesting information about a debtor that is an estate.

 

Item 84 - Paragraphs 129AECA(5)(a) and (b)

This item is consequential to amendments to subsections 129AECA(1) (items 79-81) and 129AECA(4) (item 83), which provide for the issuing of notices to an estate in relation to a debt.

 

Item 85 - Paragraphs 129AEF(1)(aaa) to (aa)

This item extends the scope of the set off provision in section 129AEF to allow for the recovery of interest debts arising under subsection 129AC(2). The use of this set off power will enable the recovery of interest debts by way of reductions to future payments under the Health Insurance Act.

 

This item also realigns the numbering across different debt types in subsection 129AEF(1), and is necessary to create consistency in the application of the set off power, and improving the recovery arrangements for debts owed to the Commonwealth.

 

Item 86 - Subsection 129AEG(1)

This item extends the scope of the garnishee power in section 129AEG to cover interest debts arising under section 129AC(2).

 

This item also extends the scope of the garnishee power to cover debts raised as a result of a written agreement under section 92 between a person and the Director.

 

As part of the introduction of debt recovery arrangements into the Health Insurance Act in 2018, garnishee provisions were included as a disincentive for practitioners who may move away from bulk billing, to avoid the recovery of debts via the set off provisions. This also provided an alternative mechanism for debt recovery for practitioners who are unwilling to repay their debts and do not bulk bill.

 

Similarly, the current amendment provides a tool to encourage repayment of PSR debts for practitioners who do not bulk bill or may have been disqualified from Medicare as a result of a written agreement under section 92.

 

Where a person under review by the PSR is not a practitioner (i.e. the person simply employs or engages practitioners), set off provisions cannot apply as the person does not have a Medicare provider number to receive Commonwealth payments. Where debts raised from persons under review who are not practitioners through the PSR scheme are not voluntarily repaid, the garnishee power is the only debt recovery avenue prior to expensive litigation to recover debts.

 

Existing procedural fairness requirements will continue to apply to all garnishee notices. If a garnishee notice is issued, subsection 129AEG(6) requires that the debtor or estate must be notified, and subsection 129AEG(13) provides the debtor or estate with the ability to seek AAT review of the decision to issue a garnishee notice.

 

Item 87 - After subsection 129AEG(1)

This item inserts new subsection 129AEG(1A), which clarifies the application of subsection 129AEG(1) in relation to a debt raised under a section 92 written agreement. A garnishee notice may be issued in relation to a recoverable amount referred to in paragraph 129AEF(1)(a), i.e. an unpaid amount under paragraph 92(4)(e) or (f), in circumstances where:

·          the debtor or their estate has entered into an arrangement with the CEM (within the relevant period provided for in new subsection 129AEG(1B)) for payment of the recoverable amount, and has defaulted in payment of all or part of the recoverable amount as required by the arrangement; or

·          at the end of the relevant period specified in new subsection 129AEG(1B), the debtor or their estate has not entered into an arrangement with the CEM to pay the recoverable amount, and all or part of the recoverable amount remains unpaid.

 

This provision reflects the intention that garnishee notices are an option of last resort and will only be used for debtors who default on their agreed obligations or debtors who are recalcitrant and unwilling to engage with the debt recovery process.

 

New subsection 129AEG(1B) provides that the relevant period is either the period of 3 months beginning on the day the written agreement under section 92 takes effect; or such longer period as the CEO allows.

 

National Health Act 1953

 

Item 88 - Subsection 99ABG(1)

This item amends subsection 99ABG(1) to provide consistency across the National Health Act, Health Insurance Act and Dental Benefits Act, and requires the Secretary to provide written notice to an estate of a liability for an administrative penalty. This ensures the same notifications that are given to a person are provided to the estate.

 

Item 89 - Before subsection 99ABH(1)

This item inserts new subsection 99ABH(1A). This extends the operation of the existing financial information gathering powers in subsection 99ABH so that it applies to estates and in relation to debts arising in relation to administrative penalties (where debts are owed by a person or a person’s estate).

 

Item 90 - Subsection 99ABH(1)

This item contains a consequential amendment resulting from the insertion of new subsection 99ABH(1A) by item 89.

