Commonwealth Numbered Regulations - Explanatory Statements

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HEALTH INSURANCE REGULATIONS (AMENDMENT) 1998 NO. 44

STATUTORY RULES 1998 No. 44

Issued by authority of the Minister for Health and Family Services

Health Insurance Act 1973

Health Insurance Regulations (Amendment)

Section 133 of the Health Insurance Act 1973 (the Act) provides that the Governor-General may make Regulations for the purposes of the Act.

The purpose of the Regulation is to allow Medicare benefits to be paid to patients in respect of services provided by certain, currently ineligible, medical practitioners in a limited range of circumstances.

Section 19AA of the Act prevents a Medicare benefit from being paid to a patient in respect of a service rendered by a medical practitioner, where the practitioner completed their internship after 1 November 1996, unless: (a) the practitioner has completed postgraduate training and is recognised as specialist consultant physician or general practitioner under the Act; or (b) the practitioner is on the Register of Approved Placements as defined in section 3GA of the Act.

Section 3GA of the Act creates a Register of Approved Placements and allows a medical practitioner who is undertaking an authorised 'approved placement' to be placed on the Register. An authorised 'approved placement may be obtained by a practitioner where he or she is on a training course or other nominated program run by a relevant body (both the course or program and the body concerned are specified in regulations). The main purpose for an 'approved placement is to allow an otherwise ineligible medical practitioner to attract Medicare benefits if they need to do so for the purposes of their postgraduate training in a recognised field of medicine (eg surgery, internal medicine, paediatrics, general practice). However, the 'approved placement mechanism also allows otherwise ineligible practitioners to attract Medicare benefits when they provide services in certain supervised situations.

The Regulation changes the name of the Schedule and adds a new body and program to Part 2 of the Schedule. The new body added is the Commonwealth Department of Health and Family Services. The new program added is the Assistance at Operations Program.

The Regulation grants the Commonwealth Department of Health and Family Services the power to authorise 'approved placements' for medical practitioners undertaking the Assistance at Operations Program.

The purpose of the Assistance at Operations Program is to allow otherwise ineligible medical practitioners to attract Medicare benefits when they assist a surgeon at an operation on a private patient. Such assistance at an operation provides necessary aid to a surgeon who would not otherwise be able to undertake the surgical procedure on their own and provides an excellent learning opportunity for the (usually less experienced) assisting medical practitioner. There is no intention to allow otherwise ineligible medical practitioners to attract Medicare benefits for any other form of service other than assisting at operations.

The Assistance at Operations Program is intended to be an interim measure only, pending legislative changes to the sub-section 19AA(5) definition of professional service in the Act. The legislative changes will allow a Medicare benefit to be payable in respect of a professional service rendered by any medical practitioner, but only where the professional service is assistance at an operation.

The commencement date for the Regulation was 1 February 1998. The commencement date reflects a commitment made by the Minister for Health and Family Services that otherwise ineligible medical practitioners would be able to attract Medicare benefits for assisting at operations from 1 February 1998. This commitment was made by the Minister on 3 February 1998. 7he earlier commencement date for the Regulation has not disadvantage any person in respect of their rights or created a liability which would be imposed on a person (other-than the Commonwealth or an authority of the Commonwealth).

In fact, the earlier commencement date provides an advantage to patients and affected medical practitioners. Thus, if there was an otherwise ineligible medical practitioner who had provided assistance at an operation on a patient (between 1 February 1998 and the date of Gazettal), the patient in question is can now claim a Medicare benefit for the professional service provided by the medical practitioner. However, given that medical practitioners know that it is an offence for ineligible medical practitioners to provide services to a patient without first advising the patient that a Medicare benefit will not be payable (see section 19CC of the Act), it is highly unlikely that any ineligible medical practitioners would have provided assistance at operation services and then billed the patient for that service (between 1 February 1998 and the date of Gazettal). Further, this change will have no impact on private health insurance firms or hospitals with respect to creating a liability or disadvantaging a person in respect of their rights.

