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1998-1999-2000
THE PARLIAMENT OF THE
COMMONWEALTH OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
NATIONAL HEALTH AMENDMENT
(IMPROVED MONITORING OF ENTITLEMENTS TO PHARMACEUTICAL BENEFITS) BILL
2000
EXPLANATORY
MEMORANDUM
(Circulated by the authority of
the Minister for Health and Aged Care,
the Hon Dr Wooldridge MP)
ISBN: 0642 450927
NATIONAL HEALTH AMENDMENT (IMPROVED MONITORING OF ENTITLEMENTS TO PHARMACEUTICAL BENEFITS) BILL 2000
OUTLINE
The purpose of this Bill is to amend the National Health Act 1953
(‘the Act’) in order to build on the current objective of Part VII
in that Act, namely, to assist patients to receive high quality care through
quality use of medicines, to subsidise the costs of prescribed pharmaceuticals
and to provide appropriate accountability for expenditure of public funds. In
broad terms, the Bill will require the inclusion of medicare numbers on
prescriptions for pharmaceutical benefits. This will help to ensure that only
those persons entitled to pharmaceutical benefits under Part VII of the Act will
receive them. The Bill provides for medicare numbers to remain private and
confidential and not to be used for purposes other than ensuring entitlement to
pharmaceutical benefits.
There will be three stages to the
implementation of the final arrangements provided for in the Bill. Stage 1
establishes the privacy regime and explicitly allows medicare numbers to be
collected, placed on prescriptions and stored by prescribers and suppliers.
This stage applies from the date of Royal Assent. Stage 2 requires medicare
numbers to be collected and placed on prescriptions by pharmacists (or other
suppliers) for the purpose of identifying entitlement to pharmaceutical
benefits. This stage applies from 1 January 2001. Stage 3 prevents payments to
pharmacists (or other suppliers) in relation to the dispensing of prescriptions
for pharmaceutical benefits where there has been a failure to comply with the
requirements of stage 2 above or where the number endorsed on a prescription
does not match the number held by the Health Insurance Commission. This stage
applies from 1 July 2001.
The main amendments to the Act are as
follows:
Stage 1
(a) it is made clearer that a person must
be an ‘eligible person’ in order to receive pharmaceutical
benefits;
(b) it is made clearer that a person must be in Australia at the
time of supply in order to receive pharmaceutical benefits;
(c) prescribers
and pharmacists will be authorised, with the consent of the person (or other
authorising party), to collect from the person (or other authorising party) the
person’s medicare number, to hold the number for future reference, and to
include the number in prescriptions for pharmaceutical benefits. The collection
of the person’s medicare number will not then be necessary for future
prescriptions to be dispensed by a pharmacist holding the number, provided the
person’s medicare number remains current;
(d) if the prescriber has
included the person’s medicare number on the prescription, the pharmacist
(or other dispenser) will be authorised to check it and alter it if he or she
concludes the number on the prescription is erroneous;
(e) there is a general
prohibition on prescribers and pharmacists disclosing or using the medicare
numbers obtained for the purpose of prescribing or dispensing pharmaceutical
benefits under Part VII of the Act except for the purposes of that Act or
regulations under that Act in relation to the Pharmaceutical Benefits Scheme, or
for purposes under the Health Insurance Commission Act 1973 in relation
to that Scheme;
(f) the above prohibition on disclosure or use of the
medicare numbers extends to persons acting for or on behalf of prescribers and
pharmacists, such as employees and contractors;
(g) contravention of the
prohibition will be an offence;
Stage 2
(h) pharmacists are
required to ask the customer for the person’s medicare number, if it is
not already included on the person’s prescription or available to the
pharmacist from his or her own records, and to endorse that number on the
prescription;
(i) if the prescriber has included the person’s medicare
number on the prescription, the pharmacist will be authorised to check it and
amend it if he or she concludes that the number on the prescription is
erroneous;
(j) if the person is an eligible person but is unable to provide a
medicare number, the pharmacist is required to follow the alternative
arrangements for such persons as determined by the Minister;
Stage
3
(k) failure to comply with the requirements described in paragraphs
(h) and (j) in stage 2 above or a mismatch with the medicare number held by the
Health Insurance Commission will result in the pharmacist not receiving any
payment from the Commonwealth. However, the pharmacist will be entitled to a
payment where the sole reason for a mismatch between the medicare number
appearing on the prescription and that held in the records of the Health
Insurance Commission is because the number on the prescription had expired
within 60 days (or such period as the Minister may determine) preceding the date
of supply.
FINANCIAL IMPACT STATEMENT
Due to the improved Pharmaceutical Benefits Scheme entitlement
monitoring, it is anticipated that savings will occur of $5.7m in 2000-2001,
$18m in 2001-2002, $20.7m in 2002-2003 and $22.2m in 2003-2004, as announced in
the 2000-2001 Budget papers.
REGULATION IMPACT STATEMENT
INTRODUCTION
The Pharmaceutical Benefits Scheme (PBS)
provides timely, reliable and affordable access by the Australian community to
necessary and cost-effective prescription medicines.
Most medicines
available on prescription are subsidised under the Scheme. The maximum cost to
general patients for each item supplied under the PBS is generally $20.30. For
concessional beneficiaries such as pensioners and health care card holders the
maximum is $3.30 per item. Around 80 per cent of prescriptions are for patients
in the concessional category.
When the aggregate patient copayments in a
calendar year for an individual or family exceeds a threshold ($631.20 for
general patients, $171.60 for concessional beneficiaries), the PBS safety net
further reduces the cost to the patient for the remainder of the calendar year
(to $3.30 per item for general beneficiaries, nil for concessional
beneficiaries).