 

Item 91 - Paragraph 99ABH(1)(a)

This item is consequential to item 89 and provides that a person or estate is required to provide to the Secretary information in writing that is relevant to the financial situation of the person or estate, when requested under subsection 99ABH(1).

 

Item 92 - Paragraph 99ABH(1)(b)

This item is consequential to item 89 and ensures that a person or their estate is required to produce to the Secretary documents in their custody or under their control that are relevant to the financial situation of a person or estate, when requested under subsection 99ABH(1).

 

Item 93 - Subsections 99ABH(2) and (3)

This item repeals subsections 99ABH(2) and 99ABH(3) and replaces these provisions with new subsections. This item reflects the insertion of new subsection 99ABH(1A) and clarifies the circumstances in which a person (whether an individual or a body corporate) must notify the Secretary of an address (and changes to that address) for the purpose of giving the person documents relating to a debt to which new subsection 99ABH(1A) applies. Civil penalties apply for individuals and bodies corporate that do not comply with the notification requirement.

 

This provision allows the Secretary to maintain contact with the debtors and aims to reduce the need to use the financial information gathering powers under section 99ABH to obtain contact information.

 

Item 94 - Paragraph 99ABH(4)(a)

This item is a consequential amendment to maintain consistency with the expanded list of debts in new subsection 99ABH(1A). This item also clarifies that a recoverable amount may be recovered from a person or estate and allows the Secretary to issue a notice to a third party requesting information or a document about a debtor that is an estate.

 

Item 95 - Paragraphs 99ABH(5)(a) and (b)

This item is consequential to amendments to subsection 99ABH(1) (items 90-92) and paragraph 99ABH(4)(a) (item 94), which provide for the issuing of notices to an estate in relation to a debt.

 

Item 96 - Paragraph 99ABL(1)(a)

This item inserts the wording “, or the estate of a person,” after “a person” to clarify that the set off provision in section 99ABL may be also applied to amounts recoverable as a debt from an estate.

 

Item 97 - Application provisions

This item sets out the application provisions for the amendments in Part 3.

 

The application provisions in subitems 97(1) and 97(2) apply to:

·          subsection 56G(1) of the Dental Benefits Act;

·          subsection 129AEC(1) of the Health Insurance Act; and

·          subsection 99ABG(1) of the National Health Act.



The amendments relate to the giving of notice of administrative penalty assessments to estates. The amendments to these provisions apply in relation to an assessment of a person’s liability to pay an administrative penalty that is made on or after the commencement of the Act (whether the service was initiated or rendered, or the pharmaceutical benefit was supplied (or purportedly supplied), before, on or after that commencement).

 

Subject to subitem 97(5), the application provisions in subitems 97(3) and 97(4) apply to:

·          section 56H of the Dental Benefits Act;

·          section 129AECA of the Health Insurance Act; and

·          section 99ABH of the National Health Act.

 

These are the financial information gathering powers in the Dental Benefits Act, Health Insurance Act and National Health Act. The application provisions clarify that the amendments to the financial information gathering powers will apply in relation to amounts that are recoverable on or after the commencement of the Act (whether the relevant debt becomes due to the Commonwealth before, on or after commencement of the Act).

 

The application provision in subitem 97(5) relates to the debtor’s obligation to provide address details after a notice has been issued requiring information or documents relevant to the debtor’s financial situation and applies to:

 

·          subsection 56H(2) of the Dental Benefits Act;

·          subsection 129AECA(2) of the Health Insurance Act; and

·          subsection 99ABH(2) of the National Health Act.

 

These sections were inserted into the Acts in 2018 and are now being replaced with new provisions (see items 63, 82 and 93). These new provisions will apply where the event after which a notice must be given (as mentioned in the relevant provision) occurs on or after commencement of the Act.

 

The application provisions in subitems 97(6) and 97(7) relate to:

·          sections 58 and 58AA of the Dental Benefits Act;

·          sections 129AEF and 129AEG of the Health Insurance Act; and

·          section 99ABL of the National Health Act.