REGULATION IMPACT STATEMENT

Amendment to Health Insurance Regulations

Background

Medical services in Australia are provided through State and Territory managed public institutions (such as public hospitals and rehabilitation services), private institutions (such as private hospitals and day-surgery centres) and private medical practitioners (including both specialists and general practitioners).

Services provided to public patients in public institutions are provided free of charge to the patient as required under the terms of the Commonwealth/State hospital funding agreements. However, services provided to private patients (regardless of the location of service delivery) are funded through a combination of Commonwealth government rebate (through the Medicare benefits scheme), private health insurance payments and 'out-of-pocket' payments made by patients.

A private patient can receive a rebate through Medicare as a subsidy toward the medical expense incurred for the provision of a medical service. Where the medical services provided are of a complex surgical nature the surgeon can be assisted by another (usually less qualified) medical practitioner. Under Medicare a patient can receive a rebate for the medical expenses incurred from both the surgeon and the assistant. The Medicare Benefits Schedule restricts benefits for assistance items to those surgical procedures which require them.

In addition to benefit to patients, junior medical practitioners often assist at surgery in order to gain additional experience in surgical skills. Consequently, in the context of Australia's medical education and training system, assisting at operations for private patients is a significant part of the training many practitioners receive.

However, as a consequence of the December 1996 amendments to the Health Insurance Act 1973 (the Act), new medical practitioners cannot provide a service eligible for a Medicare benefit until they have completed further training sufficient to become recognised as a specialist, consultant physician or general practitioner. In this context, a new medical practitioner is a person who completed their internship after 1 November 1996 or who obtained their primary medical qualification from a medical school outside of Australia and who first became a medical practitioner (for the purposes of the Act) after 1 January 1997.

This change has had two unintended impacts. Firstly, the learning opportunities for new medi6al practitioners have been diminished. Secondly, the changes have created difficulties for both surgeons and hospitals by increasing the complexity of their staff management (to take into account which medical practitioners can attract a Medicare benefit for assisting at an operation).

Objective

The objective of this regulatory change is to increase the opportunities available to new medical practitioners to develop their surgical knowledge and skill and decrease the complexity of staff management for surgeons and hospitals.

Alternatives

Three alternatives were considered:

Option 1:       Take no action.

Option 2:       Allow all medical practitioners to assist at operations through amendments to

       the Act but maintain the more general restrictions imposed in December 1996

       in respect of consultations and therapeutic procedures.

Option 3:       Allow new medical practitioners (ie a person who completed their internship

       after 1 November 1996) to assist at operations through an amendment to

       regulations created under the existing 'approved placement' arrangements in the

       Act. (The 'approved placement' arrangements in section 3GA of the Act allow

       a specified body, for example the Royal Australasian College of Surgeons, to

       grant approval for Medicare access to a medical practitioner who is

       undertaking a training course or program with that body.)

Note that option 2 has been adopted as the long term solution and is currently being pursued through amendments currently being debated in Parliament. This statement relates to the implementation of option 3 as an interim measure. If the Act is amended as suggested the proposed regulation relating to assistance at operations will be repealed.

Impact Analysis

Impact on consumers

Each option is cost neutral for consumers because the problem is not getting a medical practitioner to assist but arises from having some who can and some who can't. Thus, a surgeon will not seek the assistance of a medical practitioner who cannot. provide a service eligible for a Medicare benefit.

If option 1 had been adopted it is possible that, in the longer term, the standard of medical care available to the community would be reduced because of the reduced opportunity medical practitioners would have to develop their surgical knowledge and skill. In the medium to longer term, staffing issues would be exacerbated as more and more hospital medical staff become ineligible to provide assistance at operations for private patients.

In the longer term Option 2 is being adopted as a means of ensuring that as many learning opportunities as are possible are available to medical practitioners allowing the overall level of generalist surgical knowledge and skill to remain at its current (high) level.

However, because of the need to act quickly, option 3 has been adopted in the short term to ensure that there is no further delay in allowing new medical practitioners from taking up such new learning opportunities.

