Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2022
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
HEALTH LEGISLATION AMENDMENT (MEDICARE COMPLIANCE AND
OTHER MEASURES) BILL 2022
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health and Aged Care, the Hon Mark
Butler MP)
HEALTH LEGISLATION AMENDMENT (MEDICARE COMPLIANCE AND
OTHER MEASURES) BILL 2022
OUTLINE
The Health Legislation Amendment (Medicare Compliance and Other Measures) Bill
2022 (the Bill) amends the Health Insurance Act 1973 (Health Insurance Act), the
National Health Act 1953 (National Health Act) and the Dental Benefits Act 2008
(Dental Benefits Act) to protect the integrity of Medicare.
The Bill supports the integrity of the Medicare Benefits Schedule (MBS), the
Pharmaceutical Benefits Scheme (PBS) and Child Dental Benefits Schedule (CDBS)
by:
• addressing inappropriate practice, principally by:
o expanding the options available to the Professional Services Review
(PSR) to make agreements with any person under review who
acknowledges inappropriate practice, including bodies corporate; and
o introducing new sanctions for persons who fail to respond to a notice
to produce documents to the Director of the PSR (Director) or to a
Committee established by the Director under section 93 of the Health
Insurance Act (Committee), or fail to appear at a Committee hearing;
and
• protecting payment integrity, encouraging compliance with claiming
requirements and supporting consistency specifically by improving
recovery arrangements for debts owed to the Commonwealth, aligning the
relevant standards and arrangements across the MBS, PBS and CDBS and
clarifying the application threshold for administrative penalties within Shared
Debt Recovery Scheme arrangements.
The ongoing integrity of the MBS, PBS and CDBS is essential to ensure that all
Australians continue to have access to a world class health system. In 2019-20,
Commonwealth expenditure on these programs amounted to more than $38 billion.
While most health practitioners claim benefits under these programs appropriately, a
few do not. In some circumstances, claims fail to meet legislative requirements, are
fraudulent or relate to inappropriate practice. In other circumstances--where the
number of Medicare-funded services per patient may be subject to additional criteria
or limits (for example, allied health services for people with chronic conditions and
complex care needs)--incorrect claiming by health practitioners may adversely affect
individual patients and impede their access to health services.
The Government supports practitioners and healthcare organisations to comply with
their obligations through a focus on education, as well as ongoing engagement with
peak bodies. However, where benefits are incorrectly or fraudulently paid, it is vital to
the public interest that Commonwealth expenditure is protected and that debts are
recovered to support further investments in health initiatives for Australians. The
Government must respond to incorrect claiming and inappropriate practice efficiently
and effectively, to ensure that Medicare programs continue to operate for the benefit
of the Australian community.
The Bill has no adverse impact on health providers practising legitimately.
1
Overview of the Bill
Addressing Inappropriate Practice
The Bill ensures all types of persons under review by the PSR, including bodies
corporate, may enter into written agreements with the Director. The Bill also enables
these written agreements with the Director to specify certain additional actions that
may take effect in relation to the person under review. Transitional provisions provide
the Director with the flexibility to enter into agreements with non-practitioner persons
under review who are referred to a Committee in the 18 months prior to
commencement of the Bill.
The Bill introduces certain sanctions to be applied to persons under review who are
not practitioners. In particular, the Bill extends the application of existing criminal
offences to all persons (other than persons under review who are practitioners) who
fail to produce documents to the Director or to a Committee after receiving a notice.
The sanctions include a civil penalty for bodies corporate who do not produce
documents or give information when required, and the ability for the Director to seek
Court orders requiring the production of documents. The Bill introduces criminal
offences where persons under review (other than practitioners) fail to attend and/or
give evidence at a Committee hearing pursuant to a notice.
The Bill clarifies that the Chief Executive Medicare (CEM) may make a request to the
Director to review the provision of services by a person if it appears to the CEM that
there is a possibility that a person may have engaged in inappropriate practice. The
CEM is not required to objectively determine that a particular person provided the
services and/or engaged in inappropriate practice prior to referral to the Director for
review. Similarly, while the Director may undertake a review, the Bill clarifies that
the Director may refer a person under review to a Committee if it appears to the
Director that the person has engaged in inappropriate practice.
Protecting Payment Integrity and Consistency in Debt Recovery
The Bill includes amendments to update and align the legislative provisions across the
Health Insurance Act, the National Health Act and the Dental Benefits Act including
to clarify:
• the recovery of interest payable on certain debts under the Health Insurance
Act and the Dental Benefits Act;
• application of administrative penalties to Shared Debt Recovery Scheme
debts;
• use of the financial information gathering powers in debt recovery;
• Administrative Appeals Tribunal review arrangements, where one or more
garnishee notices are issued in relation to certain debts;
• the Commonwealth's ability to recover a debt from a person or the estate of
the person.
The Bill ensures that both the set off provision in section 129AEF of the Health
Insurance Act and the garnishee power in section 129AEG of the Health Insurance
2
Act may be applied to debts owed by a person to the Commonwealth, as a result of a
written agreement under section 92 between the person and the Director.
Finally, the Bill amends the National Health Act and the Dental Benefits Act to clarify
that the Commonwealth may recover an amount as a debt where it should not have
been paid due to the provision of false or misleading information, aligning the
relevant provisions with equivalent provisions in the Health Insurance Act.
Financial Impact Statement
Nil.
3
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
HEALTH LEGISLATION AMENDMENT (MEDICARE COMPLIANCE AND
OTHER MEASURES) BILL 2022
This Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview of the Bill
The Bill amends the Health Insurance Act 1973 (Health Insurance Act), the National
Health Act 1953 (National Health Act) and the Dental Benefits Act 2008 (Dental
Benefits Act) to implement measures to protect the integrity of the Medicare Benefits
Schedule (MBS), the Pharmaceutical Benefits Scheme (PBS) and the Child Dental
Benefits Schedule (CDBS) by:
• addressing inappropriate practice principally by:
o adding flexibility to the options available to the Professional Services
Review (PSR) to review services and make agreements with any
person under review who acknowledges inappropriate practice,
including bodies corporate; and
o introducing new sanctions for persons who fail to respond to a notice
to produce documents to the Director of the PSR (Director) or to a
Committee established by the Director under section 93 of the Health
Insurance Act (Committee), or fail to appear at a Committee hearing;
and
• protecting payment integrity, encouraging compliance with claiming
requirements and supporting consistency specifically by improving
recovery arrangements for debts owed to the Commonwealth, aligning the
relevant standards and arrangements across the MBS, PBS and CDBS and
clarifying the application threshold for administrative penalties within Shared
Debt Recovery Scheme arrangements.
Human rights implications
Right to Health
The Bill engages the right to health. Article 12(1) of the International Covenant on
Economic, Social and Cultural Rights (ICESCR) promotes the right of all individuals
to enjoy the highest attainable standard of physical and mental health.
The Bill assists with the progressive realisation of the right of all individuals to enjoy
the highest attainable standard of physical and mental health by supporting the
integrity of Australia's Medicare programs. The Bill provides mechanisms to support
Medicare provider compliance by strengthening how:
• inappropriate practice may be reviewed, including by expanding the
Director's ability to enter into written agreements with all persons under
review; and
4
• the Commonwealth may recover incorrect Medicare payments and enforce
the recovery of debts.
This means that more money will be available to be reinvested in new services and
medications, improving the Australian community's access to Medicare programs.
Right to Privacy
The Bill engages the right to privacy, as it provides for the production, disclosure and
collection of personal information, including health and financial information.
Article 17 of the International Covenant on Civil and Political Rights (ICCPR)
provides that no one shall be subjected to arbitrary or unlawful interference with their
privacy, family, home, correspondence, nor to unlawful attacks on their honour and
reputation. This right to privacy may be limited, however, to achieve a legitimate
objective where the limitations are lawful and not arbitrary. In order for an
interference with the right to privacy to be permissible, the interference must be
authorised by law, be consistent with the ICCPR, be reasonable in the circumstances
and proportionate to the objectives sought to be achieved.
The Bill contains provisions enabling the sharing of information, including personal
information, between the Chief Executive Medicare (CEM) and the Director to
encourage compliance with written agreements made between persons under review
and the Director. The Bill enables the CEM to notify the Director that the CEM is of
the opinion that a person, who has made an agreement with the Director, has not
complied with the agreed specified actions. For example, agreements will typically
include a requirement that the person under review must repay Medicare or dental
benefits, which were paid for services where the person acknowledged inappropriate
practice.
One of the CEM's functions relates to the recovery of relevant debts owed to the
Commonwealth. If the CEM becomes aware, while performing this function, of a
person's failure to pay the agreed amount, the CEM may notify the Director, which
will inform the Director's further actions, if any. The Bill includes an express
procedural fairness requirement that the CEM must provide the person under review
with written notice prior to notifying the Director. The notice must set out the reasons
why the CEM is of the opinion that the person under review has not complied with the
agreement and must give the person an opportunity to make submissions about why
the CEM should not notify the Director.
The Bill expands the circumstances in which the possibility of publication of certain
personal information may occur. The information will include the person's name,
address and profession, as well as the nature of the acknowledged inappropriate
practice and specified actions agreed with the Director. The publication may occur in
circumstances where a person under review has entered into an agreement
acknowledging inappropriate practice, but has not taken action specified in the
agreement that is necessary to give effect to the agreement, or action has been taken in
a court for the purposes of enforcing the agreement. The CEM may notify the Director
if any of these circumstances arise.
The sharing of information in this context is between Commonwealth agencies and
other relevant privacy and secrecy laws, and their associated safeguards, will continue
5
to apply. In this instance, the legitimate objective to be achieved is the repayment of
incorrectly paid Medicare benefits by the person under review, in circumstances
where the person under review has agreed to do so. Given Medicare benefits are paid
by the Commonwealth, the sharing of limited information between Commonwealth
agencies is proportional to the objective of protecting the integrity of Medicare.
Similarly, the ability of the Director to publish particulars on the failure to comply
with an agreement provides an incentive for persons under review to meet the actions
specified in their agreement. To date, agreements have been confidential but,
unfortunately, some persons have not complied with the terms of their agreement. The
publication measure signals that, where a person enters into an agreement with the
Director, there is an expectation that the agreement will be honoured and failure to
comply may result in reputational consequences. The Bill therefore protects the
integrity of the PSR agreement process.
As a result, any limitations on the right to privacy are necessary, reasonable and
proportionate to the legitimate objectives of the Bill.
Civil Penalties
The Bill extends the application of existing civil penalty provisions, where persons
fail to notify the CEM of an address for the giving of documents relating to a debt
owed to the Commonwealth.
It should be noted that the extension would engage the criminal process rights under
Article 14 of the ICCPR if the civil penalties are considered to be "criminal penalties"
under international human rights law. Determining whether the penalties are
considered to be criminal under international human rights law requires consideration
of the classification of the penalty provisions under Australian domestic law, the
nature and purpose of the penalties, and the severity of the penalties.
