Medical and Midwife Indemnity Legislation Amendment Bill 2019 - Commentary on Ministerial Responses [2019] AUSStaCSBSD 147 (13 November 2019)

• Medical and Midwife Indemnity Legislation Amendment Bill 2019
• Computerised decision-making 41
• Reversal of evidential burden of proof44
• Broad delegation of legislative power48

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Medical and Midwife Indemnity Legislation Amendment Bill 2019

Purpose	This bill seeks to amend various Acts in relation to medical and midwife indemnity to: • simplify the current legislative structure underpinning the Government’s support for medical indemnity insurance; • repeal redundant legislation; • remove the existing contract requirements for the Premium Support Scheme (PSS) and incorporate the necessary requirements in legislation; • require all medical indemnity insurers to provide universal cover to medical practitioners; • maintain support for high cost claims and exceptional claims made against allied health professionals and enable exceptional cost claims to be made, which is provided for in a separate scheme to medical practitioners; • support high cost claims and exceptional cost claims made against private sector employee midwives not covered under the MPIS; • clarify eligibility for the Run-off Cover Schemes (ROCS) and permit access for medical practitioners and eligible midwives retiring before the age of 65; • cause an actuarial assessment to report on the stability and affordability of Australia’s medical indemnity market, with the report to be laid before each House of Parliament; and • amend reporting obligations and improve the capacity for monitoring and information sharing
Portfolio	Health
Introduced	House of Representatives on 18 September 2019
Bill status	Before the Senate

Computerised decision-making ^[41]

2.119 In Scrutiny Digest 7 of 2019 the committee requested the minister's more detailed advice as to:

• why it is considered necessary and appropriate to permit the Chief Executive Medicare (CEM) to arrange for the use of computer programs for any purpose for which the CEM may or must take administrative action;

• whether consideration has been given to how automated decision-making processes will comply with administrative law requirements (for example, the requirement to consider relevant matters and the rule against fettering of discretionary power); and

• whether consideration has been given to requiring that certain administrative actions (for example, complex or discretionary decisions) be taken by a person rather than by a computer.^[42]

Minister's response^[43]

2.120 The minister advised:

These new provisions provide the Chief Executive Medicare (CEM) with a discretionary power to authorise the use of computer programs for any purpose for which the CEM may or must take administrative action if it is deemed necessary and appropriate to do so.
Consideration will be given to what decisions are suitable for automation in line with administrative law requirements. In general, they will be decisions where particular facts are reliably established without the need for complex assessment or the need to assess information so as to form a particular position. Decisions that involve assessment of information provided by applicants in order to make a decision and making findings on whether specified statutory criteria are met or not met will not form part of the automated decision making process. Complex administrative decisions that involve consideration of technical information from many sources would require that persons that are adversely affected by the decision be accorded procedural fairness. These are not the types of decisions that are proposed to be covered by automated decision making.
The reasoning for applying proposed sections 76A and 87A broadly across both the Ml Act and MPICCS Act through these amendments, rather than limiting it to just section 37 of the Ml Act, is to ensure that the CEM is lawfully permitted to move other aspects of its decision making to an automated system in the future where suitable.
The circumstances in which a computer program will be used to take or make an administrative action will be for indemnity insurance applications and claims submitted on line for payments to eligible insurers. Services Australia is implementing on line claiming and automation of payment and claims for a range of indemnity insurance fund schemes they administer.
At this stage, the only decisions which will be suitable for computerised decision making relate to section 37 whereby the CEM has the authority to make certain (Premium Support Scheme) payments following successful submission and manual assessment of claims data. It is not intended that all decisions will be automated.
My Department, in consultation with Services Australia, will be maintaining the current practice of conducting certain administrative actions (for example, assessing claim applications and making decisions on whether to accept or reject a claim) by a person rather than just by a computer system. We are developing extensive system requirements and eligibility rules along with ongoing manual complex claims interventions where a person will be required to make decisions not just a computer program. My Department will always maintain the pursuance of making administrative decisions that are robust, lawful and comply with administrative law.
Implementation of computerised decision making is expected to deliver a number of potential benefits. Automation is expected to streamline services, significantly reduce duplication of work for insurers and Services Australia and improve security of claims data.

Committee comment

2.121 The committee thanks the minister for this response. The committee notes the minister's advice that consideration will be given to what decisions are suitable for automation in line with administrative law requirements and that in general, they will be decisions where particular facts are reliably established without the need for complex assessment or the need to assess information so as to form a particular position.

2.122 The committee also notes the minister's advice that, at this stage, the only decisions that will be suitable for computerised decision-making relate to section 37 but that the reasoning for applying proposed sections 76A and 87A broadly across both the Medical Indemnity Act 2002 (Ml Act) and Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 (MPICCS Act) is to ensure that the Chief Executive Medicare (CEM) is lawfully permitted to move other aspects of its decision making to an automated system in the future where suitable.

