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1997
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF REPRESENTATIVES
HEALTH INSURANCE (PATHOLOGY SERVICES) AMENDMENT BILL
1997
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health and Family
Services,
the Hon. Dr Michael Wooldridge, MP)
88763 Cat.
No. 96 9153 7 ISBN 0644 50448X
HEALTH INSURANCE (PATHOLOGY SERVICES) AMENDMENT BILL 1997
OUTLINE
This Bill is to amend the Health Insurance Act 1973 (“the
Act”).
Items 1 to 7 of Schedule 1 seek to allow the payment of
Medicare benefits for pathology services when the necessary approvals for
pathology providers are overdue for renewal, under certain circumstances.
Under section 16A of the Act, a Medicare benefit cannot be paid for a
pathology service unless the service is rendered by or on behalf of an approved
pathology practitioner (APP) in an accredited pathology laboratory (APL), and
the proprietor of the laboratory was an approved pathology authority (APA). The
approval provisions are set out in Part IIA of the Act. In the case of APAs
and APPs, acceptance of an undertaking is required before approval is granted.
Undertakings are renewed annually upon receipt of an application and a fee. In
the case of APLs, approvals are renewed every three years, again upon receipt of
an application and a fee.
Sometimes a pathology organisation,
inadvertently or because of circumstances beyond its control, fails to submit an
application and fee for renewal of one of these approvals
before the current
approval has lapsed. In many of these cases, Act of Grace payments have been
sought from the Minister for Finance to compensate for the Medicare benefits
lost. It is not desirable for payments to continue to be paid as Act of Grace
payments, as the administrative processes are cumbersome and not cost
efficient.
These amendments would give the Minister for Health and Family
Services discretion to backdate approvals, where applications are no more than
one month late, allowing Medicare benefits to be paid for services rendered from
the commencement of the backdated approval.
The Bill also seeks to
strengthen the power of the Health Insurance Commission to enforce the
provisions of the Act relating to pathology, thus reducing the level of
inappropriate services. It strengthens a provision relating to the licensing
scheme for pathology specimen collection centres, to ensure that a notice
establishing that it is licensed is clearly visible, thus deterring the
operation of unlicensed centres. It removes any ambiguity in a current
provision relating to the occupation by a pathology company of premises owned by
a medical practitioner or entrepreneur, and will deter arrangements which are
forms of inducements to the ordering of pathology services.
Finally, it
gives the Commonwealth the power to prescribe penalties for minor pathology
offences in regulations which can be enforced by the Health Insurance
Commission.
The proposals to strengthen the power of the Health Insurance
Commission were developed in consultation with the peak pathology professional
bodies, the Australian Association of Pathology Practices (AAPP) and the Royal
College of Pathologists of Australasia (RCPA), and have their
support.
FINANCIAL IMPACT STATEMENT
The Bill will ensure that Medicare benefit payments are not disrupted in
instances that do not warrant it, and that the cost of Act of Grace processes
are reduced.
As noted above, the Bill aims to reduce the level of
inappropriate pathology activity that imposes costs both on the Commonwealth and
the public.
NOTES ON CLAUSES
Clause 1 -
Short Title
Specifies the short title of this Act as the Health
Insurance (Pathology Services) Amendment Act 1997.
Clause 2 -
Commencement
Provides that this Act shall come into operation on the
day it receives the Royal Assent.
Clause 3 -
Schedules
Provides that the amendments and items in a schedule have
effect according to its terms.
Schedule 1 - Amendment of the Health Insurance Act 1973
Item 1
This item amends paragraph 23DC(10A)(a), which
provides that the Minister may not specify a day on which a pathology
practitioner undertaking comes into force earlier than the day on which it was
accepted, to allow the amendments in item 2 to take effect.
Item
2
This item inserts a new section 23DDA.
New subsection 23DDA
(1) enables the Minister to backdate an approved pathology provider undertaking
to a day earlier than the day on which it was accepted, for a period of up to
one month after the previous undertaking has expired. The Minister will have
the power to backdate an approval, provided that he/she is satisfied that the
reason the undertaking has been submitted past the expiry date is because of a
minor clerical oversight on the person's part or circumstances beyond that
person's control. The Minister must also be satisfied that the backdating is in
the public interest. In addition, the acceptance fee for the undertaking must
have been paid.
New subsection 23DDA (2) provides that the earlier day
specified in the notice given under subsection 23DC (10) must be the day after
the day on which the previous undertaking ceased to be in force.
New
subsection 23DDA (3) provides that for the purposes of paragraph (1)(e), but
without limiting those matters, the Minister must have regard to whether the
person would suffer financial hardship if an earlier day was not specified, and
whether substantial inconvenience would be caused to other persons who would not
be eligible to receive Medicare benefits for the rendering of professional
services if an earlier day was not specified.
The effect of this item is to enable the continued payment of Medicare
benefits to providers (and their patients) during a period when they would
otherwise be ineligible because a pathology practitioner undertaking has lapsed
as a result of a minor oversight .
Item 3
This item amends
paragraph 23DF(11A)(a),which provides that the Minister may not specify a day on
which a pathology authority undertaking comes into force earlier than the day on
which it was accepted, to allow the amendment in item 4 to take effect.
Item 4
This item inserts a new section 23DGA.
New
subsection 23DGA (1) enables the Minister to backdate an approved pathology
authority undertaking to a day which is earlier than the day on which it was
accepted, for a period of up to one month after the previous undertaking has
expired. The Minister will have the power to backdate an approval, provided
that he/she is satisfied that the reason the undertaking has been submitted past
the expiry date is because of a minor clerical oversight on the person's part or
circumstances beyond that person's control. The Minister must also be satisfied
that the backdating is in the public interest. In addition, the acceptance fee
for the undertaking must have been paid.
