Tony Abbott (Warringah, Liberal Party, Shadow Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Link to this | Hansard source

I do not propose to detain the Committee long on the Health Insurance Amendment (Compliance) Bill 2009, but I do wish to make a few observations about the approach that the opposition intends to take to it. I begin by reaffirming that the opposition strongly supports Medicare. Indeed, it used to be said under the former government that it was the best friend that Medicare had ever had. Many members of the current government were probably sick of hearing that statement, but I think that the former government did by its actions abundantly justify that statement. Obviously, if Medicare is to work—if it is to function effectively—there have to be meaningful mechanisms to tackle fraud and overservicing.

At the moment, the Chief Executive Officer of Medicare can request information from doctors who are reasonably suspected of engaging in inappropriate or improper practices. The CEO of Medicare reports that some 20 per cent of doctors who are asked to provide access to patients’ medical records refuse to do so. The government believes that of that 20 per cent many are quite possibly engaged in improper or inappropriate practices. I would suggest to the Main Committee that it could equally be that they simply do not believe that it is ethically proper of them to provide their patients’ medical records to a third party, even a third party as eminent as the CEO of Medicare.

This legislation seeks to give the CEO of Medicare the power to require the production of patients’ medical records rather than just request them. I should point out that this strikes me and the opposition as a rather heavy-handed solution to a problem that may be more apparent than real. For instance, every year some $4.5 million is recovered from doctors in Medicare payments which turn out to have been inappropriately claimed. That suggests, firstly, that there are mechanisms in place to recover moneys from doctors who have inappropriately claimed and, secondly, that it is not such a shocking problem given that $4.5 million, while a lot of money in itself, is a minuscule percentage of the $14 billion or thereabouts that Medicare disburses every year.

Five convictions on average are secured every year against doctors for improperly claiming Medicare benefits. Obviously, five is five too many but when we remember that there are some 55,000 doctors registered to claim Medicare benefits, the fact that in any one year five do so improperly suggests that the vast majority of doctors are working entirely appropriately under the system. I would be very disappointed to think that this government was engaging in doctor bashing. The last thing that we should do if we want our health care system, and in particular Medicare, to function well is to assume that all doctors are cheats. Medicare only works because of the goodwill and integrity of the medical profession. I believe it is important for the government and the parliament to work with the profession rather than against it in matters such as this.

I wonder whether it would not be more appropriate and ultimately more productive, when the CEO of Medicare believes that there may be some grounds for suspecting that benefits have been claimed improperly or inappropriately, if rather than issuing a notice requiring a doctor to produce medical records the CEO instead sent a Medicare official to the doctor’s practice to be there with the doctor on site to inspect the relevant records. This, I think, would be a simpler and more collegial way of ascertaining the true facts of the situation and in the long run more likely to get to the truth of the matter than the issuing of notices to produce records.

If it really does seem to the CEO of Medicare that something improper has taken place, there are already mechanisms for securing access to patients’ records, mechanisms which have been in place for many years and which are well regarded in terms of the privacy provisions surrounding them. There is the possibility of a professional services review or, if that is regarded as insufficient, the possibility of bringing action in court against the doctor concerned. At least on the face of it, this legislation strikes me as going too far and as giving a power to the CEO of Medicare the necessity for which is far from clear. Without wishing further to detain the Main Committee and without wishing to move amendments at this stage of the bill, I foreshadow that the opposition is looking at some amendments which we will consider in another place.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Health Insurance Amendment (Compliance) Bill 2009. I am not really clear whether the opposition will support this legislation or whether it will oppose it in the House. I note that the shadow minister talked of some amendments to be moved in another place, but I am still not sure whether or not that means that the opposition is seeking to oppose this legislation. This bill will enable Medicare to give a notice requiring the production of documents to a practitioner or another person who has control of documents to substitute an amount of Medicare benefit paid in respect of professional services. This initiative aims to protect the integrity of Medicare and to enhance Medicare Australia through an audit process and sees the government deliver on its commitment of responsible economic management. The 2008-09 budget measures also included an increase in the number of audits conducted under the compliance program.