When a dispenser has supplied a pharmaceutical benefit in
accordance with the relevant legislation (mainly part VII of the National
Health Act 1953 and National Health Regulations), the dispenser
becomes entitled to a payment from the Commonwealth equal to the difference
between the Commonwealth Price and the patient contribution (for items for which
the Commonwealth price is greater than the copayment). The payment is claimed
by means of a paper form accompanied, in all but a very small proportion of
cases, by an electronic record of each prescription and supply on a diskette or
e-mailed as an encrypted file. A proportion of claims are rejected because they
do not comply with statutory requirements
When the Scheme began in 1953,
the only eligibility requirement for consumers was that he or she be under
treatment by a medical or dental practitioner. In 1996 the definitions of
"general patient" and "concessional beneficiary" in the National Health Act
1953 were amended to require that these beneficiaries be eligible persons as
defined in the Health Insurance Act 1973, that is eligible for Medicare.
The main categories of people eligible for Medicare are persons residing
in Australia who are Australian or New Zealand citizens, holders of permanent
visas, or holders of temporary visas who have applied for permanent visas and
meet certain requirements. Bilateral reciprocal health care agreements between
Australia and eight other countries provide for visitors from those countries to
be entitled to pharmaceutical benefits. There are increasing numbers of
temporary residents who are not eligible for Medicare and are not covered by
reciprocal health care agreements, for example employees recruited from the USA
and Asia who have not applied for permanent visas.
Determining whether a
particular individual is eligible for Medicare can be a complex process, beyond
what a pharmacist or a pharmacist's assistant could be expected to carry out.
For example, few non-specialists would be able to say whether a citizen of the
Cook Islands married to a New Zealand citizen visiting Australia is eligible for
Medicare.
The PBS operates only within Australia.
The Repatriation
Pharmaceutical Benefits Scheme (RPBS) provides benefits to veterans whose
eligibility is evidenced by gold or white Veterans’ cards (covering all
health conditions, and service-related conditions respectively) issued by the
Department of Veterans Affairs. The range of medicines covered and the level of
subsidy differ from the PBS. All RPBS prescriptions and claims for payment must
include the veteran’s card number.
Claims and payments for both the
PBS and RPBS are administered by the Health Insurance Commission which also
administers claims and payments of Medicare benefits.
PBS claims data
held by the Commonwealth is protected by stringent secrecy provisions in the
National Health Act 1953, binding guidelines issued by the Privacy
Commissioner under section 135AA of that Act, and the Privacy Act
1986.
In 1998-1999 the PBS dealt with nearly 129 million
prescriptions at a cost to government of $2.8 billion. In the year to 30 June
2000 annual expenditure on the PBS grew by 14 per
cent.
PROBLEMS
The major problems being addressed are
problems of accountability in demonstrating that pharmaceutical benefits are
obtained only by persons entitled to them. The proposed legislation also goes
some way to address problems in maintaining records for consumers for safety net
purposes and for consumers' own use.
The high price of some medicines
creates an incentive for consumers to seek subsidies even when they are not
entitled to them.
At present, the legislation provides that dispensers
may not supply a pharmaceutical benefit (that is, they may not supply the
medication at the subsidised price) unless they are satisfied that the patient
is entitled to a pharmaceutical benefit (subsection 87(3A) of the National
Health Act 1953), but they are not required to take any specific action to
check Medicare eligibility. General patients (or their agents) verify that
pharmaceutical benefits have been supplied by signing prescriptions, but are not
required to provide any proof of identity.
Prescriptions show the names
and addresses of patients, which is often not exactly the same name and/or
address as recorded by the Health Insurance Commission in its Medicare enrolment
file. The name and address details included in the prescription are not
sufficient to enable eligibility for Medicare to be determined reliably by
reference to the Medicare enrolment file.
Concessional beneficiaries are
required to produce cards issued by Centrelink or the Department of
Veterans’ Affairs and the number of the card is transcribed onto the
prescription and is included in the dispenser's claim for payment. Concessional
beneficiaries (or their agents) also sign the prescription to confirm supply of
the benefit.
Since in the case of a general patient the dispenser is not
required to undertake any specific action to ensure that consumer is eligible
for Medicare, there is a risk that benefits will be supplied to persons who are
not eligible for Medicare, for example tourists from other countries not covered
by reciprocal health care agreements, and that the Commonwealth will make
payments to dispensers in respect of such supplies of benefits.
In cases
where a dispenser considers it would be appropriate to check the eligibility of
a consumer, he or she may face difficulties, for example because the consumer is
unwilling to produce a Medicare card or the law relating to the case in question
is complex, or because the consumer may feel that he or she is being targeted
because of cultural or language differences. The lack of legislative backing
for specific mechanisms of checking eligibility makes this role difficult for
dispensers.
Since non-concessional PBS prescriptions generally do not
carry any identifying number for the patient, there is a lack of an appropriate
audit trail to demonstrate that the benefit has been supplied, and payment made
to the dispenser, in accordance with the eligibility requirements of the
legislation.
The lack of identification of general patients also carries
the risk that persons eligible for Medicare will receive benefits, and the
Commonwealth will pay dispensers, when the legislation does not provide for
those benefits. For example, there are statutory limits on how often a person
may receive a benefit for the same item - there is a minimum interval of four
days, and often 20 days between prescriptions. If a patient presents successive
prescriptions for the same item to different pharmacists, this rule cannot be
monitored. This weakness facilitates abuse of the scheme by persons obtaining
excessive numbers of prescriptions for recreational drug use or commercial
export (known colloquially as "doctor shoppers").
When concessional
beneficiaries obtain a concessional benefit the number of the relevant card
(pensioner concession card, health care card, or Commonwealth Seniors Health
Card) is recorded and included in the dispenser's claim for payment. Centrelink
provides copies of its card number files to the Health Insurance Commission,
which attempts to match the cardholder's name and address details on the
Centrelink file to the name and address details on its own enrolment file in
order to identify the person. In a significant proportion of cases these details
cannot be matched. While the holder of a properly issued card is certain to be
eligible for Medicare, the lack of reliable matching to HIC enrolment records
means that the benefit histories for individual concessional beneficiaries
cannot be reliably assembled and compliance with the rules about the frequency
of supply of items cannot be reliably monitored.
Given the size and rate
of growth of total PBS expenditure there is a strong public interest in ensuring
accountability for the expenditure.