The penalty provisions proposed by the Bill expressly characterise the penalties as
civil penalties. These provisions create solely pecuniary penalties in the form of a debt
payable to the Commonwealth. The purpose of the penalties is to support Medicare
provider compliance by encouraging the provision of address details within the time
period required by the legislation.
Given the significant Commonwealth expenditure on Medicare programs, it is both
reasonable and important to encourage the prompt provision of address details when a
debt is owed to the Commonwealth. This minimises the use of financial information
gathering powers purely to obtain contact details, which should be ordinarily provided
by the debtor.
The civil penalty provisions will not impose criminal liability and will not lead to the
creation of a criminal record. The penalties will only apply to persons who have a
debt due to the Commonwealth under related Medicare program legislation, rather
than to the public in general. Further, the imposition of the civil penalties is not
6
dependent on a finding of criminal guilt. These factors all indicate that the civil
penalties included in the Bill are civil rather than criminal in nature.
In terms of severity, the civil penalties are not sufficiently severe that they could be
considered criminal penalties for the purposes of Australia's human rights obligations.
Accordingly, the criminal process rights provided in Article 14 of the ICCPR will not
be engaged by the amendments relating to civil penalties.
The Bill similarly imposes civil penalties for bodies corporate who fail to comply with
notices to produce information. The provisions do not engage criminal process rights
as the ICCPR does not afford such rights to bodies corporate.
Criminal Offences
Careful consideration has been given to the need for criminal offences, and the
conduct that should be subject to a criminal offence. The Bill extends the application
of existing criminal offences in the Health Insurance Act for failing to produce
documents or give information when required. All offences included in the Bill relate
to the PSR scheme, and their inclusion is intended to promote compliance with the
regulatory scheme.
The underlying purpose of the PSR's legislative functions is to protect the integrity of
Commonwealth-funded Medicare programs and prevent inappropriate practice, which
may have both cost and patient safety implications. The PSR requires access to
relevant documents and/or information to undertake its functions, including reviewing
potential cases of inappropriate practice. The current sanctions available for failing to
produce documents are disqualification from Medicare for persons under review who
are practitioners, or a criminal offence which applies to persons other than a person
under review. There are currently no consequences for a failure to comply for persons
under review who are not practitioners.
The provision of requested information is very important to progressing the review of
a person. Encouraging compliance with a notice is necessary to ensure that the PSR is
able to carry out its core functions. By amending the offence that deals with a failure
to produce documents to apply to all persons (other than a person under review who is
a practitioner), this will ensure that appropriate consequences exist for all persons who
do not produce documents when required. The offence applies where the relevant
person is required by a notice to produce documents or give information to the
Director or a Committee and intentionally refuses or fails to comply with that
requirement. The maximum penalty does not include imprisonment and is consistent
with the Guide to Framing Commonwealth Offences, Infringement Notices and
Enforcement Powers issued by the Attorney-General's Department (the Guide). The
offence is proportionate to achieving the objective of ensuring that a person cannot
subvert the PSR scheme by intentionally failing to produce documents. The inclusion
of criminal offences is therefore reasonable and proportionate to support the PSR
scheme, with the ultimate aim to protect the integrity of Medicare programs.
Strict liability offences
The Bill engages the right to the presumption of innocence in Article 14(2) of the
ICCPR by introducing a strict liability offence for a failure to attend a Committee
hearing or a failure to give evidence or answer a question from a Committee member.
7
Article 14(2) of the ICCPR provides that a person charged with a criminal offence has
a right "to be presumed innocent until proven guilty according to law". Strict liability
offences engage article 14(2) because, where strict liability is applied to an offence,
the requirement for the prosecution to prove fault is removed. Strict liability
provisions will not violate the presumption of innocence so long as the provisions are
reasonable in the circumstances and maintain rights of defence.
The strict liability offences that will be introduced by the Bill will not be inconsistent
with the presumption of innocence because they are reasonable, necessary and
proportionate in the pursuit of a legitimate objective. The offences will support the
functions of the PSR to investigate whether a person engaged in inappropriate
practice, specifically in requiring a person under review to attend a hearing so that the
person may answer questions about the provision of services. This offence provides a
consequence for failure to comply with a notice to attend a hearing or a failure to
answer questions at a hearing, regardless of whether that failure is intentional.
The maximum penalties for these offences are in line with the Guide and do not
include imprisonment. Although a provision for "reasonable excuse" has not been
included, there is a specific exception for circumstances involving a medical condition
which prevents a person from attending a hearing. In addition, all persons maintain
the defences of general application contained in Part 2.3 of the Criminal Code Act
1995. Defences of mistake of fact and intervening conduct or event are available
specifically in relation to strict liability offences.
For these reasons, the strict liability offences are not inconsistent with the
presumption of innocence and are reasonable, necessary and proportionate in pursuit
of a legitimate objective.
Conclusion
To the extent that there are any limitations on human rights, these are necessary,
reasonable and proportionate to the legitimate objective of the Bill.
The Hon Mark Butler MP, Minister for Health and Aged Care
8
HEALTH LEGISLATION AMENDMENT (MEDICARE COMPLIANCE AND
OTHER MEASURES) BILL 2022
NOTES ON CLAUSES
Clause 1 - Short Title
Clause 1 provides that the short title of the Act is the Health Legislation Amendment
(Medicare Compliance and Other Measures) Act 2022.
Clause 2 - Commencement
This clause provides that the Act commences the day after it receives Royal Assent.
Clause 3 - Schedules
This clause provides that each Act that is specified in a Schedule to the Bill is
amended or repealed as set out in the applicable items in the Schedule concerned, and
any other item has effect according to its terms. This is a technical provision which
gives operational effect to the amendments contained in the Schedules.
SCHEDULE 1 -- AMENDMENTS
Part 1 - Professional Services Review scheme
Background
The Professional Services Review (PSR) scheme, set out in Part VAA of the Health
Insurance Act 1973 (Health Insurance Act), is a peer review process for examining
cases of possible inappropriate practice by a person following a request for review by
the Chief Executive Medicare (CEM). Once a person is referred to the PSR, the
Director of the PSR (Director)must make a preliminary decision whether to undertake
a review. The Director must undertake a review if, based on the information gathered
by the Director, it appears that there is a possibility that the person has engaged in
inappropriate practice in providing services during the review period. Having decided
to undertake a review, the Director may take no further action, refer the person under
review to a Committee established by the Director under section 93 of the Health
Insurance Act (Committee), or enter into a written agreement with the person under
review.
Historically, health provider compliance has concentrated on the behaviour of
individual practitioners. Although the PSR scheme allows for review of persons
(including bodies corporate) who employ or otherwise engage practitioners, certain
provisions only apply in circumstances where the person under review is a
practitioner. These provisions include the power for the Director to enter into a
written agreement with the person under review, as well as certain sanctions for
failing to produce documents or attend hearings when required. In the changing
Medicare environment, where non-practitioner entities are increasingly influencing
the provision of health care services, adjustments to certain compliance arrangements
are required to ensure the continued integrity of the Medicare compliance framework.
As a result, a need has been identified to extend the relevant provisions to non-
practitioner persons.
9
Item 1 - Subsection 81(1)
This item inserts a definition of "executive officer" of a body corporate into
subsection 81(1). The definition of an executive officer of a body corporate is "a
person, by whatever name called and whether or not a director of the body, who is
concerned in, or takes part in, the management of the body". Section 81 provides that
definitions in that section apply only to terms used in Part VAA of the Health
Insurance Act, which sets out the PSR scheme. The definition inserted into subsection
81(1) is consistent with the definition of "executive officer", which appears in Part
IIBA of the Health Insurance Act.
Item 2 - Subsection 81(1) (paragraph (b) of the definition of service)
This item replaces the word "dispensing" with the word "supply" in relation to
pharmaceutical benefits, as part of the definition of "service" set out in subsection
81(1). This amendment is to ensure consistency in terminology between the Health
Insurance Act and legislation that provides for the supply of pharmaceutical benefits,
the National Health Act 1953 (National Health Act).
Items 3 and 4 - Subsection 86(1) and subsection 86(1) (note)
These items amend subsection 86(1) and insert a new note in that subsection to clarify
the basis on which the CEM may make a written request for the Director to review the
provision of services by a person. This amendment provides that the CEM may make
a request if it appears to the CEM that there is a possibility that the person may have:
(a) provided services during the period; and
(b) engaged in inappropriate practice in the provision of those services.
This amendment clarifies that there is no requirement for the CEM to undertake an
investigation to objectively determine that a particular person provided services
and/or engaged in inappropriate practice, prior to making a request to the Director.
The CEM has no compulsory powers that would enable the undertaking of this type of
investigation. The CEM makes requests to the Director based on Medicare claiming
information, open source material and any information volunteered by practitioners
before a request for review is sent to the Director.
The insertion of new Note 2 is intended to further explain that the Director's review of
the provision of services by a person during a period may include reviewing whether
particular services were provided during the period by the person or another person.
New Note 1 replicates the current note under subsection 86(1) (which refers the reader
to the definition of 'provides services' in subsection 81(2)).
Item 5 - Subsection 89B(5)
This item makes a minor change to streamline the language of subsection 89B(5) and
reflects the inclusion of new section 106ZPNA (see item 41). As amended by Part 1
of this Bill, the subsection will require the Director to set out the terms (where
applicable) of section 106ZPM, subsection 106ZPN(1), subsection 106ZPN(2) or
section 106ZPNA in a notice to produce documents. This ensures that a notice
recipient is aware of all the possible consequences for failing to comply with the
notice.
10
Item 6 - Subsection 92(1)
This item repeals the existing subsection 92(1) and replaces it with a new subsection
92(1). The new subsection 92(1) provides that a person under review and the Director
may enter into a written agreement under which the person under review
acknowledges that the person has engaged in inappropriate practice in connection
with the provision of services during the review period, and that specified action in
relation to the person under review is to take effect. The actions that may be specified
are described in subsection 92(2), which is amended by items 7 to 18 below.
The new subsection 92(1) enables any person under review, including non-
practitioner persons and bodies corporate, to acknowledge inappropriate practice and
enter into a written agreement with the Director.
This amendment provides equal treatment for corporate entities and other non-
practitioner persons under review, allowing them the same access to a written
agreement with the Director as practitioners. It also gives the PSR the flexibility to
deal with non-practitioner persons under review in a timely and cost-effective manner
as an alternative to the lengthier and more resource-intensive process of review by a
Committee. Feedback from stakeholders indicates that PSR reviews would proceed
more effectively and efficiently if all persons under review had the same opportunity
to negotiate agreements with the Director.
As the person under review may be a body corporate, the body corporate will not have
provided the specified services personally. The services may have been rendered or
initiated by an associated person (see item 18 below for a definition of associated
person). It is intended that any action specified in the agreement will be directed only
to the person under review, even if the inappropriate practice related to services
rendered or initiated by associated persons.
When a body corporate is reviewed, individual practitioners may or may not also be
subject to review. However, each referral to the PSR is separate. It is important to
note that a body corporate's acknowledgment of inappropriate practice will not
prejudice the position of any individual practitioners it employs or otherwise engages.
