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Private Health Insurance Amendment Bill (No. 2) 2014

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2013-2014

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

PRIVATE HEALTH INSURANCE AMENDMENT BILL (NO. 2) 2014

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Health, the Hon Peter Dutton MP)

 

 





PRIVATE HEALTH INSURANCE AMENDMENT BILL (NO. 2) 2014

 

OUTLINE

The purpose of the Private Health Insurance Amendment Bill (No. 2) 2014 is twofold. The Bill will transfer the functions of the Private Health Insurance Ombudsman to the Office of the Commonwealth Ombudsman by amending both the Private Health Insurance Act 2007 and the Ombudsman Act 1976 with effect from 1 July 2015 (dependent on passage of the Bill). The Bill will also operate to ensure that provisions of the Private Health Insurance Act 2007 relating to the calculation of the Australian Government Rebate on private health insurance that were intended to be repealed by the Private Health Insurance Legislation Amendment Act 2014 will be taken never to have commenced .

 

Policy Background

Transfer of functions of the Private Health Insurance Ombudsman

As part of the 2014-15 Budget: Smaller Government - additional reductions in the number of Australian Government bodies , it was announced that the statutory agency of the Office of the Private Health Insurance Ombudsman would be merged into that of the Office of the Commonwealth Ombudsman. These changes are expected to reduce duplication, improve coordination and increase efficiency in how public funds are used to deliver services to the community.

 

The Private Health Insurance Ombudsman will remain a separate statutory office, however the person who holds the position of the Commonwealth Ombudsman will automatically also hold the position of the Private Health Insurance Ombudsman.  This is consistent with the approach taken for other industry ombudsmen created under the Ombudsman Act 1976 As part of the transfer of functions, the opportunity has been taken to streamline some of the investigative procedures of the Private Health Insurance Ombudsman with those of the Commonwealth Ombudsman. 

 

Removal of references to the Base Premium measure inadvertently included in the PHI Act

The previous Labor Government intended that the Australian Government Rebate on private health insurance (the Rebate) be calculated by reference to a ‘base premium’. The Private Health Insurance Legislation Amendment (Base Premium) Act 2013 was enacted to implement this policy with effect from 1 April 2014, although some provisions took immediate effect in 2013. 

 

Prior to the full commencement of the base premium measure the Government decided to use a different, simpler mechanism for calculating the Rebate.

 

In March 2014 the Private Health Insurance Legislation Amendment Act 2014 was passed with the intent of removing all references to a base premium from the Private Health Insurance Act 2007 . However, due to an unintended delay in the granting of Royal Assent it was only partially effective in doing so. The Bill will provide for references to the base premium inadvertently included in the Private Health Insurance Act 2007 to be taken never to have been so included.



 

Financial Impact Statement

The transfer of functions of the Private Health Insurance Ombudsman is estimated to result in net savings to industry of approximately $0.6 million over three years. Any savings will be reflected in levies payable by the private health insurance industry.

 

The removal of the Base Premium provisions will not have any financial impact. Although reference to base premiums remains in a small number of provisions in the Private Health Insurance Act 2007 , the removal of remaining references to the concept of a base premium will not affect how the premiums reduction scheme is applied for insurers and relevant policy holders.

 



 

Statement of Compatibility with Human Rights

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

PRIVATE HEALTH INSURANCE AMENDMENT BILL (NO.2) 2014

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

Transfer of functions of the Private Health Insurance Ombudsman

As part of the 2014-15 Budget: Smaller Government - additional reductions in the number of Australian Government bodies it was announced that t he functions of the Private Health Insurance Ombudsman will be transferred to the Office of the Commonwealth Ombudsman as of 1 July 2015. The Private Health Insurance Amendment Bill (No. 2) 2014 (the Bill) amends the Private Health Insurance Act 2007 and the Ombudsman Act 1976 to implement this measure.

 

Removal of references to the Base Premium measure inadvertently retained in the PHI Act

The Private Health Insurance Legislation Amendment (Base Premium) Act 2013 was intended to amend the Private Health Insurance Act 2007 to provide for the private health insurance premium reduction, for the purpose of the Australian Government Rebate on private health insurance, to be calculated by reference to a ‘base premium’ from 1 April 2014. The Private Health Insurance Legislation Amendment (Base Premium) Act 2013 had a staggered commencement, with some provisions commencing from June 2103 and some from

1 April 2014. 

 

Prior to the full commencement of the base premium measure from 1 April 2014, the Australian Government decided to use an alternative mechanism for calculating the rebate that was simpler for insurers to implement. 

 

In March 2014 the Private Health Insurance Legislation Amendment Act 2014 was passed with the intent of removing all references to a base premium from the Private Health Insurance Act 2007 before 1 April 2014. However, due to an unintended delay in the granting of Royal Assent, which occurred on 9 April 2014, it was only effective to remove those references that had commenced in June 2013. The Bill will provide for amendments to the Private Health Insurance Act 2007 relating to ‘base premiums’ that took effect on 1 April 2014 to be taken never to have been made.

 

Human rights implications

 

The right to health

The right to health - the right to the enjoyment of the highest attainable standard of physical and mental health - is contained in article 12(1) of the International Covenant on Economic, Social and Cultural Rights. The United Nations Committee on Economic, Social and Cultural Rights (the Committee) has stated that health is a ‘fundamental human right indispensable for the exercise of other human rights’, and

that the right to health is not to be understood as a right to be healthy, but rather entails a right to a system of health protection which provides equality of opportunity for people to enjoy the highest attainable level of health.

 

The Committee states that the notion of ‘the highest attainable standard of health’ takes into account both the condition of the individual and the country’s available resources.  The right may be understood as a right of access to a variety of public health and health care facilities, goods, services, programmes and conditions necessary for the realisation of the highest attainable standard of health.

 

Discussion of the Bill

 

The Private Health Insurance Ombudsman operates to protect the interests of people who have or wish to obtain private health insurance by:

(a)     assisting to resolve complaints made against private health insurers, private health insurance brokers or health care providers relating to private health insurance arrangements;

(b)    investigating the practices and procedures of insurers, brokers or health care providers;

(c)     mediating between private health insurers and health care providers; and

(d)    disseminating information about private health insurance and the rights and obligations of people who hold insurance, including through the privatehealth.gov.au website.

 

The Private Health Insurance Ombudsman may also make recommendations to Government about general changes in regulatory or industry practices and provide advice on possible means for dealing with problems identified through investigations. 

 

The Private Health Insurance Ombudsman is not the appropriate forum for dealing with clinical matters or commercial negotiations and where a complaint primarily relates to either of these matters the Ombudsman may decline to deal with the complaint.

 

The Office of the Private Health Insurance Ombudsman is currently established under the Private Health Insurance Act 2007 .  In order to reduce the size of government and streamline its operations the Bill will transfer the functions of the Private Health Insurance Ombudsman to the Office of the Commonwealth Ombudsman from 1 July 2015 (dependent on passage of the Bill).

 

The Office of the Private Health Insurance Ombudsman will be established by the Ombudsman Act 1976 and the person who holds the position of the Commonwealth Ombudsman will also hold the position of the Private Health Insurance Ombudsman .  As part of the transfer of functions, the opportunity has been taken to streamline some of the investigative procedures of the Private Health Insurance Ombudsman with those of the Commonwealth Ombudsman. 

 

However, the basic schema of the Private Health Insurance Ombudsman functions will be retained under the Ombudsman Act 1976 :

(a)     the same classes of individuals and organisations will be able to make complaints to the Private Health Insurance Ombudsman, namely current or prospective policy-holders, private health insurers and brokers, and health care providers;

(b)    complaints may be made against the same classes of individuals and organisations, namely insurers, brokers and health care providers;

(c)     complaints may be made to the Private Health Insurance Ombudsman on the same grounds, in particular complaints about health care providers will still need to be in relation to private health insurance arrangements and either:

                              (i)             also involve a complaint against an insurer,

                            (ii)             be made by an insurer or policy-holder; or

                          (iii)             if the complainant is another health care provider or a private health insurance broker, must include an insurer or policy-holder as a complainant.

 

The Private Health Insurance Ombudsman will also retain the current mechanisms for dealing with a complaint, which are conducting mediation, referring a complaint to the subject of the complaint, or investigating the complaint. As was the case under the Private Health Insurance Act 2007 , the Private Health Insurance Ombudsman cannot take or continue to take any of these actions without the agreement of the complainant.  The Private Health Insurance Ombudsman also cannot commence or continue to conduct mediation or investigate a complaint once it is withdrawn.

 

The Private Health Insurance Ombudsman will also continue to be able to undertake own-motion investigations into the practices and procedures of a private health insurer or private health insurance broker, or into the practices and procedures of a health care provider where there is a nexus with private health insurance arrangements or an insurer.

 

The Private Health Insurance Ombudsman promotes the enjoyment of the right to health, as the Ombudsman provides an independent, accessible and timely complaints handling mechanism, supporting the Government’s commitment to the private health insurance industry in Australia. 

 

Right to privacy

Article 17 of the International Covenant on Civil and Political Rights prohibits the unlawful or arbitrary interference with a person’s privacy, subject to a limited power to derogate from this obligation to an extent necessary in the circumstances.

 

Because the Private Health Insurance Ombudsman ’s main role is responding to complaints, individuals will usually provide relevant personal information to the Private Health Insurance Ombudsman as part of their complaint. However in order to be capable of dealing effectively with complaints it may be reasonably necessary for the Private Health Insurance Ombudsman to require personal information about a complainant from an insurer, broker or health care provider about whom a complaint has been made.

 

In line with current provisions in the Private Health Insurance Act 2007 and the Ombudsman Act 1976 , the Private Health Insurance Ombudsman will have the power to compel the production of information and records relating to a complaint or investigation from any person the Private Health Insurance Ombudsman reasonably believes capable of giving them.

 

Under the Private Health Insurance Act 2007 , the Private Health Insurance Ombudsman was not, as part of handling a complaint, able to request information about the complainant’s dealings with the subject of the complaint without the complainant’s consent. The Private Health Insurance Ombudsman also was not, as part of an own-motion investigation, able to request information or records relating to a particular individual without the consent of the individual. These limits on the information gathering-power are not maintained under the Ombudsman Act 1976   to better align with current limitations on the Commonwealth Ombudsman’s information gathering-powers.

 

However, information and records including personal information provided to the Private Health Insurance Ombudsman will be protected from inappropriate disclosure by the general secrecy provisions applying to the Ombudsman Act 1976 . That Act will make it an offence for the Private Health Insurance Ombudsman, a member of staff of the Office of the Commonwealth Ombudsman or a person appointed by the Private Health Insurance Ombudsman to undertake mediation, to record or disclose to any other person any information disclosed to or obtained under the Ombudsman Act 1976 . This general prohibition on recording and disclosure is subject to a number of exceptions to enable the Private Health Insurance Ombudsman to effectively perform its role, including:

(a)     where the recording or disclosure is in the performance of the person’s powers and functions under the Ombudsman Act 1976 ;

(b)    where the disclosure is made as part of a report made under the Ombudsman Act 1976 and, in the Ombudsman’s opinion, the matters ought to be disclosed in the course of setting out grounds for the findings and recommendations in the report;

(c)     providing records and information to the Australian Competition and Consumer Commission (ACC) for the purposes of referring a complaint to the ACC, which can only be done with the consent of the complainant.

 

The Ombudsman Act 1976 also authorises the disclosure of information relating to a subject of a complaint or own-motion investigation who is not an individual (eg a private health insurer or corporate health care provider) provided by the staff of that subject with the consent of the individual primarily responsible for the management of the subject.  In all other cases, disclosure may be made with the consent of the person who provided the information to the Private Health Insurance Ombudsman.

 

The Private Health Insurance Ombudsman will also have the power to share certain information with specified agencies including the Department of Health and the Department of Human Services.  However, this information can only be information that relates to a private health insurer, an applicant to become a private health insurer, a person carrying on health insurance business or a director or officer of one of the bodies mentioned.