2.123 The committee reiterates that administrative law typically requires decision-makers to engage in an active intellectual process in respect of the decisions they are required or empowered to make. A failure to engage in such a process—for example, where decisions are made by computer rather than by a person—may lead to legal error. In addition, there are risks that the use of an automated decision-making process may operate as a fetter on discretionary power, by inflexibly applying predetermined criteria to decisions that should be made on the merits of the individual case. These matters are particularly relevant to more complex or discretionary decisions, and circumstances where the exercise of a statutory power is conditioned on the decision-maker taking specified matters into account or forming a particular state of mind.

2.124 While noting the minister's advice that the use of computerised decision making will be appropriately limited, the committee notes that there is no limitation on the types of decisions that will be subject to computerised decision-making on the face of the primary legislation. As the minister has noted that computerised decision making will only be used for decisions under section 37 of the MI Act, from a scrutiny perspective, the committee considers that it would be appropriate for the bill to limit the use of computerised decision making to decisions under this section only. The relevant Acts could be further amended in the event that a broader power to allow computerised decision making was required.

2.125 Alternatively, the committee notes that it may be appropriate for the bill to be amended to:

• generally limit the types of decisions that can be made by computers thereby enabling the committee and others to evaluate the appropriateness of computerised decision-making by reference to the best practice principles identified in the Administrative Review Council report, Automated Assistance in Administrative Decision Making; and/or

• provide that the CEM must, before determining that a type of decision can be made by computers, be satisfied by reference to general principles articulated in the legislation that it is appropriate for the type of decision to be made by a computer rather than a person.

2.126 In light of the committee's scrutiny concerns, the committee requests the minister's further advice as to whether the minister proposes to bring forward amendments to the bill to:

• limit computerised decision making to decisions under section 37 of the Medical Indemnity Act 2002; and/or

• generally limit the types of decisions that can be made by computers; and/or

• provide that the Chief Executive Medicare must, before determining that a type of decision can be made by computers, be satisfied by reference to general principles articulated in the legislation that it is appropriate for the type of decision to be made by a computer rather than a person.

2.127 The committee also requests that the key information provided by the minister be included in the explanatory memorandum, noting the importance of this document as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).

Reversal of evidential burden of proof^[44]

2.128 In Scrutiny Digest 7 of 2019 the committee requested the minister's advice as to why it is considered necessary and appropriate to reverse the evidential burden of proof in proposed subsections 77(2A) and (2B) of the Medical Indemnity Act 2002, and proposed subsections 88(2A) and (2B) of the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010. The committee noted that its consideration of this matter would be assisted if the minister's response explicitly addressed relevant principles set out in the Guide to Framing Commonwealth Offences.^[45]

Minister's response

2.129 The minister advised:

Subsection 77(2) of the Ml Act and subsection 88(2) of the MPICCS Act provide that a person commits an offence if they copy, record, disclose or produce protected information or a protected document to another person, where the first person is not performing or exercising duties, powers or functions under specified legislation. The offence is punishable by two years' imprisonment.
The new provisions would provide that, despite subsections 77(2) and 88(2), certain listed persons may copy, record, or disclose protected information or a protected document, for the purposes of monitoring, assessing or reviewing the operation of the medical indemnity legislation. As pointed out by the Committee, the new provisions would create offence specific defences to the offences in subsections 77(2) and 88(2). The defences reverse the evidential burden of proof.
The Australian Government Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (Guide) notes that placing the burden of proof on the defendant should be limited to where the matter is peculiarly within the knowledge of the defendant and where it is significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.^[46]
An additional factor to consider is whether the offences only impose an evidential burden (as the prosecution must still disprove the matters beyond reasonable doubt if the defendant discharges the evidential burden).
The defendant bears the evidential burden with respect to the exceptions under subsection 77(2) of the Ml Act and subsection 88(2) of the MPICCS Act. Whether someone has acted in the performance of his or her duties, or in the exercise of his or her powers or functions, under the medical indemnity legislation and relevant legislation, or had acquired the information in the performance of those duties, is something peculiarly within the knowledge of that person. It would be difficult for the prosecution to provide evidence that the person is not covered by an exemption when evidence relevant to whether an exemption applies can only be known by that person.
The Guide notes that an evidential burden does not completely displace the prosecutor's burden (it only defers that burden).^[47] The defendant must point to evidence establishing a reasonable possibility that these defences are made out. If this is done, the prosecution must refute the defence beyond reasonable doubt.

Committee comment

2.130 The committee thanks the minister for this response. The committee notes the minister's advice that whether someone has acted in the performance of his or her duties, or in the exercise of his or her powers or functions, under the medical indemnity legislation and other relevant legislation, or had acquired the information in the performance of those duties, is something peculiarly within the knowledge of that person.

2.131 The committee further notes the minister's advice that it would be difficult for the prosecution to provide evidence that the person is not covered by an exemption when evidence relevant to whether an exemption applies can only be known by that person.