The Health Insurance Commission is
not currently able to provide consumers with fully reliable benefit histories to
enable them to document their entitlement to the PBS safety net. Consumers are
increasingly requesting such histories for safety net and other purposes and are
surprised when they find that such histories are unavailable or
incomplete.
A final issue of concern is privacy. Some medical
practitioners and dispensers may currently collect and retain Medicare numbers
in their computer systems, for example when the prescription is of a kind which
must be authorised by the Health Insurance Commission at the time of
prescribing, in which case the Medicare number is often written on the
prescription as part of the authorisation process, or when a medical
practitioner has obtained the number in order to "bulk-bill". At present such
collection and storage is not subject to any Commonwealth statutory regulation.
Some State and Territory legislation may apply to personal health information
and professional codes of medical and dental practitioners and pharmacists would
generally require protection of patient confidentiality. However, consumers
have no clearly defined assurance that their expectations that Medicare numbers
provided solely for PBS purposes are not being used or disclosed for other
purposes.
OBJECTIVES
The broad aims of Part VII of the
National Health Act 1953 are to assist patients to receive high quality
health care through quality use of medicines, to subsidise the costs of
prescribed pharmaceuticals and to provide appropriate accountability for
expenditure of public funds.
The major specific objective of the
proposal is to remedy the deficiency, identified above, in accountability for
the PBS in demonstrating that benefits have been supplied only to persons who
are entitled to them, without impeding legitimate access, while protecting the
privacy of the Medicare number when used for this purpose.
A lesser
objective is to assist consumers in obtaining safety net entitlements and to
obtain information about their PBS prescription history.
The Government
announced the Improved Entitlement Monitoring for the PBS initiative in the
Budget for 2000-2001.
The existing arrangements leave it open to prescribers and dispensers to
check eligibility by seeking consumers' Medicare card numbers and to include
them in prescriptions and claims for payment in respect of supply of
pharmaceutical benefits.
This option would involve:
• Specifying
Medicare numbers as evidence of Medicare
eligibility;
• Allowing prescribers to ask for
Medicare numbers, endorse them on prescriptions, and, with the consumer's
consent, store them for use in writing future
prescriptions;
• Requiring dispensers to ask for
Medicare number when a consumer requests supply of an pharmaceutical benefit for
which an amount will be payable by the Commonwealth to the dispenser (while
providing alternative arrangements for cases where the person is eligible but
unable to provide a Medicare number, for example in emergency situations or
where the person is a homeless youth and has no
documentation);
• Requiring pharmacists to
include the Medicare numbers on prescriptions and in claims for payment, and
making payment conditional on fulfilling this
requirement;
• Enabling dispensers, with the
consumer's consent, to store the number for use in supplying future
pharmaceutical benefits; and
• Providing privacy
protection for this use of Medicare numbers, including prohibition of use or
disclosure of Medicare numbers acquired for PBS purposes for other
uses.
These arrangements would be introduced in a phased manner in order
to give consumers and practitioners time to
adapt.
IMPACTS
The groups affected by each of these options can be described as
follows:
• the Commonwealth Government and its agencies - the
Health Insurance Commission and the Department of Health and Aged
Care.
• Businesses such as pharmacies and private hospitals which
supply pharmaceutical benefits, medical practitioners and dentists who prescribe
PBS medicines.
• Consumers for whom medicines are prescribed -
including those not eligible for Medicare and those who are eligible for
Medicare but who will generally not be able to provide a Medicare number, such
as such as some homeless people and some indigenous people.
Cost
Under the status quo, costs to the Commonwealth from payments for supply of
pharmaceutical benefits to people not entitled would continue. There is
potential for increases in these costs in line with increasing numbers of
temporary residents in Australia who are not eligible for Medicare.
No benefits flow to the Commonwealth Government from maintaining the
status quo.
Maintaining the status quo would have little or no cost impact on
business.
Prescribers and dispensers have no incentive to spend extra
time and effort in ascertaining Medicare eligibility, and dispensers face a
disincentive in lost sales if they refuse to supply benefits to persons as a
result of discovering that they are ineligible. Without specific legislative
backing, dispensers also face disincentives in accusations of discrimination if
they checked Medicare eligibility selectively, or if checking were done
non-selectively, indignation from consumers who considered their eligibility
self-evident.
Maintaining the status quo would have no additional beneficial impact on
business unless there were an increase in payments presented for persons not
entitled to subsidies in line with increasing numbers of temporary residents in
Australia who are not eligible for Medicare.
Cost
If the status quo were maintained there would be no
cost impact on consumers.
Benefit
Some consumers would
continue to receive some PBS subsidies to which they are not entitled.
Cost
The costs to the Commonwealth of this option would
comprise mainly:
• the cost of a communication and education
strategy for consumers, prescribers and dispensers; and
• development
of Health Insurance Commission systems.
The total costs would be of the
order of $0.25m - $0.75m
Indicative cost savings in the health portfolio from reduced outlays on
pharmaceutical benefits for people not entitled (ineligible people and eligible
people accessing benefits when not entitled) are estimated at $5.7 million in
2000-2001 and $18.4 million in 2001-2002. A total saving in the health
portfolio of $66.6 million, and in the Veterans’ Affairs portfolio of $1.7
million is anticipated over four years.
This option would create
significant gains in accountability.
Prescribers might face additional time costs in obtaining Medicare
numbers and consent to store numbers, and in including numbers in prescriptions.
However, since medical practitioners must obtain Medicare numbers (or have their
staff do so on their behalf) in order to bulk bill medical services, this impact
should be minimal.
Dispensers would face additional time costs in
obtaining Medicare numbers and consent to store numbers (or have their staff do
so on their behalf), and in including numbers in prescriptions. Since
dispensing and claiming of payment are handled by pharmacy software, there
should be little or no impact on time costs in these areas. Dispensers might
face reduced turnover arising from fewer supplies of pharmaceutical benefits to
people who are not entitled. Dispensers would be encouraged to assist consumers
who need to enrol in Medicare or take other administrative action in order to
access pharmaceutical benefits: this would generate additional time costs.
There may be costs to prescribers and dispensers in purchasing software
updated to take account of the new requirements.