In addition, individual practitioners will not be named in agreements with bodies
corporate or other persons who employ or otherwise engage practitioners (and such
agreements are themselves confidential, subject to new paragraph 92(4)(da) and
amendments to section 106ZPR (see items 15 and 42-47 below).
Item 7 - Paragraph 92(2)(a)
This item inserts the words 'under review' after the words 'the person'. This item is
the first of a number of consequential amendments resulting from the expansion of the
scope of section 92 to allow for written agreements between the Director and any
person under review, notwithstanding whether the person is a practitioner, a non-
practitioner or a body corporate.
Item 8 - After paragraph 92(2)(a)
This item inserts new paragraph 92(2)(aa) as a new action that may be specified in an
agreement under subsection 92(1), namely that the Director, or a nominee of the
Director, is to counsel the person under review. Counselling is intended to prevent
future inappropriate practice by ensuring that the person under review is aware of
11
what is expected of them and the steps that may be taken to correct any aberrant
behaviour, which has led or may lead to inappropriate practice. Counselling focuses
on education for the person under review, to support them in complying with their
obligations. Adding counselling to the suite of specified actions that may be included
in a written agreement is consistent with existing section 106U, which enables
counselling to be included in a final determination, made by the Determining
Authority, following a finding of inappropriate practice by a Committee.
Item 9 - Paragraphs 92(2)(b) and (ca)
This item makes a consequential amendment, resulting from the expansion of the
scope of section 92, to allow for written agreements between the Director and any
person under review (whether the person is a practitioner, a non-practitioner or a body
corporate).
Item 10 - After paragraph 92(2)(cb)
This item inserts new paragraph 92(2)(d) which provides for a new action that may be
specified in a written agreement made under subsection 92(1). If any services under
review were rendered or initiated by an associated person (discussed in item 18
below), the person under review must give specified classes of associated persons
specified information about the appropriate provision of services, or that is relevant to
preventing inappropriate practice in the provision of services, in a specified form
within a specified period, and must also provide the CEM with evidence that they
have undertaken such action.
The provision ensures persons under review, who have associated persons render or
initiate services, take responsibility for providing correct information to staff they
employ or otherwise engage (such as practitioners or billing staff), to prevent future
inappropriate practice. It enables written agreements with persons under review to
require the provision of educational information to associated persons (of specified
classes) by the person under review in relation to the provision of services and
inappropriate practice. Where this specified action is applied, the written agreement
between the person under review and the Director will specify:
• the information to be provided;
• the classes of associated persons to which the information is to be provided;
• the form of the information to be provided (if any);
• the time period in which the information must be provided; and
• the evidence to be provided to the CEM that the information has been
provided as specified.
This provision complements the specified action of counselling a person under review
(see item 8 above) by focusing on education for associated persons. It ensures that
where the person under review has acknowledged inappropriate practice in relation to
services rendered by associated persons, the associated persons will receive
information about what is expected of them and the actions required to correct any
aberrant behaviour that either led to past, or might lead to future, inappropriate
practice.
Item 11 - Paragraphs 92(2)(da), (db) and (e)
This item makes a consequential amendment resulting from the expansion of the
scope of section 92 to allow for written agreements between the Director and any
12
person under review (whether the person is a practitioner, a non-practitioner or a body
corporate).
Item 12 - Paragraph 92(2)(e)
This item replaces the word "dispensing" with the word "supplying" in relation to
pharmaceutical benefits. This is amendment is to ensure consistency in terminology
between the Health Insurance Act and the National Health Act.
Item 13 - Paragraphs 92(2)(f) and (g)
This item amends paragraphs 92(2)(f) and (g) to ensure that the specified actions set
out in those paragraphs may be applied only to persons under review who are
practitioners. These paragraphs relate to disqualification, which is relevant only to
individual practitioners and not to non-practitioner persons under review.
Item 14 - Paragraph 92(2A)(a)
This item clarifies that the "person" referred to in paragraph 92(2A)(a) is the person
under review and is a consequential amendment resulting from the amendments to
subsection 92(1) made by Part 1 of this Bill (which extend its operation to allow for
agreements with non-practitioner persons including bodies corporate).
Item 15 - After paragraph 92(4)(d)
This item inserts new paragraph 92(4)(da) which provides that, if the CEM is of the
opinion that the person under review has not taken action specified in the written
agreement that is necessary to give effect to the agreement, the CEM may notify the
Director, in writing, of the CEM's opinion and reasons for that opinion. This would
generally only occur following a series of procedural fairness steps to ensure that the
person is aware of their obligations.
For example, written agreements will typically include a requirement that the person
under review must repay Medicare or dental benefits that were paid for the services
acknowledged by the person under review as inappropriate practice. The CEM is
responsible for collecting repayments of these amounts. If, for example, the person
under review does not pay the agreed amount and persistently refuses to respond to
communications as part of the debt recovery process, the CEM may have cause to
notify the Director that the person is likely to be in breach of the agreement. The
Director will then have a discretion under section 106ZPR to publish the name of the
person under review and details of the inappropriate practice that was the subject of
the written agreement (see also items 42-47 below).
Item 16 - At the end of subsection 92(4)
This item adds a note, which provides a cross-reference to section 106ZPR to make
clear that if the CEM notifies the Director under new paragraph 92(4)(da) that the
person is likely to be in breach of the agreement (see item 15 above), the Director may
cause certain particulars to be published under section 106ZPR (see items 42-47
below).
Item 17 - After subsection 92(4)
This item inserts new subsection 92(4A), which provides for steps that must be taken
by the CEM before notifying the Director under paragraph 92(4)(da) of the CEM's
opinion that the person under review has not taken action specified in the written
13
agreement that is necessary to give effect to the agreement. The CEM must give the
person under review a written notice that sets out the reasons why the CEM is of the
opinion that the person has not taken action specified in the agreement that is
necessary to give effect to the agreement, and invites the person to make written
submissions to the CEM (within a specified period of not less than 14 days after the
notice is given) about why the CEM should not notify the Director under paragraph
92(4)(da). The CEM must consider any submissions made as mentioned in
subparagraph 92(4)(a)(ii). This provision ensures that the person under review has an
opportunity to make submissions as to whether that person has taken action specified
in the written agreement prior to the CEM notifying their opinion to the Director.
Item 18 - Subsection 92(7)
This provision inserts the definition of associated person, in relation to the person
under review, for the purposes of section 92. This definition has the meaning given by
subsection 106U(5), namely that an associated person is: an employee of, or person
otherwise engaged by, the person under review; or an employee of, or a person
otherwise engaged by, a body corporate of which the person under review is an
officer.
Item 19 - Before subsection 93(1)
This item inserts new subsection 93(1A). This provision states that section 93 applies
if it appears to the Director that the person under review may have:
(a) provided services during the review period; and
(b) engaged in inappropriate practice in the provision of the services.
This amendment clarifies the conditions and circumstances supporting a referral by
the Director to a Committee under section 93. The Director enters into an agreement
with a person under review only if the person is prepared to acknowledge their
inappropriate practice. Where a written agreement is not reached, the Director, who is
able to issue compulsory notices to produce, may have evidence suggesting
inappropriate practice. However, it has never been part of the PSR scheme that the
Director must make any findings in relation to inappropriate practice before referring
a matter to a Committee. It is properly a matter for a Committee to investigate and
make any findings of inappropriate practice. A Committee is supported in this
function by its ability to: issue notices to produce documents, require the person under
review to attend a hearing and give evidence, and to summons witnesses.
Item 20 - At the end of subsection 93(1)
This item includes a note in subsection 93(1), which clarifies that a Committee
investigating whether a person under review engaged in inappropriate practice in
providing the services may investigate whether the services were provided by the
person or another person.
Item 21 - Paragraph 93(6)(a)
This item is a consequential amendment to item 19 to align the language of paragraph
93(6)(a) with the language used in new subsection 93(1A).
Item 22 - Subsection 102(4)
Section 102 provides for a Committee to give the person under review a notice
advising that the Committee proposes to hold a hearing and requiring the person under
14
review to appear and give evidence. This item amends subsection 102(4) to reflect
that this subsection applies when the person under review is an individual and a notice
is issued to the individual requiring them to appear at the hearing and give evidence.
New subsection 102(5) has also been inserted (by item 23 below) and that new
subsection applies where the person under review is a body corporate.
Item 23 - At the end of section 102
This item adds subsection 102(5), which reflects that the person under review may be
a body corporate, in which case a notice of hearing under section 102 may require the
body corporate to cause an executive officer to appear at a hearing and give evidence
on its behalf. The term "executive officer" of a body corporate is defined in section
81(1) (see item 1).
Items 24, 25, 26 and 27 - Section 103 (heading), subsection 103(1), paragraph
103(1)(c), paragraph 103(1)(d)
Section 103 sets out the rights of persons under review at Committee hearings. These
items do not change the rights available to persons under review. Rather, these items
amend the terms used throughout section 103 to reflect that the section now only
applies to persons under review who are individuals. New section 103A (see item 28)
sets out the rights of persons under review who are bodies corporate.
Item 28 - After section 103
This item adds new section 103A, which sets out the rights of persons under review at
Committee hearings, where the person under review is a body corporate. The rights of
the body corporate are broadly equivalent to the rights for an individual in section 103
and are able to be exercised by an executive officer of the body corporate acting on its
behalf. One main difference is that, as a body corporate does not have a "character",
there is no restriction in paragraph 103A(1)(c) as to what kind of evidence a witness
can give and paragraph 103(1)(d), which allows for written character statements, has
not been replicated in section 103A.
It is important to note that, should the executive officer be asked a question by a
Committee member in the course of the hearing, and is unable to answer, then the
executive officer may call a witness and put the question to the witness. If the witness
answers the question, the executive officer is taken to have answered the Committee's
question. This is to reflect the fact that bodies corporate may not have one executive
officer who is able to answer all questions that may be put to the executive officer by
the Committee. It is intended that other individuals may be able to assist the executive
officer to answer questions and that new sections 104A and 105AA (see items 32 and
34) are not intended to apply if the executive officer cannot answer questions
personally but is co-operating with the hearing process and another person answers
the question for them.
Items 29 and 30 - Section 104 (heading) and paragraph 104(1)(a)
These items amend the heading of section 104 and paragraph 104(1)(a) to reflect that
section 104 applies to set out the consequences of a failure to appear at a Committee
hearing or give evidence or answer questions at a hearing where the person under
review is an individual (whether or not a practitioner). These are consequential
amendments reflecting the insertion of new section 104A, which applies where the
person under review is a body corporate (see item 32 below).
15
Item 31 - Paragraph 104(4)(e)
This item clarifies that paragraph 104(4)(e), under which the Committee must inform
the Director that the person has appeared and given evidence and answered questions
(as required), applies only where the person under review is a practitioner. This is
because paragraph 104(4)(e) links to subsection 105(2), which provides for revoking a
disqualification from the ability to bill Medicare and is therefore only relevant to
practitioners.