 

The application of these provisions will not limit the protections previously provided to individuals under the Private Health Insurance Act 2007 .

 

 

Fair trial and fair hearing rights

Fair trial and fair hearing rights are contained in article 14 of the International Covenant on Civil and Political Rights (ICCPR) to which Australia is a signatory. Article 40 of the Convention on the Rights of the Child (CRC) and article 13 of the Convention on the Rights of Persons with Disabilities (CRPD) also apply.

The right to a fair and public criminal trial or a fair and public hearing in civil proceedings is one of the guarantees in relation to legal proceedings. Fair trial and fair hearing rights include:

·          that all persons are equal before courts and tribunals, and

·          the right to a fair and public hearing before a competent, independent and impartial court or tribunal established by law.

The other guarantees are the presumption of innocence, and minimum guarantees in criminal proceedings, such as the right to counsel and not to be compelled to self-incriminate.

 

It should be noted that under the Private Health Insurance Act 2007 , the only statutory process available to the Private Health Insurance Ombudsman to gather information was to make a formal written request for information or records to the subject of a complaint.  Failure to comply with such a request was an offence of strict liability. However, consistent with information gathering powers in the Ombudsman Act 1976 , the Private Health Insurance Ombudsman will now be able to either request information and documents from a person, or formally require the production of information or records by written notice. This will allow for a more graduated information gathering approach.

 

Further, while it will still be an offence to fail to produce information or documents pursuant to a written notice the offence will not be one of strict liability, although the evidentiary burden will be upon the defendant to prove that they had a reasonable excuse for failing to comply. The transition away from strict liability offences is due to the understanding that a defendant should be able to establish a reasonable excuse for their failure to comply with the requirements of the Ombudsman Act 1976 .

 

Persons providing information or producing documents to the Private Health Insurance Ombudsman in the reasonable belief it will assist the Ombudsman, whether following a request or compelled by the Private Health Insurance Ombudsman by written notice, will continue to have protections in relation to the provision of the information.

 

A person will not be liable to any penalty under the provision of any enactment by reason of giving the information or documents to the Private Health Insurance Ombudsman.  As under the Private Health Insurance Act 2007 , for the purposes of the Privacy Act 1988 and State and Territory laws which provide that personal information may be disclosed where authorised by law, the disclosure of personal information to the Private Health Insurance Ombudsman will be taken to be authorised by the Ombudsman Act 1976 .

 

If a person provides information or produces a record to the Private Health Insurance Ombudsman and by doing so:

·          contravenes any other Commonwealth law;

·          might tend to incriminate himself or herself; 

·          might tend to disclose legal advice given to the subject of a complaint or an own-motion investigation;

·          might tend to disclose a communication between officers, employees or contractors of the subject and another person that are subject to legal professional privilege; or

·          otherwise acts contrary to the public interest;

 

the information or record, the giving of the information or record and anything obtained as a direct or indirect result of the giving of the information or record will be inadmissible against the person, other than in proceedings for an offence under sections 137.1, 137.2 or 149.1 of the Criminal Code 1995 that relate to the Ombudsman Act 1976.

Claims of legal professional privilege in relation to a document or information are not otherwise affected.

 

These protections ensure that a person furnishing the Private Health Insurance Ombudsman with necessary information is not unfairly disadvantaged by doing so, including by having that information used against them in other proceedings.

 

In relation to mediations, the Private Health Insurance Ombudsman will continue to be able to mandate attendance at mediation by insurers, brokers or health care providers.  Failure to attend some or all of a mediation where directed, and where the other party attended or was willing to attend, remains an offence. However, where a medical practitioner is required to attend mediation he or she will still be able to appoint a representative to attend on his or her behalf.

 

Additionally, evidence of anything said by a person during mediation, whether their participation is voluntary or has been ordered by the Private Health Insurance Ombudsman , will remain inadmissible in any Federal or State or Territory court or in any proceedings to hear evidence under Commonwealth, State or Territory law. This protection will continue to encourage parties to mediation to participate frankly in order to encourage a speedy resolution to a complaint. Mediations are most commonly conducted between health care providers and insurers.

 

Review of decisions

Currently some decisions made by the Private Health Insurance Ombudsman under the Private Health Insurance Act 2007 are reviewable by the Administrative Appeals Tribunal. 

 

The Private Health Insurance Ombudsman may refer a complaint to the insurer, private health insurance broker or health care provider who is the subject of the complaint to investigate the matter and report back to the Ombudsman on the outcome. Under the Private Health Insurance Act 2007 the subject of the complaint has a statutory power to ask the Private Health Insurance Ombudsman to extend the time for reporting back to the Ombudsman and, if the Ombudsman refused, could seek review of the decision by the Administrative Appeals Tribunal.  This express power for the subject of a complaint to request additional time to report to the Private Health Insurance Ombudsman has not been included in the Ombudsman Act 1976 to better align with current Commonwealth Ombudsman complaint handling processes. Accordingly, the associated power of Tribunal review has also not been included.

 

Under the Private Health Insurance Act 2007 a person who has been issued with a notice to produce information or records to the Private Health Insurance Ombudsman has a statutory power to request additional time to comply with the notice and a right to have a decision to refuse additional time reviewed by the Administrative Appeals Tribunal. This express power for the recipient of a notice to request additional time to provide information or records to the Private Health Insurance Ombudsman has also not been included in the Ombudsman Act 1976 to better align with current Commonwealth Ombudsman complaint handling processes. Accordingly, the associated power of Tribunal review has also not been included.

 

Judicial review of decisions about the issuing of notices to report to the Private Health Insurance Ombudsman or provide information or documents to the Ombudsman remains available, along with all other decisions of the Private Health Insurance Ombudsman, has not been affected. This gives persons affected by such decisions an avenue to have the legality of the decisions reviewed.

 

The amendments to the Private Health Insurance Act 2007 will not affect any human rights or freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act . As mentioned, these amendments will give full effect to the intention of the Private Health Insurance Legislation Amendment Act 2014 by removing any remaining references to the concept of a ‘base premium’ from the Private Health Insurance Act 2007 .

 

Conclusion

There is no incompatibility with the right to health as the legislation is for a legitimate objective and reasonable, necessary and proportionate in the circumstances.

 

The existence of protections for individuals under the Ombudsman Act 1976 as well as the ability to seek review of decisions made by the Private Health Insurance Ombudsman by the Federal Court of Australia is compatible with the fair trial and fair hearing rights.

 



 

Conclusion

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 . The Bill promotes the right to health and while there are limitations on the right to privacy, these limitations are reasonable and proportional to enable the Private Health Insurance Ombudsman to fulfil his or her functions for the benefit of private health insurance policy-holders and the industry. Additionally, the potential for the Private Health Insurance Ombudsman to request or compel the production of information or records to assist the Ombudsman deal with complaints and investigations has been recognised.  In response, the Bill has provided adequate protections for individuals from penalties resulting from the provision of information or records to the Ombudsman and the use of that information or those records in proceedings against the person.

 

The Hon Peter Dutton MP, the Minister for Health



 

PRIVATE HEALTH INSURANCE AMENDMENT BILL (NO. 2) 2014

 

NOTES ON CLAUSES

 

Clause 1 - Short Title

This clause provides that the Bill, once enacted, may be cited as the Private Health Insurance Amendment Act (No. 2) 2014.

 

Clause 2 - Commencement

This clause sets out when the Private Health Insurance Amendment Bill (No. 2) 2014 and various provisions within it commence.

 

Sections 1 to 3 and Schedule 2, which set out the formal aspects of the Act and remove references to base premium from the Private Health Insurance Act 2007 , respectively, will commence on Royal Assent. 

 

Schedule 1, which transfers the functions of the Private Health Insurance Ombudsman from the Private Health Insurance Act 2007 to the Ombudsman Act 1976 and includes associated transitional provisions, will commence as follows:

·          if the Bill receives Royal Assent prior to 1 July 2015, on 1 July 2015;

·          if the Bill receives Royal Assent on or after 1 July 2015, on a single day to be fixed by Proclamation .

 

However, if Schedule 1 has not commenced by the end of 6 months after Assent, it will automatically commence on the next day after the end of the 6 month period.

 

Clause 3 - Schedules

This clause provides that legislation that is specified in a Schedule to the Act 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.

 

SCHEDULE 1 - Private Health Insurance Ombudsman

 

Part 1—Main Amendments

 

Ombudsman Act 1976

 

Item 1 amends the title of the Ombudsman Act 1976 to replace and an Overseas Students Ombudsman with an Overseas Students Ombudsman and a Private Health Insurance Ombudsman to reflect the Commonwealth Ombudsman’s new responsibilities to also act as the Private Health Insurance Ombudsman.

 

Item 2 inserts a number of definitions relevant to the operations of the Private Health Insurance Ombudsman into subsection 3(1) of the Ombudsman Act 1976 .  These include: adult, Chief Executive Medicare, complying health insurance policy, complying health insurance product, health care provider, health insurance business,  medical practitioner, personal information, private health insurance arrangement, private health insurance broker, Private Health Insurance (Information Disclosure) Rules, private health insurance policy, private health insurer and product, all of which have the same meaning as in the Private Health Insurance Act 2007 .

 

Of particular importance to the functions of the Private Health Insurance Ombudsman are the concepts of a private health insurer, a private health insurance broker, a health care provider and a private health insurance arrangement.

 

A private health insurer is a registered insurer who carries on health insurance business. 

 

A health care provider is a person who:

·          provides goods or services as, or as part of, hospital or general treatment; or

·          manufactures or supplies goods provided as, or as part of, hospital or general treatment

 

A private health insurance broker is a person who:

·          deals in insurance policies that cover hospital or general treatment (other than by being a registered private health insurer); and

·          acts on behalf of persons seeking to be insured under such policies.

 

A private health insurance arrangement includes any of :

·          a private health insurance policy or a product;

·          an agreement or arrangement between a private health insurer and a health care provider, or an arrangement between a private health insurer and a private health insurance broker;

·          an agreement or arrangement between a private health insurer and another person who is not a health care provider, or an agreement or arrangement between two or more health care providers, that relates to insurance in relation to hospital treatment or general treatment;

·          Private Health Insurance (Complying Product) Rules made for the purposes of item 1 or 5 of the table in subsection 72-1(2);

·          Private Health Insurance (Prostheses) Rules;

·          an arrangement between a private health insurance broker and a person seeking to become insured under a private health insurance policy.

 

A definition of PHI records is also added. The PHI records of the subject of a complaint or investigation are any of the following documents (whenever they came into existence) in the possession or control of the subject:

·          the constitution and rules (if the subject is an insurer);

·          internal training manuals and related documents;

·          documents relevant to a private health insurance arrangement to which the subject is a party or that applies to the subject; and

·          to the extent that a complaint or investigation relates to the subject’s dealing with a particular person, the subject’s documents relating to those dealings.

 

Item 3 repeals the note at the end of the definition of officer from subsection 3(1) of the Ombudsman Act 1976 and substitutes a note. The new note provides that for the meaning of officer in Parts IIB, IIC and IID of the Ombudsman Act 1976 (which deal with the Postal Industry, Overseas Students and Private Health Insurance Ombudsmen, respectively), the reader should see sections 19G, 19ZF and 20A of the Ombudsman Act 1976 .   

 

Item 4 amends paragraph 4A(e), which sets out the functions of the Commonwealth Ombudsman for the purposes of the finance law within the meaning of the Public Governance, Performance and Accountability Act 2013 .  Item  4 adds new subparagraph  4A(e)(v), providing a reference to the functions of the Private Health Insurance Ombudsman as specified in section 20D.

 

Item 5 inserts Part IID—Private Health Insurance Ombudsman after Part IIC of the Ombudsman Act 1976 as follows.

 

Division 1—Preliminary

 

Section 20

Section 20 provides that the object of Part IID is to establish the office of the Private Health Insurance Ombudsman and set out his or her powers and functions, so that the Private Health Insurance Ombudsman may protect the interests of people with private health insurance. Previously this provision was set out in section 235-1 of the Private Health Insurance Act 2007 .

