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Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021



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ISSN 1328-8091

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BILLS DIGEST NO. 31, 2021-22 18 NOVEMBER 2021

Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021 Leah Ferris Law and Bills Digest Section

Contents

Purpose and Structure of the Bill ..................................... 3

Background ..................................................................... 3

Table 1: Department of Health: health funding schemes and incentive programs.............................. 3

Previous changes to debt-recovery arrangements ............................................................ 5

Committee consideration ................................................ 5

Senate Standing Committee for the Selection of Bills .............................................................................. 5

Senate Standing Committee for the Scrutiny of Bills .............................................................................. 5

Policy position of non-government parties/independents...................................................... 5

Position of major interest groups..................................... 5

Financial implications ...................................................... 6

Statement of Compatibility with Human Rights................ 6

Parliamentary Joint Committee on Human Rights ..... 6 Key issues and provisions ................................................ 6

Part 1 - Changes to the Professional Services Review Scheme ........................................................... 6

Clarification of the ability of the CEM to refer matters to the Director of PSR .................................. 7

New power for the Director of PSR to enter into agreements with corporate entities ......................... 8

Changes to the types of specified actions which can be taken under an agreement ............................ 9

Changes to the process for monitoring a person’s compliance under their agreement with the Director ..................................................... 10

Date introduced: 21 October 2021

House: House of Representatives

Portfolio: Health

Commencement: The day after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at November 2021.

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Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021 2

Clarification of the ability of the Director to refer a person to a PSR Committee ................................. 10

Rights of bodies corporate at PSR Committee hearings ................................................................... 10

Increased penalties for the refusal or failure to produce documents or information ........................ 11

Expansion of the power of the Director to publish information about a person ....................... 12

Part 2 - Review of certain debt-recovery decisions .................................................................... 12

Part 3 - Miscellaneous debt-recovery amendments ............................................................. 13

Extension of civil penalty provisions where a person has failed to notify the CEM of change in their address ............................................................ 14

Expansion of garnishee arrangements .................... 14 Part 4 - False or misleading information .................. 15 Concluding comments ................................................... 15

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Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021 3

Purpose and Structure of the Bill The Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021 (the Bill) amends the Health Insurance Act 1973 (HIA), the Dental Benefits Act 2008 (DBA), and the National Health Act 1953 (NHA) to make a number of changes to the Commonwealth’s health provider compliance program.

The Bill is comprised of one Schedule which is divided into four Parts:

• Part 1 amends the HIA to provide for a number of amendments to the operation of the Professional Services Review (PSR) Scheme, including allowing the Director of PSR to enter into agreements with body corporates

• Part 2 amends the HIA, NHA and DBA to clarify that a person or body corporate owing a debt to the Commonwealth may only make one application to the Administrative Appeals Tribunal with respect to a reconsidered decision/notice of assessment/shared debt determination even where multiple garnishee notices have been issued in relation to the debt;

• Part 3 makes a number of amendments to the HIA, NHA and DBA to clarify the Commonwealth’s debt recovery arrangements following the passage of the Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Act 2018; and

• Part 4 amends the NHA and DBA respectively to replace references in those Acts to ‘making a false or misleading statement’ with references to the ‘giving of false or misleading information’.

Background The HIA, NHA and DBA set out a legislative framework for the provision and claiming of services and benefits with respect to the three major public health funding schemes: the Medicare Benefits Schedule (MBS), the Pharmaceutical Benefits Scheme (PBS) and the Child Dental Benefits Scheme (CDBS).

In the 2018-19 financial year, the combined expenditure of the three health schemes and the Practice Incentive Program (PIP) was $36.6 billion (which is estimated to have grown to over $42.6 billion in 2020-21),1 representing about half of all Australian government expenditure on health.2 The 2018-19 expenditure for the relevant public health funding schemes and the PIP is set out at Table 1 below.

Table 1: Department of Health: health funding schemes and incentive programs

Scheme/program Purpose 2018-2019 expenditure

MBS The MBS, established under

the HIA, is Australia’s national health insurance scheme which subsidises the cost of selected medical services for eligible patients that are provided by eligible practitioners.

$24.1 billion

1. Australian National Audit Office (ANAO), Managing Health Provider Compliance, Auditor-General Report, 17, 2020-21, ANAO, Canberra, 23 November 2020, p. 12. 2. Department of Health (DoH), Health Provider Compliance Strategy 2021-22, DoH, Canberra, July 2021, p. 1.