Prescribers and dispensers who wished to limit provision of
pharmaceutical benefits to people who were entitled would have explicit
legislative backing and would have clear procedures to follow for eligible
members of vulnerable groups who would have difficulty in producing a Medicare
number.
Eligible consumers enrolled in Medicare will face slight time costs in
providing Medicare numbers and consent for prescribers and pharmacists to store
those numbers. Eligible persons not enrolled in Medicare may face an initial
time cost and inconvenience in arranging enrolment and possibly obtaining
refunds from the Health Insurance Commission of costs of prescription medicines
bought initially on a private basis. Since there will be arrangements in place
to enable eligible people who cannot provide a Medicare number to access
benefits, there will be no adverse health impact for these
consumers.
Ineligible persons will no longer receive subsidised
pharmaceutical benefits and will therefore have to pay the full cost or insure
themselves.
Consumers will be able to access better help from the HIC in obtaining
PBS prescription histories in order to assist them to develop the necessary
documentation for accessing the PBS safety net.
CONSULTATION
Consultation has been
undertaken with representatives of consumers, pharmacy and medical practitioner
groups, and the office of the Commonwealth Privacy Commissioner
Broad
consumer groups being consulted are the Consumers' Health Forum, the Australian
Consumers Association, and the Council on the Ageing.
Groups representing
eligible consumers who may have difficulty in providing Medicare numbers are
being consulted about special arrangements to enable those people to continue to
access Medicare benefits. These include the National Aboriginal Community
Controlled Health Organisation (NACCHO) and the Council to the
Homeless.
Business / professional groups being consulted include the
Pharmacy Guild of Australia, the Australian Medical Association, the Royal
Australasian College of Physicians, the Pharmaceutical Society of Australia, the
General Practice Partnership Advisory Council, the National Prescribing Service
and the General Practice Computing Group
Pharmacy representatives are
concerned that the administrative costs should be minimised by streamlining the
procedures, especially procedures for entitled persons who cannot provide a
Medicare number and procedures for checking that Medicare numbers given are
valid.
The AMA has indicated that it is concerned that Medicare numbers
may be used as patient identifiers for other functions.
This proposal has
also received in principle support from the office of the Commonwealth Privacy
Commissioner.
CONCLUSION
As indicated in the
issues section above, the status quo has not been successful in ensuring an
adequate level of accountability.
The option embodied by the proposed
legislation would be significantly effective in addressing the problems with
accountability and would go some way to addressing the problems with information
for consumers about their PBS histories. It is therefore the preferred
option.
IMPLEMENTATION AND REVIEW
As
indicated above, the Government announced the Improved Entitlement Monitoring
for the PBS initiative in the Budget for 2000-2001.
The initiative will
be implemented by:
• passage of amendments to
the National Health Act 1953 in the current sittings of Parliament, with
associated amendments to regulations under that Act and making of instruments,
providing for a phased approach as follows:
− Privacy provisions to
take effect immediately;
− Prescribers and dispensers allowed
immediately to ask for Medicare numbers for future use, and, with consumer
consent, to retain those numbers;
− From 1 January 2001, dispensers
required to ask for Medicare numbers, with alternative arrangements in place for
vulnerable groups, and include the numbers in prescriptions and claims for
payment; and
− From 1 July 2001, payment of pharmacists to be
conditional on inclusion of Medicare numbers in prescriptions and claims for
payment;
• Education and information
campaigns directed to consumers, prescribers and dispensers will be undertaken
from the date of commencement of the legislation:
− The main focus of
these campaigns would be to establish the production of a Medicare card as a
normal part of having a prescription dispensed;
− This will include
information and assistance on options for eligible persons who need to enrol in
Medicare, apply for refunds, or seek the voluntary assistance of the dispenser
in supplying a medicine in anticipation of the consumer providing the Medicare
number later etc;
and
• Working with software
suppliers to enable them to make the necessary developments in their
products
As indicated above, the new arrangements will involve some
additional time and effort costs for dispensers, these being concentrated in the
first 9 to 12 months of operation.
The effectiveness of the initiative
will be assessed mainly by ongoing analysis of PBS claims and expenditure data
to evaluate the percentage of claims which lack valid Medicare numbers matching
the name on the prescription, changes in expenditure etc. There will also be
ongoing monitoring of, and response to, reports from representatives of groups
of people who may have difficulty in providing Medicare cards.
As the
initiative would be an integral part of an ongoing major program, a sunset
provision would be inappropriate.
NATIONAL HEALTH AMENDMENT (IMPROVED MONITORING OF ENTITLEMENTS TO PHARMACEUTICAL BENEFITS) BILL 2000
Notes on Clauses
This section cites the short title of the proposed legislation as the
National Health Amendment (Improved Monitoring of Entitlement to
Pharmaceutical Benefits) Act 2000.
The section provides that the Act commences on the day on which the
legislation receives Royal Assent. Note that some provisions only apply after
specified dates (for example, subsection 99(7) applies from 1 July 2001).
This section notes that each Act that is specified in the Schedule is to
be amended or repealed as set out in the applicable items in the
Schedule.
Item 1
This item amends subsection 84(1) to add a
definition of communicated prescription to mean a prescription
that is communicated to an approved pharmacist in circumstances set out in
regulation 22 of the National Health (Pharmaceutical Benefits) Regulations.
Regulation 22 deals with the supply of pharmaceutical benefits before the
surrender of written prescriptions. For example, a presciber may ring a
pharmacist for an emergency supply of a medicinal preparation to a person, with
the prescription paperwork to follow later.
This item amends subsection 84(1) to add a definition of expiry
date in relation to a medicare number for the purposes of Part VII of
the Act. Where the card does not specify a particular expiry date or specify a
month at the end of which the card expires, the Minister can specify a date on
which it expires.
Item 3
This item amends subsection
84(1) to add a definition of medicare card for the purposes of
Part VII of the Act. This is defined as a card issued by the Health Insurance
Commission and commonly known as a medicare card. This card evidences a
person’s status as an eligible person within the meaning of the Health
Insurance Act 1973 (‘Health Insurance Act’), and also evidences
a person’s eligibility for pharmaceutical benefits under the Act.