1mpact on principal surgeons and medical institutions (public and private hospitals)

If option 1 had been pursued surgeons and medical institutions would face continued staff management problems and these problems would worsen over time.

Option 2 ensures flexibility in staff management for principal surgeons and hospitals with no additional administrative requirement. However, as noted above, this option is dependant upon legislative changes being made to the Act and will not be able to be implemented for several months.

In contrast, Option 3 can be implemented rapidly and will also require minimal additional administrative action on the part of principal surgeons and medical institutions.

Impact on (less experienced) medical practitioners

Option 1 would mean that (less experienced) medical practitioners could only seek generalist medical training in the public hospital system whereas options 2 and 3 provide greater flexibility for practitioners to take up training opportunities in the private sector.

Option 2, however, is dependant upon legislative changes being made to the Act and will not be able to be implemented for several months.

Option 3 can be implemented rapidly, but will require some additional administrative action-on the part of new medical practitioners due to the requirement that each individual be placed on an approved placement. The new medical practitioner will be required to make an additional application to the Health Insurance Commission specifying that they wish to be able to assist at operations.

Note that those new medical practitioners who are either overseas trained doctors or former overseas medical students will not be able to take advantage of option 3. These medical practitioners will be compelled to wait until the option 2 legislative changes are implemented.

Impact on government

Option 2 is cost neutral for the Commonwealth because the problem is not getting a medical practitioner who can assist but arises from having some who can and some who can't. Thus, a surgeon will not seek the assistance of a medical practitioner who cannot provide a service eligible for a Medicare benefit. This option allows any doctor to assist and attract a benefit for the service. The decision on whether or not it will be necessary to provide assistance at an operation is one which is made by the surgeon not the assistant and is also restricted to certain operations under the Medicare schedule. The overall number of surgical procedures performed in any year is relatively independent of supply side effects (ie in comparative terms, the ability for surgeons to induce increased consumer demand for surgical services is much less than their ability to induce increased consumer demand for less invasive general consultations). Thus, whilst option 2 increases the number of medical practitioners who are eligible to attract a Medicare benefit for assisting at operations, the change (by itself) is unlikely to have a significant impact upon the total number of assistance at operations services performed in any given year.

Option 3 achieves broadly similar ends to option 2 but is administratively more complex and costly because of the requirement under the Act that an authorising body endorse the approved placements. However, unlike option 2, option 3 will allow the early implementation of this measure for new medical practitioners.

Consultation

The Department has monitored the impact of the December 1996 changes to the Act through a number of mechanisms including the Medical Training Review Panel (an statutory advisory body with State & Territory, industry, professional, educational and union representatives), specific consultations with professional and union groups and more general contacts with industry and professional representatives.

State and Territory governments (who administer the public hospital system) were frustrated by the reduced flexibility they experienced as a result of the changes. Educational, professional and union representatives noted the reduced training opportunities available as a result of the changes.

While union representatives wanted the Commonwealth to repeal the whole of the 1996 legislation, the issue of assistance at operations was a more specific issue which is amenable to change without undermining the fundamentals of the legislation. State and Territory representatives did not want any widening of the policy beyond that proposed in options 2 or 3. Professional and educational representatives accept both options 2 and 3 and thought that they were an appropriate and timely response.

Administration

The bodies responsible for administering this scheme will be the Health Insurance Commission and the Department of Health and Family Services. Option 3 win increase administration costs for both the Commission and the Department because of the requirement that the Department notify the Commission as to which medical practitioners are on the Assistance at Operations Program. However, given that option 3 is an interim measure only both the Commission and the Department will be able to manage the Assistance at Operations program through their current levels of funding.

Review

The impact of option 3 will be monitored through ongoing consultations with representatives from various State and Territory, industry, professional, educational and union groups.

Further, close attention will be directed toward the level of Commonwealth outlays on assistance at operations procedures under Medicare and appropriate further action will be taken to address any significant increase in outlays.