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Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021 4

Scheme/program Purpose 2018-2019 expenditure

PBS The PBS, established under

the NHA, is part of the Australian Government’s broader National Medicines Policy. Under the PBS, the Australian Government subsidises the cost of medicine for most medical conditions.

$11.8 billion

CDBS The CDBS, established under

Part VAA of the HIA and the DBA, is a Commonwealth funded dental scheme. The scheme provides benefits for a wide range of dental services, such as examinations, x-rays and preventive treatments to children up to 17 years of age whose families receive certain government benefits (eligible children).

$352.1 million

PIP Practice Incentive Program

(PIP) payments support eligible general practices that meet specific performance criteria designed to encourage quality care, enhanced capacity, and improved access and health outcomes for patients. Incentive payments include eHealth, quality improvement, teaching, Indigenous health, after hours care, procedural activities and loadings for rural locations.

$321.9 million

Source: Australian National Audit Office (ANAO), Managing Health Provider Compliance, Auditor-General Report, 17, 2020-21, ANAO, Canberra, 23 November 2020, p. 12 and Department of Health (DoH), Health Provider Compliance Strategy 2021-22, DoH, Canberra, July 2021, p. 1.

The relevant Acts also provide for post payment compliance activities to be undertaken by the Government, to identify incorrect claiming and recover debts in relations to the three schemes and the PIP.

The Provider Benefits Integrity Division (PBID) in the Department of Health (Health) is responsible for the Commonwealth’s health provider compliance program.3 Services Australia (formerly the Department of Human Services) administers the MBS, PBS and CDBS on behalf of Health and

3. Following the Government’s Healthier Medicare Initiative announcement in April 2015, the Administrative Arrangements Order on 30 September 2015 transferred responsibility for Medicare provider compliance from the then Department of Human Services to the Department of Health.

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makes payments. Health is responsible for the legislation and policy for the schemes and enforcing compliance of provider billing.

The Australian National Audit Office reported that in the 2018-2019 financial year, Health recovered $49.3 million in claims which should not have been paid and reported $123.4 million in estimated savings through changes in claiming behaviour of providers.4

Previous changes to debt-recovery arrangements In recent years, the Government has passed three Bills aimed at improving health provider compliance arrangements:

• the Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Bill 2018 which introduced new debt-recovery powers for Medicare debts owed to the Commonwealth, including providing for a shared debt recovery scheme (discussed further in the key issues and provisions section of this Bills Digest)5

• the Health Legislation Amendment (Data-matching and Other Matters) Bill 2019 which introduced a data-matching scheme for permitted Medicare compliance and related purposes6 and

• the Health Insurance Amendment (Compliance Administration) Bill 2020 which clarified the circumstances in which the Commonwealth can recover a Medicare benefit or payment where it has been provided on the basis of false or misleading information.7

Committee consideration At the time of writing, the Bill had not been referred to any committees.

Senate Standing Committee for the Selection of Bills On 20 October 2021, the Senate Selection of Bills Committee deferred consideration of the Bill to its next meeting.8

Senate Standing Committee for the Scrutiny of Bills The Senate Standing Committee for the Scrutiny of Bills has yet to consider this Bill.9

Policy position of non-government parties/independents At the time of writing, non-government parties and independents have not commented publicly on the Bill.

Position of major interest groups At the time of writing, no commentary on the Bill from relevant stakeholders was identified.

4. ANAO, Managing Health Provider Compliance, op. cit., p. 6. 5. For further information, see: K Ramesh, Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Bill 2018, Bills digest, 124, 2017-18, Parliamentary Library, Canberra, 2018. 6. For further information, see: J Phillips, Health Legislation Amendment (Data-matching and Other Matters) Bill 2019, Bills

digest, 66, 2019-20, Parliamentary Library, Canberra, 2019. 7. For further information, see: M Conn, Health Insurance Amendment (Compliance Administration) Bill 2020, Bills digest, 37, 2020-21, Parliamentary Library, Canberra, 2020. 8. Senate Standing Committee for the Selection of Bills, Report, 12, 2021, The Senate, Canberra, 20 October 2021. 9. Senate Standing Committee for the Scrutiny of Bills, Index of bills considered by the committee, as at 25 October 2021.