 

The Private Health Insurance Ombudsman fulfils his or her role of protecting the interests of people with private health insurance by:

·          assisting people who have made complaints relating to private health insurance to resolve those complaints;

·          investigating the practices and procedures of private health insurers, private health insurance brokers and healthcare providers;

·          mediating between private health insurers and health care providers; and

·          disseminating information about private health insurance and the rights and obligations of privately insured people .

 

Section 20A

Section 20A sets out two definitions applicable for Part IID of the Ombudsman Act 1976 . An officer of a private health insurer for Part IID has the same meaning as in the Private Health Insurance Act 2007 , specifically a director or chief executive officer of the insurer or a person who makes, or participates in making, decisions that

affect the whole, or a substantial part, of the business of the insurer.

 

An officer of a subject of a complaint to the Private Health Insurance Ombudsman under Division 3 or the subject of an investigation undertaken at the initiative of the Ombudsman under Division 4 is:

·          if the subject is an individual—the individual; or

·          if the subject is a private health insurer—a person who is an officer of the insurer; or

·          if the subject is a company within the meaning of the Corporations Act 2001 —a director of the company; or

·          if the subject is an incorporated association—a member of the management committee of the association; or

·          if the subject is an unincorporated entity—a member of the governing body of the entity; or

·          if the subject is a partnership—a partner in the partnership.

 

This definition is being transferred from the Dictionary to the Private Health Insurance Act 2007 .

 

Section 20B

Section 20B provides that matters relevant to Part IID are also dealt with in the Private Health Insurance Ombudsman Rules. Previously this provision was set out in section 235-5 of the PHI Act.

 

A note to section 20B provides that the Private Health Insurance Ombudsman Rules are made by the Commonwealth Ombudsman under 20ZJ.

 

Division 2—Establishment and functions of the Private Health Insurance Ombudsman

 

Section 20C

Section 20C establishes the office of the Private Health Insurance Ombudsman.

 

Subsection 20C(1) provides that for the purposes of the Ombudsman Act 1976 there is to be a Private Health Insurance Ombudsman.

 

Subsection 20C(2) provides that the person who holds the office of the Commonwealth Ombudsman also holds the office of the Private Health Insurance Ombudsman.

 

Subsection 20C(3) provides that for the purposes of subsection 20C(2), a reference to the person who holds the office of the Commonwealth Ombudsman includes a person who is acting in that office at the time because of an appointment under section 29 of the Ombudsman Act 1976 .

 

Section 20D

Section 20D details the functions of the Private Health Insurance Ombudsman.  These are:

·          to deal with complaints made under Division 3 of the Ombudsman Act 1976 );

·          to conduct investigations at the initiative of the Ombudsman in accordance with Division 4 of the Ombudsman Act 1976 ) ;

·          to publish (in written form and on the Private Health Insurance Ombudsman’s website) a report called the State of the Health Funds Report, providing comparative information on the performance and service delivery of all private health insurers during a financial year, as soon as practicable after the end of each financial year;

·          to collect and publish (in written form and on the internet) information about the complying health insurance products available to people, in order to assist them to understand the entitlements and benefits available under those products;

·          to publish, in aggregate form, information (excluding personal information) about complaints made to the Private Health Insurance Ombudsman;

·          to report and make recommendations to the Minister for Health in relation to investigations undertaken by the Private Health Insurance Ombudsman (whether as a result of complaints or at the Ombudsman’s own initiative);

·          to report to the Minister for Health or to the Department of Health about the practices of particular private health insurers or private health insurance brokers;

·          to report (as part of the report mentioned above) to the Minister for Health or to the Department of Health about the practices of particular health care providers.  However, the Private  Health  Insurance Ombudsman may only report on the practices of particular providers to the extent they relate to:

o    the application of private health insurance arrangements or classes of arrangements to services or goods provided, or to goods manufactured or supplied, by the health care providers; or

o    private health insurance arrangements or classes of arrangements to which those kinds of health care providers may be party;

·          to make recommendations to the Minister for Health or the Department of Health about regulatory practices or industry practices relating to private health insurers or private health insurance brokers;

·          to make recommendations (as part of a recommendation mentioned above) to the Minister for Health or the Department of Health about regulatory practices or industry practices relating to health care providers. However, the Private  Health  Insurance Ombudsman may only report on the regulatory or industry practices relating to health care providers to the extent to which those practices relate to:

o    the application of private health insurance arrangements or classes of arrangements to services or goods provided, or to goods manufactured or supplied, by the health care providers; or

o    private health insurance arrangements or classes of arrangements to which those kinds of health care providers may be party;

·          to promote a knowledge and understanding of the Private Health Insurance Ombudsman’s functions; and

·          to perform any other functions that are incidental to the performance of any of the functions listed above.

 

Previously this provision was set out in section 238-5 of the Private Health Insurance Act 2007 .

 

Division 3 —Complaints

 

Subdivision A—Relevant Complaints

 

Section 20E

Subsection 20E(1) details who may make a complaint to the Private Health Insurance Ombudsman. These are:

·          a person who is, or was at the time of the incident to which the complaint relates, insured or seeking to be insured under a private health insurance policy

·          a private health insurer;

·          a health care provider; or

·          a private health insurance broker.

 

A note to subsection 20E(1) provides that section 7 of the Ombudsman Act 1976 also deals with making complaints. The note also provides that the application of section 7 to the Private Health Insurance Ombudsman is provided for in section 20ZK.

 

Subsection 20E(2) provides that a complaint may be made by a person on behalf of another person.

 

Previously this provision was set out in section 241-1 of the Private Health Insurance Act 2007 .

 

Section 20F

Section 20F sets out the classes of persons against whom complaints may be made to the Private Health Insurance Ombudsman.  These are private health insurers, health care providers and private health insurance brokers. These are the same classes of persons against whom a complaint could be made under section 241-5 of the Private Health Insurance Act 2007 .

 

Section 20G

Section 20G establishes the grounds on which complaints may be made to the Private Health Insurance Ombudsman. Previously this provision was set out in section 241-10 of the Private Health Insurance Act 2007 .

 

Subsection 20G(1), which is applicable to all complaints, provides that a complaint may be about any matter arising out of or connected with a private health insurance arrangement, or any matter arising out of or connected with Chapter 2 of the Private Health Insurance Act 2007 .  Chapter 2 of that Act deals with the lifetime health cover and premium reductions scheme.  

 

Paragraph 20G(2)(a) provides that when a complaint is against a health care provider, it must also be about either or both of ;

·          the application of a private health insurance arrangement to goods or a service provided, or goods manufactured or supplied, by the health care provider; or

·          a private health insurance arrangement to which the health care provider is, or was at the time of the incident to which the complaint relates, a party.   

 

Paragraph 20G(2)(b) further provides that a complaint against a health care provider must also:

·          be made against a private health insurer;

·          be made by a private health insurer or a person insured under a private health insurance policy; or

·          if the complaint is made by another health care provider or a private health insurance broker, a private health insurer or a policy-holder must also be a complainant.  

 

Subsection 20G(3) provides that the Private Health Insurance Ombudsman Rules may prescribe matters about which complaints cannot be made.

 

Subdivision B—Dealing with Complaints

 

Section 20H

Section 20H provides for the actions of the Private Health Insurance Ombudsman upon the initial receipt of a complaint.  Previously this provision was set out in section 241-15 of the Private Health Insurance Act 2007 .

 

Section 20H provides that on receiving a complaint, the Private Health Insurance Ombudsman may inform the subject of the complaint of the nature of the complaint and also may request or require information from the subject of the complaint under Division 6 of the Ombudsman Act 1976 .

 

Section 20J

Section 20J provides for the ways in which the Private Health Insurance Ombudsman may deal with complaints. Previously this provision was set out in section 241-20 of the Private Health Insurance Act 2007 .

 

Subsection 20J(1) provides that the Private Health Insurance Ombudsman may deal with a complaint by:

·          conducting mediation under Division 5 of the Ombudsman Act 1976;

·          referring the complaint to the private health insurer, private health insurance broker or health care provider who is the subject of the complaint under Subdivision C of the Ombudsman Act 1976 ; or

·          if the complaint is not resolved to the complainant’s satisfaction by mediation, or the Private Health Insurance Ombudsman is not satisfied with the outcome of a referral to the subject of a complaint and section 20P of the Ombudsman Act 1976 therefore applies, by investigating the complaint in accordance with Subdivision D of the Ombudsman Act 1976 .

 

Subsection 20J(2) provides that the Private Health Insurance Ombudsman must not take any of the above actions unless the complainant agrees.

 

Subsection 20J(3) provides that the Private Health Insurance Ombudsman must not undertake, or continue to undertake, an investigation or mediation if the complainant withdraws the complaint.

 

Subsection 20J(4) provides that the Private Health Insurance Ombudsman must not take any action mentioned in subsection 20J(1) if the complaint is about a matter prescribed by the Private Health Insurance Ombudsman Rules as a matter about which a complaint may not be made.

 

Section 20K

Section 20K provides for the referral of complaints from the Private Health Insurance Ombudsman to the Australian Competition and Consumer Commission. Previously this provision was set out in section 241-25 of the Private Health Insurance Act 2007 .

 

Subsection 20K(1) provides that the Private Health Insurance Ombudsman must refer a complaint to the Australian Competition and Consumer Commission if, in the Ombudsman’s opinion, a complaint raises a matter that could be dealt with more effectively or conveniently by the Australian Competition and Consumer Commission. This is subject to subsections 20K(2) and 20K(3).

 

Subsection 20K(2) provides that the Private Health Insurance Ombudsman must not refer a matter to the Australian Competition and Consumer Commission unless the complainant agrees to the referral.

 

Subsection 20K(3) provides that the Private Health Insurance Ombudsman must not refer a matter to the Australian Competition and Consumer Commission if the complainant withdraws the complaint.

 

Subsection 20K(4) provides that if the Private Health Insurance Ombudsman refers a matter to the Australian Competition and Consumer Commission, the Private Health Insurance Ombudsman must:

·          tell the complainant that the matter has been referred; and

·          give the Australian Competition and Consumer Commission any information or documents that relate to the complaint in the Private Health Insurance Ombudsman’s possession or under his or her control.

 

Subsection 20K(5) provides that the Australian Competition and Consumer Commission may investigate a matter. If the Commission does investigate it must report to the Private Health Insurance Ombudsman within 30 days after the referral on the conduct of the investigation and any findings that it has made.

 

Subsection 20K(6) provides that if the Australian Competition and Consumer Commission decides not to investigate a matter it must, within 30 days after the referral, give the Private Health Insurance Ombudsman a written notice informing the Private Health Insurance Ombudsman and giving its reasons for the decision.

 

Section 20L

Section 20L provides for the Private Health Insurance Ombudsman to refer complaints to other bodies.

 

Subsection 20L(1) provides that if, in the Private Insurance Ombudsman’s opinion, a complaint raises a matter that could be dealt with more effectively or conveniently by another body, the Private Health Insurance Ombudsman must, subject to section 20L, refer the matter to that body.

 

Subsection 20L(2) provides that the Private Health Insurance Ombudsman must not refer a matter to another body unless the complainant agrees to the referral.

 

Subsection 20L(3) provides that the Private Health Insurance Ombudsman must not refer a matter to another body if the complainant withdraws the complaint.

 

Subsection 20L(4) provides that if the Private Health Insurance Ombudsman refers a matter to another body, the Private Health Insurance Ombudsman must tell the complainant of the matter’s referral and give the other body any information or documents that relate to the complaint that are in the Private Health Insurance Ombudsman’s possession or under his or her control.

 

Subsections 20L(1) to (3) were previously set out in section 241-30 of the Private Health Insurance Act 2007 . Subsection 20L(4) has been added for consistency of style with similar provisions in the Ombudsman Act 1976 .

 

Section 20M

Section 20M sets out the grounds on which the Private Health Insurance Ombudsman may decide not to deal with a complaint. Previously this provision was set out in section 241-35 of the Private Health Insurance Act 2007 .