New subsection 23DGA (2)
provides that the earlier day specified in the notice given under subsection
23DF (11) must be the day after the day on which the previous undertaking ceased
to be in force.
New subsection 23DGA (3) provides that for the purposes
of paragraph (1)(e), but without limiting those matters, the Minister must have
regard to whether the person would suffer financial hardship if an earlier day
was not specified, and whether substantial inconvenience would be caused to
other persons who would not be eligible to receive Medicare benefits for the
rendering of professional services if an earlier day was not
specified.
The effect of this item is to enable the continued payment of
Medicare benefits to providers (and their patients) during a period when they
would otherwise be ineligible because a pathology authority undertaking has
lapsed as a result of a minor oversight.
Item 5
This item
amends paragraph 23DN(4)(a),which provides that approval of an accredited
pathology laboratory may not take effect on a day earlier than the one on which
the application was received, to allow the amendment in item 6 to take effect.
Item 6
This item inserts a new section after section
23DNA, which determines the principles of accreditation for pathology
laboratories.
The intention of new subsection 23DNAAA (1) is to enable the
Minister to backdate an accredited pathology laboratory for a period of one
month after the previous approval has expired. The Minister will have the power
to backdate an approval, provided that he/she is satisfied that the reason the
application has been submitted past the expiry date is because of a minor
clerical oversight on the person's part or circumstances beyond that person's
control. The Minister must also be satisfied that the backdating is in the
public interest. In addition, the acceptance fee for the approval must have
been paid.
New subsection 23DNAAA (2) provides that the earlier day
specified in the approval must be the day after the day on which the previous
approval ceased to have effect.
New subsection 23DNAAA (3) provides that
for the purposes of paragraph (1)(e), but without limiting those matters, the
Minister must have regard to whether the person would suffer financial hardship
if an earlier day was not specified, and whether substantial inconvenience would
be caused to other persons who would not be eligible to receive Medicare benefit
for the rendering of professional services if an earlier day was not
specified.
The effect of this item is to enable the continued payment of
Medicare benefits to providers (and their patients) during a period when they
would otherwise be ineligible because approval of an accredited laboratory has
lapsed as a result of a minor oversight.
Item 7
This item
is a savings provision. It provides that, where approvals of pathology
practitioner undertakings, pathology authority undertakings and laboratory
accreditation have been backdated, the Commonwealth waives its right to recover
any Medicare benefits paid for services rendered by the pathology practitioners
or authorities concerned, or at the laboratories concerned, during the period
covered by the backdating before the backdating came into force.
Item
8
This item replaces section 23DNK.
New subsection 23DNK (1)
provides that an APA operating a licensed collection centre (LCC) must ensure
that a notice is clearly displayed at all times to let the public know that the
centre is licensed. If a specimen is collected in an unlicensed collection
centre, the consumer is not able to obtain Medicare benefits for tests performed
on that specimen. This notice should be clearly visible from outside the LCC to
ensure that the public can clearly see whether a centre offering collection
services is licensed. It will also allow checking of compliance with the
requirements of section 23DNK, without a physical requirement to enter the LCC
premises. LCCs often do not operate during normal business hours, but are
frequently located within other premises that are open during those hours.
Where the premises housing the LCC are open, but the LCC is closed, HIC officers
are not able to enter the LCC to check compliance.
The penalty for not
displaying a notice is increased from $100 to $1000. It is intended that the
external display requirement will have a deterrent effect on breaches of 23DNK,
and will enable consumers to be aware of the licensing arrangements required to
obtain Medicare benefits.
New subsection 23DNK allows for circumstances
where it is not possible for an APA to comply because of a lawful arrangement
such as a tenancy agreement. The obligation must have been in force at the time
this Act commenced.
Item 9
This item inserts new
subsections (2C) and (2D) after subsection 23DO(2B) to provide that a person,
who unsuccessfully applied for backdating of approval of an undertaking or of
laboratory accreditation, may apply to the Minister for reconsideration of that
decision.
Item 10
This item amends subsection 23DO(3) to
provide that the Minister must advise the applicant in writing of his/her
decision on the reconsideration of backdating of an approval.
Item
11
This item amends paragraph 23DO(5)(c) to provide that a person who
has unsuccessfully appealed to the Minister for a review of a decision not to
backdate an approval may appeal to the Administrative Appeals
Tribunal.
Item 12
This item seeks to strengthen section
129AAA, which provides that an APP must not enter into an arrangement with a
practitioner or medical entrepreneur for the use or occupation of premises by
the APP unless it is for the purpose of establishing an LCC or accredited
pathology laboratory or where the APP renders professional services in the
premises. This clause makes it clear that, if premises are occupied by an APP,
that APP must use them to render professional services personally.
The
intention of the amendment is to prevent arrangements where the APP merely
oversees the use of the premises through agents or employees, and where the
purpose of the arrangement is to provide inducements or kickbacks to a medical
practitioner or entrepreneur in the form of rent or to operate an unlicensed
collection centre.
Item 13
This item amends section 133 of
the Act to allow the Commonwealth to make regulations which prescribe penalties
for minor pathology offences.
This amendment will enable regulations to
be made to allow the Health Insurance Commission (HIC) to deal more efficiently
and expeditiously with the less serious infringements relating to pathology. An
example of the type of breach that would fall into this system includes the
failure by APAs to advise the public that a pathology laboratory is no longer
approved and that the services rendered there do not attract Medicare
benefits.
It is anticipated that the system will result in a higher level
of compliance with the legislative provisions for pathology.