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Financial implications The Explanatory Memorandum states there are no financial implications arising from the Bill.10

By improving debt-recovery arrangements for health providers, the Bill may increase the amount of money which the Commonwealth can recover and may lead to a reduction in incorrect claiming by health providers.

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act.

The Government considers that to the extent there are any limitations on human rights, these are necessary, reasonable and proportionate to the legitimate objectives of the Bill.11 Potential human rights implications with respect to particular amendments are discussed further in the ‘Key issues and provisions’ section of this Bills Digest.

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights had no comments with respect to this Bill.12

Key issues and provisions

Part 1 - Changes to the Professional Services Review Scheme Part VAA of the HIA establishes the PSR Scheme. The purpose of the PSR Scheme is to review and investigate the provision of services by a practitioner to determine whether the practitioner has engaged in inappropriate practice.

Subsection 81(1) of the HIA defines ‘practitioner’ to include medical practitioners, dentists, optometrists, chiropractors, midwives, nurse practitioners, physiotherapists, podiatrists and osteopaths. Subsection 81(1) also defines ‘service’ to mean rendering or initiating of services under the MBS, CBDS or a relevant Department of Veterans’ Affairs (DVA) law,13 or prescribing under the PBS.

Subsection 82(1) of the HIA defines ‘inappropriate practice’ as conduct that is such that a PSR Committee could reasonably conclude that it would be unacceptable to the general body of the members of the profession in which the practitioner was practising when they rendered or initiated the services. Subsection 82(2) provides that subject to exceptional circumstances, a practitioner engages in inappropriate practice in rendering or initiating services during a particular period (the relevant period) if the circumstances in which some or all of the services were rendered or initiated constitute a prescribed pattern of services.14 It is also an offence under

10. Explanatory Memorandum, Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021, p. 3. 11. The Statement of Compatibility with Human Rights can be found at pages 34-38 of the Explanatory Memorandum to the Bill. 12. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 13, 2021, 10 November 2021, p. 32. 13. Subsection 81(1) of the Health Insurance Act 1973 (HIA) defines relevant DVA law to mean any of the following: (a) the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 (b) Chapter 6 of the Military Rehabilitation and Compensation Act 2004 (c) the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (d) the Treatment Benefits (Special Access) Act 2019 (e) Part V of the Veterans’ Entitlements Act 1986 (f) any other Commonwealth law prescribed by the regulations for the purposes of this paragraph. 14. Section 82A of the HIA provides that the circumstances in which services are rendered or initiated by a practitioner constitute

a prescribed pattern of services if they are circumstances prescribed by the Regulations.

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Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021 7

paragraph 82(2)(b) for a person who is an officer of a body corporate to knowingly, recklessly or negligently cause or permit a practitioner employed by the person to engage in such conduct.

Section 83 of the HIA allows the Minister of Health (the Minister) to appoint a medical practitioner to be the Director of PSR (the Director). The Minister must not appoint a person unless the Australian Medical Association (AMA) has agreed to the appointment.15 The Minister also has the power to appoint medical practitioners as Deputy Directors of PSR and as members of the PSR Review Panel.16

In reviewing and investigating the provision of services by a practitioner, PSR undertakes a three-stage process (noting that a review may be resolved following the first stage):

• the first stage involves the consideration by the Director of PSR of whether a practitioner might have engaged in inappropriate practice

• the second stage is a peer review process by a PSR Committee (constituted under Division 4 of Part VAA of the HIA) to determine whether the practitioner did engage in inappropriate practice

• the third and final stage involves the consideration and determining of an appropriate outcome by the Determining Authority (a statutory agency established under Division 5 of Part VAA of the HIA).17

Clarification of the ability of the CEM to refer matters to the Director of PSR The Department of Health monitors practitioners' claiming patterns. Under the HIA, only the Chief Executive of Medicare (CEM) may refer cases of inappropriate practice to the Director of PSR. There is no ability for PSR to initiate reviews of practitioners without a referral from the CEM.

Currently, the CEM has the discretion to decide whether or not to request the Director review the provision of services by a practitioner unless the services rendered or initiated by the practitioner constitute a prescribed pattern of services, in which case the CEM must refer the practitioner to the Director.18

Items 3 and 4 of the Bill amend subsection 86(1) of the HIA to clarify that the CEM may only request that the Director review the provision of services by a person where there is a possibility that the person may have:

• provided services during the period and

• engaged in inappropriate practice in the provision of services.