Medicare card is also defined to mean a card or written
authorisation provided to a person which evidences a person’s eligibility
for pharmaceutical benefits under the Repatriation Pharmaceutical Benefits
Scheme established under the Veterans’ Entitlements Act 1986, or
any other card that may be prescribed in regulations under the Act.
Item 4
This item amends subsection 84(1) to add a
definition of medicare number for the purposes of Part VII of the
Act. This is defined to mean, in relation to a person covered by a medicare
card, the particular combination of numbers, or letters and numbers, on the card
applicable to the person covered by that card. It includes the sub-numerate
next to a person’s name on the card. This definition also covers the
combination of numbers, or letters and numbers, that are applicable to a person
as if that person was covered by a medicare card. Persons who are, or who are
entitled to be treated as, eligible persons under the Health Insurance Act but
do not have a medicare card would include, for example, foreign persons covered
by reciprocal health care agreements which entitle those persons to hold a
medicare card (such as English citizens) but whom may be travelling and will not
stay in one place long enough to obtain a medicare card.
Item
5
This item amends subsection 84(1) to add a definition of
special number. This is defined as being the particular
combination of numbers, or letters and numbers, allocated in accordance with a
procedure determined by the Minister under new subsection 86E(4) of the Act,
that is unique to that person as a person included in a class of persons
identified by the Minister in a determination under new subsection 86E(1).
This provision is intended to cover those persons who are entitled to
pharmaceutical benefits but who, for various reasons, do not have a medicare
card or whose medicare number will not be known or available at the time of
supply of pharmaceutical benefits. In relation to some groups, a special number
may be allocated to the group as a whole, rather than a particular number being
allocated to each member of the group. Classes that may be the subject of a
determination under subsection 86E(1) include persons who are not legally
competent, persons requiring drugs or medicinal preparations in an emergency,
persons in respect of whom a prescription is communicated by a practitioner to
an approved supplier, and foreign persons covered by reciprocal health care
agreements under section 7 of the Health Insurance Act which do not entitle
those persons to hold a medicare card (for example, Irish and New Zealand
citizens).
Item 6
This item inserts new subsections (8),
(9) and (10) after subsection 84(7) of the Act.
Subsection 84(8)
provides that the provision to a person or body of a medicare number as a number
applicable to a particular individual can be satisfied by either:
• the
production to that person or body of a medicare card having on it the medicare
number applicable to the particular individual; or
• the provision of
any other information, whether in documentary form or provided orally, that
indicates the medicare number applicable to the particular
individual.
Subsection 84(9) similarly applies in respect of the
provision to a person or body of the expiry date in relation to a medicare
number provided as a number applicable to a particular individual.
In
this way, prescribers and suppliers are not limited to collecting the medicare
number, or medicare number and expiry date, only by production of the medicare
card.
Subsection 84(10) makes clear that a reference to a medicare number
or special number that ultimately appears on a prescription means a number as it
appears on the prescription at the time it is sent to the Health Insurance
Commission with a claim for payment by an approved supplier.
Item
7
This item repeals the existing section 86 and inserts new sections
86 to 86E.
New section 86 deals with entitlement to receive
pharmaceutical benefits. This section makes clear that a person has to be an
‘eligible person’ within the meaning of the Health Insurance Act and
be receiving medical treatment by a medical practitioner or dental treatment by
a participating dental practitioner in order to be entitled to receive
pharmaceutical benefits under the Act.
Section 86A requires that a
person must be in Australia at the time of supply in order to receive
pharmaceutical benefits under Part VII of the Act
Subsection 86B(1) sets
out the grounds on which an approved supplier, such as a pharmacist, may request
a person presenting a prescription to provide their medicare number (or the
number applicable to the person to whom the prescription relates), and the
expiry date in relation to that number.
Subsection 86B(2) makes clear
that an approved supplier may request provision of the medicare number, or
medicare number and expiry date in relation to that number, even
if:
• the prescription already contains a medicare number as a number
applicable to the person to whom the prescription relates; or
• the
approved supplier already has the medicare number, or number and expiry date, in
his or her records.
The checking and endorsement powers of an approved
supplier in respect of a prescription (except for a prescription communicated by
a practitioner – see subsection 86B(5)) where a medicare number is
provided to the approved supplier are set out in subsection 86B(3). These
powers enable a supplier to endorse a prescription with a medicare number if the
prescription has not already been so endorsed, or confirm, alter or disregard
the number where the prescription has already been endorsed and the supplier has
better information. Where an expiry date in relation to a medicare number is
provided or is contained in the approved supplier’s records, the approved
supplier may confirm that the supply of a pharmaceutical benefit authorised by
the prescription is not being sought after the expiry date.
This
subsection also takes account of the fact that a medicare number (with or
without an expiry date in relation to that number) may be provided to the
supplier by means other than its inclusion on a prescription. A medicare number
may, for example, be provided to the supplier for his or her records on a
receipt or piece of paper or orally.
Subsection 86B(4) sets out the
endorsement powers of an approved supplier in respect of a prescription (other
than a communicated prescription as defined in item 1 above) covering those
classes of persons who do not have a medicare number but who have been given a
special number by Ministerial determination under subsection
86E(1).
Subsection 86B(5) sets out an approved supplier’s
endorsement power in relation to a written version of a communicated
prescription (as defined at item 1 above) which does not contain a medicare
number as a number applicable to the person to whom the prescription relates.
Under subsection 86B(5) the prescription (once the written version is received)
may be endorsed by the approved supplier with:
• the medicare number as
a number applicable to the person to whom the prescription relates and which is
already retained in the approved supplier’s records in accordance with
section 86D; or
• the special number applicable to the person under
subsection 86E(1) as a person in respect of whom a prescription has been so
communicated if the medicare number is not retained in the approved
supplier’s records.
From the date of Royal Assent up until 1
January 2001 it is discretionary whether or not an approved supplier requests
the provision of a person’s medicare number, or medicare number and expiry
date, or endorses the prescription with that number, number and expiry date or
special number, or confirms, alters or disregards the number where the
prescription is already so endorsed.