 

These sections are the set off and garnishee powers for the different debt types under the Dental Benefits Act, Health Insurance Act and National Health Act . The amendments to these sections made by Part 3 will apply in relation to an amount that is recoverable on and after the commencement of the Act. For clarification, the set off and garnishee powers, as amended by Part 3, may be used for all amounts that are recoverable on or after commencement of this Act (whether the relevant debt becomes due to the Commonwealth before, on or after commencement of the Act) .

 

The original policy intention of this power, as outlined in the Revised and Supplementary Explanatory Memorandum to the then Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Bill 2018, included the recovery of relevant debts established before, on or after the commencement of the provision. This was not fully implemented when PSR debts were added to the set off provision in 2019, and therefore this amendment will enable the set off provision to operate as originally intended.

 

The application provisions in subitems 97(8) and 97(9) relate to the amendments made by Part 3 to sections 129ACA and 129ACB (see items 71 to 75).

 

The amendments to section 129ACA of the Health Insurance Act (see items 71 to 74) apply in relation to the making of a determination on or after commencement of the Act, whether the amount paid purportedly by way of benefit was paid before, on or after that commencement.

 

The amendments to subsection 129ACB(6) of the Health Insurance Act (see item 75) apply in relation to applications made under subsection 129ACB(1) of the Act on or after commencement of the Act, whether the debt to which the reconsidered decision relates becomes recoverable as a debt due to the Commonwealth before, on or after that commencement.

 

The application provision in subitem 97(10) relates to the amendments made by Part 3 to subsection 129AEA(4) (see item 76). The amendments to subsection 129AEA(4) of the Health Insurance Act, relating to liability for administrative penalties, apply to shared debt determinations made under subsection 129ACA(2) of the Act on or after commencement of the Act, whether the amount paid purportedly by way of benefit was paid before, on or after that commencement.



Part 4 - False or misleading information

 

Background

 

In 2020, subsection 129AC(1) and subsection 129ACA(1) of the Health Insurance Act were amended to clarify that an amount may be recovered from a person in circumstances where a Medicare benefit or payment was paid under the Health Insurance Act as a result of a person giving false or misleading information (rather than the previous wording, which referred to the need for a “false or misleading statement”).

 

These amendments reflected the fact that the design parameters of electronic claiming mechanisms are developed to achieve efficiencies and therefore may no longer support the inclusion of a specific statement or declaration being made by a person in relation to a Medicare claim that is submitted electronically. The intent was to ensure that post-payment compliance activities are not constrained by technological advances with electronic Medicare claiming mechanisms, by capturing broad circumstances in which false or misleading information may be given, regardless of whether a person makes manual or electronic Medicare claims.

 

The Dental Benefits Act and National Health Act have to date retained references to false or misleading statements rather than false or misleading information. To ensure consistency with the Health Insurance Act, the Dental Benefits Act and the National Health Act are now being amended to refer to false or misleading information. This is intended to ensure that post-payment compliance activities for dental or pharmaceutical benefits are similarly not constrained by the type of claiming mechanism (manual or electronic) that is used.

 

“Information” may be given in a document, in a statement or in any other form. “Information” will be false or misleading where it is factually incorrect, regardless of whether the person giving the information knew that it was false or misleading, or whether the information given was purposely or intentionally untrue. This includes circumstances where a person gives false or misleading information either intentionally or unintentionally.

 

Dental Benefits Act 2008

 

Item 98 - Section 56 (heading)

This item substitutes “false or misleading statements” with “false or misleading information” in the heading of section 56. This is to reflect the changes to section 56 made in items 99 to 102.

 

Item 99 - Paragraph 56(1)(b)

This item amends paragraph 56(1)(b) to replace “making of a false or misleading statement” with “giving of false or misleading information”. This change allows the Commonwealth to recover incorrect amounts paid, purportedly by way of benefit or payment, where the payment was made as a result of the giving of false or misleading information. This change is to ensure consistency across Medicare program legislation.

 

The phrase “false or misleading” captures information that is factually incorrect, regardless of whether the person giving the information knew that it was false or misleading, or whether the information given was purposely or intentionally untrue.