The Explanatory Memorandum provides that these amendments are intended to clarify ‘that there is no requirement for the CEM to undertake an investigation to objectively determine that a particular person provided services and/or engaged in inappropriate practice, prior to making a request to the Director’.19

The proposed amendments also clarify that in reviewing the provision of services by a person, the Director of PSR may also examine whether the services were provided by that person or another person. The Explanatory Memorandum notes that these changes are intended to ‘further explain’

15. HIA, subsection 83(2). 16. HIA, sections 85 and 84. 17. Professional Services Review (PSR), ‘About the PSR Scheme’, PSR website, n.d. For further information about the Determining Authority, see: PSR, ‘Determining Authority consideration’, PSR website, n.d.

18. HIA, section 86. 19. Explanatory Memorandum, op. cit., p. 5.

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what a review conducted by the Director of PSR may entail,20 in that the PSR may access the records of health practitioners who have not been referred to PSR in determining whether a practitioner who has been referred is engaging in inappropriate practice.

New power for the Director of PSR to enter into agreements with corporate entities Upon completing a review of the provision of services by a practitioner, the Director of PSR can decide not to take further action, enter into an agreement with the practitioner, or refer the matter to the relevant PSR Committee.21

Currently if the person under review is a practitioner, the Director and the person may enter into a written agreement under which:

(a) the person acknowledges that the person engaged in inappropriate practice in connection with rendering or initiating specified services during the review period and

(b) specified action in relation to the person is to take effect.22

Subsection 92(2) of the HIA specifies the kind of actions that may be taken, including the person being reprimanded or disqualified or having to repay the Commonwealth where a benefit has been paid as a result of inappropriate practice. An agreement between a practitioner and the Director of PSR does not take effect unless it is ratified by the Determining Authority.23

Items 5, 7, 9, 11, 13, 14 and 18 of the Bill amend section 92 of the HIA to allow the Director of PSR to enter into agreements with any person, including non-practitioners and body corporates. The Explanatory Memorandum states that these amendments will give PSR ‘the flexibility to deal with non-practitioner persons under review in a timely and cost-effective manner and avoid the lengthier and more resource-intensive process of review by a PSR Committee’.24

Specifically, item 18 amends subsection 92(7) to define an associated person, in relation to a person under review, to mean:

(a) an employee of the person under review or

(b) a person otherwise engaged by the person under review or

(c) an employee of a body corporate of which the person under review is an officer or

(d) a person otherwise engaged by a body corporate of which the person under review is an officer.

Item 6 repeals and replaces subsection 92(1) to allow any person to enter into an agreement with the Director acknowledging that they have engaged in inappropriate practice in connection with the rendering or initiating specified services during the review period and agreeing on the specified actions to be taken.

It does not matter whether the person rendered or initiated the services, or they were instead rendered or initiated by an associated person. Rather, the focus is on whether the person themselves engaged in inappropriate practice in connection with the rendering or initiating of the service which would include where an officer of a body corporate has allowed a practitioner under

20. Ibid. 21. HIA, subsection 89C(2). 22. HIA, subsection 92(1). 23. HIA, subsection 92(3). 24. Explanatory Memorandum, op. cit., p. 6.

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Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021 9

their employ to engage in such conduct.25 It would also capture employees of the practitioner (for example, receptionists) where they have caused or permitted the conduct of the practitioner which is the subject of the review.26

As each referral to PSR is separate, each agreement will only deal with the specific person/body corporate, even if the inappropriate practice relates to services rendered or initiated by associated persons. Further, the Explanatory Memorandum provides that ‘a body corporate’s acknowledgement of inappropriate practice will not prejudice the position of any individual practitioners it employs or otherwise engages’.27

Item 49 of the Bill provides that where a person other than a practitioner has been referred to a PSR Committee in the 12 months prior to the commencement of the Act, the Director of PSR may notify the relevant Committee within six months of the Act commencing that it would be desirable to enter into an agreement with that person.

Changes to the types of specified actions which can be taken under an agreement Items 8 and 10 of the Bill amend subsection 92(2) to introduce new forms of action to be agreed between the person and the Director of PSR.

Item 8 inserts new paragraph 92(2)(aa) which allows the Director, or a nominee of the Director, to counsel the person under review. Counselling focuses on education for the person under review and is intended to prevent future inappropriate practice by ensuring that the person is aware of what is expected of them and how to correct past behaviour.28

Item 10 inserts new paragraph 92(2)(d) which provides for a new action where the services the subject of the review were rendered or initiated by as associated person, as opposed to the person under review.