Section 86C applies from 1 January
2001. From this date, the approved supplier must request the provision of a
medicare number and expiry date where it is not endorsed on a prescription.
Where that medicare number is provided to the approved supplier and a benefit is
payable under the Pharmaceutical Benefits Scheme, the approved supplier must
endorse that medicare number on the prescription. Failure to provide a medicare
number when presenting a prescription for the supply of a pharmaceutical benefit
(or satisfy the special number requirements) does not preclude a person from
paying full price for a drug or medicinal preparation and then seeking the
appropriate refund from their local Medicare office or writing to the Health
Insurance Commission seeking the refund. This claiming process operates under
existing legislation and does not need to be modified.
Under subsection
86C(1), an approved supplier is required to request provision of the medicare
number and expiry date in relation to that number if presented with a
prescription for the supply of a pharmaceutical benefit to a person
where:
• the prescription does not contain a medicare number as a
number applicable to the person to whom the prescription relates; and
• the approved supplier’s records do not already contain such a
number.
Paragraph 86C(1)(b) ensures that this provision only applies in
respect of pharmaceutical items where the Commonwealth is to pay a benefit under
the Pharmaceutical Benefit Scheme; that is, where the price exceeds the
copayment.
Subsection 86C(2) provides that an approved supplier may
request provision of the medicare number and expiry date in relation to that
number even if:
• the prescription already contains a medicare number
as a number applicable to the person to whom the prescription relates; or
• the approved supplier already has the medicare number and/or expiry
date recorded and retained in his or her records in accordance with section
86D.
Subsection 86C(3) provides that an approved supplier must endorse a
prescription for the supply of pharmaceutical benefits if a medicare number is
provided under subsection 86C(1) or is already included in his or her records in
accordance with section 86D, and the prescription has not already been so
endorsed.
Subsection 86C(4) provides that where:
• a
medicare number is provided under subsection 86C(2) or is included in an
approved supplier’s records in accordance with section 86D; and
• the prescription has already been endorsed with a medicare number as
a number applicable to the person to whom the prescription relates
the
approved supplier may confirm or alter the endorsed number, or may disregard the
number provided or included in his or her records in preference for the endorsed
number.
Subsection 86C(5) provides that an approved supplier may check
to ensure that the supply of a pharmaceutical benefit authorised by the
prescription is not being sought after the expiry date of the relevant medicare
number.
Subsection 86C(6) sets out the endorsement requirements for an
approved supplier in respect of a prescription (other than a communicated
prescription as defined in item 1 above) covering those classes of persons who
do not have a medicare number but who have been given a special number by
Ministerial determination under subsection 86E(1).
Subsection 86C(7) sets
out an approved supplier’s endorsement powers in respect of a written
version of a communicated prescription not containing a medicare number. Under
subsection 86C(7) the prescription (once the written version is received) must
be endorsed by the approved supplier with the medicare number as a number
applicable to the person to whom the prescription relates if this number is
already retained in the approved supplier’s records, or endorsed with the
special number applicable to the person under subsection 86E(1) as a person in
respect of whom a prescription has been so communicated. Paragraph 86C(7)(b)
ensures that this requirement is in respect of a prescription for pharmaceutical
items where the Commonwealth is to pay a benefit under the Pharmaceutical
Benefit Scheme; that is, where the price exceeds the copayment.
Section
86D sets out the power of approved suppliers to record and retain medicare
numbers and expiry dates where that has been authorised by the person providing
the medicare number, or medicare number and expiry date. This section enables a
medicare number (with or without the expiry date in relation to that number) to
be provided to an approved supplier without it already being endorsed on a
prescription. For example, it is open to a person to provide their medicare
number by showing an approved supplier their medicare card, or by showing a
receipt which has the medicare number recorded on it, or by orally advising the
approved supplier of the number. The approved supplier must be satisfied that
the person providing the number, or number and expiry date, is the person in
respect of whom the number was provided, or the person’s legal guardian,
or another person capable of giving an authorisation under subsection
86D(1).
Subsection 86D(1) provides that where a medicare number is
provided to an approved supplier as the result of a request under section 86B or
86C, or it is provided with a view to facilitating the supply of pharmaceutical
benefits in the future, the approved supplier may, with the authorisation of the
person providing the number, or number and expiry date:
• record and
retain the medicare number, or number and expiry date, in his or her records; or
• if he or she already has those particulars recorded and retained,
check the accuracy and completeness of those recorded particulars and modify
them if necessary.
These are the permitted storage and retention
activities as defined in subsection 86D(6).
Subsection 86D(2)
enables an approved supplier to record and retain medicare numbers and expiry
dates supplied to him or her by a practitioner in respect of communicated
prescriptions (as defined in item 1 above). An approved supplier can only be
informed of a medicare number (with or without an expiry date in relation to
that number) with the authority of the person whose number it is, or of another
person on that person’s behalf, as required under subsection 88(3B) (see
item 8 below).
Subsection 86D(3) clarifies that there is no obligation
on a person to authorise an approved supplier to record and retain (in an
approved supplier’s records) a person’s medicare number, or the
expiry date in relation to such a number.
Subsection 86D(4) provides
that an approved supplier is responsible for storage and security of those
medicare numbers, or numbers and expiry dates in relation to those numbers,
retained in his or her records.
Subsection 86D(5) provides that
determinations under subsection 86D(1) are disallowable
instruments.
Section 86E sets out the powers of the Minister to define
classes of persons for whom special numbers are available. The determinations
(which must be in writing) under this section are intended to cover persons who
are entitled to pharmaceutical benefits but who, for various reasons, do not
have a medicare card or whose medicare number will not be known or available at
the time of supply of pharmaceutical benefits.
Subsection 86E(1) gives
the Minister the power to determine that certain classes of persons be classes
in respect of whom an entitlement to pharmaceutical benefits can be evidenced
otherwise than by production of a medicare number.
Subsection 86E(2)
provides that classes that may be so determined include persons who are not
legally competent, persons requiring drugs or medicinal preparations in an
emergency, persons in respect of whom a prescription is communicated by a
practitioner to an approved supplier, and foreign persons who are covered by
reciprocal health care agreements under section 7 of the Health Insurance Act.