Item 32 - After section 104
This item inserts new section 104A, which applies when a notice under section 102
requires a person under review that is a body corporate to cause an executive officer
to appear at a Committee hearing and to give evidence, but the executive officer either
fails to appear or refuses or fails to give evidence or to answer questions.
Subsection 104A(2) provides that, in these circumstances, the Committee may
proceed with the hearing in any case (see paragraph 104A(2)(a)), or hold another
hearing (see paragraph 104A(2)(b)). Subsection 104A(3) provides that if an executive
officer of the body corporate then appears at the hearing, gives evidence as required
and answers every question that the executive officer is asked by a Committee
member in the course of the hearing, paragraph 104A(2)(a) ceases to apply.
Subsection 104A(4) provides that paragraph 104A(2)(a) does not apply if: the body
corporate has only one executive officer; before the hearing takes place the executive
officer notifies the Committee that the executive officer has a medical condition
preventing them from appearing or from giving evidence or answering questions; the
executive officer has complied with any reasonable requirement of the Committee that
the executive officer undergo a medical examination; and the results indicate that the
executive officer has a medical condition preventing them from appearing or from
giving evidence or answering questions.
Item 33 - Section 105 (heading)
This item replaces the heading of section 105 to reflect that section 105 relates to
disqualification for practitioners in circumstances were a practitioner fails to appear at
a Committee hearing, give evidence or answer a question when required.
Item 34 - After section 105
This item inserts new section 105AA. Subsection 105AA(1) provides that a person
under review who is an individual (and not a practitioner) commits an offence if the
person is given a notice under section 102 requiring that the person appears at a
hearing and give evidence to a Committee, and person fails to appear at the hearing,
or appears at the hearing but refuses or fails to give evidence or to answer questions.
The maximum penalty is 30 penalty units (currently $6,660). This maximum penalty
is in line with the maximum penalty set out in paragraph 9.4.1 of the Attorney-
General's Department's Guide for Framing Commonwealth Offences, Infringement
Notices and Enforcement Powers (the Guide).
Subsection 105AA(2) provides that subsection 105AA(1) does not apply if paragraphs
104(5)(a), 104(5)(b) and 104(5)(c) apply to the individual. These provisions may
apply when, before a Committee hearing takes place, the individual notifies the PSR
Committee that the individual has a medical condition preventing them from
16
appearing or from giving evidence or answering questions; the individual has
complied with any reasonable requirement of the Committee that the individual
undergo a medical examination; and the results indicate that the individual has a
medical condition preventing them from appearing or from giving evidence or
answering questions.
Subsection 105AA(2) provides an offence-specific defence, which is appropriate in
this case, in accordance with the Guide, as it relates to matters peculiarly within the
knowledge of the defendant.
Although the prosecution is likely to have knowledge of one aspect of the offence-
specific defence, that is, whether the defendant notified the Committee as required,
information relating to the medical condition of the defendant and the results of any
medical examination(s) would not be available to the prosecution in all cases. Details
as to the existence and extent of a medical condition would therefore be matters
peculiarly within the knowledge of the defendant. Conversely, it would be difficult for
the prosecution to prove, in all cases, that the defendant did not have a medical
condition preventing them from appearing at a hearing or giving evidence as required.
In circumstances where a defendant notifies the Committee that the defendant has a
medical condition preventing them from appearing at a hearing and then does not
provide any evidence that the defendant has undergone a medical examination, the
defendant would be the only person with any evidence of such medical examination
and the results of the examination. If the defendant is then prosecuted under
subsection 105AA(1), it would only be the defendant that holds the evidence
necessary to successfully raise the offence-specific defence in subsection 105AA(2).
As stated in the note after subsection 105AA(2), the defendant bears an evidential
burden in relation to these matters but not a legal burden as it is not expressed to do
so. This is in line with the principle in the Guide and the default position in section
13.3 of the Criminal Code Act 1995 (the Criminal Code).
Subsection 105AA(3) provides that an offence under subsection 105AA(1) is an
offence of strict liability.
Subsection 105AA(4) provides that a person under review who is a body corporate
commits an offence if the body corporate is given a hearing notice under section 102
requiring that an executive officer appear at a hearing and give evidence to a
Committee, and the body corporate fails to cause an executive officer to appear at the
hearing, to give evidence or to answer questions. The penalty for a body corporate is
150 penalty units (currently $33,300).
Subsection 105AA(5) provides that subsection 105AA(4) does not apply if the body
corporate has only one executive officer and paragraphs 104A(4)(b), 104A(4)(c) and
104A(4)(d) apply to this executive officer. These provisions relate to when the
executive officer may have a medical condition preventing the executive officer from
appearing or from giving evidence or answering questions, as set out above in item
32.
17
Subsection 105AA(5) provides an offence-specific defence, which is also appropriate
in this case, in accordance with the Guide, as the body corporate is a sole director
company and details of the medical condition of the sole executive officer would be
peculiarly within the knowledge of the defendant.
As stated in the note after subsection 105AA(5), the defendant bears an evidential
burden in relation to these matters but not a legal burden as it is not expressed to do
so. This is in line with the principle in the Guide and the default position in section
13.3 of the Criminal Code.
Subsection 105AA(6) provides that an offence under subsection 105AA(3) is an
offence of strict liability.
These criminal offences are necessary to prevent a person under review seeking to
obstruct the Committee's investigation by failing to appear at a hearing or failing to
give evidence or answer questions where required.
Importantly, section 105AA does not place any limitations on a person under review
who is an individual relying on the common law privilege against self-incrimination
when giving evidence or answering a question at a Committee hearing.
In addition, all persons maintain the defences of general application contained in
Part 2.3 of the Criminal Code, and defences of mistake of fact and intervening
conduct or event are available specifically in relation to strict liability offences.
Inclusion of offence-specific defences in subsections 105AA(2) and 105AA(5)
addresses specific stakeholder concerns by providing a medical exemption that
mirrors the application of subsection 104(5) as this is a situation not completely
covered by existing defences in the Criminal Code.
Item 35 - Subsection 105A(5)
This item makes a minor change to streamline the language of subsection 105A(5)
and to reflect the inclusion of new section 106ZPNA (see item 41). As amended by
Part 1 of this Bill, the subsection will now require the Director to include a copy of
section 106ZPM, subsection 106ZPN(1), subsection 106ZPN(2) or section 106ZPNA
(whichever is applicable) with a notice to produce documents. This is so a notice
recipient is aware of all the possible consequences for failing to comply with the
notice.
Item 36 - Section 106B
This item amends section 106B, which enables a Committee member to summons a
person (other than the person under review) to appear at a Committee hearing. The
amendment excludes an executive officer of a body corporate from being summonsed,
if the person under review is a body corporate with only a single executive officer.
This recognises that, if the person under review is a body corporate with only a single
executive officer, the executive officer cannot be summonsed under section 106B as
they would already be subject to a notice under section 102 to appear at the hearing on
behalf of the body corporate.
Item 37 - Paragraph 106U(1)(f)
18
This item substitutes "dispensing" with "supplying" in paragraph 106U(1)(f). This
amendment is to ensure consistency in terminology between the Health Insurance Act
and the National Health Act.
Item 38 - Subsection 106U(2)
This item repeals subsection 106U(2). Subsection 106U(2) currently provides that
paragraphs 106U(1)(a) and 106U(1)(b) do not apply if the person under review is a
body corporate. Paragraphs 106U(1)(a) and 106U(1)(b) provide, respectively, that a
draft or final determination made by the PSR Determining Authority may contain a
direction that the Director, or their nominee, reprimand the person under review, and
counsel the person under review. Repeal of subsection 106U(2) ensures these
reprimand and counselling directions may be included in a draft determination or a
final determination made by the Determining Authority (established by section 106Q
of the Health Insurance Act) if the person under review is a body corporate (not just if
the person under review is an individual, as is currently the case).
Item 39 - Paragraphs 106ZPA(2)(e) and (f)
This item repeals paragraphs 106ZPA(2)(e) and 106ZPA(2)(f) and substitutes a new
paragraph 106ZPA(2)(e). Section 106ZPA sets out the requirements for the
constitution of the Determining Authority, which has two functions: ratifying
agreements made between a person under review and the Director, and making
determinations relating to a person under review after a Committee has prepared a
report finding the person engaged in inappropriate practice. This item amends the
composition of the Determining Authority so that the other member(s) must be in the
same professions as the person or persons who rendered or initiated the services to
which the agreement or report relates. This provision applies regardless of whether the
person under review personally rendered or initiated the services and will ensure that
the Determining Authority for each case includes relevant practitioners.
Item 40 - Section 106ZPM (heading)
This item amends the heading of section 106ZPM as a result of the insertion of a new
section 106ZPN and new section 106ZPNA by item 41. As sections 106ZPN and
106ZPNA introduce different consequences for failure to produce documents or give
information, the heading of section 106ZPM is being amended to clarify that it also
provides consequences of failure to produce documents or give information (i.e.
benefits not payable, disqualification etc). This item does not change any other aspect
of section 106ZPM.
Item 41 - Section 106ZPN
This item repeals section 106ZPN. This section currently provides for an offence with
a maximum penalty of 20 penalty units that applies to a person (other than a person
under review) who intentionally refuses or fails to produce documents or give
information required in response to a notice under subsection 89B(2) (from the
Director) or 105A(2) (from a Committee).
This item inserts a new section 106ZPN as well as inserting a new section 106ZPNA.
The new sections set out the consequences for a failure to produce documents or give
information required under subsection 89B(2) or 105A(2). The provision of certain
information required by the Director or a Committee is critical to the review of
inappropriate practice, so these amendments include consequences for the non-
19
provision of information to promote compliance and ensure that the PSR can access
the information it needs to undertake its functions.
New section 106ZPN does this by replacing the current offence in section 106ZPN
with a new offence provision that covers all persons (other than persons under review
who are practitioners) and has a maximum penalty of 30 penalty units (see subsection
106ZPN(1)). This new offence applies where a person (other than a person under
review who is a practitioner) refuses or fails to comply with a requirement to produce
a document or give information under subsection 89B(2) or 105A(2). Rather than
being subject to this offence, persons under review who are practitioners are liable to
disqualification for failure to produce documents.
The offence is subject to the defences in the Criminal Code, including sudden and
extraordinary emergency, which applies to offences generally.
New section 106ZPN also inserts a new civil penalty provision for bodies corporate.
Subsection 106ZPN(2) states that a body corporate refusing or failing to comply with
a requirement to produce a document or give information under subsection 89B(2) or
105A(2) is liable for a civil penalty. The civil penalty is 30 penalty units (currently
$6,660). Subsection 106ZPN(3) provides for a separate contravention of subsection
106ZPN(2) for each day on which a body corporate refuses or fails to comply after the
deadline in the notice has passed; so companies that are persistently recalcitrant will
be subject to larger maximum penalties.