In this scenario, the agreement can require the person under review to:

• give specified classes of associated persons specified information about the appropriate provision of services, that is relevant to preventing inappropriate practice in the provision of services, in a specified form within a specified period and

• give the CEM evidence they have undertaken this action.

The Explanatory Memorandum states that where this specified action is applied, the written agreement between the person under review and the Director will specify:

• the information to be provided

• the classes of associated persons to which the information is to be provided

• the form of the information to be provided (if any)

• the time period in which the information must be provided and

• the evidence to be provided to the CEM that the information has been provided as specified.29

Item 38 of the Bill repeals subsection 106U(2) to also allow for a draft or final determination made by the Determination Authority with respect to a body corporate to include a direction that the

25. HIA, paragraph 82(2)(b). 26. HIA, paragraph 82(2)(a). 27. Explanatory Memorandum, op. cit., p. 6. 28. Ibid. 29. Ibid., p. 7.

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Director, or their nominee, reprimand the body corporate under review, or counsel the body corporate under review.

Changes to the process for monitoring a person’s compliance under their agreement with the Director Following ratification of the agreement by the Determining Authority, the Director must notify the CEM in writing of the making and ratification of the agreement and ensure that any actions specified in the agreement are taken by the person subject to the agreement.30

Item 15 of the Bill inserts proposed paragraph 94(4)(da) which allows the CEM to notify the Director in writing where the CEM is of the opinion that the person under review has not taken the required action under the agreement, along with the CEM’s reasons for thinking that the person is likely to be in breach of their agreement.

Item 17 inserts proposed subsection 92(4A) which provides that before notifying the Director, the CEM must give the person a written notice that:

• sets out the reasons why the CEM is of the opinion that the person has not taken action specified in the agreement that is necessary to give effect to the agreement and

• invites the person to make written submissions to the CEM (within a specified period of not less than 14 days after the notice is given) about why the CEM should not notify the Director

and consider any submissions provided by the person.

If the CEM proceeds with notifying the Director under proposed paragraph 94(4)(da), the Director may publish certain particulars about the person (see further below).31

Clarification of the ability of the Director to refer a person to a PSR Committee Upon completing a review of the provision of services by a practitioner, the Director of PSR can refer the matter to the relevant PSR Committee to investigate whether the person under review engaged in inappropriate practice in providing the services specified in the referral.32

Similar to the proposed changes in items 3 and 4 of the Bill, items 19 and 20 insert proposed subsection 93(1A) to clarify that the Director may only make a referral to a PSR Committee where it appears to the Director that the person under review may have:

• provided services during the review period and

• engaged in inappropriate practice in the provision of services.

The Explanatory Memorandum provides that these amendments are intended to clarify ‘that is has never been part of the PSR scheme that the Director makes any findings in relation to inappropriate practice before referring a matter to a PSR Committee’.33

Rights of bodies corporate at PSR Committee hearings Section 102 of the HIA provides for a PSR Committee to give the person under review a notice advising that the Committee proposes to hold a hearing and requiring the person under review to appear and give evidence.

30. HIA, paragraphs 92(4)(c) and (d). 31. HIA, proposed subsection 92(4). 32. HIA, subsection 93(1). 33. Explanatory Memorandum, op. cit., p. 9.

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Item 1 of the Bill amends subsection 81(1) to define an executive officer of a body corporate to mean ‘a person, by whatever name called and whether or not a director of the body, who is concerned in, or takes part in, the management of the body corporate’.

Item 23 of the Bill inserts proposed subsection 102(5) to allow the PSR Committee to issue a notice requiring an executive officer of a body corporate to appear at a hearing.

Item 28 inserts proposed section 103A which sets out the rights of a body corporate at a hearing. These are broadly similar to the rights provided to an individual in section 103 of the HIA, though as a body corporate does not have a ‘character’, the right to produce statements as to one’s character has been removed. Proposed subsection 103A(2) also allows an executive offer to call a witness on their behalf to respond to a question put by the PSR Committee, noting that if the witness answers the question then the executive officer is taken to have answered the question.

Item 32 inserts proposed section 104A which clarifies how a hearing will proceed where the executive officer of a body corporate has failed to appear at a hearing, give evidence, or answer a question.