 

Subsection 20M(1) provides that the Private Health Insurance Ombudsman may decide not to deal, or not to continue to deal, with a complaint in accordance with the section. If the Private Health Insurance Ombudsman decides not to deal with a complaint he or she must tell the complainant of the decision and the reasons for it. If requested by the complainant, the Private Health Insurance Ombudsman must give written notice of the decision and the reasons for it.

 

Subsection 20M(2) provides that the Private Health Insurance Ombudsman may decide not to take any action in relation to a complaint if the incident complained about occurred more than 12 months before the complaint is made.

 

Subsection 20M(3) provides that the Private Health Insurance Ombudsman may decide not to deal with a complaint if satisfied that the complainant has not taken reasonable steps to negotiate a settlement of the complaint with the private health insurer, private health insurance broker or health care provider who is the subject of the complaint.

 

Subsection 20M(4) provides that the Private Health Insurance Ombudsman may decide not to deal, or not to continue to deal, with a complaint if the complainant does not agree to a matter relating to the complaint being referred to another body under section 20L of the Ombudsman Act 1976 .

 

Subsection 20M(5) provides that the Private Health Insurance Ombudsman may decide not to deal, or not to continue to deal, with a complaint, if he or she believes that:

·          the subject of the complaint has dealt, or is dealing, adequately with the complaint, or has not yet had an adequate opportunity to do so;

·          he or she has already dealt adequately with the complaint;

·          the complainant is capable of assisting the Private Health Insurance Ombudsman in dealing with the complaint but does not do so on request;

·          the complainant does not have a sufficient interest in the subject matter of the complaint;

·          the matter is trivial;

·          the complaint is frivolous or vexatious or not made in good faith;

·          the complaint is mainly about commercial negotiations and, having regard to the object of Part IID of the Ombudsman Act 1976 , it is not appropriate to deal, or to continue to deal, with the complaint;

·          the complaint is mainly about clinical matters and, having regard to the object of Part IID of the Ombudsman Act 1976 , it is not appropriate to deal, or continue to deal, with the complaint;

·          the complainant has exercised, or exercises, a right to have the matter to which the complaint relates reviewed by a court or tribunal constituted by or under a law of the Commonwealth or of a State or Territory;

·          both of the following apply:

o         the complainant has, or had, a right to have the matter to which the complaint relates reviewed by a court or tribunal constituted by or under a law of the Commonwealth or of a State or Territory, but has not exercised that right; and

o         it is, or would have been, reasonable for the complainant to exercise that right; or

·          to deal, or to continue to deal with the complaint is not warranted having regard to all of the circumstances - this particular power has been added to provide consistency with the discretion of the Commonwealth Ombudsman not to investigate other complaints under the Ombudsman Act 1976 .

 

Subdivision C—Referral to subjects of complaints

 

Section 20N

Section 20N deals with the referral of a complaint to the subject of a complaint. Previously this provision was set out in section 241-40 of the Private Health Insurance Act 2007 .

 

Subsection 20N provides that the Private Health Insurance Ombudsman may, at any time and whether or not mediation has been conducted, refer a complaint to the subject of the complaint (i.e. a private health insurer, private health insurance broker or health care provider) and request the subject:

·          investigate the complaint; and

·          report to the Private Health Insurance Ombudsman on the outcome of the investigation and any action that the subject proposes to take as a result, before the end of the period specified in the request.

 

A note to subsection 20N provides that the Private Health Insurance Ombudsman must have the complainant’s agreement to act under section 20N.

 

The capacity that existed under section 241-40 of the Private Health Insurance Act 2007 for the subject of a complaint to request additional time to report to the Private Health Insurance Ombudsman has been removed to provide consistency with the existing powers and administrative processes of the Commonwealth Ombudsman under the Ombudsman Act 1976 .

 

Subdivision D—Investigation of complaints

 

Section 20P

Section 20P deals with the investigation of complaints by the Private Health Insurance Ombudsman. Previously this provision was set out in section 241-45 of the Private Health Insurance Act 2007 .

 

The section provides that the Private Health Insurance Ombudsman may investigate a complaint if the complaint is not resolved to the complainant’s satisfaction by mediation, or the Private Health Insurance Ombudsman is not satisfied with the outcome of a referral to the subject of the complaint under Subdivision C.

 

A note to section 20P provides that the Private Health Insurance Ombudsman must have the complainant’s agreement to act under the section and cannot continue if the complaint is withdrawn.

 

Subdivision E—Recommendations and reports

 

Section 20Q

Section 20Q provides for the Private Health Insurance Ombudsman to make recommendations to private health insurers, private health insurance brokers or health care providers as a result of referring a complaint to the subject of the complaint or investigating a complaint. Previously this provision was set out in section 241-55 of the Private Health Insurance Act 2007 .

 

Subsection 20Q(1) provides that the Private Health Insurance Ombudsman may make recommendations under section 20Q after:

·          receiving a report from the subject of a complaint after referral under Subdivision C; or.

·          investigating a complaint under Subdivision D.

 

Subsection 20Q(2) provides that the Private Health Insurance Ombudsman may recommend any or all of:

·          to a private health insurer, that the insurer take a specific course of action in relation to the complaint or make changes to its rules, or both;

·          to a private health insurer, that the insurer request a health care provider or private health insurance broker to take a specific course of action in relation to the complaint;

·          to a health care provider or private health insurance broker, that the provider or broker take a specific course of action in relation to the complaint.

 

Subsection 20Q(3) provides that the Private Health Insurance Ombudsman may by written notice given to the person to whom the recommendation was made, or an officer of that person, require the person to report to the Private Health Insurance Ombudsman on the action proposed to be taken to give effect to the recommendation, before action is taken. The notice must specify the period within which the report is to be given.

 

The specific offence for failing to report to the Private Health Insurance Ombudsman on the action proposed to be taken that was previously found in subsection 241-55(4) of the Private Health Insurance Act 2007 has not been included in section 20Q. Item 13 of Schedule 1 to the Bill amends section 36 of the Ombudsman Act 1976 so that failing to give a report when required to do so under that Act will constitute an offence.  This will be relied on in the event of non-compliance with section 20Q.

 

Section 20R

Section 20R provides for the Private Health Insurance Ombudsman to report and make recommendations to the Minister for Health following an investigation arising from a complaint to the Ombudsman.  Previously this provision was set out in section 241-60 of the Private Health Insurance Act 2007 .

 

Subsection 20R(1) provides that the Private Health Insurance Ombudsman may report and make recommendations under section 20R after completing an investigation of a complaint against a particular subject under Subdivision D.

 

Subsection 20R(2) provides that the Private Health Insurance Ombudsman may report to the Minister for Health on the outcome of the investigation (including any recommendations made to the subject of the complaint and any responses to those recommendations from the subject).

 

Subsection 20R(3) provides that the Private Health Insurance Ombudsman may recommend to the Minister for Health either or both:

·          general changes in regulatory practice or industry practices relating to the kind of subject of the complaint (i.e. private health insurance broker, private health insurer or health care provider);

·          possible means of dealing with specific problems arising in relation to the particular subject of the complaint.

 

Subsection 20R(4) provides that the Private Health Insurance Ombudsman may make recommendations about possible means of dealing with specific problems arising in relation to health care providers or a particular health care provider only to the extent to which the recommendations relate to:

·          the application of a private health insurance arrangement or a class of private health insurance arrangements to services or goods provided, or goods manufactured or supplied, by that kind of health care provider; or

·          a private health insurance arrangement or a class of private health insurance arrangements to which that kind of provider may be party.

 

Subsection 20R(5) provides that before reporting to the Minister for Health the Private Health Insurance Ombudsman must both:.

·          inform the subject of the complaint that the Private Health Insurance Ombudsman proposes to make the report and of the nature of any criticism of the subject’s conduct that will appear in the report; and

·          invite the subject of the complaint to comment on such criticism, before the end of the period specified in the invitation.

 

Subsection 20R(5) further provides that any comments made by the subject of the complaint must be included in the report made to the Minister for Health.

 

Subdivision F—Miscellaneous

 

Section 20S

Section 20S deals with keeping complainants informed about the Private Health Insurance Ombudsman’s handling of the complaint. Previously this provision was set out in section 241-65 of the Private Health Insurance Act 2007 .

 

Subsection 20S(1) provides that the Private Health Insurance Ombudsman must keep a complainant informed about the Ombudsman’s handling of the complaint.

 

Subsection 20S(2) provides that the Private Health Insurance Ombudsman must inform the complainant in writing of:

·          any action taken by a private health insurer, health care provider or private health insurance broker as a result of the Ombudsman’s handling of the complaint, and also of any recommendations made by the Ombudsman under section 20Q; and 

·          the reasons for any action or recommendation .

 

Division 4—Investigations

 

Subdivision A—Investigations

 

Section 20T

Section 20T provides for the initiation of investigations by the Private Health Insurance Ombudsman at the Ombudsman’s own initiative. Previously this provision was set out in section 244-1 of the Private Health Insurance Act 2007 .

Subsection 20T(1) provides that the Private Health Insurance Ombudsman may, on his or her own initiative, investigate the practices and procedures of a private health insurer or a private health insurance broker.

 

Subsection 20T(2) provides that the Private Health Insurance Ombudsman may, on his or her own initiative, investigate the practices and procedures of a health care provider together with an investigation of a private health insurer under subsection 20T(1).  However, the Private Health Insurance Ombudsman may only do so if:

·          the investigation relates to a matter arising out of or connected with a private health insurance arrangement; and

·          the practices and procedures relate to the application of a private health insurance arrangement to services or goods provided, or to goods manufactured or supplied, by the health care provider , or to a private health insurance arrangement to which the health care provider is, or was in the period to be investigated, a party; and

·          the Private Health Insurance Ombudsman considers, having regard to the object of Part IID, that investigation of the health care provider together with the private health insurer is necessary or appropriate in order to consider the matter effectively.

 

A note to subsection 20T(2) provides that an investigation may include mediation.

 

Subdivision B—Recommendations and reports

 

Section 20U

Section 20U provides for the Private Health Insurance Ombudsman to make recommendations to private health insurers, private health insurance brokers or health care providers as a result of own-motion investigations made by the Private Health Insurance Ombudsman. Previously this provision was set out in section 244-10 of the Private Health Insurance Act 2007 .

 

Subsection 20U(1) provides that the Private Health Insurance Ombudsman may make recommendations under section after conducting an investigation under Division 4 (i.e. an investigation at the initiative of the Ombudsman).

 

Subsection 20U(2) provides that the Private Health Insurance Ombudsman may recommend either or both of the following:

·          to a private health insurer, that the insurer take a specific course of action or make changes to its rules;

·          to a health care provider or private health insurance broker, that the provider or broker take a specific course of action.

 

Subsection 20U(3) provides that the Private Health Insurance Ombudsman by written notice given to the person to whom a recommendation is made, or an officer of that person, require the person to report to the Private Health Insurance Ombudsman on the action proposed to be taken to give effect to the recommendation, before the action is taken. The notice must specify the period within which the report is to be given.

 

The specific offence for failing to report to the Private Health Insurance Ombudsman on the action proposed to be taken that was previously found in subsection 244-10(4) of the Private Health Insurance Act 2007 has not been included in section 20U. Item 13 of Schedule 1 to the Bill amends section 36 of the Ombudsman Act 1976 so that failing to give a report when required to do so under that Act will constitute an offence.  The offence in section 36 will be relied on in the event of non-compliance with this section.

 

Section 20V

Section 20V provides that the Private Health Insurance Ombudsman may report to the Minister for Health on outcomes of own-motion investigations under Division 4. Previously this provision was set out in section 244-15 of the Private Health Insurance Act 2007 .

 

Subsection 20V(1) provides that the Private Health Insurance Ombudsman may, after completing an investigation under section 20T:

·          report to the Minister for Health on the outcome of the investigation and any mediation conducted as part of the investigation (including any recommendations made to the subject of the investigation);

·          make recommendations to the Minister for Health concerning:

o     general changes in regulatory practice or industry practices relating to that kind of subject of investigation; or

o     possible means of dealing with specific problems arising in relation to the particular subject of the investigation.

