Anne McEwen (SA, Australian Labor Party) Share this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

Health Insurance Amendment (Compliance) Bill 2009

This bill will amend the Health Insurance Act 1973 to give effect to the Increased Medicare Compliance Audits initiative which was announced in the 2008 09 Budget.

Expenditure on the Medicare scheme was over $14 billion in 2008-09 and has grown by more than $1 billion per annum over the last two years. Compliance audits are conducted to ensure that taxpayers’ money is spent appropriately. At present, many practitioners voluntarily cooperate with Medicare Australia during a compliance audit. However, on average 20% of practitioners either do not respond to or refuse to cooperate with a request for documents. When this occurs Medicare Australia does not have the authority to require the production of relevant documents, and cannot confirm that the Medicare payment is correct. This legislation is intended to address that deficiency.

The Government has worked closely with stakeholders, including the Office of the Privacy Commissioner, the Australian Medical Association, key medical colleges and the Consumer’s Health Forum to balance the public interest in ensuring the integrity of public revenue expended on Medicare services with the privacy concerns.

Key stakeholders were consulted and given the opportunity to comment during 2008 and in the first half of 2009. This process included the release of an Exposure Draft and Privacy Impact Assessment, as well as referral of the Compliance Audits initiative to the Senate Community Affairs Legislation Committee.

The Report of the Senate Community Affairs Legislation Committee Inquiry into Medicare Compliance Audits recommended that Regulations to ensure that patient clinical records are only required to be accessed where necessary during a compliance audit should be developed. The Government has accepted the substance of the recommendation. However given the concerns expressed during the hearing it is more appropriate to address this in the primary legislation. Therefore the Bill will provide for significant involvement by medical practitioners employed by Medicare Australia in the compliance audit process.

In response to the stakeholder feedback and Senate Committee recommendations, the Government has amended the Bill to include significant involvement by medical practitioners employed by Medicare Australia in the compliance audit process. This will mean that Medicare Australia will have employees who are medical practitioners involved in every compliance audit.

This Bill will enable the Chief Executive Officer (CEO) 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 whether a Medicare benefit paid in respect of a service should have been paid. However before a notice to produce documents can be given to a person the CEO must fulfil several conditions:

• Firstly, the CEO must have a reasonable concern that the Medicare benefit paid in respect of a service may exceed the amount that should have been paid. This means that Medicare Australia cannot conduct random compliance audits. A reasonable concern may be related to a particular practitioner, a group of practitioners or a particular service or groups of services. For example, the use of a particular Medicare item may have grown so significantly or unexpectedly that the CEO can have a reasonable concern about the provision of any service associated with that item number. The CEO may also have a concern about a professional service if it has been provided by a person who is a particular type of practitioner and the CEO has a concern about that specific group of practitioners.

The compliance audits conducted by Medicare Australia under the provisions in this Bill will be limited to seeking to confirm whether a Medicare Benefit paid in respect of a service exceeded the amount that should have been paid.

This means that the audit will seek to establish that the elements of a particular service, which are outlined in the Medicare Benefits Schedule and are relevant to the accuracy of the payment, were performed. For example if a Medicare benefit is only payable for a service when a specific test is undertaken, Medicare Australia will ask the practitioner to produce documents that demonstrate that the test was performed.

Medicare Australia’s compliance audits will not review matters relating to clinical decision making, the clinical relevance of the service provided to the patient or professional conduct. This means that the elements of a service which are not factual, but rely on the clinical judgement of a practitioner will not be reviewed during a compliance audit. For example, one element which must be completed in order for a Medicare benefit to be paid for some Medicare services is the requirement for practitioners to undertake an exhaustive patient history. However the judgement about what constitutes an ‘exhaustive history’ is clinical rather than a matter of fact. Therefore this element of the service would not be in scope during a compliance audit.

• Secondly the CEO must 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.
• Thirdly the CEO must give the person a reasonable opportunity to voluntarily respond to an audit request. This means that practitioners who choose to voluntarily tell Medicare Australia that they have received a benefit that exceeds the amount they should have been paid, will still benefit from discounts on any financial penalty that may apply.