Item 34 inserts proposed section 105AA which makes it an offence of strict liability for an executive officer of a body corporate to fail to either appear at a hearing, give evidence at a hearing, or answer questions. The maximum penalty is 30 penalty units ($6,660) for an individual and 150 penalty units for a body corporate ($33,000).34

The Explanatory Memorandum notes that the maximum penalty is in line with the maximum penalty recommended for non-compliance offences by the Attorney-General’s Department A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.35 While the penalty for practitioners who fail to either appear at a hearing, give evidence at a hearing, or answer questions is only 20 penalty units ($4,440),36 practitioners may also be disqualified under section 105 of the HIA.

The Government states that these amendments will ‘ensure that appropriate consequences exist for all persons who do not produce documents when required’ and the new offence provisions are reasonable and proportionate to the Government’s objective to protect the integrity of the PSR scheme.37

Increased penalties for the refusal or failure to produce documents or information Section 106ZPN of the HIA currently makes it an offence for a person (other than a person under review) to intentionally refuse or fail to produce documents or give information requested in a notice issued by either the Director of PSR or a PSR Committee. The maximum penalty is currently 20 penalty units ($4,440).

Item 41 of the Bill repeals and replaces 106ZPN to expand its application to all persons (other than persons under review who are practitioners) and to increase the maximum penalty to 30 penalty units ($6,660). While practitioners will no longer be subject to this offence, section 106ZPM provides that practitioners may be disqualified for failing to produce documents.

34. Crimes Act 1914, section 4AA and the Notice of Indexation of the Penalty Unit Amount made under that section set the current value of a penalty unit at $222. 35. Attorney-General’s Department (AGD), A guide to framing Commonwealth offences, infringement notices and enforcement powers (Guide to Framing Commonwealth Offences), AGD, Canberra, September 2011, p. 93. The maximum penalty for body

corporates is also in line with the maximum penalty recommended in the Guide to Framing Commonwealth Offences: p. 40. 36. HIA, sections 106D and 106E. 37. Explanatory Memorandum, op. cit., p. 37.

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Proposed subsection 106ZPN(2) also introduces a civil penalty provision for body corporates with a maximum penalty of 30 penalty units (currently $6,660). Proposed subsection 106ZPN(3) provides for separate contravention of proposed subsection 106ZPN(2) for each day that the body corporate continues to fail to produce the documents.38

Item 41 also inserts proposed section 106ZPNA which allows for the Director of PSR to apply to the Federal Court of Australia for a court order compelling a body corporate to produce documents or give information. The Explanatory Memorandum notes that this provision is similar to section 70 of the Australian Securities and Investments Commission Act 2001.39

Expansion of the power of the Director to publish information about a person Following a final determination by the Determining Authority coming into effect, subsection 106ZPR(1) of the HIA allows the Director of PSR to publish, in a manner he or she thinks is most appropriate:

• the name and address of the person under review

• the profession or specialty of the person under review

• the nature of the conduct of the person under review in respect of which the PSR Committee found that the person had engaged in inappropriate practice and

• the directions contained in the final determination.

Item 43 of the Bill inserts proposed subsection 106ZPR(1A) which expands the circumstances in which the Director may publish the particulars of a person to include where a person has not fulfilled their obligations under an agreement made under section 92 of the HIA (discussed above).

The Explanatory Memorandum states that this change ‘is intended to provide a strong behavioural incentive for compliance with written agreements, by signalling the potential for visible reputational consequences and loss of public goodwill’.40

While acknowledging that these amendments limit a person’s rights to privacy, as set out in Article 17 of the International Covenant on Civil and Political Rights (ICCPR),41 the Government argues that these amendments are a necessary limitation to this right in order to ‘protect the integrity of the PSR process’.42

Proposed subsection 106ZPR(1A) also reflects that, following the enactment of the Bill, the Director of PSR will now be able to enter into agreements with bodies corporate and the Director will be able to publish the particulars with respect to body corporates who do not fulfil their obligations under their agreements. Items 44, 45 and 46 of the Bill amend subsection 106ZPR(1) to clarify the types of particulars that can be published by the Director of PSR.