 

However, subsection 20T(2) provides that the Private Health Insurance Ombudsman may make recommendations concerning changes in regulatory or industry practices relating to health care providers, or possible means of dealing with specific problems arising in relation to a particular health care provider that is the subject of an investigation only to the extent to which the recommendations relate to:

·          the application of a private health insurance arrangement or a class of private health insurance arrangements to services or goods provided, or to goods manufactured or supplied, by that kind of health care provider; or

·          a private health insurance arrangement or a class of private health insurance arrangements to which that kind of health care provider may be party.

 

Subsection 20T(3) provides that before reporting to the Minister for Health the Private Health Insurance Ombudsman must:

·          inform the subject of the investigation that the Ombudsman proposes to make the report and the nature of any criticism of the conduct of the subject that will appear in the report; and

·          invite the subject of the investigation to comment on any criticism that appears in a report before the end of the period specified in the invitation.

 

Subsection 20T(3) further provides that a report must include any comments made by the subject of the investigation.

 

Section 20W

Section 20W provides that if the Private Health Insurance Ombudsman considers, as a result of an investigation under this Division, that there might have been conduct in the nature of a restrictive trade practice for the purposes of the Competition and Consumer Act 2010 , the Private Health Insurance Ombudsman must, before the Ombudsman reports on the matter under section 20V:

·          consult with the Australian Competition and Consumer Commission; and

·          have regard to the advice of the Australian Competition and Consumer Commission on the matter.

 

Previously this provision was set out in section 244-20 of the Private Health Insurance Act 2007 .

 

Division 5—Mediation

 

Section 20X

Section 20X provides for the Private Health Insurance Ombudsman to conduct mediation. Previously this provision was set out in section 247-1 of the Private Health Insurance Act 2007 .

 

Subsection 20X(1) provides that the Private Health Insurance Ombudsman may, at any time, try to settle a complaint by mediating between the complainant and the subject of the complaint.

 

Subsection 20X(2) provides that the Private Health Insurance Ombudsman may, if he or she considers it appropriate and consistent with the object of Part IID, try to resolve a matter being investigated at the initiative of the Ombudsman under Division 4 by mediating between a private health insurer and a health care provider.

 

Subsection 20X(3) provides that a party may participate in mediation voluntarily or be required to participate in mediation by a direction given by the Private Health Insurance Ombudsman under section 20Y.

 

A note to subsection 20X(3) provides that the Private Health Insurance Ombudsman must have the complainant’s agreement to mediation to try to resolve a complaint and cannot continue if the complaint is withdrawn.

 

Section 20Y

Section 20Y deals with compulsory attendance at mediation. Previously this provision was set out in section 247-5 of the Private Health Insurance Act 2007 .

 

Subsection 20Y(1) provides that the Private Health Insurance Ombudsman may direct the subject of a complaint, or a private health insurer or health care provider that is the subject of an investigation under Division 4, to participate in mediation.

 

Subsection 20Y(2) provides that the Private Health Insurance Ombudsman Rules may prescribe matters to which the Private Health Insurance Ombudsman is to have regard when deciding whether or not to give a direction under subsection 20Y(1).

 

Subsection 20Y(3) provides that a direction made under section 20Y made by the Private Health Insurance Ombudsman must:

·          be in writing;

·          name either or both the subject of the complaint or investigation, or an officer, or officers, of the subject;

·          be given to those named in it;

·          specify the time of the mediation, which must not be earlier than 14 days after the day the direction is given; and

·          specify the place of the mediation.

 

A note to subsection 20Y(3) provides that subsection 33(3) of the Acts Interpretation Act 1901 has the effect that the direction may be varied or revoked.

 

Subsection 20Y(4) provides that a person commits an offence if the person is named in a direction, the other party to the mediation attends or was willing to attend the mediation and the person fails to participate in some or all of the mediation.  Where a medical practitioner named in a direction to attend mediation has appointed a representative under section 20Z, the offence under section 20Y(4) will be made out where the representative fails to participate in some or all of the mediation (and the other party does or is willing to attend).

 

The penalty for an offence is 10 penalty units. This penalty has been reduced from 30 penalty units under section 247-5 of the Private Health Insurance Act 2007 .

 

Section 20Z

Section 20Z enables medical practitioners to appoint representatives to act on their behalf if the practitioner is directed to attend mediations. Previously this provision was set out in section 247-10 of the Private Health Insurance Act 2007 .

 

Subsection 20Z(1) provides that if the Private Health Insurance Ombudsman directs a medical practitioner to participate in mediation, the medical practitioner may appoint an individual to participate on the practitioner’s behalf.

 

Subsection 20Z(2) provides that an appointment of a medical practitioner’s representative must be in writing, be signed by the medical practitioner and be made before any mediation begins.

 

Section 20ZA

Section 20ZA deals with the conduct of compulsory mediation. Previously this provision was set out in section 247-15 of the Private Health Insurance Act 2007 .

 

Subsection 20ZA(1) provides that if the Private Health Insurance Ombudsman directs a party to participate in mediation, the mediation may be conducted by the Private Health Insurance Ombudsman or by a person appointed by the Private Health Insurance Ombudsman under section 20ZC .

 

Subsection 20ZA(2) provides that mediation in which a party has been directed to participate by the Private Health Insurance Ombudsman will cease if the parties involved agree to settle the matter or the Private Health Insurance Ombudsman concludes that the matter cannot be settled by mediation.

 

Subsection 20ZA(3) provides that the Private Health Insurance Ombudsman Rules may prescribe matters to which the Private Health Insurance Ombudsman is to have regard before concluding that a matter cannot be settled by mediation.

 

Subsection 20ZA(4) provides that a person appointed by the Private Health Insurance Ombudsman to conduct mediation must, as soon as practicable after the mediation is or should have been conducted, report to the Private Health Insurance Ombudsman about:

·          whether the mediation was conducted;

·          if the mediation failed, the reasons for that failure; and

·          if the parties agreed to settle the complaint, the terms of the settlement, including any action that was agreed to be taken.

 

Section 20ZB

Section 20ZB deals with the admissibility of things said by parties to a mediation. Previously this provision was set out in section 247-20 of the Private Health Insurance Act 2007 .

 

Subsection 20ZB(1) provides that the evidence of anything said, or any admission made, during participation in mediation under section 20X is not admissible in any court (whether exercising federal jurisdiction or not) or in any proceedings before a person authorised by a law of the Commonwealth or of a State or Territory, or by the consent of the parties, to hear evidence.

 

Subsection 20ZB(2) provides that section 20ZB applies whether or not a party has been directed to participate in the mediation by the Private Health Insurance Ombudsman.

 

Section 20ZC

Section 20ZC provides for the appointment of mediators by the Private Health Insurance Ombudsman. Previously this provision was set out in section 247-25 of the Private Health Insurance Act 2007 .

 

Subsection 20ZC(1) provides that the Private Health Insurance Ombudsman may appoint a person to conduct mediation in which a person is or will be directed to participate.

 

Subsection 20ZC(2) provides that the Private Health Insurance Ombudsman Rules may prescribe matters to which the Private Health Insurance Ombudsman is to have regard when appointing a person to conduct mediation.

 

Subsection 20ZC(3) provides that a person appointed as a mediator is appointed for the period specified by the Private Health Insurance Ombudsman in the instrument of appointment.

 

Subsection 20ZC(4) provides that subject to section 35 of the Ombudsman Act 1976 , which imposes an obligation on officers not to disclose or record information obtained under the Act (subject to specified exceptions), a mediator appointed under section 20ZC is not personally liable to an action or other proceeding for damages in relation to anything done or omitted to be done, reasonably and in good faith, in or in relation to the conduct of the mediation.

 

Division 6—Information-gathering

 

Section 20ZD

Section 20ZD deals with the power of the Private Health Insurance Ombudsman to request records and information.

 

Subsection 20ZD(1) provides that the Private Health Insurance Ombudsman may, in accordance with section 20ZD, obtain such information, and make such inquiries, as he or she thinks fit.

 

However, subsection 20ZD(2) provides that the Private Health Insurance Ombudsman may request a person to give a PHI record or information under the section only if the Ombudsman could require the person to give the record or information to the Private Health Insurance Ombudsman under section 20ZD.

 

The PHI records of the subject of a complaint or investigation (see item 2 of Schedule 1) include the constitution and rules of an insurer, internal training manuals and documents relevant to a private health insurance arrangement to which the subject is a party or that applies to the subject. To the extent that a complaint or investigation relates to the subject’s dealing with a particular person, PHI records also include the subject’s records relating those dealings.

 

Section 20ZD has no equivalent in the Private Health Insurance Act 2007 , which only provided for the Private Health Insurance Ombudsman to seek information from the subject of a complaint by issuing written notices to the subject, failure to comply with which was an offence. Section 20ZD has been introduced for consistency with administrative procedures between the operations of the Commonwealth Ombudsman and the Private Health Insurance Ombudsman. 

 

Section 20ZE

Section 20ZE establishes the power of the Private Health Insurance Ombudsman to compel the production of PHI records and information.

 

Subsection 20ZE(1) provides that if the Private Health Insurance Ombudsman reasonably believes that a person is capable of giving information or PHI records relevant to deciding whether or how to deal with a complaint, mediating or investigating a complaint or evaluating actions proposed to be taken by the subject of a complaint following referral of a complaint to the subject, or from performing an investigation under Division 4 (including mediating as part of the investigation under Division 5), the Private Health Insurance Ombudsman may, by notice in writing given to the person, require the person, to give the Private Health Insurance Ombudsman the information or the PHI records (relating to the complaint or the practices and procedures being investigated) that are specified in the notice, before the end of the period specified in the notice.

 

Subsection 20ZE(2) provides that the Private Health Insurance Ombudsman may give one or more notices under subsection 20ZE(1) in relation to a complaint or investigation, at any time while the Private Health Insurance Ombudsman is dealing with the complaint or investigation.

 

Subsection 20ZE(3) provides that a person is not excused from giving information or a PHI record when required to do so under subsection 20ZE(1) on the ground that the information or PHI record might tend to incriminate the person or expose the person to a penalty.

 

A note to section 20ZE provides that section 20ZF deals with matters such as the person’s exposure to penalty and the admissibility of such information or PHI records.

 

However, section 20ZE limits how information or PHI records provided as the result of a request or notice may be used against the person who gives the information or PHI record.

 

Previously this provision was set out in section 250-1 of the Private Health Insurance Act 2007 .  However, the specific offence in that section for failing to provide information or documents to the Private Health Insurance Ombudsman on request has not been reproduced.  Section 36 of the Ombudsman Act 1976 makes it an offence to fail to, among other things, furnish information or produce a document or record when required to do so under the Ombudsman Act 1976 and will be applied to the Private Health Insurance Ombudsman. 

 

Section 20ZF

Section 20ZF deals with certain implications of providing information or PHI records to the Private Health Insurance Ombudsman pursuant to a request or notice.  

 

Subsection 20ZF(1) provides that section 20ZF applies when a person gives information or a PHI record to the Private Health Insurance Ombudsman:

·          in compliance with a request under section 20ZD or a notice under section 20ZE; or

·          reasonably believing that this would assist the Private Health Insurance Ombudsman in:

o    mediating a complaint under Division 5 or otherwise dealing with it under Subdivision B or D of Division 3; or

o    referring a complaint under section 20K or 20L; or

o    making a decision under section 20M not to deal, or not to continue to deal, with a complaint; or

o    investigating a matter under section 20T.

 

Subsection 20ZF(2) provides that a person is not liable to any penalty under the provisions of any other enactment by reason of his or her giving information or PHI records to the Private Health Insurance Ombudsman in compliance with a request under section 20ZD or a notice under section 20ZE.

 

Subsection 20ZF(3) provides that for the purposes of the Privacy Act 1988 or any provision of a law of a State or Territory where the personal information contained in a record or information may be disclosed if authorised by law, the giving of information or records to the Private Health Insurance Ombudsman is taken to be authorised by the Ombudsman Act 1976 .