Persons in the latter class may be required to produce their passport or proof
of permanent residency in order to prove their entitlement to pharmaceutical
benefits. The Minister may also determine classes of persons not included in
the specified examples.
Subsection 86E(3) provides that a determination
under subsection 86E(1) may set out the things an approved supplier must be
satisfied of before being satisfied that a person falls within a particular
class, and the procedure to be followed in establishing such matters.
Subsection 86E(4) requires the Minister to include in each determination
under subsection 86E(1) the procedure for allocating a special number applicable
to particular classes of persons.
Subsection 86E(5) provides that
determinations made under subsection 86E(1) are disallowable
instruments.
Subsection 88(3A) provides that a medical practitioner or participating
dental practitioner may request the provision of a medicare number applicable to
a person and the expiry date in relation to that number and, if that number is
provided or if it is already retained in the practitioner’s records,
endorse that medicare number on a prescription written for that person. This
provision also applies to a subsequent written version of a communicated
prescription.
Subsection 88(3B) applies in relation to communicated
prescriptions. It provides that a medical practitioner or participating dental
practitioner must not inform an approved supplier of a person’s medicare
number, or medicare number and expiry date in relation to that number, for the
purpose of that supplier recording and retaining that number or number and date,
unless the person whose number it is or another person authorised on that
person’s behalf authorises the practitioner to do so. This subsection is
not intended to prevent the subsequent inclusion of a medicare number in the
written version of a communicated prescription under subsection 88(3A).
This provision does not place any requirement on medical practitioners
or participating dental practitioners to obtain the medicare number from a
person or to endorse a prescription with that number. Nor is there any
obligation on a person to provide a medicare number to a practitioner or
authorise a practitioner to inform an approved supplier of such a number for the
purpose of recording and retaining it in the supplier’s records (see
subsection 88(3C)).
Section 88AA sets out the power of medical practitioners and
participating dental practitioners to record and retain medicare numbers and
expiry dates.
A person could provide their medicare number to the
practitioner by producing their medicare card, or by showing a receipt which has
the medicare number recorded on it, or by orally advising the practitioner of
the number. The practitioner must be satisfied that the person providing the
number, or number and expiry date, is the person whose number it is, or the
person’s legal guardian, or a person capable of giving an authorisation
under this section. There is provision for the making of determinations by the
Minister to specify other persons capable of giving authorisation for the
purposes of this section.
Subsection 88AA(1) provides that where a
medicare number (whether with or without the expiry date in relation to that
number) is provided to a practitioner as the result of a request under
subsection 88(3A), or is provided with a view to facilitating the writing of a
prescription for the supply of pharmaceutical benefits in the future, the
practitioner may, with the authorisation of the person providing the medicare
number, or medicare number and expiry date:
• record and retain the
medicare number, or medicare number and expiry date, in his or her records; or
• if he or she already has those particulars recorded, check the
accuracy and completeness of the record and modify the record if
necessary.
Subsection 88AA(2) makes clear that there is no obligation on
a person to authorise a practitioner to record and retain (in a
practitioner’s records) a person’s medicare number, or the expiry
date in relation to such a number, provided as a result of a request under
subsection 88(3A).
Subsection 88AA(3) provides that a practitioner is
responsible for storage and security of those medicare numbers, or numbers and
expiry dates in relation to those numbers, retained in his or her records. The
practitioner is also obliged to do everything reasonably within his or her power
to prevent unauthorised use or disclosure of the information contained in the
record where others have access to that record in connection with the provision
of services to the practitioner. The latter may include, for example, persons
employed by the practitioner or independent contractors.
This item adds subsections 99(7), (8) and (9), which will apply from 1
July 2001.
Section 99 deals with payment for the supply of a
pharmaceutical benefit. Subsection 99(7) provides that an approved supplier is
not entitled to be paid by the Commonwealth for the supply of pharmaceutical
benefits to a person on a prescription presented to the approved supplier from 1
July 2001 unless:
• the prescription ultimately contains a medicare
number, or special number, as a number applicable to the person to whom the
prescription relates; and
• if the number so appearing is a medicare
number, that medicare number corresponds with a medicare number held in the
records of the Health Insurance Commission as a number applicable to that
person.
This subsection stops payment of benefits to an approved supplier
if a valid medicare number or special number is not included on the prescription
when the claim is made to the Health Insurance Commission. The reference to the
‘ultimate’ medicare number or special number is intended to cover
situations where, for example, a person has forgotten his or her medicare card
or a person’s agent is unaware of the person’s medicare number, but
the approved supplier is confident that the person is an eligible person. In
such situations, it is open to the approved supplier to supply all or part of
the pharmaceutical item on condition that the patient later inform the supplier
of the patient’s medicare number for endorsement on the prescription.
As stated in item 7 above, failure to provide a medicare number or
satisfy the special number requirements when presenting a prescription for the
supply of a pharmaceutical benefit does not preclude a person from paying full
price for a drug or medicinal preparation and then seeking the appropriate
refund from their local Medicare office or writing to the Health Insurance
Commission seeking the refund. This claiming process operates under existing
legislation and does not need to be modified.
Subsection 99(8) deals with
the situation where the medicare number ultimately appearing on the prescription
does not correspond with the medicare number applicable to that person which is
held in the records of the Health Insurance Commission. Where the sole reason
for the non-correspondence of number and name is that the medicare number on the
prescription expired within 60 days preceding the date of supply, then the
approved supplier is entitled to payment in respect of the supply as if that
medicare number had not expired and had continued to correspond with the number
and name of the person held in the records of the Health Insurance Commission.
The reason payment to an approved supplier is allowed in this situation is that,
in most cases, a person in this group will in fact be an eligible person within
the meaning of the Health Insurance Act at the time of supply, but their card
has expired and a new card has not yet been obtained.
The period of 60
days specified in paragraph 99(8)(e) may be varied by Ministerial determination.
Subsection 99(9) provides that determinations for the purposes of
subsection 99(8) are disallowable instruments.