In determining the amount of pecuniary penalty, section 125A of the Health Insurance
Act requires the Court to have regard to all relevant matters, including: the nature and
extent of the contravention; the nature and extent of any loss or damage suffered as a
result of the contravention; the circumstances in which the contravention took place;
and whether the person has previously been found by the Court in proceedings under
the Health Insurance Act to have engaged in any similar conduct.
A civil penalty provision provides additional flexibility in the deterrents that may be
invoked to ensure the PSR's access to information necessary to perform its functions
and appropriate co-operation by bodies corporate. Civil penalties require proof to the
civil standard i.e. on the balance of probabilities. The provision is intended to provide
a strong incentive for a body corporate to co-operate with the PSR process rather than
writing off financial penalties as the "cost of doing business".
This item also inserts new section 106ZPNA allowing the Director to apply for a court
order to compel the production of documents or giving of information. Subsection
106ZPNA(1) states that the section applies if the Director is satisfied that a body
corporate has refused or failed to comply with a requirement to produce a document
or give information under subsection 89B(2) or subsection 105A(2). Subsection
106ZPNA(2) provides that the Director may, by writing, certify the failure (to comply
with the requirement to produce a document or give information) to the Federal Court
of Australia. Subsection 106ZPNA(3) provides that if the Director does so, the
Federal Court of Australia may inquire into the case and may order the body corporate
to comply with the requirement as specified in the order.
20
Section 106ZPNA applies only to bodies corporate (whether or not those bodies are
the person under review) and does not apply to individuals. This provision allows a
streamlined process for the Director to bring a matter involving non-compliance with
a notice to produce documents to Court for adjudication and, ultimately, provides the
Court with the power to order a corporation to produce the documents required. The
provision is similar to section 70 of the Australian Securities and Investments
Commission Act 2001.
Item 42 - Section 106ZPR (heading)
This item amends the heading of section 106ZPR to reflect amendments to section
106ZPR and that it now relates to agreements made under section 92.
Item 43 - Before subsection 106ZPR(1)
This item inserts new subsection 106ZPR(1A) before subsection 106ZPR(1). New
subsection 106ZPR(1A) provides that the Director may cause to be published, in such
way as the Director thinks most appropriate, the particulars mentioned in subsection
106ZPR(1), if the circumstances set out in subsection 106ZPR(1A) exist. The
particulars are, in brief, the name and address of the person under review, their
profession or specialty (or if the person is not a practitioner, the profession or
speciality of the person that rendered or initiated the relevant services), and the nature
of the conduct and actions specified or directions given in relation to the relevant
written agreement or final determination.
The amendments expand the circumstances in which the Director may cause
particulars to be published essentially by adding the scenarios where a person has not
fulfilled their obligations under a section 92 written agreement. The Director has the
discretion to publish where:
• the CEM has notified the Director of the CEM's opinion that the person under
review has not taken the actions specified as part of their written agreement;
and/or
• action has been undertaken in a court for the purposes of enforcing the
agreement (including to recover a debt due by the person to the
Commonwealth under paragraphs 92(4)(e) or (f)); or
• a final determination by the Determining Authority under section 106TA has
come into effect.
This provision is directed towards persons under review who do not fulfil their
agreement/s entered into with the Director. This is intended to provide a strong
behavioural incentive for compliance with written agreements, by signalling the
potential for visible reputational consequences and loss of public goodwill. The PSR
maintains a publicly available policy regarding publication of case particulars.
Item 44 - Subsection 106ZPR(1)
This item substitutes wording in subsection 106ZPR(1). This amendment is
consequential to the new subsection 106ZPR(1A) inserted by item 43, which now
outlines the circumstances in which the Director may publish the particulars in
subsection 106ZPR(1) (summarised above in relation to item 43). Subsection
106ZPR(1) now only has the effect of setting out the particulars that can be published
under section 106ZPR.
21
Item 45 - Paragraph 106ZPR(1)(b)
This item repeals paragraph 106ZPR(1)(b) and substitutes new paragraphs
106ZPR(1)(b) and 106ZPR(1)(ba). This is to reflect that section 106ZPR may apply to
bodies corporate, which do not have a profession or specialty in the same way
practitioners do. In this case, it is appropriate that the relevant information published
when the person under review is a person other than a practitioner relates to the
profession or specialty of the person or persons who rendered or initiated the services
to which the written agreement or final determination relates.
Item 46 - Paragraphs 106ZPR(1)(c) and (d)
This item repeals paragraphs 106ZPR(1)(c) and 106ZPR(d) and substitutes new
paragraphs to reflect the scenarios in new subsection 106ZPR(1A). If new paragraph
106ZPR(1A)(a) applies, the particulars are the nature of the conduct of the person
under review in respect of which the person acknowledged under the written
agreement that the person engaged in inappropriate practice and the specified actions
in the agreement. If paragraph (1A)(b) applies, the particulars are the nature of the
conduct of the person under review in respect of which the Committee found that the
person had engaged in inappropriate practice and the directions in the determination.
Item 47 - Subsection 106ZPR(3)
This item omits the wording "subsection (1)" and substitutes with "this section" as a
consequential amendment to the earlier amendments to section 106ZPR.
Item 48 - Application and savings provisions
This item sets out the application and savings provisions for the amendments in Part
1.
The amendments to section 86 apply in relation to a request made under subsection
86(1) on or after the commencement of the Act (whether the services to which the
request relates were rendered or initiated before, on or after commencement).
The amendments to subsections 89B(5) and 105A(5) apply in relation to a notice
given on or after the commencement of the Act (whether the relevant request under
subsection 86(1) or referral under subsection 93(1) is made before, on or after
commencement).
The amendments to section 92 apply in relation to agreements under that section,
which are entered into on or after the commencement of the Act (whether the relevant
request under subsection 86(1) is made, or the services to which the agreement relates
were rendered or initiated, before, on or after commencement).
The repeal of subsection 92(1) by Part 1 does not affect an agreement entered into
under that subsection before the commencement of the Act.
The amendments to section 93 apply in relation to a referral to a Committee made on
or after the commencement of the Act (whether the services to which the referral
under section 93(1) relates were rendered or initiated before, on or after
commencement).
22
The amendments to sections 103, 103A, 104, 104A and 105AA apply in relation to a
notice given under section 102 on or after the commencement of the Act (whether the
relevant referral under subsection 93(1) was made before, on or after
commencement).
The amendments to section 106U apply in relation to the making of a draft
determination under section 106T on or after commencement. The amendments to
section 106U also apply in relation to the making of a final determination under
section 106TA on or after the commencement of the Act (provided the relevant draft
determination is made under section 106T on or after that commencement). The
amendments will apply to these final and draft determinations whether the referral
under subsection 93(1) was made before, on or after commencement.
The amendments to subsection 106ZPA(2) apply in relation to an agreement entered
into under section 92 on or after the commencement of the Act (whether the request
under subsection 86(1) is made or the services to which the agreement relates are
rendered or initiated before, on or after commencement).
New sections 106ZPN and 106ZPNA apply in relation to notices given under
subsection 89B(2) or 105A(2) on or after the commencement of the Act (whether the
request under subsection 86(1), or the referral under subsection 93(1), is made before,
on or after that commencement).
The amendments to section 106ZPR apply in relation to written agreements entered
into under section 92 on or after the commencement of the Act, and to final
determinations under section 106TA that come into effect on or after commencement.
It is in the public interest that requests and referrals may be made, and written
agreements may be entered into, regarding services provided before the
commencement of the Act. Obligations in relation to the provision of services have
not changed and the changes only relate to how inappropriate practice may be
reviewed and addressed by the PSR in a manner that provides greater flexibility for
both the PSR and persons under review.
Item 49 - Transitional provisions - entering into section 92 agreements with
persons under review (other than practitioners) referred to Committee in 18
months before commencement
This item sets out transitional provisions enabling persons under review, who are not
practitioners, to access the new arrangements for entering into a written agreement
with the Director. The transitional provisions apply to persons who are referred to a
Committee, established under section 93, in the 18 months immediately before the
commencement of the Act. These provisions are necessary to allow a non-practitioner
person under review (including a body corporate), who has a review in progress when
these amendments take effect, to enter into an agreement with the Director. The
transitional arrangements enable an expedient resolution for any persons who are
willing to acknowledge inappropriate practice, in lieu of having to engage in the
lengthy and onerous process of review by a Committee.
This item provides the Director the option to enter into a written agreement with a
person under review by notifying the Committee within 6 months of the
23
commencement of the Act. Once notified, the Committee must suspend its
consideration of the referral, unless it has already provided the person under review
with a copy of a draft or final report setting out its findings in relation to inappropriate
practice.
The suspension of a Committee review process under these transitional provisions
ends if one of the following occurs:
• the Director enters into an agreement with the person under review, which is
ratified by the Determining Authority within 6 months of the suspension
starting, in which case Division 4 of Part VAA of the Health Insurance Act
ceases to have effect and the Committee process ends;
• the Director notifies the Committee that it is no longer desirable or not
possible to enter into an agreement with the person under review; or
• a period of 6 months has passed from the day suspension starts.
In the latter two scenarios, once the suspension ends, the Committee's consideration
of the referral continues in accordance with the standard process established in
Division 4 of Part VAA. A period of suspension enabled by these provisions will
extend the period of 6 months for the Committee to give a final report to the
Determining Authority as required by section 106G.
Part 2 - Review of certain debt-recovery decisions
Background
Garnishee arrangements provide an avenue of debt recovery for persons that owe a
debt to the Commonwealth and a disincentive to practitioners who seek to avoid set
off arrangements by reducing or stopping bulk-billed services. Garnishee
arrangements are generally an option of last resort and are subject to strict legislative
requirements set out in the Health Insurance Act, National Health Act and Dental
Benefits Act. A garnishee arrangement allows the Commonwealth to recover a debt
from a debtor by recovering the debt from a third party (e.g. a bank or employer) in
circumstances where that third party owes, or may later owe, money to the debtor.
Currently, when a garnishee notice is issued under the Health Insurance Act, the
person owing the debt to the Commonwealth (the debtor) may apply to the
Administrative Appeals Tribunal (AAT) for review of:
• a reconsidered debt decision (i.e. a debt decision that has already been
internally reconsidered by a delegate of the CEM under section 129AAJ or
section 129ACB of the Health Insurance Act and a new decision made);
• an assessment by the CEM of the debtor's liability to pay an administrative
penalty; and
• the decision to issue the garnishee notice.
Applications for review must be made within the timeframes set out in the Health
Insurance Act.
Amendments set out in Part 2 are intended to prevent a debtor from lodging multiple
applications for review in the AAT, where multiple garnishee notices are required to
recover a single debt. For example, where there are insufficient funds in one account
24
to recover the full debt amount, a second garnishee notice is required to recover the
remaining debt amount. Similarly, the amendments clarify that a debtor may lodge
only one application for AAT review of an assessment of the debtor's liability to pay
administrative penalties.
The intended outcome of these amendments is that the AAT is not required to review
the same debt decision more than once, to improve efficiencies and timeliness of debt
recovery.
The changes amend the relevant provisions across the Health Insurance Act, National
Health Act and Dental Benefits Act to ensure consistency.