 

Subsection 20ZF(4) provides that section 20ZF does not otherwise affect a claim of legal professional privilege that anyone may make in relation to the information or PHI record.

 

Subsection 20ZF(5) provides that if the information or PHI record is given by an individual and, by giving the information the PHI record the individual:

·          contravenes any other law;

·          might tend to incriminate the person or make them liable to a penalty;

·          discloses a legal advice given to the subject of a complaint made under Division 3 or an investigation under Division 4; or.

·          if the subject of a complaint made under Division 3 or an investigation under Division 4 is an individual—discloses a privileged communication between the subject and another person or body; or

·          if the subject of a complaint made under Division 3 or an investigation under Division 4 is not an individual—discloses a privileged communication between:

o     an officer of the subject and another person or body; or

o     a person who is employed in the service of, or engaged to provide services to, the subject, and another person or body; or

·          otherwise acts contrary to the public interest;

 

then none of the following are admissible in evidence against the individual in any proceedings, other than proceedings for an offence against section 137.1, 137.2 or 149.1 of the Criminal Code that relates to the Ombudsman Act 1976 :

·          the information or PHI record given;

·          giving the information or PHI record;

·          any information, document or thing obtained as a direct or indirect consequence of giving the information or PHI record.

 

Sections 137.1 and 137.2 of the Criminal Code relate to making false or misleading statements in certain applications to the Commonwealth or to the Commonwealth or a Commonwealth officer, respectively.  Section 149.1 relates to obstructing, hindering or resisting a Commonwealth official performing public functions. 

 

Subsection 20ZF(6) provides that in section 20ZF privileged communication means a communication protected against disclosure by legal professional privilege.

 

Division 7—Provisions relating to the Private Health Insurance Ombudsman

 

Section 20ZG

Section 20ZG deals with annual and additional reports to be provided by the Private Health Insurance Ombudsman.

 

Subsection 20ZG(1) provides that as soon as practicable after the end of each financial year, the Private Health Insurance Ombudsman must give an annual report to the Minister, for presentation to the Parliament, on the operations of the Private Health Insurance Ombudsman during the financial year. In this case, the Minister referred to is the Minister responsible for administering the Ombudsman Act 1976 .

 

Subsection 20ZG(2) provides that the Private Health Insurance Ombudsman may, from time to time, give the Minister, for presentation to the Parliament, a report:

·          on the operations of the Ombudsman during a part of a year; or

·          in relation to any matter relating to, or arising in connection with, the exercise of the powers, or the performance of the functions, of the Private Health Insurance Ombudsman.

 

Subsection 20ZG(3) provides that subsections 20ZG(1) and 20G(2) do not affect the powers and duties of the Private Health Insurance Ombudsman under paragraphs 20D(c) or (g) or sections 20R or 20V.  Those provisions deal with the annual State of the Health Funds Report and reports made by the Private Health Insurance Ombudsman to the Health Minister.

 

Subsection 20ZG(4) provides that if the Private Health Insurance Ombudsman gives a report to the Minister under subsection 20ZG(1) or 20ZG(2), the Minister must cause the report to be laid before each House of the Parliament within 15 sitting days of that House after the Minister receives the report.

 

Subsection 20ZG(5) provides that a report relating to the operations of the Private Health Insurance Ombudsman during a period may be included in a report made under section 19 of the Ombudsman Act 1976 or section 46 of the Public Governance, Performance and Accountability Act 2013 relating to the operation of the Private Health Insurance Ombudsman during that period.

 

Subsection 20ZG(6) provides that a report relating to the operations of the Private Health Insurance Ombudsman during a period must include:

·          the number and nature of complaints received;

·          the outcomes of any actions taken, recommendations made or investigations conducted in relation to such complaints;

·          the outcomes in relation to complaints referred to another body under section 20L;

·          the number and nature of investigations (if any) conducted by the Private Health Insurance Ombudsman under section 20T; and

·          the outcomes of investigations conducted under section 20T.

 

Division 8—Miscellaneous

 

Section 20ZH

Section 20ZH provides that a person commits an offence if he or she subjects, or threatens to subject, another person to detriment and because the other person has made, or proposes to make, a complaint under Part IID. The penalty for committing such an offence is six months imprisonment.

 

This offence was previously set out in section 256-5 of the Private Health Insurance Act 2007 .

 

Section 20ZI

Subsections 20ZI(1) and (2) enable the Private Health Insurance Ombudsman to require private health insurers by written notice to give specified information about the functions of the Ombudsman to adult policy-holders, or to publish the information in a specified manner.

 

Subsection 20ZI(3) provides that if more than one adult is insured under a single complying health insurance policy of a private health insurer, the insurer is taken to comply with a notice if the insurer complies with the notice in relation to only one of those adults.

 

Previously this provision was set out in section 256-10 of the Private Health Insurance Act 2007 .

 

Section 20ZJ

Section 20ZJ provides for the making of the Private Health Insurance Ombudsman Rules. These Rules were previously made under section 333-20 of the Private Health Insurance Act 2007 by the Minister for Health.

 

Subsection 20ZJ(1) provides that the Commonwealth Ombudsman may, by legislative instrument (and subject to subsection 20ZJ(2)), make rules prescribing matters required or permitted by Part IID to be prescribed by the rules, or necessary or convenient to be prescribed for carrying out or giving effect to Part IID.

 

Subsection 20ZJ(2) provides that the Rules may not:

·          create an offence or civil penalty provision;

·          provide powers of arrest or detention or entry, search or seizure;

·          impose a tax;

·          set an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in the Ombudsman Act 1976 ; or

·          amend the Ombudsman Act 1976 .

 

Using rules, rather than regulations, as the form of legislative instrument is consistent with current drafting practice and the Office of Parliamentary Counsel’s Drafting Direction 3.8 on subordinate legislation. The Office of Parliamentary Counsel’s starting point is that subordinate instruments should be made in the form of legislative instruments (as distinct from regulations) unless there is good reason not to do so.  This is subject to the qualification that there are some things that should be done in regulations unless there is a strong justification for prescribing those provisions in another type of legislative instrument.  None of these things are in contemplation for these rules.

 

The Commonwealth Ombudsman was deemed to be sufficient to be granted this rule-making power in lieu of a Minister in light of the Ombudsman’s significant responsibilities and detailed subject knowledge.

 

There is no power in the Ombudsman Act 1976 for the Commonwealth Ombudsman to delegate his or her power to make rules (see item 7 of Schedule 1).

 

Section 20ZK

Section 20ZK provides for the application to the Private Health Insurance Ombudsman of a number of provisions of the Ombudsman Act 1976 that are not contained within Part IID.

 

Subsection 20ZK(1) provides that subject to section 20ZK, the following provisions apply in relation to the Private Health Insurance Ombudsman as if a reference in any of those provisions to the Ombudsman were a reference to the Private Health Insurance Ombudsman:

·          the definition of authorized person in subsection 3(1);

·          section 7 ( complaints);

·          section 11A (powers of Federal Court of Australia);

·          subsection 31(1) (staff);

·          section 33 ( Ombudsman not to be sued);

·          Section 34(7) (delegation from State Ombudsman);

·          section 35 (officers to observe confidentiality);

·          section 35AA ( disclosure of information and documents to Integrity Commissioner);

·          35A ( disclosure of information by Ombudsman) ;

·          section 35B (d isclosure of ACC information);

·          section 35C (disclosure of ACLEI information);

·          section 36 (offences);

·          section 37 (protection from civil actions).



 

Application of section 7 of the Ombudsman Act 1976

Paragraph 20ZK(2)(a) provides section 7 applies as if a reference to ‘investigating a complaint’ should apply as if it were a reference to dealing with a complaint as mentioned in a subsection 20J(1).

 

Section 7 of the Ombudsman Act 1976 sets out some procedural provisions for making complaints to the Ombudsman. As applied, it will provide (among other things) that complaints to the Private Health Insurance Ombudsman may be made orally or in writing and that the Private Health Insurance Ombudsman may decline to investigate an oral complaint further if the complainant refuses to reduce the complaint to writing where requested to do so.

 

Application of section 11A of the Ombudsman Act 1976

Paragraph 20ZK(2)(b) provides that:

·          a reference in section 11A to a ‘requirement made by the Ombudsman by notice under section 9 to furnish information, to produce documents or other records or to attend before the Ombudsman to answer questions in relation to an investigation under this Act’ should apply as if it were a reference to a requirement made by the Private Health Insurance Ombudsman by notice under section 20ZE to give information or PHI records in relation to a complaint made under Division 3 of Part IID or an investigation under Division 4 of Part IID; and

·          a reference in section 11A to an ‘order directing the person to furnish the information, produce the documents or attend before the Ombudsman to answer questions’ should apply as if it were a reference to an order directing the person to give the information or PHI records to the Private Health Insurance Ombudsman.

 

Section 11A of the Ombudsman Act 1976 , as applied, will enable the Private Health Insurance Ombudsman to seek an order from the Federal Court ordering a person who has failed to comply with a requirement to give information or records to the Private Health Insurance Ombudsman to produce the relevant information or PHI records.

 

Application of subparagraph 35(3)(b)(i) of the Ombudsman Act 1976

Paragraph 20ZK(2)(c) provides that in subparagraph 35(3)(b)(i), in relation to information relating to a complaint made under Division 3 of Part IID or an investigation under Division 4 of Part IID the subject of which is not an individual:

 

·          a reference to information given by an officer of a Department or prescribed authority in the performance of his or her duties should apply as if it were a reference to information given by an officer of the subject or a person employed in the service of, or engaged to provide services to, the subject; and

 

·          a reference to the principal officer of the Department or authority or the responsible Minister should apply as if it were a reference to the individual primarily responsible for the management of the subject.

 

Subparagraph 35(3)(b)(i) of the Ombudsman Act 1976 , as applied, will authorise the Private Health Insurance Ombudsman or officers assisting the Ombudsman to disclose information given to the Ombudsman by an officer, employee or contractor of the subject of a complaint (other than a subject who is an individual) with the consent of the person primarily responsible for the management of the subject (eg the Chief Executive Officer of an insurer). Where the subject of a complaint is an individual, that individual can consent to the disclosure of information they have provided to the Private Health Insurance Ombudsman under subparagraph 35(3)(b)(ii). 

 

Application of subsection 35(6A ) of the Ombudsman Act 1976

Paragraph 20ZK(2)(d) provides a reference in subsection 35(6A) to paragraph 6(4D)(e) or 6(18)(d) should apply as if it were a reference to paragraph 20K(4)(b), 20L(4)(b) or section 20W. 

 

Subsection 35(6A) of the Ombudsman Act 1976 , as applied, will expressly enable the Private Health Insurance Ombudsman or an officer acting on his or her behalf to disclose information or documents to the Australian Competition and Consumer Commission (ACCC) or to another body where the Private Health Insurance Ombudsman refers a complaint to the ACCC or other body under sections 20K or 20L, respectively.  It will also enable disclosure to the ACCC for the purposes of consulting with the ACCC on possible restrictive trade practices under section 20W.

 

Application of section 35AA of the Ombudsman Act 1976

Paragraph 20ZK(2)(e) provides that a reference in section 35AA to the ‘investigation of an action as mentioned in paragraph 5(1)(b)’ should apply as if it were a reference to an investigation of, or mediation in relation to, a complaint. Section 35AA deals with the disclosure of information to the Integrity Commissioner. The section, as applied, will enable the Private Health Insurance Ombudsman to disclose information or documents to the Integrity Commissioner if, in the course of an investigation, the Private Health Insurance Ombudsman obtains information or a document that may be relevant to a corruption issue. 

 

Application of section 35A of the Ombudsman Act 1976

Paragraph 20ZK(2)(f) provides that a reference in section 35A to an ‘investigation’ by the Commonwealth Ombudsman should apply as if it were a reference to the Private Health Insurance Ombudsman’s dealing with a complaint or conducting an own-motion investigation.