Only when these three conditions are met can the CEO serve a notice requiring a person to produce documents to substantiate a Medicare benefit paid in respect of a service.

The Bill does not introduce any record keeping requirements. 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. However the Bill includes a provision that a person does not have to produce documents containing clinical details to anyone who is not a medical practitioner employed by Medicare Australia. This means that practitioners can choose to supply documents containing clinical details to another medical practitioner employed by Medicare Australia rather than an administrative officer. As a result the practitioner who provided the Medicare service will decide whether documents containing clinical details need to be provided to Medicare Australia, and if so, who will receive those documents.

Medicare Australia is also working with relevant stakeholders, including the Australian Medical Association, to develop guidelines for practitioners setting out the kinds of information 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 protection for practitioners by providing that the documents and information about particular services provided in response to a notice cannot be used as the basis for a referral to Professional Services Review or for most criminal and civil proceedings. This means that information relating to identified services produced in response to a notice to produce documents will not be able to be used in any other proceedings, except for those relating to false and misleading statements under the Health Insurance Act 1973.

The Bill ensures that practitioners will be notified of the outcome of an audit in which they were involved. Where a practitioner is found to owe a debt to the Commonwealth, the Bill also introduces a requirement that they be given 28 days in which to seek internal review of the decision before a debt notice is issued.

At present, where the amount paid in respect of the service cannot be substantiated, the practitioner is required to repay the amount. This will continue to occur. In addition, this Bill provides that a practitioner who cannot substantiate the amount paid in respect of a service may also be liable for a financial administrative penalty. The financial penalty is intended to encourage practitioners to itemise Medicare services correctly.

A base penalty amount of 20% will be applied to debts in excess of $2,500 or a higher amount if specified in regulations. An analysis of Medicare Australia data indicates that this threshold reflects the point at which mistaken claims may become routine, or reflective of poor administration or decision making. In 2008-09, only 22% of practitioners who were found to have made incorrect claims were asked to make repayments of more than $2,500.

The $2,500 threshold amount may be increased by regulations. This provides for future adjustments of the threshold to ensure that practitioners are not disadvantaged by incremental increases in the value of the Medicare benefit amount paid in respect of services.

The Bill allows the base penalty amount of 20% to be reduced or increased according to individual circumstances described in the legislation. This encourages self-disclosure and promotes voluntary compliance whilst discouraging recidivism. If a practitioner:

• tells Medicare Australia that an incorrect amount has been paid in respect of the service prior to being contacted by the CEO, there is a 100% reduction in the penalty;
• tells Medicare Australia that an incorrect amount has been paid in respect of the service before a notice to produce documents is issued, the penalty is reduced by 50%;
• tells Medicare Australia that an incorrect amount has been paid in respect of the service after a notice to produce documents has been issued but before completion of the audit, the penalty is reduced by 25%;
• does not respond to a notice to produce documents, the full amount of the services identified in the notice become repayable and the penalty is increased by 25%;
• has been unable to substantiate an amount paid in respect of other services in the previous 24 months and the total they repaid was more than $30,000, the penalty in respect of the current amount which is being recovered is increased by 50%.

The Bill is not retrospective and will only apply to Medicare services provided after the commencement of the legislation on 1 January 2010.

This Bill forms part of the Government’s commitment to responsible economic management.

Tax Laws Amendment (2009 Measures No. 2) Bill 2009

This Bill amends various taxation laws to implement a range of improvements to Australia’s tax laws.

Schedule 1 ensures there are no inappropriate tax consequences arising from payments made under the financial claims scheme, which this Parliament enacted in October last year. Under that scheme, APRA can make payments to account holders in failed financial institutions and to claimants under general insurance policies with failed insurance companies. The specific amendments cover capital gains tax, farm management deposits, retirement savings accounts, first home saver accounts and various withholding and reporting obligations.

Schedule 2 increases access to the small business CGT concessions for taxpayers owning passively held CGT assets.

These amendments will extend access to the small business CGT concessions to circumstances that are not currently eligible. Owners of passively held assets will now be able to qualify for the concessions under the small business entity test, which was introduced in 2007 to simplify eligibility requirements for the small business concessions.