Dental Benefits Act 2008
Item 50 - Subsections 56D(8) and (9)
This item repeals subsections 56D(8) and 56D(9) and substitutes new subsections.
This item amends the circumstances in which applications may be made to the AAT
under subsection 56D(7) for review of a reconsidered decision to claim an amount as
a debt. Subsection 56D(8) provides that an application under subsection 56D(7) may
be made only if the applicant has been given notice of the reconsidered decision, and
one or more garnishee notices have been given under subsection 58AA(2) in relation
to the debt to which the reconsidered decision relates.
Subsection 56D(9) provides that an application under subsection 56D(7) must be
made within 28 days after the day the first garnishee notice is given.
Item 51 - Subsections 56G(3) to (5)
This item repeals subsections 56G(3), 56G(4) and 56G(5) and substitutes new
subsections. This amends the circumstances in which applications to the AAT may be
made to seek review of assessments by the CEM of liability to pay administrative
penalties for which a garnishee notice has been issued under subsection 58AA(2).
Subsection 56G(4) now provides that an application under subsection 56G(3) may be
made only if the applicant has been given notice that the person is liable for an
administrative penalty, the decision to claim the debt to which the administrative
penalty relates is a reconsidered decision, and one or more garnishee notices have
been issued in relation to that debt. Subsection 56G(5) now provides that an
application under subsection 56G(3) must be made within 28 days after the day the
first garnishee notice is given.
Health Insurance Act 1973
Item 52 - Subsections 129AAJ(8) and (9)
This item repeals subsections 129AAJ(8) and 129AAJ(9) and substitutes new
subsections. This item amends the circumstances in which applications may be made
under subsection 129AAJ(7) to the AAT for review of a reconsidered decision to
claim an amount as a debt. Subsection 129AAJ(8) now provides that an application
under subsection 129AAJ(7) may be made only if the applicant has been given notice
of the reconsidered decision under subsection 129AAJ(5), and one or more garnishee
notices have been issued under subsection 129AEG(1) in relation to the debt to which
25
the reconsidered decision relates. Subsection 129AAJ(9) now provides that an
application under subsection 129AAJ(7) must be made within 28 days after the day
the first garnishee notice is given.
Item 53 - Subsections 129ACB(8) and (9)
This item repeals subsections 129ACB(8) and 129ACB(9) and substitutes new
subsections. This amends the circumstances in which applications to the AAT may be
made to seek review of reconsidered decisions relating to shared debt determinations.
Subsection 129ACB(8) now provides that an application under subsection 129ACB(7)
may be made only if the applicant has been given notice of the reconsidered decision,
and one or more garnishee notices have been given under subsection 129AEG(1) in
relation to the debt to which the reconsidered decision relates. Subsection 129ACB(9)
now provides that an application under subsection 129ACB(7) must be made within
28 days after the day the first garnishee notice is given.
Item 54 - Subsections 129AEC(2) to (4)
This item repeals subsections 129AEC(2), 129AEC(3) and 129AEC(4) and substitutes
new subsections. This item amends the circumstances in which applications to the
AAT may be made to seek review of assessments by the CEM of liability to pay
administrative penalties for which notice has been given under subsection
129AEC(1). Subsection 129AEC(3) now provides that an application under
subsection 129AEC(2) may be made only if the applicant has been given notice that
the person is liable for an administrative penalty, the decision to claim the debt to
which the administrative penalty relates is a reconsidered decision, and one or more
garnishee notices have been given in relation to that debt. Subsection 129AEC(4) now
provides that an application under subsection 129AEC(2) must be made within 28
days after the day the first garnishee notice is given.
National Health Act 1953
Item 55 - Subsections 99ABD(8) to (10)
This item repeals subsections 99ABD(8), 99ABD(9) and 99ABD(10) and substitutes
new subsections. This amends the circumstances in which applications may be made
under subsection 99ABD(8) to the AAT for review of a reconsidered decision to
claim an amount as a debt. Subsection 99ABD(9) now provides that an application
under subsection 99ABD(8) may be made only if the applicant has been given notice
of the reconsidered decision under subsection 99ABD(6), and one or more garnishee
notices have been given under subsection 99ABJ(2) in relation to the debt to which
the reconsidered decision relates. Subsection 99ABD(10) now provides that an
application under subsection 99ABD(8) must be made within 28 days after the day the
first garnishee notice is given.
Item 56 - Subsections 99ABG(4) to (6)
This item repeals subsections 99ABG(4), 99ABG(5) and 99ABG(6) and substitutes
new subsections. This amends the circumstances in which applications to the AAT
may be made to seek review of decisions relating to liability for administrative
penalties. Subsection 99ABG(5) now provides that an application under subsection
99ABG(4) may be made only if the applicant has been given notice that the person is
liable for an administrative penalty, the decision to claim the debt to which the
administrative penalty relates is a reconsidered decision, and one or more garnishee
26
notices have been given in relation to that debt. Subsection 99ABG(6) now provides
that an application under subsection 99ABG(4) must be made within 28 days after the
day the first garnishee notice is given.
Item 57 - Application provisions
This item sets out the application provisions for the amendments in Part 2.
The amendments to subsections 56D(8) and 56D(9) of the Dental Benefits Act,
subsections 129AAJ(8), 129AAJ(9), 129ACB(8) and 129ACB(9) of the Health
Insurance Act, and subsections 99ABD(8), 99ABD(9) and 99ABD(10) of the
National Health Act in relation to the AAT review of decisions claiming debts and
shared debt determinations apply in relation to the making of an application for AAT
review on or after the commencement of the Act (whether the debt to which the
reconsidered decision relates becomes due to the Commonwealth, or the reconsidered
decision is made, before, on or after commencement of the Act).
The amendments to subsections 56G(3), 56G(4) and 56G(5) of the Dental Benefits
Act, subsections 129AEC(2), 129AEC(3) and 129AEC(4) of the Health Insurance
Act, and subsections 99ABG(4), 99ABG(5) and 99ABG(6) of the National Health Act
in relation to the AAT review of administrative penalties apply in relation to the
making of an application for AAT review on or after the commencement of the Act
(whether the debt that gives rise to the administrative penalty becomes due, the person
becomes liable for an administrative penalty or the assessment of the administrative
penalty is made before, on or after commencement of the Act).
Part 3 - Miscellaneous debt-recovery amendments
Background
Amendments as part of the Health Legislation Amendment (Improved Medicare
Compliance and Other Measures) Act 2018 introduced measures to strengthen
recovery powers for Medicare debts owed to the Commonwealth. This legislation
provided the Commonwealth with:
• the ability to set off Medicare payments in order to recover a debt owing to the
Commonwealth;
• the power to garnishee certain funds so that debts owed to the Commonwealth
under the MBS, PBS and CDBS may be repaid; and
• the power to issue a notice to obtain information or documents about the
financial situation or location of a person (or their estate) who owes a debt to
the Commonwealth (financial information gathering powers).
The amendments in Part 3 ensure consistency in the application of the set off,
garnishee and financial information gathering powers.
Dental Benefits Act 2008
Item 58 - Subsection 56G(1)
This item inserts the wording "or the person's estate" in subsection 56G(1) after the
wording "liable for an administrative penalty". This item provides that where the
27
CEM gives written notice to a person who is liable for an administrative penalty, the
notice may be given to the person's estate (in cases where the person has died).
Item 59 - Before subsection 56H(1)
This item inserts new subsection 56H(1A) before subsection 56H(1). The new
subsection 56H(1A) provides that section 56H applies in relation to an amount (a
recoverable amount) that is recoverable from a person, or from the estate of a person,
as a debt to the Commonwealth, if the amount is an amount for which notice has been
served as mentioned in subsection 56C(4), or an amount of interest under subsection
57(5). This subsection extends the operation of section 56H (the power to obtain
information relating to a debt) to amounts recoverable from a person or the estate of a
person. It also extends the operation of the section to recoverable amounts of interest.
Item 60 - Subsection 56H(1)
This item omits "a person who owes a debt to the Commonwealth for which notice
has been served as mentioned in subsection 56C(4), require the person" and
substitutes "the person or estate, require the person or estate". This is consequential to
the amendment in item 59 and ensures that written notice may be given to a person's
estate.
Item 61 - Paragraph 56H(1)(a)
This item substitutes "person's financial situation" with "financial situation of the
person or estate" in paragraph 56H(1)(a). This is consequential to the amendment in
item 59 and ensures that written notice may be given to a person's estate seeking
information in writing that is relevant to the estate's financial situation.
Item 62 - Paragraph 56H(1)(b)
This item clarifies that where documents (relevant to the financial situation of the
estate) are in the custody or under the control of the estate, the estate may be required
to produce these documents when a written notice is given by the CEM.
Item 63 - Subsections 56H(2) and (3)
This item repeals subsections 56H(2) and 56H(3) and replaces these with new
subsections. The purpose of the amendment is to create consistency across the Dental
Benefits Act, Health Insurance Act and National Health Act in relation to the
requirement for a debtor to provide up-to-date address information for the purposes of
enabling the CEM to provide documents relating to the debt to the debtor.
The subsections provide that, once a person (whether an individual or a body
corporate) has been notified of a debt due to the Commonwealth, the person has an
obligation to notify the CEM of the address for the purposes of receiving documents
relating to the debt and to notify the CEM if that address changes. Civil penalties
apply for individuals and bodies corporate that do not comply with this requirement.
The provision allows the CEM to maintain contact with the debtors and aims to
reduce the need to use the section 56H financial information gathering power to
obtain contact information.
28
Item 64 - Paragraph 56H(4)(a)
This item amends the wording in paragraph 56H(4)(a) to clarify that a recoverable
amount may be recovered from a person or estate, and allows the CEM to issue a
notice to a third party requesting information about a debtor that is an estate.
Item 65 - Paragraphs 56H(5)(a) and (b)
This item is consequential to amendments to subsection 56H(1) (items 60-62) and
subsection 56H(4) (item 64), which provide for the issuing of notices to an estate in
relation to a debt.
Items 66 and 67 - Subsection 58(1) and paragraph 58(1)(b)
Item 66 inserts the words ", or the estate of that person," after "a person" in
subsection 58(1). Item 67 inserts the words "or from the estate of the person" after
"person" in paragraph 58(1)(b). These amendments enable recovery of amounts from
a person or their estate by way of reductions to future payments under the Dental
Benefits Act.
Items 68, 69 and 70 - Paragraphs 58(1)(b) and 58(4)(b) and 58AA(1)(a)
Items 68 and 70 amend these paragraphs to insert references to subsection 57(5), and
item 69 is a consequential amendment to item 70. These amendments enable recovery
of interest payable on a debt (under subsection 57(5)) by way of reductions to future
payments under the Dental Benefits Act or a garnishee notice.
Health Insurance Act 1973
Item 71 - Paragraph 129ACA(2)(a)
This item omits the words "primary debtor and the secondary debtor", and substitutes
"primary debtor, or estate, and the secondary debtor, or estate,". The intention is to
enable the CEM to make a written shared debt determination, in relation to a person
or their estate where a notice has been given under subsection 129ACA(7).