Part 2 - Review of certain debt-recovery decisions The Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Act 2018 (the Improved Medicare Compliance Act) introduced new debt-recovery powers for Medicare debts owed to the Commonwealth, including:

38. In determining the pecuniary penalty for contravening the civil penalty provision, section 125A of the HIA sets out the list of factors that the Court must take into consideration. 39. Explanatory Memorandum, op. cit., p. 15. 40. Ibid., pp. 15-16. 41. International Covenant on Civil and Political Rights, done in New York on 16 December 1966, [1980] ATS 23 (entered into force

for Australia (except Art. 41) on 13 November 1980; Art. 41 came into force for Australia on 28 January 1994). 42. Explanatory Memorandum, op. cit., p. 36.

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• allowing Medicare to withhold up to 20 percent of payments under the MBS to pay off debts owed by practitioners to the Commonwealth and

• allowing for shared debt arrangements between practitioners and their employers with respect to debts owed to the Commonwealth under the MBS and

• the power to garnishee certain funds so that debts owed to the Commonwealth under the MBS, PBS and CBDS can be repaid by a third party and

• allowing for shared debt arrangements between practitioners and their employers.

A garnishee arrangement ‘allows the Commonwealth to recover a debt from a debtor by recovering the debt from a third party (for example, a bank or an employer) in circumstances where that third party owes money to a debtor’.43

The Improved Medicare Compliance Act amended the HIA, NHA and DBA to allow the Commonwealth to issue garnishee notices with respect to debts owed to the Commonwealth under the MBS, PBS and CDBS.

The amendments also allowed a person owing a debt to the Commonwealth (the debtor) with respect to the MBS, PBS and CDBS to apply to the Administrative Appeal Tribunal (AAT) for a review of:

• a reconsidered debt decision (where a decision has already been reviewed by the CEM)44

• an assessment by the CEM of the debtor’s liability to pay an administrative penalty45 and

• the decision to issue the garnishee notice.46

The Improved Medicare Compliance Act amended the HIA to allow for the AAT to undertake reviews relating to shared debt determinations made by the CEM (shared debt determinations cannot be made with respect to the PBS or CDBS).47

Items 50-57 of the Bill amend the HIA, NHA and DBA to amend the circumstances in which the debtor can make an application to the AAT to seek a review of:

• a reconsidered debt decision

• an assessment by the CEM of the debtor’s liability to pay an administrative penalty or

• a shared debt determination under the HIA.

Specifically, the proposed amendments clarify that a debtor may only make one application to the AAT with respect to a reconsidered decision/notice of assessment/shared debt determination even where multiple garnishee notices have been issued in relation to the debt. The Explanatory Memorandum provides that the purpose of these amendments is to ensure that the AAT is not required to review the same debt decision more than once, ‘to improve efficiencies and timeliness of debt recovery’.48

Part 3 - Miscellaneous debt-recovery amendments Following the enactment of the Improved Medicare Compliance Act, Part 3 of the Bill amends the HIA, NHA and DBA to make a number of minor amendments to the debt-recovery provisions in those Acts.

43. Ibid., p. 18. 44. HIA, subsection 129AAJ(7); NHA, subsection 99ABD(8); and DBA, subsection 56D(7). 45. HIA, subsection 129AEC(2); NHA, subsection 99ABG(4); and DBA, subsection 56G(3). 46. HIA, subsection 129AEG(13); NHA, subsection 99ABJ(14); and DBA, subsection 58AA(2). 47. HIA, subsection 129ACB(7). 48. Explanatory Memorandum, op. cit., p. 19.

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Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021 14

These include amendments which:

• expand the situations in which the Commonwealth can seek to recover payment from a deceased person’s estate through allowing the CEM to issue notices for the repayment of an administrative penalty and/or to issue shared debt determinations to a person’s estate49

• clarify that, for shared debt determinations, administrative penalties apply where the sum of the recoverable amounts to which a determination relates is more than $2,500 or if a higher amount is prescribed by the Regulations - that higher amount (currently administrative penalties only arise with respect to shared debt determinations where the cost of the service exceeds $2,500)50

• expand the application of existing financial gathering information powers in the HIA to a wider range of scenarios51 and

• provide for the Commonwealth to recover the interest payable on debts through allowing Medicare to withhold payments where interest is owed, or by allowing the Commonwealth to recover the interest payable by way of a garnishee arrangement.52

Extension of civil penalty provisions where a person has failed to notify the CEM of change in their address Currently, under the HIA, NHA and DBA, a person who has been served a notice informing them they owe a debt to the Commonwealth has an obligation to notify the CEM of their address, for the purposes of giving the person documents relating to their debt, within 14 days of either having received a notice or following a subsequent change of address.53 A person who fails to notify the CEM of their change in address incurs a civil penalty of 20 penalty units ($4,440).