 

Section 35A deals with the disclosure of information or making of a statement by the Ombudsman with respect to the Ombudsman’s performance of his or her duties.  Section 35A as applied will enable the Private Health Insurance Ombudsman to disclose information or make a statement with respect to the performance of his or her duties to any person, or the public or a section of the public if, in the Private Health Insurance Ombudsman’s opinion, it is in the interests of any Department, prescribed authority or person, or otherwise in the public interest, to do so. 

 

However, the Private Health Insurance Ombudsman cannot disclose information or make a statement under section 35A with respect to a particular investigation,  mediation or referral to the subject of a complaint if to do so is likely to interfere with the carrying out of that investigation, mediation or referral. 

 

The ability of the Private Health Insurance Ombudsman to disclose information or make statements under section 35A is affected by section 35B and section 35C of the Ombudsman Act 1976 , both of which have also been applied to the Private Health Insurance Ombudsman.

 

Section 35B as applied will prevent the Private Health Insurance Ombudsman from disclosing information or the content of documents or records that are or were in the possession of the Australian Crime Commission or the Board of the Commission if the Attorney-General certifies that the disclosure of the information would be contrary to the public interest, including because it would prejudice the fair trial of a person or risk the safety of a person. Section 35C will prevent the disclosure of information or the contents of documents that are or were in the possession of the Australian Commission for Law Enforcement Integrity on the same grounds. 

 

Application of subsection 35B(2) and 35C(2) of the Ombudsman Act 1976

Paragraph 20ZK(2)(g) provides that in the definition of listed disclosure method in subsections 35B(2) and 35C(2) a reference to Division 2 of Part II is to apply as if it were a reference to section 20R, 20V or 20ZG and a reference to section 6 or 6A is to apply as if it were a reference to section 20K or 20L.

 

Application of section 37 of the Ombudsman Act 1976

Paragraph 20ZK(2)(h) provides that a reference in section 37 to a ‘requirement under section 9’ should apply as if it were a reference to a requirement under section 20ZE.

 

Section 37 as applied will prevent civil proceedings lying against any person in respect of loss, damage or injury of any kind suffered by another person because of

·          a complaint made to the Private Health Insurance Ombudsman in good faith; or

·          a statement to, or documents or information given to an officer under the Ombudsman Act 1976 for the purposes of the Act (whether or not given in pursuance of a requirement under section 20ZE or section 11A).

 

Item 6 renumbers section 20 of the Ombudsman Act 1976 as section 20ZL to allow for the insertion of the new section 20 into the Ombudsman Act 1976 .

 

Item 7 amends subsection 34(1) of the Ombudsman Act 1976 , which deals with the delegations of power by the Commonwealth Ombudsman under the Act. This item removes “17 and 19” from paragraph 34(1)(a) and substitutes “17, 19 and 20ZJ”, with the effect that the Commonwealth Ombudsman is prohibited from delegating his or her power to make Private Health Insurance (Ombudsman) Rules,

 

Item 8 inserts new subsection 34(2C), which provides for the Private Health Insurance Ombudsman to either generally, or as provided by the instrument of delegation or instrument in writing, delegate any and all of his or her powers or functions under the Ombudsman Act 1976 to a member of staff mentioned in section 31 of the Ombudsman Act 1976 .  However, the Private Health Insurance Ombudsman may not delegate his or her powers under sections 20R and 20V (reporting on the outcome of an investigation following a complaint or at the own motion of the Private Health Insurance Ombudsman, respectively).

Item 9 amends the definition of ‘officer’ in subsection 35(1) for the purpose of the secrecy provisions in that section to include reference to a person appointed by the Private Health Insurance Ombudsman under section 20ZC to mediate a complaint.

 

Item 10 amends the secrecy provisions in section 35 of the Ombudsman Act 1976 to insert subsections 35(6B), 35(6C) and 35(6D), which provide for the sharing of information about private health insurers among agencies.

 

Subsection 35(6B) provides that subsections 35(2) and 35(5) do not prevent an officer, in the performance of his or her duties, from disclosing information mentioned in subsection 35(6C) in accordance with subsection 35(6D).

 

Subsection 35(6C) provides that the information is information that:

·          relates to any or all of a private health insurer, an applicant to become a private health insurer or a person carrying on health insurance business, or a director or officer of any such person; and

·          is not information of a kind specified in the Private Health Insurance (Information Disclosure) Rules as information that must not be disclosed under section 323-10 of the Private Health Insurance Act 2007.

 

Subsection 35(6D) provides that the officer may, if the disclosure is made in accordance with any requirements in the Private Health Insurance (Information Disclosure) Rules, disclose the information to the following:

·          the Minister for Health;

·          the Secretary of the Department of Health;

·          an APS employee in, or a person holding or performing the duties of an office in the Department of Health;

·          a member of the Council (within the meaning of the Private Health Insurance Act 2007);

·          a person employed, or a consultant engaged, by the Council (within the meaning of the Private Health Insurance Act 2007);

·          the Chief Executive Medicare; or

·          a Departmental employee (within the meaning of the Human Services (Medicare) Act 1973 ).

The Private Health Insurance Ombudsman could previously disclose these categories of information to the same recipients under section 323-10 of the Private Health Insurance Act 2007 , which also provides for the sharing of information about insurers between agencies.

 

Item 11 amends paragraph (a) of the definition of listed disclosure method in subsection 35C(2) of the Ombudsman Act 1976 to correct a typographical error. Reference to ‘Part 2’ of the Act is amended to ‘Part II’.

Items 12 amends section 36 of the Ombudsman Act 1976 , which establishes an offence for failing to take various actions, including attending before the Ombudsman, furnishing information or producing documents when required to do so under the Act. Item 12 amends paragraph 36(1)(ba) to refer to a failure to furnish ‘or publish’ information when required to do so under the Act.  Under new section 20ZI the Private Health Insurance Ombudsman can require insurers to publish specified information about the Ombudsman’s functions.

The penalty for an offence under section 36 is $1,000 or 3 months imprisonment, however the offence will not apply where a person has a reasonable excuse.

 

Item 13 amends section 36 to add new paragraph 36(1)(c) which creates an offence for failing to give a report to the Ombudsman where required to do so under the Act. Under new section 20N, where the Private Health Insurance Ombudsman refers a complaint to the subject of the complaint the Ombudsman can ask the subject to report back to the Ombudsman on the outcome of the investigation and any action that the subject proposes to take as a result.

 

Private Health Insurance Act 2007

 

Item 14 repeals paragraph (a) from section 230-1 of the Private Health Insurance Act 2007 , which outlines what Chapter 6 of the Private Health Insurance Act 2007 is about .  Paragraph 230-1(a) referred to the Private Health Insurance Ombudsman’s role in dealing with complaints and conducting investigations under the Private Health Insurance Act 2007 and is now redundant.  

 

Item 15 repeals Part 6-2 of the Private Health Insurance Act 2007 in its entirety. Part 6-2 established the Office of the Private Health Insurance Ombudsman and provided for the functions and powers of the Ombudsman.

 

Item 16 inserts paragraph (d) into section 323-5 of the Private Health Insurance Act 2007 .  That section establishes a number of ‘authorised disclosures’ of protected information obtained under the Private Health Insurance Act 2007 to allow for disclosure in the course of official duties. New paragraph 323-5(d) provides that the disclosure of protected information for the purpose of enabling a person to perform functions under part IID of the Ombudsman Act 1976 will also be a type of authorised disclosure for the purposes of section 323-1 of the Private Health Insurance Act 2007 .

 

Item 17 repeals subsection 323-10(1) of the Private Health Insurance Act 2007 and substitutes a new subsection 323-10(1) and subsection 323-10(1A).

 

Section 323-10 establishes an authorised disclosure of protected information involving the sharing of certain information about private health insurers among specified agencies. The changes to be made by item 17 and item 18 (see below) reflect that, as the Private Health Insurance Ombudsman will no longer have functions or collect information under the Private Health Insurance Act 2007 , the disclosure of information by the Ombudsman and officers assisting the Ombudsman should be authorised by the Ombudsman Act 1976 rather than the Private Health Insurance Act 2007 .

 

The substituted subsection 323-10(1) provides that section 323-10 applies to information if it:

·          relates to any of a private health insurer, an applicant to become a private health insurer or a person carrying on health insurance business, or a director or officer of any such person; and

·          is not information of a kind specified in the Private Health Insurance (Information Disclosure) Rules as information that must not be disclosed under the section.

 

This is the same class of information previously covered by section 323-10(1).

 

Subsection 323-10(1A) makes it an authorised disclosure for subsection 323-1(3) for a person to whom subsection 323-10(2) applies (including the Minister for Health, the Secretary of the Department of Health, officers in the Department of Health and the Chief Executive Medicare but no longer including the Private Health Insurance Ombudsman) to disclose the information to:

·          another person to whom subsection 323-10(2) applies;

·          the Private Health Insurance Ombudsman; or,

·          an APS employee in, or a person holding or performing the duties of an office in, the Statutory Agency of the Commonwealth Ombudsman.

 

However, it will only be an authorised disclosure if the disclosure is made in accordance with any requirements in the Private Health Insurance (Information Disclosure) Rules.

 

Item 18 removes reference to the Private Health Insurance Ombudsman and persons in the Statutory Agency of the Private Health Insurance Ombudsman from subsection 323-10(2) by repealing subsections 323-10(2)(f) and (g) of the Private Health Insurance Act 2007 .

 

This means that section 323-10 no longer authorises the Private Health Insurance Ombudsman or staff to disclose information pursuant to the section.  The disclosure of information collected by the Private Health Insurance Ombudsman and staff while performing functions under the Ombudsman Act 1976 will be dealt with in that Act.

 

Item 19 removes “the Council, the Minister and the Private Health Insurance Ombudsman” from section 328-1 and substitutes “The Council and the Minister” in order to incorporate the removal of the Private Health Insurance Ombudsman form the Private Health Insurance Act 2007 .

 

Item 20 repeals items 36 and 37 from the table in section 328-5 of the Private Health Insurance Act 2007 . Section 328-5 specifies decisions made under the Private Health Insurance Act 2007 that are able to be reviewed by the Administrative Appeals Tribunal (AAT).  

 

Item 36 provided for the review of decisions by the Private Health Insurance Ombudsman to refuse to extend a period to report to the Private Health Insurance Ombudsman following referral of a complaint to the subject of the complaint.  Item 37 provided for the review of decisions by the Private Health Insurance Ombudsman to refuse to extend a period to give a record or information to the Private Health Insurance Ombudsman following written request.

 

The Ombudsman Act 1976 does not provide for the subject of a complaint to make a request to the Private Health Insurance Ombudsman extend time to report to the Ombudsman or to produce a record or information required by the Ombudsman.  This has been done to ensure consistency of administrative processes with the Commonwealth Ombudsman.

 

Item 21 repeals item 11 from the table in subsection 333-20(1) of the Private Health Insurance Act 2007 .  That item provided for the Minister for Health to make the Private Health Insurance (Ombudsman) Rules. These rules will now be made under the Ombudsman Act 1976 .

 

Item 22 repeals from the Dictionary to the Private Health Insurance Act 2007 the second occurring definition of officer , which applies to the officer of a subject of a complaint to the Private Health Insurance Ombudsman or an own-motion investigation by the Ombudsman. This definition will no longer be relevant for the Private Health Insurance Act 2007 .

 

Item 23 repeals the definition of Private Health Insurance Ombudsman from the Dictionary to the Private Health Insurance Act 2007 and substitutes a new definition providing that the Private Health Insurance Ombudsman is the Private Health Insurance Ombudsman established by section 20C of the Ombudsman Act 1976 .

 

Item 24 repeals the definition of records from the Dictionary to the Private Health Insurance Act 2007 . This definition related only to the records of the subject of a complaint to the Private Health Insurance Ombudsman or an own-motion investigation by the Ombudsman and will no longer be relevant for the Private Health Insurance Act 2007 .

