Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Hansard source

I rise today to speak on the Health Insurance Amendment (Compliance) Bill 2010 which, for a variety of reasons, has been subject to much debate in the previous parliament. The bill implements the increased Medicare compliance audits measure from the 2008-09 budget. This measure proposed to increase Medicare compliance audits from 500 to 2,500 per year and increase powers to secure documents from doctors to substantiate Medicare claims.

The Department of Health and Ageing has highlighted the considerable growth of the MBS over recent times. From 2004-05 to 2008-09 the number of MBS items grew by 23 per cent, the number of providers grew by 15 per cent, MBS transactions grew by 17 per cent and there was a 43 per cent increase in the value of MBS claims. With $15 billion of taxpayers’ money spent on Medicare each year and clearly growing rapidly, it is appropriate that there are robust mechanisms to investigate and discourage incorrect or false claims. Separate to investigating clinical issues, as is the case with the Professional Services Review, the compliance process focuses on inappropriate billing and claiming.

The government claims that 20 per cent of practitioners do not respond in relation to compliance audits or refuse to cooperate with requests to substantiate benefits paid. And they further argue that Medicare does not currently have the power to make medical and health practitioners comply with requests. Based on this information, there is a case to make legislative changes. However, the documents required to substantiate claims may contain patient clinical information, which is why we rightly need to approach this matter with caution.

The bill was first released as an exposure draft in April 2009 and referred to the Senate Community Affairs Committee for inquiry. The exposure draft generated a strong response. The main concerns were with respect to third parties viewing patient clinical information and the impact this may have on the practitioner-patient relationship. The majority report also raised questions about Medicare staff qualifications and capacity to interpret and make judgments regarding clinical records.

An important point, made in evidence to the committee, is that the MBS is indeed complex and a significant proportion of incorrect claims appear not to be deliberate. There are large demands on health practitioners and their offices and there will inevitably be some administrative errors from time to time. It is important, though, to stress in this debate that incorrect claims are not necessarily the result of fraudulent activity.

There is a continuing role for government to simplify the MBS and to provide sufficient education and guidance regarding its interpretation. These common-sense measures do improve compliance, without patient privacy issues resulting from using patient records as part of an audit process.

In balancing the needs of patient privacy and the proper use of taxpayers’ funds, the coalition proposed a number of amendments to enhance safeguards in this legislation. The government has largely included these amendments in the bill presented to this parliament. As a result of the coalition’s amendments, Medicare must consult with relevant professional bodies about the types of documents that contain information relevant to ascertaining whether payments should indeed have been made; requests for information and documents must now be made in writing; notice must include the reason for the CEO’s concern about the payment and must explain the factual issue that the person is required to substantiate; notice to produce documents will not include requests for information about whether a particular service was clinically relevant; and a person may provide Medicare with additional information to substantiate an amount.

Other amendments to this bill were approved by the Senate at the time but rejected by the Minister for Health and Ageing. These amendments to the Health Insurance Act would have allowed the parliament to disallow items on the General Medical Services Table and for the previous items and associated rebates to be revived. The amendments were instigated by the minister’s arbitrary halving of rebates for cataract surgery.

Unfortunately, at the time, and as is so often the case, the minister refused to negotiate with the patient and doctor groups or allow for greater parliamentary scrutiny of changes to the General Medical Services Table and blocked the amendments in this chamber.

The minister’s refusal to support the Senate’s amendments prevented the original bill passing the previous parliament. Eventually the minister was forced into a backflip, was forced to negotiate with patient groups and ultimately doctors and arrived at a compromise position. This of course should have been the process from the outset, but instead many patients were left substantially out of pocket because of the minister’s unreasonable delay to negotiations.

The legislation before us provides that the Medicare CEO must have a reasonable concern that a benefit paid for a service exceeds the amount that should have been paid. It is important to note that Medicare cannot conduct random compliance audits. The audits are only to ascertain that a service claimed was actually undertaken and under section 129AAD, subsection (9), clinical relevance of the service can not be taken into account.

The CEO must also take advice from a medical practitioner employed by Medicare on what types of documents may be requested for the purposes of this bill. Section 129AAD, subsection (6), stipulates that any documents that contain clinical information do not have to be produced to anyone other than an employee of Medicare Australia who is a medical practitioner.

Under this legislation Medicare can only compel the production of relevant documents if the person has been given a reasonable opportunity to respond to a written request to produce relevant documents. The bill does not stipulate a record-keeping requirement. However, under section 129 AAD, the notice to produce documents must specify details of each professional service for which documentary evidence is required; the reasons for the concern that an amount paid may exceed the amount that should have been paid; the information relevant to ascertaining whether amounts paid should have been paid; how the document, extract or copy is to be produced; and, finally, the period within which and place at which the document, extract or copy is to be produced.