Part 3 of the Bill extends the application of existing civil penalty provisions in the HIA, NHA and DBA to body corporates, with a maximum penalty of 100 civil penalty units ($22,200).54 Item 82 of the Bill amends the HIA to also expand the circumstances in which a person or body corporate is required to notify the CEM of a change in their address to cover a wider range of Medicare debts.

Expansion of garnishee arrangements As discussed above, the Improved Medicare Compliance Act amended the HIA, NHA and DBA to allow the Commonwealth to issue garnishee notices with respect to debts owed to the Commonwealth under the MBS, PBS and CDBS.

Items 85 and 86 of the Bill operate to extend the power of the CEM to issue garnishee notices to include PSR debts raised following an agreement between the Director of PSR and the person/body corporate under section 92 of the HIA.

Item 87 of the Bill inserts proposed subsection 129AEG(1A) which provides that the CEM can only issue a garnishee notice where a person/body corporate has defaulted in repaying their debt as required under the agreement, or where the end of the relevant period has expired and the amount remains unpaid and the person has not entered into an arrangement with the CEM to repay to the amount. Item 87 also inserts proposed subsection 129AEG(1B) which defines relevant period to mean:

49. Items 58-62, 64-67, 71-75, 77, 79-81, 83-84, 88-92, 94-96 of the Bill. 50. Item 76 of the Bill amends the HIA to repeal and replace paragraphs 129AEA(4)(b) and 129AEA(4)(c) with proposed paragraphs 129AEA(4)b), 129AEA(4)(c) and 129AEA(4)(d). 51. Item 78 of the Bill amends the HIA to insert proposed subsection 129AECA(1A). 52. Items 68-70, 85 and 86 of the Bill amend the DBA and HIA. 53. HIA, subsections 129AECA(2) and (3); NHA, subsections 99ABH(2) and (3); and DBA, subsections 56H(2) and (3). 54. See items 63, 82 and 93 of the Bill.

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Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021 15

• the period of three months beginning on the day the agreement under section 92 takes effect or

• such longer period as the CEM allows.

Part 4 - False or misleading information In December 2020, the Government enacted the Health Insurance Amendment (Compliance Administration) Act 2020 which amended the HIA to clarify the circumstances in which the Commonwealth can recover a Medicare benefit or payment where it has been provided on the basis of false or misleading information—regardless of the form in which that information is provided.55

Specifically, subsections 129AC(1) and 129ACA(1) of the HIA were amended to replace references to ‘making a false or misleading statement’ with references to the ‘giving of false or misleading information’. The Health Insurance Amendment (Compliance Administration) Act 2020 also inserted subsections 129AC(1AAA) and 129ACA(1A) into the HIA to clarify that it is immaterial what form the information is provided in.

The Government states that these amendments:

… reflected the fact that the design parameters of electronic claiming mechanisms are built to achieve efficiencies and therefore may no longer support the inclusion of a specific statement or declaration being made by a person in relation to a Medicare claim which is submitted electronically. The intent was to ensure that postpayment compliance activities are not constrained by technological advances with electronic Medicare claiming mechanisms, by capturing broad circumstances in which false or misleading information may be given, regardless of whether a person makes manual or electronic Medicare claims.56

However, while the Health Insurance Amendment (Compliance Administration) Act 2020 amended the HIA, the NHA and DBA continued to retain references to ‘false and misleading statements’.

Items 98-101 and 103-106 of the Bill amend the NHA and DBA respectively to replace references in those Acts to ‘making a false or misleading statement’ with references to the ‘giving of false or misleading information’. Items 102 and 107 of the Bill amend the NHA and DBA clarify that it is immaterial what form the information is provided in.

Concluding comments The Bill strengthens the ability of the Commonwealth to recover debts owed by health providers and makes a number of administrative changes to existing measures. Overall, the proposed amendments appear to be uncontroversial and unopposed by stakeholders.

55. For further information, see: M Conn, Health Insurance Amendment (Compliance Administration) Bill 2020, op cit. 56. Explanatory Memorandum, op. cit., p. 30.

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Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2021 16

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