This legislation ensures that Medicare remains viable. Expenditure on Medicare has now increased to $14 billion per year, and it has more than doubled over the last 10 years. It is in that light that the government has introduced this legislation. It establishes a compliance measure to be undertaken by Medicare Australia administrative staff to maintain the integrity of Medicare. It is a vital part of the government’s overall economic management and a vital part of the government’s strategy to ensure that Medicare remains viable into the future.

Medicare is an institution that protects all Australians. The shadow minister indicated that, when he was the minister for health, his government was the best friend that Medicare ever had. I would strongly argue against that proposition put by the shadow minister. It was under his reign as minister that bulk-billing plummeted. It was under his reign as minister that many problems developed within Medicare. It was only because of Labor constantly keeping him on his toes that Medicare actually survived the Howard years. So it is with great pleasure that I am able to stand up in this place and support the bill we have before us.

I note very strongly that most medical practitioners do the right thing and charge appropriately. Other medical practitioners may make mistakes. I think that most errors that occur would just be an oversight, and this legislation takes into account those kinds of problems. The Senate Community Affairs Legislation Committee inquiry into compliance audits on Medicare benefits recommended:

… as part of the Medicare compliance audit process specific measures are detailed in the regulations to ensure that patient clinical records are only required to be accessed where necessary.

The government has taken into account what this legislation’s purpose is and listened to what the Senate Community Affairs Legislation Committee put forward.

The government has also consulted widely, and that is a really important point for me to make at this point in my contribution to this debate. We have also consulted very widely with all sectors of the community that are involved in this. Key stakeholders have all been consulted, and they were given the opportunity in 2008 and in the first half of this year to comment. This included the AMA, as it did the Senate committee. As I have already stated, the Senate committee’s recommendations have been considered and are reflected in the legislation that we are debating here in the chamber today.

I should walk through a few aspects of this legislation. In doing so I should mention that the government decided that it was very much appropriate to address the issues covered by this legislation in primary legislation rather than regulation. Therefore, the bill was amended to include significant involvement by medical advisers in the compliance audit process. A ‘medical adviser’, for the record, is a medical practitioner employed by Medicare Australia. That is of vital importance, because the audit is not an audit of clinical process, clinical decisions or clinical practice but rather an administrative audit. The documents that will be required to be produced by a medical practitioner will not in any way impinge on patient privacy or in any way look at patient decisions in relation to patient care and appropriate medical decisions. If it is found that there has been some breach, there are a number of conditions that need to be satisfied before the CEO can act: firstly, the CEO must have reasonable concern that Medicare benefits paid in respect of a service may exceed the amount that has been paid; secondly, the CEO must take advice from a medical adviser before a notice can be issued; and, thirdly, the CEO must give a person a reasonable opportunity to voluntarily respond to the audit request prior to formal notice.

It is important to note that this legislation was needed because currently 20 per cent of medical practitioners do not comply voluntarily with the audit and it was felt by the government that this needed to be right across the board to ensure the integrity, ongoing success and viability of Medicare. Medicare Australia will continue to work with all the stakeholders, will continue to see that it involves everybody and will continue to consult. That is something that is very different from the previous government. It is something that is very different to what happened when the previous minister for health, in the Howard government—the member for Warringah, who just spoke—held the portfolio and had an opportunity to have an impact in these areas. The bill also looks at the penalty rate. Where a person voluntarily admits they have made a mistake there will be a 100 per cent reduction in the penalty. Where it has been paid, there will be a 50 per cent reduction. Before the completion of the audit, there will be a 25 per cent reduction. But if a person does not respond to the audit then they will have a 25 per cent increase.

Overall, this is a very fair piece of legislation. It is legislation that has been designed to ensure the ongoing viability of Medicare, and it is very reasonable that both sides of this House support it. It did worry me that, when the shadow minister spoke a few moments ago, he indicated that he may not support this legislation. I was hoping that he would clarify that fact for me. I will be very disappointed if the shadow minister does not get behind this very sensible piece of legislation, which is designed to ensure the long-term viability of Medicare.

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