It is appropriate that there is clarity for health professionals as to what needs to be provided and the reasons for it. The explanatory memorandum does specify that Medicare is working with the AMA and other stakeholders to develop guidelines about the types of information that may be required to substantiate claims. It is stated that the guidelines will emphasise that patient records and clinical information should only be provided where absolutely necessary. The coalition does emphasise the importance of this point and the need to carefully monitor and scrutinise the use of clinical information once this measure is implemented. The confidentiality of the doctor-patient relationship should remain paramount.

Another change this bill makes is to introduce penalties for debts that exceed $2,500. This threshold is justified in the explanatory memorandum on the basis that it reflects the point at which mistaken claims may become routine, reflective of poor administration or decision making. Section 129AEA, subsection (1)(d), does allow for a higher threshold to be specified by regulation. As Medicare rebates grow, it is important that the threshold is reviewed so that it does, as accurately as possible, reflect a point where incorrect claims are more than incidental or the result of isolated administrative mistakes. The penalty is to be 20 per cent of the debt.

The financial penalties in this bill are intended to encourage early and voluntary identification and repayment of incorrect claims. Where a person voluntarily contacts Medicare to inform that an incorrect payment or claim has been made, the penalty is reduced in full. If the person voluntarily informs Medicare after being contacted, but before notice is given to produce documents, the penalty is reduced by 50 per cent. Finally, if the person voluntarily informs Medicare after notice is given, but before the end of the period specified in the notice, the base penalty is reduced by 25 per cent.

In addition, to improve compliance and reduce recidivism, there are circumstances where the base penalty can be increased. If a practitioner does not respond to a notice, the full amount of the services identified becomes repayable and the penalty is increased by 25 per cent. Similarly, if a practitioner has been unable to substantiate an amount paid for other services in the previous 24 months and the total amount repaid exceeded $30,000, the penalty for the current amount is increased by 50 per cent.

Whilst the government may be focused on the compliance of health practitioners, when it comes to Medicare claims they are, as we now know, less forthcoming with transparency in their own actions and proposals. In fact, the government has directly undermined not only medical practitioners in relation to Medicare but also the fundamental principles on which Medicare has been built. Under the government’s first version of health reform last year, GP surgeries would have lost $58 million in Medicare practice incentive payments for after-hours patient care. The then President of the Royal Australian College of General Practitioners, Dr Chris Mitchell, was reported as saying on 15 July 2010 that the removal of Medicare incentive payment will have ‘enormous implications for the role of the GP’ and ‘has the potential to have an impact on the viability of general practice to deliver the services outside normal opening hours’. In fact, Dr Mitchell went further and said it would:

… jeopardise the availability of after-hours services in some areas and potentially increase the burden on ambulance callouts and emergency department presentations.

Furthermore, at a press conference on 22 February 2011, the Prime Minister stated that Medicare Locals will be ‘fund-holding organisations’. The government has refused at every turn to specify the services for which Medicare Locals will have fund-holding responsibility. This is a significant departure from the existing model of fee-for-service and, indeed, patient choice and creates enormous uncertainty for doctors and patients.

The Prime Minister also implied that Medicare Locals will provide coordinated care and address the issue of patients having to provide records to different health professionals. It is unclear from this comment whether Medicare Locals will have access to patient records, have copies of patient records or be able to compel doctors to provide patient records. Given that the so-called legal entities will be staffed by teams of bureaucrats, it does again give rise to concerns about the use of clinical information without consent by people other than medical practitioners.

The intent of this bill is to ensure that taxpayers’ funds are used appropriately. This is from a minister that allocated $29½ million to advertising a health reform proposal that was never delivered. This is from a minister that has spent hundreds of millions of dollars on so-called superclinics that are still not operational and in many cases will erode the viability of existing services. This is from a government that has wasted billions of dollars on putting pink batts into people’s rooves and taking them out again. This is from a government that will spend over $20 billion in interest payments on its debt over the next four years alone. Incredibly, this government’s unprecedented waste and mismanagement make the $70.3 million saving from this measure look like a simple rounding error.

Whilst the government today is trying to apply scrutiny to doctors and those on the frontline, it has to be said that it is the Gillard government and Minister Roxon herself who are more deserving of intense scrutiny for their array of policy failures and unimaginable waste.

A number of amendments have been adopted addressing key concerns with the original version of this bill. The coalition does not oppose the bill before us today, but we will continue to scrutinise its implementation and the government’s actions in relation to Medicare which undermine patient privacy and choice and, as importantly, give rise to waste.

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