2.132 The committee requests that the key information provided by the minister be included in the explanatory memorandum, noting the importance of this document as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).

2.133 In light of the information provided, the committee makes no further comment on this matter.

Broad delegation of legislative power^[48]

2.134 In Scrutiny Digest 7 of 2019 the committee requested the minister's advice as to:

• why it is proposed to allow regulations to modify and exempt matters from the operation of the primary legislation; and

• whether it would be appropriate to amend the bill to insert at least high-level guidance concerning the making of such regulations.^[49]

Minister's response

2.135 The minister advised:

The proposed provisions that the Committee has drawn my attention to, are consistent with provisions across the indemnity schemes where the Commonwealth is making payments to compensate administrative costs incurred by medical indemnity insurers in respect of incidents notified to insurers that could give rise to claims in relation to which certain indemnities could be payable.
These new provisions would only allow for modification, rather than actual amendment, of the primary legislation. In addition, the proposed provisions include limitations on what can be modified (see, for example, subsection 34ZZZD(3) to the Bill, which provides that paragraph 34ZZD(2)(b) does not allow the regulations to modify a provision that creates an offence, or that imposes an obligation which, if contravened, constitutes an offence).
The modification is only in relation to particular subject matter, that is, certain liabilities associated with costs that have been paid by the Commonwealth for the benefit of the Commonwealth. Any regulations that would need to be made will be subject to Parliamentary scrutiny and disallowance.
The reliance on regulations to modify the application of the Ml Act in relation to certain liabilities associated with costs which have been paid, is based on the principle that delegated legislation is necessary and justified. This is because it allows administrative and technical detail to be adjusted relatively quickly (compared to provisions of the primary legislation), in the event that shifting policy requirements give rise to the need to change policy at an administrative level. The use of delegated legislation such as legislative instruments allows policy departments, with appropriate parliamentary scrutiny, to work out the application of the law in greater detail within, but not exceeding, the principles that the Parliament has laid down by statute in the primary legislation.
As highlighted by the Administration Law Branch of the Attorney General's Department, Henry VIII clauses are usually only appropriate if they are intended to allow modification to keep the legislation up to date by adopting changes made in other legislation or in international agreements.
Consultation
Extensive consultation formed part of the development of these reforms. My Department consulted with Services Australia, the Department of the Prime Minister and Cabinet, the Department of Treasury and the Department of Finance. Views and evidence from stakeholders, including the Australian Medical Association, the Insurance Council of Australia, other peak bodies and medical indemnity insurers were considered as part of the policy development process. My Department will continue to work collaboratively with other Government Departments and other affected stakeholders on the specific content of the legislative instruments.

Committee comment

2.136 The committee thanks the minister for this response. The committee notes the minister's advice that the proposed provisions are consistent with provisions across the indemnity schemes where the Commonwealth is making payments to compensate administrative costs incurred by medical indemnity insurers. The committee further notes the minister's advice that the modification power is only in relation to a particular subject matter, that is, certain liabilities associated with costs that have been paid by the Commonwealth for the benefit of the Commonwealth.

2.137 While the committee notes this advice, the committee reiterates that it has significant scrutiny concerns regarding provisions enabling delegated legislation to modify the operation of primary legislation, noting these clauses are akin to Henry VIII clauses (which authorise delegated legislation to make substantive amendments to primary legislation). From a scrutiny perspective, the committee is concerned that these clauses impact parliamentary oversight and may subvert the appropriate division of powers between Parliament and the executive.

2.138 The committee draws its scrutiny concerns to the attention of senators and leaves to the Senate as a whole the appropriateness of allowing regulations to modify and exempt matters from the primary legislation.

2.139 The committee also draws this matter to the attention of the Senate Standing Committee on Regulations and Ordinances for information.

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[41] Schedule 3, item 15, proposed section 76A; item 26, proposed section 87A. The committee draws senators’ attention to these provisions pursuant to Senate Standing Orders 24(1)(a)(ii) and (iii).

[42] Senate Scrutiny of Bills Committee, Scrutiny Digest 7 of 2019, pp. 33-35.

[43] The minister responded to the committee's comments in a letter dated 1 November 2019. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 8 of 2019 available at: www.aph.gov.au/senate_scrutiny_digest

[44] Schedule 3, item 18, proposed subsections 77(2A) and (2B); item 29, proposed subsections 88(2A) and (2B). The committee draws senators’ attention to these provisions pursuant to Senate Standing Order 24(1)(a)(i).

[45] Senate Scrutiny of Bills Committee, Scrutiny Digest 7 of 2019, pp. 35-36.

[46] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 51.

[47] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 52.

[48] Schedule 6, item 3, proposed paragraphs 34ZZG(2)(b) and 34ZZZD(2)(b); proposed subsections 34ZZZF(1) and (2). The committee draws senators’ attention to these provisions pursuant to Senate Standing Order 24(1)(a)(i).

[49] Senate Scrutiny of Bills Committee, Scrutiny Digest 7 of 2019, p. 37.