This means that a taxpayer that owns a CGT asset used in a business by an affiliate or entity connected with the taxpayer, and partners owning certain CGT assets used in the partnership business, will have access to the small business CGT concessions via the small business entity test from the 2007 08 income year.

The Schedule also makes a number of minor amendments to refine and clarify aspects of the existing small business CGT concessions provisions so that they operate flexibly and as intended.

Schedule 3 provides a general exemption from CGT for capital gains or capital losses arising from a right or entitlement to a tax offset, deduction or similar benefit. A highly technical interpretation of the income tax law may result in a capital gain or capital loss arising to taxpayers who have a right to receive an urban water tax offset on the satisfaction of the right. This amendment will put beyond doubt that a capital gain or capital loss would not arise for taxpayers in such circumstances, or in other circumstances where taxpayers have a right or entitlement to a tax offset, deduction or other taxation benefit.

Schedule 4 provides refundable tax offsets for eligible projects under the Government’s $1 billion National Urban Water and Desalination Plan. Under the Plan, eligible projects may receive assistance at a rate of 10 per cent of eligible capital costs, up to a maximum of $100 million per project.

This Schedule implements the refundable tax offset component of the Plan and delivers on the Government’s election commitment.

Schedule 5 amends the list of deductible gift recipients, known as DGRs, in the Income Tax Assessment Act 1997. Subject to conditions, taxpayers can claim income tax deductions for gifts to organisations with DGR status. DGR status will assist the listed organisations to attract public support for their activities. This Schedule adds four new organisations to the Act:

• Australasian College of Emergency Medicine
• ACT Region Crime Stoppers Limited
• The Grattan Institute, and
• Parliament of the World’s Religions Melbourne 2009 Limited.

This Schedule also extends the time limit on the DGR status of three further organisations:

• Bunbury Diocese Cathedral Rebuilding Fund
• St George’s Cathedral Restoration Fund, and
• Yachad Accelerated Learning Project

Schedule 6 amends the A New Tax System (Australian Business Number) Act 1999, or ABN Act, to allow the Registrar of the Australian Business Register to act as the Multi-agency Registration Authority to enable representatives of businesses to be identified for the purpose of communicating electronically with multiple government agencies on behalf of businesses. This is a part of the Government’s Standard Business Reporting program. There are also a number of other amendments to the ABN Act that improve the integrity and efficiency of the Australian Business Register and help position the Registrar to take on the role of the Multi-agency Registration Authority.

Schedule 7 amends the Fuel Tax Act 2006 and related provisions elsewhere in the tax law, to remove the provision that businesses must be a member of the Greenhouse Challenge Plus program to claim more than $3 million of fuel tax credits in a financial year. This amendment to the Fuel Tax Act will have effect from 1 July 2009.

The Greenhouse Challenge Plus program will cease after 30 June 2009. The Greenhouse Challenge Plus program provision in the Fuel Tax Act was originally included so that large fuel users would monitor and take measures to reduce their carbon emissions. This outcome will be better achieved through the Government’s Carbon Pollution Reduction Scheme.

Without this amendment, businesses would be unable to claim fuel tax credits in excess of $3 million in a financial year after 30 June 2009. This would be inconsistent with the policy intent of the fuel tax credit system.

Finally, Schedule 8 provides an exemption from tax for the Clean up and Restoration Grants paid to small businesses and primary producers affected by the Victorian bushfires. This measure recognises the extraordinary hardship suffered by small businesses and primary producers in affected areas, and provides certainty for recipients in terms of tax treatment at a time when they should not need to worry about tax matters.

Full details of the measures in this Bill are contained in the explanatory memorandum.

Income Tax (TFN Withholding Tax (ESS)) Bill 2009

This bill imposes tax on certain amounts relating to employee share schemes, and for related purposes.

Full details of this Bill are contained in the explanatory memorandum already presented.

Debate (on motion by Senator McEwen) adjourned.

Ordered that the Health Insurance Amendment (Compliance) Bill 2009 be listed on the Notice Paper as a separate order of the day.