 

Items 100 and 101 - Paragraphs 56(2)(a) and (3)(a) and paragraph 56(3)(b)

These items make consequential amendments to reflect the changed terminology in section 56, with references to the making of false or misleading statements being replaced with references to the giving of false or misleading information.

 

Item 102 - At the end of section 56

This item adds new subsection 56(4) which provides for broad circumstances in which false or misleading information may be given. False or misleading information may be given in a document; in a statement; or in any other form. For example, a person who makes an electronic claim for dental benefits would be giving information by entering values into the system to communicate a fact in relation to the claim.

 

National Health Act 1953

 

Item 103 - Section 99ABA (heading)

This item substitutes “false or misleading statements” with “false or misleading information” in the heading of section 99ABA. This is to reflect the changes to section 99ABA made in items 104 to 107.

 

Item 104 - Subsection 99ABA(1)

This item amends subsection 99ABA(1) to replace “making of a false or misleading statement” with “giving of false or misleading information”. This change allows the Commonwealth to recover incorrect amounts paid, purportedly by way of benefit or payment, where the payment was made as a result of the giving of false or misleading information. This change is to ensure consistency across Medicare program legislation.

 

The phrase “false or misleading” captures information that is factually incorrect, regardless of whether the person giving the information knew that it was false or misleading, or whether the information given was purposely or intentionally untrue.

 

Items 105 and 106 - Paragraph 99ABA(2)(a) and paragraph 99ABA(3)(b)

These items make consequential amendments to reflect the changed terminology in section 99ABA, with references to the making of false or misleading statements being replaced with references to the giving of false or misleading information.

 

Item 107 - At the end of section 99ABA

This item adds new subsection 99ABA(4), which provides for broad circumstances in which false or misleading information may be given. False or misleading information may be given in a document; in a statement; or in any other form. For example, a person who makes an electronic claim for pharmaceutical benefits would be giving information by entering values into the system to communicate a fact in relation to the claim.

 

Item 108 - Application provisions

This item sets out the application provisions for the amendments in Part 4.

 

The amendments to section 56 of the Dental Benefits Act apply in relation to an amount paid before, on or after the commencement of the Act. This means that if, as a result of the giving of false or misleading information, an amount is paid, purportedly by way of a payment of dental benefit, that exceeds the amount (if any) that should have been paid, the amount may be recovered if it was paid by the Commonwealth before, on or after the commencement of the Act.

 

The amendments to section 99ABA of the National Health Act apply in relation to information given in relation to an amount on or after 1 July 2018 (when section 99ABA was included in the National Health Act). This means that if, as a result of the giving of false or misleading information, an amount is paid, purportedly by way of a benefit or payment under the National Health Act, that exceeds the amount (if any) that should have been paid, the amount may be recovered if the information was given on or after 1 July 2018. This application provision is based on information given, rather than amounts paid, to reflect both the nature of PBS claims, and the original application provision for section 99ABA.

 

The amendments made to section 56 of the Dental Benefits Act and section 99ABA of the National Health Act do not affect rights or liabilities arising between parties to proceedings:

 

·          in which judgment is reserved by a court on or before the commencement of this item; or

·          which have been heard and finally determined by a court on or before the commencement of this item;

 

to the extent that those rights or liabilities arose from, or were affected by, the application of section 56 of the Dental Benefits Act or section 99ABA of the National Health Act, as in force before the commencement of the Act.

 

These amendments to section 56 of the Dental Benefits Act and section 99ABA of the National Health Act are necessary to align the provisions with technological advancements in a modernised Medicare claiming process, as well as improved service delivery for health providers and patients. However, obligations on providers as well as the legislative basis on which Medicare benefits are payable are unaffected by these measures. A person who has given false or misleading information and received Medicare benefits that they were not entitled to receive, should not be allowed to unjustly enrich themselves at the expense of the Australian community. Where a person gives false or misleading information to the Commonwealth and the Commonwealth pays a benefit that should not have been paid, it is in the public interest to be able to recover the payment, even where this conduct has occurred prior to the commencement of the Act. This is necessary to ensure that Commonwealth expenditure is protected.