Items 72 and 73 - Subsection 129ACA(8) and paragraphs 129ACA(8)(a) and (b)
These items add references to an estate in subsection 129ACA(8) where it currently
refers to a person. The intention is to provide the estate the same procedural fairness
as a person. Subsection 129ACA(8) (as amended by these items) will provide that,
where the CEM has given a notice to an estate under subsection 129ACA(7) (notice
of the CEM's intention to make a shared debt determination under subsection
129ACA(2)), the estate has 14 days to provide a response to the CEM as to why a
shared debt determination should or should not be made under subsection 129ACA(2)
and what percentage of the debt should be recoverable from the estate.
Item 74 - Paragraph 129ACA(10)(a)
This item adds the words "or estate" before "in relation to a professional service:" The
intention is to maintain the notification to State and Territory Health Departments
where an estate receives a shared debt determination under subsection 129ACA(2) or
a notice mentioned in subsection 129ACA(5); and the professional service was
rendered, or purportedly rendered, in or at a hospital.
Item 75 - Subsection 129ACB(6)
29
This item adds the words "or estate" after "person". The intention is that within the
Shared Debt Recovery Scheme the estate is provided the same rights as a person. This
item ensures that following the review of a decision related to a shared debt
determination, the estate will be provided with a written notice of the reconsidered
decision.
Item 76 - Paragraphs 129AEA(4)(b) and (c)
This item repeals paragraphs 129AEA(4)(b) and 129AEA(4)(c) and substitutes new
paragraphs 129AEA(4)(b), 129AEA(4)(c) and 129AEA(4)(d).
This item clarifies that, for shared debt determinations, administrative penalties apply
where the sum of the recoverable amounts to which a determination relates is more
than $2,500; or if a higher amount is prescribed by the regulations--that higher
amount. This corrects an issue with the current provision that administrative penalties
apply where a recoverable amount in respect of a professional service is greater than
$2,500, which would rarely apply as this is higher than the benefit amount for most
items on the Medicare Benefits Schedule.
Item 77 - Subsection 129AEC(1)
This item inserts "or the person's estate," after "liable to an administrative penalty,".
The intention of this item is to ensure that the CEM must provide to the person or
estate of the person, notification in writing of the assessment and liability for an
administrative penalty.
Item 78 - Before subsection 129AECA(1)
This item inserts new subsection 129AECA(1A), which specifies that the power to
obtain information relating to a debt (financial information gathering powers) applies
to a debt if it relates to one of the following:
• a written agreement with the Director under section 92;
• an amount for which a notice has been served as mentioned in
subsection 129AAI(4) (including in relation to a debt claimed as the result of a
person giving of false or misleading information);
• a shared debt determination;
• administrative penalties under subsection 129AC(1G);
• interest payable under subsection 129AC(2);
• a section 129AD debt (including a debt arising from final determination by the
Determining Authority under section 106TA) (where the Commonwealth is
the payee for the debt).
This expands the existing financial information gathering powers that currently apply
only to recoverable amounts for which a notice has been served as mentioned in
subsection 129AAI(4) and shared debt determinations.
Item 79 - Subsection 129AECA(1)
This item amends subsection 129AECA(1) to omit the words "a person or estate who
owes a debt to the Commonwealth for which notice has been served as mentioned in
subsection 129AAI(4) or 129ACA(5)" and substitute the words "the person or estate".
This is a consequential amendment resulting from the insertion of subsection
129AECA(1A), which now specifies the debts to which the financial information
gathering powers in section 129AECA apply.
30
Item 80 - Paragraph 129AECA(1)(a)
This item clarifies that a person or estate is required to give information in writing
relevant to the financial situation of the person or estate. Subsection 129AECA(1)
applies to the person or the estate and this amendment maintains the intention of
subsection 129AECA(1).
Item 81 - Paragraph 129AECA(1)(b)
This item clarifies that where documents (relevant to the financial situation of the
estate) are in the custody or under the control of the estate, these documents may be
required to be produced to the CEM.
Item 82 - Subsections 129AECA(2) and (3)
This item repeals subsections 129AECA(2) and 129AECA(3) and replaces these with
new subsections. Subsection 129AECA(2) provides that a person may also be
required to provide the CEM or a Departmental employee (within the meaning of the
Human Services (Medicare) Act 1973) with an address for the purpose of giving
documents to the person relating to the debt within 14 days after the day the relevant
event mentioned in paragraphs 129AECA(2)(a) to (e) occurs. The start date and end
date of this 14-day period will depend on the type of debt at issue. Subsection
129AECA(3) requires a person who has a debt and has provided their address to
update their address within 14 days of changing that address.
The amendments expand the application of subsection 129AECA(2) from a person
with a debt relating to an amount for which a notice is served as mentioned in
subsection 129AAI(4) or relating to a shared debt determination, to a person who has
a debt mentioned in new subsection 129AECA(1A) (see item 78). New subsection
129AECA(2) provides that a person (whether an individual or a body corporate) must
notify the CEM or a departmental employee of their address for the purposes of
receiving documents in relation to a debt that falls into the expanded list of debts in
subsection 129AECA(1A). New subsection 129AECA(3) provides that they must
then also notify the CEM if that address changes. Civil penalties apply for individuals
and bodies corporate that do not comply with the notification requirement.
This provision allows the CEM to maintain contact with the debtors and aims to
reduce the need to use the section 129AECA financial information gathering powers
to obtain contact information.
Item 83 - Paragraph 129AECA(4)(a)
This item is a consequential amendment to maintain consistency with the expanded
list of debts in subsection 129AECA(1A). Subsection 129AECA(4) also clarifies that
a recoverable amount may be recovered from a person or estate and allows the CEM
to issue a notice to a third party requesting information about a debtor that is an estate.
Item 84 - Paragraphs 129AECA(5)(a) and (b)
This item is consequential to amendments to subsections 129AECA(1) (items 79-81)
and 129AECA(4) (item 83), which provide for the issuing of notices to an estate in
relation to a debt.
31
Item 85 - Paragraphs 129AEF(1)(aaa) to (aa)
This item extends the scope of the set off provision in section 129AEF to allow for the
recovery of interest debts arising under subsection 129AC(2). The use of this set off
power will enable the recovery of interest debts by way of reductions to future
payments under the Health Insurance Act.
This item also realigns the numbering across different debt types in subsection
129AEF(1), and is necessary to create consistency in the application of the set off
power, and improving the recovery arrangements for debts owed to the
Commonwealth.
Item 86 - Subsection 129AEG(1)
This item extends the scope of the garnishee power in section 129AEG to cover
interest debts arising under section 129AC(2).
This item also extends the scope of the garnishee power to cover debts raised as a
result of a written agreement under section 92 between a person and the Director.
As part of the introduction of debt recovery arrangements into the Health Insurance
Act in 2018, garnishee provisions were included as a disincentive for practitioners
who may move away from bulk billing, to avoid the recovery of debts via the set off
provisions. This also provided an alternative mechanism for debt recovery for
practitioners who are unwilling to repay their debts and do not bulk bill.
Similarly, the current amendment provides a tool to encourage repayment of PSR
debts for practitioners who do not bulk bill or may have been disqualified from
Medicare as a result of a written agreement under section 92.
Where a person under review by the PSR is not a practitioner (i.e. the person simply
employs or engages practitioners), set off provisions cannot apply as the person does
not have a Medicare provider number to receive Commonwealth payments. Where
debts raised from persons under review who are not practitioners through the PSR
scheme are not voluntarily repaid, the garnishee power is the only debt recovery
avenue prior to expensive litigation to recover debts.
Existing procedural fairness requirements will continue to apply to all garnishee
notices. If a garnishee notice is issued, subsection 129AEG(6) requires that the debtor
or estate must be notified, and subsection 129AEG(13) provides the debtor or estate
with the ability to seek AAT review of the decision to issue a garnishee notice.
Item 87 - After subsection 129AEG(1)
This item inserts new subsection 129AEG(1A), which clarifies the application of
subsection 129AEG(1) in relation to a debt raised under a section 92 written
agreement. A garnishee notice may be issued in relation to a recoverable amount
referred to in paragraph 129AEF(1)(a), i.e. an unpaid amount under
paragraph 92(4)(e) or (f), in circumstances where:
• the debtor or their estate has entered into an arrangement with the CEM
(within the relevant period provided for in new subsection 129AEG(1B)) for
payment of the recoverable amount, and has defaulted in payment of all or part
of the recoverable amount as required by the arrangement; or
32
• at the end of the relevant period specified in new subsection 129AEG(1B), the
debtor or their estate has not entered into an arrangement with the CEM to pay
the recoverable amount, and all or part of the recoverable amount remains
unpaid.
This provision reflects the intention that garnishee notices are an option of last resort
and will only be used for debtors who default on their agreed obligations or debtors
who are recalcitrant and unwilling to engage with the debt recovery process.
New subsection 129AEG(1B) provides that the relevant period is either the period of
3 months beginning on the day the written agreement under section 92 takes effect; or
such longer period as the CEO allows.
National Health Act 1953
Item 88 - Subsection 99ABG(1)
This item amends subsection 99ABG(1) to provide consistency across the National
Health Act, Health Insurance Act and Dental Benefits Act, and requires the Secretary
to provide written notice to an estate of a liability for an administrative penalty. This
ensures the same notifications that are given to a person are provided to the estate.
Item 89 - Before subsection 99ABH(1)
This item inserts new subsection 99ABH(1A). This extends the operation of the
existing financial information gathering powers in subsection 99ABH so that it
applies to estates and in relation to debts arising in relation to administrative penalties
(where debts are owed by a person or a person's estate).
Item 90 - Subsection 99ABH(1)
This item contains a consequential amendment resulting from the insertion of new
subsection 99ABH(1A) by item 89.
Item 91 - Paragraph 99ABH(1)(a)
This item is consequential to item 89 and provides that a person or estate is required
to provide to the Secretary information in writing that is relevant to the financial
situation of the person or estate, when requested under subsection 99ABH(1).
Item 92 - Paragraph 99ABH(1)(b)
This item is consequential to item 89 and ensures that a person or their estate is
required to produce to the Secretary documents in their custody or under their control
that are relevant to the financial situation of a person or estate, when requested under
subsection 99ABH(1).
Item 93 - Subsections 99ABH(2) and (3)
This item repeals subsections 99ABH(2) and 99ABH(3) and replaces these provisions
with new subsections. This item reflects the insertion of new subsection 99ABH(1A)
and clarifies the circumstances in which a person (whether an individual or a body
corporate) must notify the Secretary of an address (and changes to that address) for
the purpose of giving the person documents relating to a debt to which new subsection
99ABH(1A) applies. Civil penalties apply for individuals and bodies corporate that do
not comply with the notification requirement.
33
This provision allows the Secretary to maintain contact with the debtors and aims to
reduce the need to use the financial information gathering powers under section
99ABH to obtain contact information.