 

Part 2—Transitional provisions

 

Item 25 provides that for the transitional provisions the commencement day is the day this item of the Private Health Insurance Amendment Bill (No. 2) 2014 commences. This item will commence on 1 July 2015. The item further provides that Health Minister in the transitional provisions means the Minister administering the Private Health Insurance Act 2007 .

 

Item 26 deals with things done by, or in relation to, the Private Health Insurance Ombudsman before the commencement day.

 

Subitem 26(1) provides that if, before the commencement day, a thing was done by, or in relation to, the Private Health Insurance Ombudsman under the Private Health Insurance Act 2007 , then the thing is taken, on and after that day, to have been done by, or in relation to, the Private Health Insurance Ombudsman under the Ombudsman Act 1976 .

 

So, for example, a request made by the Private Health Insurance Ombudsman prior to the commencement day for an insurer to produce documents will be taken have been made by the Private Health Insurance Ombudsman under the Ombudsman Act 1976 .

 

Subitem 26(2) provides that the Minister for Health may, by writing, determine that subitem 26(1) does not apply in relation to a specified thing done by, or in relation to, the Private Health Insurance Ombudsman before the commencement day.

 

Subitem 26(3) provides that a determination made under subitem 26(2) is not a legislative instrument within the meaning of the Legislative Instruments Act 2003.

 

Item 27 deals withthings started but not finished by the Private Health Insurance Ombudsman before the commencement day in the form of four subitems.

 

Subitem 27(1) provides that item 27 applies if:

·          before the commencement day, the Private Health Insurance Ombudsman started doing a thing under the Private Health Insurance Act 2007 ; and

·          immediately before the commencement day had not finished doing that thing.

 

Subitem 27(2) provides that the Private Health Insurance Ombudsman may, on and after the commencement day, finish doing the thing under the Ombudsman Act 1976 . This will enable the Private Health Insurance Ombudsman to, for example, continue under the Ombudsman Act 1976 with unfinalised investigations started before the commencement day under the Private Health Insurance Act 2007

 

Subitem 27(3) provides the Minister for Health may, by writing, determine that subitem 27(2) does not apply in relation to a specified thing started by the Private Health Insurance Ombudsman before the commencement day.

 

Subitem (4) provides that a determination made under subitem 27(3) is not a legislative instrument within the meaning of the Legislative Instruments Act 2003.

 

Item 28 provides for the application of the Safety, Rehabilitation and Compensation Act 1988 to the abolition of the Office of Private Health Insurance Ombudsman and the transfer of any staff to the Office of the Commonwealth Ombudsman.

 

Subitem 28(1) provides that item 28 applies if, before the commencement day, an employee of the Private Health Insurance Ombudsman (see subitem 28(4)) suffered an injury resulting in an incapacity for work or an impairment.

 

Subitem 28(2) provides that sections 36, 37, 38, 39, 41 and 41A of the Safety, Rehabilitation and Compensation Act 1988 apply on and after the commencement day, in relation to the injury, as if the employee were employed by the Office of the Commonwealth Ombudsman.

 

A note to subitem 28(2) provides that the main effect of the subitem is that sections 36, 37, 38, 39, 41 and 41A of the Safety, Rehabilitation and Compensation Act 1988 apply in relation to the employee’s injury as if the Commonwealth Ombudsman were the rehabilitation authority.

Subitem 28(3) provides that on and after the commencement day, the Office of the Commonwealth Ombudsman is, for the purposes of section 40 of the Safety, Rehabilitation and Compensation Act 1988 , taken to be the relevant employer of the employee.

 

Subitem 28(4) provides that for the purposes of this item, an employee of the Private Health Insurance Ombudsman means a member of the staff assisting the Private Health Insurance Ombudsman under the Private Health Insurance Act 2007 .

 

Item 29 provides for the transfer or records between the Private Health Insurance Ombudsman and the Office of the Commonwealth Ombudsman.

 

Subitem 29(1) provides that item 29 applies to any records or documents that, immediately before the commencement day, were in the possession of the Private Health Insurance Ombudsman or a member of the staff assisting the Private Health Insurance Ombudsman under the Private Health Insurance Act 2007.

 

Subitem 29(2) provides that any such records and documents are to be transferred to the Office of the Commonwealth Ombudsman on or after the commencement day.

 

A note to subitem (2) provides that the records and documents are Commonwealth records for the purposes of the Archives Act 1983.

 

Item 30 provides that for sections 323-1 and 323-40 of the Private Health Insurance Act 2007 , a disclosure of information is an authorised disclosure if the disclosure is:

·          made in the course of performing a duty or function, or exercising a power, under Part IID of the Ombudsman Act 1976; or.

·          one that the person would have been able to make under the Ombudsman Act 1976 , had the information been obtained in the course of performing a duty or function, or exercising a power, under the Ombudsman Act 1976.

 

Section 323-1 of the Private Health Insurance Act 2007 makes it an offence for a person who has or at any time had powers, duties or functions under that Act to disclose protected information unless the disclosure is an authorised disclosure.  Staff of the Private Health Insurance Ombudsman who transfer to the Office of the Commonwealth Ombudsman will be persons who had powers, duties or functions under the Private Health Insurance Act 2007 and obtained protected information in the course of their work.

 

Section 323-40 of the Private Health Insurance Act 2007 creates an offence for subsequent disclosure of protected information obtained by a person as a result of certain types of authorised disclosures under sections 323-10, 323-15 or 323-20 of that Act, unless the further disclosure is also an authorised disclosure under the Private Health Insurance Act 2007 .

This will ensure that officers transferring to the Office of the Commonwealth Ombudsman do not commit an offence under the Private Health Insurance Act 2007 if, in the legitimate course of their duties under Part IID of the Ombudsman Act 1976 , or as otherwise provided for under that Act, they disclose information they obtained under the Private Health Insurance Act 2007 .

It will also ensure that staff of the Commonwealth Ombudsman to whom information is disclosed pursuant to an authorised disclosure under sections 323-10, 323-15 or 323-20 of the Private Health Insurance Act 2007 do not commit an offence under that Act where they further disclose that information in the legitimate course of their duties under Part IID of the Ombudsman Act 1976 , or as otherwise provided for under that Act,

 

Item 31 allows for transitional rules to be made regarding the transition of functions of the Private Health Insurance Ombudsman from the Private Health Insurance Act 2007 to the Ombudsman Act 1976 .

 

Using rules, rather than regulations, as the form of legislative instrument is consistent with current drafting practice and the Office of Parliamentary Counsel’s Drafting Direction 3.8 on subordinate legislation. Office of Parliamentary Counsel’s starting point is that subordinate instruments should be made in the form of legislative instruments (as distinct from regulations) unless there is good reason not to do so.  This is subject to the qualification that there are some things that should be done in regulations unless there is a strong justification for prescribing those provisions in another type of legislative instrument.  None of these things are in contemplation for these rules. 

 

The Health Minister has no power in this Schedule to delegate the Minister’s power to make rules.

 

Subitem (1) provides that the Health Minister may, by legislative instrument (and subject to subitem (2)), make rules prescribing matters of a transitional nature (including prescribing any saving or application provisions) relating to the amendments or repeals made by this Act.

 

Subitem (2) provides that to avoid doubt any transitional rules made may not:

·          create an offence or civil penalty provision;

·          provide powers of arrest or detention or powers relating to entry, search or seizure;

·          impose a tax;

·          set an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in this Act; or.

·          amend this Act.

 

Subitem (3) provides that this Act (other than subitem (2)) does not limit the rules that may be made for the purposes of subitem (1).

 

 

SCHEDULE 2—Base premium measure

 

Item 1 provides that items 1, 2, 3, 6 and 13 of Schedule 1 of the Private Health Insurance Legislation Amendment (Base Premium) Act 2013 are taken to never have commenced.

 

The previous Labor Government intended that the Australian Government’s private health insurance rebate be calculated by reference to a ‘base premium’ from 1 April 2014. The Private Health Insurance Legislation Amendment (Base Premium) Act 2013 was enacted to implement this policy. The Private Health Insurance Legislation Amendment (Base Premium) Act 2013 had a staggered commencement, with some provisions commencing in June 2103 and some on 1 April 2014. 

 

Prior to the full commencement of the base premium measure from 1 April 2014, the Government decided to use an alternative mechanism for calculating the rebate that was simpler for insurers to implement. 

 

In March 2014 the Private Health Insurance Legislation Amendment Act 2014 was passed with the intent of removing all references to a base premium from the Private Health Insurance Act 2007 PHI Act before 1 April 2014. However, due to an unintended delay in the granting of Royal Assent, which occurred on 9 April 2014, it was only effective to remove those references that had commenced in June 2013.  This item undoes the effects of items 1, 2, 3, 6 and 13 of Schedule 1 of the Private Health Insurance Legislation Amendment (Base Premium) Act 2013, which amended various sections of the Private Health Insurance Act 2007 with effect from 1 April 2014.

 

A note to the item provides that items 1, 2, 3, 6 and 13 of Schedule 1 of the Private Health Insurance Legislation Amendment (Base Premium) Act 2013 are superseded by the amendments made by the Private Health Insurance Legislation Amendment Act 2014 .

 

Item 2 effectivelyprovides for the validation of any overpayments that may have been made to private health insurers by the Commonwealth because of the unintended inclusion of references to base premiums in the Private Health Insurance Act 2007 . It does this by ensuring that for any debt owed to Government by insurers arising from the failure to repeal the provisions introduced by the Private Health Insurance Legislation Amendment (Base Premium) Act 2013 there is also a parallel new entitlement to insurers. The new entitlement would come out of the relevant standing appropriation in section 282-40 of the Private Health Insurance Act 2007 . This way the debt may be set-off against the parallel new entitlement.

 

Subitem 2(1) provides for the scope of the validation of the payment to private health insurers. The subitem provides that item 2 applies if:

 

(a)     during the period starting on 1 April 2014 and ending immediately before the commencement of item 2, an amount was purportedly paid to a private health insurer under a provision of Part 6-4 of the Private Health Insurance Act 2007 , which provides for the Commonwealth to reimburse insurers in respect of reductions in premium charged by insurers due to the premiums reduction scheme;

 

(b)    the amount paid to the private health insurer exceeded the amount that, disregarding item 1, was payable to the private health insurer under the payment provision; and

 

(c)     the amount paid to the insurer equalled the amount that, taking account of item 1, was payable to the private health insurer under the payment provision.

 

Subitem 2(2) provides that any excess as specified in paragraph 2(1)(b) is a debt due to the Commonwealth by the private health insurer and may be recovered by action in a court of competent jurisdiction.

 

Subitem 2(3) provides that there is payable to the insurer an amount equal to the excess referred in in paragraph 2(1)(b).

 

Subitem 2(4) provides that a payment under subitem 2(3) is taken to be a payment to which section 282-40 of the Private Health Insurance Act 2007 applies. Section 282-40 creates a standing appropriation for payments made under the premiums reduction scheme.

 

Subitem 2(5) provides that a payment under subitem 2(3) is taken to satisfy any obligation to make a payment to the same private health insurer of the amount that was payable as described in paragraph 2(1)(c). This ensures that item 2 does not create a double obligation on the Commonwealth to reimburse insurers in respect of premium reductions.

 

Subitem 2(6) provides that the amount payable by the private health insurer as a debt due to the Commonwealth under subitem 2(2) may be recovered by deduction from the amount payable to the private health insurer under subitem 2(3). Commonwealth agencies are required to pursue debts for which they are responsible, except where the debt has been waived, written off or is not legally recoverable.  Subitem 2(6) ensures that the Commonwealth is not required to pursue private health insurers in respect of any debts arising from overpayments made to insurers, as these debts can be deducted from the new entitlement to payment created by subitem 2(3). 

 

Item 3 provides that the amendments made by the Private Health Insurance Legislation Amendment Act 2014 are to be taken to have commenced on 1 April 2014, that is, the whole of the adjustment year (within the meaning of the Private Health Insurance Act 2007 ), despite the fact that the Private Health Insurance Legislation Amendment Act 2014 commenced on 9 April 2014.