This item inserts section 135AAA after existing section 135A concerning
privacy of medicare numbers. The language used in new section 135AAA is
consistent with that used in existing provisions such as section 135A.
New section 135AAA sets out the privacy requirements for prescribers and
approved suppliers in relation to medicare numbers and expiry dates provided for
the purposes of the Pharmaceutical Benefit Scheme. Section 135AAA extends the
provisions that already apply to persons performing duties under the Act (such
as Health Insurance Commission staff) to other persons who will have access to
medicare numbers.
Subsection 135AAA is consistent with the Privacy Act
in that a medicare number, or medicare number and expiry date, provided to a
practitioner or approved supplier can only be used for those purposes for which
it was provided. In respect of a medicare number (or medicare number and expiry
date) provided to a practitioner, the specified purpose or purposes
are:
• to enable a practitioner to write or communicate a prescription
for the supply of a pharmaceutical benefit; or
• to enable the
medicare number or medicare number and date to be recorded and retained by a
practitioner to facilitate the writing of those prescriptions in the future; or
• both of the above purposes (see subsection 135AAA(1)).
In
respect of a medicare number (or medicare number and expiry date) provided to an
approved supplier, the specified purpose or purposes are:
• to enable
an approved supplier to supply a pharmaceutical benefit; or
• to
enable the medicare number, or medicare number and date, to be recorded and
retained by an approved supplier in his or her records to facilitate the supply
of pharmaceutical benefits in the future; or
• to enable an approved
supplier to record and retain that medicare number, or medicare number and date,
in order to complete the written version of a communicated prescription;
or
• all or several of the above purposes (see subsection
135AAA(3)).
It is an offence for a practitioner (subsection 135AA(1)) or
an approved supplier (subsection 135AAA(3)) to directly or indirectly make an
unauthorised disclosure or unauthorised use of a medicare number or expiry date
in relation to that number where that number and date have been provided for one
or several of the above purposes. Under subsections 135AAA(2) and (4) an
unauthorised disclosure or unauthorised use occurs where such disclosure or use
is not made or undertaken:
• in the performance of the duties, or in
the exercise of the powers or functions, of that person as a practitioner or
approved supplier under the Act in relation to the Pharmaceutical Benefits
Scheme; or
• for the purpose of enabling a person to perform functions
under the Health Insurance Act in relation to the Pharmaceutical Benefits
Scheme.
The penalty for a breach of subsection 135AAA(1) or (3) is 50
penalty units ($5000) or imprisonment for 2 years, or both.
Subsection
135AAA(5) extends the prohibitions in subsections 135AAA(1) and (3) to persons
employed or engaged by a practitioner or an approved supplier, or a company that
provides services in support of a practitioner or approved supplier.
The
prohibition on disclosure continues to apply even after a person ceases to be a
practitioner, approved supplier, or employed or engaged by a practitioner or
approved supplier, and is subject to the same obligations and liabilities as
specified above.
Subsection 135AAA(6) provides that a person to whom a
medicare number, or medicare number and expiry date in relation to that number,
is disclosed in contravention of subsection 135AAA(1), (3) or (5) is guilty of
an offence if:
• the person knows or ought reasonably to know that the
disclosure of the medicare number, or medicare number and expiry date, was in
contravention of that subsection; and
• the person directly or
indirectly discloses that medicare number or that expiry date to any person, or
otherwise makes use of that number or that date.
The penalty for this
offence is also 50 penalty units ($5000) or imprisonment for 2 years, or
both.
Under subsection 135AAA(7), a person or body to whom a medicare
number, or medicare number and expiry date in relation to that number, are
provided for a purpose referred to in subsection 135AAA(1), (3) or (5) (see
above), may disclose that number or expiry date to another person for another
specified purpose with the express authority of the person in respect of whom
that number was provided, or the person’s legal guardian, or another
person capable of giving an authorisation (as determined by the Minister under
section 86D or 88AA).
A person to whom the medicare number, or medicare
number and expiry date, is disclosed in accordance with an express authority
under subsection 135AAA(7), is guilty of an offence under subsection 135AAA(8)
if the person:
• directly or indirectly discloses that number or that
date to another person; or
• makes use of that number or that
date;
other than for the purpose specified by the person giving the authority
under subsection 135AAA(7).
Subsection 135AAA(9) provides that a
medicare number or expiry date in relation to such a number can still be
communicated to a court for the purpose of proceedings under section
135AAA.
Subsection 135AAA(10) defines approved supplier,
expiry date, medicare number and participating
dental practitioner to have the same meaning within section 135AAA as in
Part VII of the Act dealing with pharmaceutical benefits.
This item inserts new subsection 135AA(5A) after existing subsection
135AA(5). The amendment is of a consequential nature to allow the Health
Insurance Commission to continue to store pharmaceutical benefits information.
It does not disturb the effect of the current guidelines for storing information
developed by the Privacy Commissioner and issued under section 135AA.
Subsection 135AA(5A) allows a pharmaceutical entitlements number
(defined in item 14 below) applicable to a person to whom a claim for benefits
under the Pharmaceutical Benefits Program relates, to be included in a database
held by the Health Insurance Commission. This subsection will include persons
covered by a benefit entitlement card as defined in item 13 below, and persons
included within a class determined by the Minister under subsection 86E(1).
This item inserts a new definition into subsection 135AA(11). The term
benefit entitlement card is defined to mean a medicare card as
defined in item 3 above, and a card which provides evidence of a person’s
status as a concessional beneficiary within the meaning of subsection 84(1).
This amendment ensures that the terms used in the Act and in the guidelines
issued by the Privacy Commissioner under section 135AA are consistent.
This item amends subsection 135AA(11) to add a definition of
pharmaceutical entitlements number. This term has been added to
ensure consistency with the guidelines issued by the Privacy Commissioner under
section 135AA. Pharmaceutical benefits number is defined
to have the same meaning as that for the term medicare
number (defined in item 4 above), but also includes the number on a card
issued by the Commonwealth to a concessional beneficiary (see subsection 84(1)
of the Act).