Item 94 - Paragraph 99ABH(4)(a)
This item is a consequential amendment to maintain consistency with the expanded
list of debts in new subsection 99ABH(1A). This item also clarifies that a recoverable
amount may be recovered from a person or estate and allows the Secretary to issue a
notice to a third party requesting information or a document about a debtor that is an
estate.
Item 95 - Paragraphs 99ABH(5)(a) and (b)
This item is consequential to amendments to subsection 99ABH(1) (items 90-92) and
paragraph 99ABH(4)(a) (item 94), which provide for the issuing of notices to an
estate in relation to a debt.
Item 96 - Paragraph 99ABL(1)(a)
This item inserts the wording ", or the estate of a person," after "a person" to clarify
that the set off provision in section 99ABL may be also applied to amounts
recoverable as a debt from an estate.
Item 97 - Application provisions
This item sets out the application provisions for the amendments in Part 3.
The application provisions in subitems 97(1) and 97(2) apply to:
• subsection 56G(1) of the Dental Benefits Act;
• subsection 129AEC(1) of the Health Insurance Act; and
• subsection 99ABG(1) of the National Health Act.
The amendments relate to the giving of notice of administrative penalty assessments
to estates. The amendments to these provisions apply in relation to an assessment of a
person's liability to pay an administrative penalty that is made on or after the
commencement of the Act (whether the service was initiated or rendered, or the
pharmaceutical benefit was supplied (or purportedly supplied), before, on or after that
commencement).
Subject to subitem 97(5), the application provisions in subitems 97(3) and 97(4) apply
to:
• section 56H of the Dental Benefits Act;
• section 129AECA of the Health Insurance Act; and
• section 99ABH of the National Health Act.
These are the financial information gathering powers in the Dental Benefits Act,
Health Insurance Act and National Health Act. The application provisions clarify that
the amendments to the financial information gathering powers will apply in relation to
amounts that are recoverable on or after the commencement of the Act (whether the
relevant debt becomes due to the Commonwealth before, on or after commencement
of the Act).
34
The application provision in subitem 97(5) relates to the debtor's obligation to
provide address details after a notice has been issued requiring information or
documents relevant to the debtor's financial situation and applies to:
• subsection 56H(2) of the Dental Benefits Act;
• subsection 129AECA(2) of the Health Insurance Act; and
• subsection 99ABH(2) of the National Health Act.
These sections were inserted into the Acts in 2018 and are now being replaced with
new provisions (see items 63, 82 and 93). These new provisions will apply where the
event after which a notice must be given (as mentioned in the relevant provision)
occurs on or after commencement of the Act.
The application provisions in subitems 97(6) and 97(7) relate to:
• sections 58 and 58AA of the Dental Benefits Act;
• sections 129AEF and 129AEG of the Health Insurance Act; and
• section 99ABL of the National Health Act.
These sections are the set off and garnishee powers for the different debt types under
the Dental Benefits Act, Health Insurance Act and National Health Act. The
amendments to these sections made by Part 3 will apply in relation to an amount that
is recoverable on and after the commencement of the Act. For clarification, the set off
and garnishee powers, as amended by Part 3, may be used for all amounts that are
recoverable on or after commencement of this Act (whether the relevant debt becomes
due to the Commonwealth before, on or after commencement of the Act).
The original policy intention of this power, as outlined in the Revised and
Supplementary Explanatory Memorandum to the then Health Legislation Amendment
(Improved Medicare Compliance and Other Measures) Bill 2018, included the
recovery of relevant debts established before, on or after the commencement of the
provision. This was not fully implemented when PSR debts were added to the set off
provision in 2019, and therefore this amendment will enable the set off provision to
operate as originally intended.
The application provisions in subitems 97(8) and 97(9) relate to the amendments
made by Part 3 to sections 129ACA and 129ACB (see items 71 to 75).
The amendments to section 129ACA of the Health Insurance Act (see items 71 to 74)
apply in relation to the making of a determination on or after commencement of the
Act, whether the amount paid purportedly by way of benefit was paid before, on or
after that commencement.
The amendments to subsection 129ACB(6) of the Health Insurance Act (see item 75)
apply in relation to applications made under subsection 129ACB(1) of the Act on or
after commencement of the Act, whether the debt to which the reconsidered decision
relates becomes recoverable as a debt due to the Commonwealth before, on or after
that commencement.
The application provision in subitem 97(10) relates to the amendments made by Part 3
to subsection 129AEA(4) (see item 76). The amendments to subsection 129AEA(4) of
35
the Health Insurance Act, relating to liability for administrative penalties, apply to
shared debt determinations made under subsection 129ACA(2) of the Act on or after
commencement of the Act, whether the amount paid purportedly by way of benefit
was paid before, on or after that commencement.
Part 4 - False or misleading information
Background
In 2020, subsection 129AC(1) and subsection 129ACA(1) of the Health Insurance Act
were amended to clarify that an amount may be recovered from a person in
circumstances where a Medicare benefit or payment was paid under the Health
Insurance Act as a result of a person giving false or misleading information (rather
than the previous wording, which referred to the need for a "false or misleading
statement").
These amendments reflected the fact that the design parameters of electronic claiming
mechanisms are developed to achieve efficiencies and therefore may no longer
support the inclusion of a specific statement or declaration being made by a person in
relation to a Medicare claim that is submitted electronically. The intent was to ensure
that post-payment compliance activities are not constrained by technological advances
with electronic Medicare claiming mechanisms, by capturing broad circumstances in
which false or misleading information may be given, regardless of whether a person
makes manual or electronic Medicare claims.
The Dental Benefits Act and National Health Act have to date retained references to
false or misleading statements rather than false or misleading information. To ensure
consistency with the Health Insurance Act, the Dental Benefits Act and the National
Health Act are now being amended to refer to false or misleading information. This is
intended to ensure that post-payment compliance activities for dental or
pharmaceutical benefits are similarly not constrained by the type of claiming
mechanism (manual or electronic) that is used.
"Information" may be given in a document, in a statement or in any other form.
"Information" will be false or misleading where it is factually incorrect, regardless of
whether the person giving the information knew that it was false or misleading, or
whether the information given was purposely or intentionally untrue. This includes
circumstances where a person gives false or misleading information either
intentionally or unintentionally.
Dental Benefits Act 2008
Item 98 - Section 56 (heading)
This item substitutes "false or misleading statements" with "false or misleading
information" in the heading of section 56. This is to reflect the changes to section 56
made in items 99 to 102.
Item 99 - Paragraph 56(1)(b)
This item amends paragraph 56(1)(b) to replace "making of a false or misleading
statement" with "giving of false or misleading information". This change allows the
36
Commonwealth to recover incorrect amounts paid, purportedly by way of benefit or
payment, where the payment was made as a result of the giving of false or misleading
information. This change is to ensure consistency across Medicare program
legislation.
The phrase "false or misleading" captures information that is factually incorrect,
regardless of whether the person giving the information knew that it was false or
misleading, or whether the information given was purposely or intentionally untrue.
Items 100 and 101 - Paragraphs 56(2)(a) and (3)(a) and paragraph 56(3)(b)
These items make consequential amendments to reflect the changed terminology in
section 56, with references to the making of false or misleading statements being
replaced with references to the giving of false or misleading information.
Item 102 - At the end of section 56
This item adds new subsection 56(4) which provides for broad circumstances in
which false or misleading information may be given. False or misleading information
may be given in a document; in a statement; or in any other form. For example, a
person who makes an electronic claim for dental benefits would be giving information
by entering values into the system to communicate a fact in relation to the claim.
National Health Act 1953
Item 103 - Section 99ABA (heading)
This item substitutes "false or misleading statements" with "false or misleading
information" in the heading of section 99ABA. This is to reflect the changes to
section 99ABA made in items 104 to 107.
Item 104 - Subsection 99ABA(1)
This item amends subsection 99ABA(1) to replace "making of a false or misleading
statement" with "giving of false or misleading information". This change allows the
Commonwealth to recover incorrect amounts paid, purportedly by way of benefit or
payment, where the payment was made as a result of the giving of false or misleading
information. This change is to ensure consistency across Medicare program
legislation.
The phrase "false or misleading" captures information that is factually incorrect,
regardless of whether the person giving the information knew that it was false or
misleading, or whether the information given was purposely or intentionally untrue.
Items 105 and 106 - Paragraph 99ABA(2)(a) and paragraph 99ABA(3)(b)
These items make consequential amendments to reflect the changed terminology in
section 99ABA, with references to the making of false or misleading statements being
replaced with references to the giving of false or misleading information.
Item 107 - At the end of section 99ABA
This item adds new subsection 99ABA(4), which provides for broad circumstances in
which false or misleading information may be given. False or misleading information
may be given in a document; in a statement; or in any other form. For example, a
person who makes an electronic claim for pharmaceutical benefits would be giving
37
information by entering values into the system to communicate a fact in relation to the
claim.
Item 108 - Application provisions
This item sets out the application provisions for the amendments in Part 4.
The amendments to section 56 of the Dental Benefits Act apply in relation to an
amount paid before, on or after the commencement of the Act. This means that if, as a
result of the giving of false or misleading information, an amount is paid, purportedly
by way of a payment of dental benefit, that exceeds the amount (if any) that should
have been paid, the amount may be recovered if it was paid by the Commonwealth
before, on or after the commencement of the Act.
The amendments to section 99ABA of the National Health Act apply in relation to
information given in relation to an amount on or after 1 July 2018 (when section
99ABA was included in the National Health Act). This means that if, as a result of the
giving of false or misleading information, an amount is paid, purportedly by way of a
benefit or payment under the National Health Act, that exceeds the amount (if any)
that should have been paid, the amount may be recovered if the information was given
on or after 1 July 2018. This application provision is based on information given,
rather than amounts paid, to reflect both the nature of PBS claims, and the original
application provision for section 99ABA.
The amendments made to section 56 of the Dental Benefits Act and section 99ABA of
the National Health Act do not affect rights or liabilities arising between parties to
proceedings:
• in which judgment is reserved by a court on or before the commencement of
this item; or
• which have been heard and finally determined by a court on or before the
commencement of this item;
to the extent that those rights or liabilities arose from, or were affected by, the
application of section 56 of the Dental Benefits Act or section 99ABA of the National
Health Act, as in force before the commencement of the Act.
These amendments to section 56 of the Dental Benefits Act and section 99ABA of the
National Health Act are necessary to align the provisions with technological
advancements in a modernised Medicare claiming process, as well as improved
service delivery for health providers and patients. However, obligations on providers
as well as the legislative basis on which Medicare benefits are payable are unaffected
by these measures. A person who has given false or misleading information and
received Medicare benefits that they were not entitled to receive, should not be
allowed to unjustly enrich themselves at the expense of the Australian community.
Where a person gives false or misleading information to the Commonwealth and the
Commonwealth pays a benefit that should not have been paid, it is in the public
interest to be able to recover the payment, even where this conduct has occurred prior
to the commencement of the Act. This is necessary to ensure that Commonwealth
expenditure is protected.
38
39