Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Hansard source

in reply—This Health Insurance Amendment (Compliance) Bill 2009 amends the Health Insurance Act 1973 to give effect to the increased Medicare compliance audit initiative which was announced in the 2008-09 budget. This is a very important bill, as the member for Shortland said. It is a very sensible bill.

Expenditure on the Medicare scheme is substantial, totalling over $14 billion in 2008-09. This expenditure has increased by more than $1 billion per annum in each of the last two years. Medicare Australia does conduct a compliance audit on Medicare services to ensure that taxpayers’ funds are spent appropriately. A compliance audit is an administrative check to confirm that all elements of a service, which are outlined in the Medicare Benefits Schedule, were performed. A compliance audit does not review matters relating to the clinical relevance of services. These are and will continue to be managed through the Professional Services Review.

The government recognises that compliance audits can be inconvenient to medical practitioners and may cause some additional workload for a short period of time. However, there is simply no other way to cost-effectively manage the risks associated with large expenditure while still maintaining accessible, affordable services through Medicare. At present, Medicare Australia cannot require the production of documents during an audit. As a result, around 20 per cent of practitioners either do not respond or refuse to cooperate with a request for documents during a compliance audit.

I note that the member for Warringah, representing the shadow minister for human services, said that therefore the conclusion is that the government think that the majority of those 20 per cent are doing something wrong. That is not necessarily the case. What we do think, though, is that it is incumbent on the government to ensure that taxpayers’ funds are being spent appropriately. It is not acceptable to have 20 per cent of respondents refusing to agree. That would be the case in this program and it would be the case in any other government program whether it be welfare based or expenditure based—whatever it is. Twenty per cent of people simply refusing to comply with an audit is far too high a figure, and the government must act to boost its powers. That is not a reflection on doctors. It is not a reflection even on those 20 per cent of doctors refusing to comply. But it is a sign of prudent fiscal management and responsible budgeting to say that we should ensure that all money is being spent appropriately.

This bill was considered at the government’s instigation by the Senate Community Affairs Legislation Committee, which concluded that it represented a good balance between the overlapping interests of maintaining patient privacy and ensuring that public funds are spent appropriately. The committee recommended the development of regulations to ensure that clinical records are only accessed where necessary during an audit. We accepted this recommendation, but we consider this is more appropriately addressed in the primary legislation, which it is, before the House. For this reason the bill provides for extensive involvement by medical practitioners employed by Medicare Australia in the compliance audit process.

This bill will enable the Chief Executive Officer of Medicare Australia to give a notice requiring the production of documents to a practitioner or another person who has custody, control or possession of the documents, to substantiate a Medicare benefit paid in respect of the service. However, before the notice to produce documents can be issued, the CEO must have reasonable concern about the Medicare benefit paid in respect of the service, take advice from a medical practitioner employed by Medicare Australia on potential sensitivities associated with the kinds of documents a practitioner may need to provide to substantiate the service and give the person a reasonable opportunity to voluntarily respond to an audit request. That is very important.

Again, the member for Warringah asked: why wouldn’t the CEO just send a representative to talk to the medical practitioner involved before issuing a notice? The fact of the matter is that that does and will continue to occur, but the CEO does need an increase in powers to deal with a situation where the medical practitioner involved simply refuses to cooperate, refuses to discuss the matter or in any way substantiate the claim that is being made. Now, importantly, it will be up to the person who receives the notice to decide what documents they have available to substantiate the service.

The notice to produce documents must include a statement that documents containing clinical details do not have to be produced unless these are necessary to substantiate the service. If a practitioner decides that documents containing clinical details must be provided then the bill allows practitioners to supply those documents to a medical practitioner employed by Medicare Australia rather than an administrative officer. This means that the practitioner who provided a service decides what documents to provide to Medicare Australia and who will receive those documents. Medicare Australia is working with stakeholders, including the Australian Medical Association, to develop guidelines on the kinds of documents that will substantiate particular services or groups of services. These guidelines will be publicly available and will emphasise that clinical information is not to be provided unless it is absolutely necessary to substantiate the service. The provisions in this bill do not commence until 1 January 2010, in order to allow for the development and publication of these guidelines.

The bill provides for an important protection for practitioners. Documents which are provided to Medicare Australia in response to a notice cannot be used against the practitioner in any other proceedings except for those relating to false or misleading statements under the Health Insurance Act. This means that Medicare Australia cannot use any information obtained as a result of the notice to produce documents as the basis for a referral to the Professional Services Review. The bill provides for practitioners to be notified of the outcome of the audit. In addition, if a practitioner is found to owe a debt to the Commonwealth, the CEO must give them 28 days in which to seek an internal review before a debt notice can be issued.

At present, if the Medicare amount paid is not substantiated, the practitioner is required to repay the money, and this will continue to occur. However, this bill provides that a practitioner who cannot substantiate the Medicare amount paid may also be liable to a financial penalty. This financial penalty is intended to encourage practitioners to itemise Medicare services correctly. A base penalty amount of 20 per cent will be applied to debts in excess of $2,500. Medicare Australia’s data indicates that this is the point at which mistaken claims may become routine or reflective of poor administrational decision making. In 2008-09, only 22 per cent of practitioners who were found to have made incorrect claims were asked to pay more than $2,500. The $2,500 threshold may be increased by regulations. This allows the threshold to be adjusted to ensure that practitioners are not disadvantaged by increases in the value of the Medicare benefit paid in respect of services. This bill allows the base penalty amount to be reduced or increased according to individual circumstances described in the legislation. This is intended to encourage self-disclosure and promote voluntary compliance. This bill is not retrospective and will apply only to Medicare services provided after the commencement of the legislation on 1 January 2010.

This is, as I said, a very important bill. It is a bill which the government has paid a great deal of attention to. It is a bill in which we have listened to concerns about privacy, and I believe we have got the balance right. I have had a number of meetings with the President of the Australian Medical Association, Dr Andrew Pesce, about this bill, and I have taken the AMA’s views on board where I have felt it prudent and appropriate to do so. The shadow minister indicated, I believe, support in the House but reserved the opposition’s position and indicated that they will be moving amendments in the other place. I will look at those amendments carefully. If they are sensible and practical then we will take them on board, but we will be looking for the opposition’s support for this very important bill, which protects taxpayers’ money and ensures the integrity of the Medicare system.

The government cannot stand before the Australian people at the moment and say, ‘We believe everything is being done that can be done to ensure that your taxpayers’ dollars are spent appropriately when it comes to Medicare.’ This bill will make a very substantial improvement to the integrity and accountability of our expenditure of taxpayers’ money on Medicare services. It is appropriately and carefully balanced and targeted, and I commend it to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.

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