Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

It is quite intriguing to be debating this bill, the Health Insurance Amendment (Compliance) Bill 2010, in this non-controversial slot, because it has had a very difficult birth in this parliament. This is, in fact, a 2008-09 budget measure which has been before us on a number of occasions before. In fact, I have dealt with it in the previous parliament myself. The reason I am speaking to this particular bill today on behalf of the coalition is in representation of Senator Fierravanti-Wells, who is absent from the Senate this week.

This Health Insurance Amendment (Compliance) Bill, of course, has been subject to much debate for a variety of reasons in the previous parliament. The bill seeks to implement the increased Medicare compliance audits 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. As the Department of Health and Ageing has highlighted, there has been considerable growth of the MBS over recent times. From 2004-05 to 2008-09, the number of MBS items has grown by 23 per cent, the number of providers has grown by 15 per cent, MBS transactions have grown by 17 per cent and there was a 43 per cent increase in the value of MBS claims. With $15 billion worth of taxpayers’ money spent on Medicare each year—clearly growing rapidly—it is, of course, appropriate that there are robust mechanisms in place 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 is, of course, focused on inappropriate billing and claiming. The government has claimed that 20 per cent of practitioners do not respond in relation to compliance audits or refuse to cooperate with requests to substantiate benefits paid. They further argue that Medicare does not currently have the power to make medical and health practitioners comply with such requests. Based on this information, we agree that there is a case to make legislative changes. However, the documents required to substantiate claims may, of course, contain patient clinical information, which is why we rightly need to approach this matter with some caution.

This bill was first released as an exposure draft back in April 2009 and referred to the Senate Community Affairs Committee for inquiry. The exposure draft generated a very 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 complex and a significant proportion of incorrect claims appear not to be deliberate. When things are complex and burdensome, these things can sometimes happen inadvertently. 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 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 provide sufficient education and guidance regarding its interpretation.

These are common-sense measures to improve compliance without the patient privacy issues resulting from using patient records as part of an audit process. In balancing the needs of patient privacy and proper use of taxpayers’ funds, the coalition proposed a number of amendments to enhance safeguards in this legislation, which the government has now largely included in amendments to the bill which is now being presented to this parliament.

As a result of the amendments proposed by the coalition, Medicare must consult with relevant professional bodies about the types of documents that contain information relevant to ascertain whether payments should have been made. Requests for information and documents must now be made in writing. Notice must include the reason for the CO’s concern about the payment and explain the actual issue that the person is required to substantiate. Notice to produce documents will not include requests for information but whether the particular service was clinically relevant. A person may provide Medicare with additional information to substantiate an amount claimed.

There were other amendments to this bill approved by the Senate at the time but rejected by the minister. This is where I came in. I see the Deputy Clerk is smiling; he would well remember his invaluable assistance in helping me draft some of these amendments at the time. These proposed amendments to the Health Insurance Act were intended to allow the parliament to disallow items on the general medical services table and for the previous items and associated rebates to be revised. The amendments were instigated by the minister’s arbitrary halving of rebates for cataract surgery. Unfortunately at the time—as is often the case with this government and, in particular, Minister Roxon—the minister refused to consult and negotiate with doctor and patient groups or allow for greater parliamentary scrutiny of the drastic cuts she was seeking to impose on cataract rebates through the general medical services table. The government blocked amendments that we put forward in that context in both the Senate and the House of Representatives.

Just to make the point in relation to this particular issue, this remains an unresolved policy issue for this parliament. The current circumstance is that this government, or any other government, can cut government rebates through the Medicare Benefits Schedule irrespective of whether or not those cuts have the support of the parliament. In relation to the cuts at the time of rebates for cataract surgery, it was obvious that the government’s proposed cuts did not have the support of the Senate. In fact, the Senate will pass a motion to disallow the particular cuts that the government was trying to get through the parliament. The circumstance is that the Senate is not in a position to disallow cuts to Medicare rebates without actually having those Medicare rebates disappear from the MBS altogether, which is of course a highly unsatisfactory situation because in practice it means that the Senate cannot do anything about the Labor government’s attempts to cut rebates through the MBS without creating the uncertainty and the highly unsatisfactory circumstance where the MBS item numbers disappear from the MBS altogether.

It all sounds very technical, but this has actually got real impacts on real people, because the level of MBS rebate will determine how much patients across Australia will have to pay for particular medical services. The lower the rebate, if the fee remains the same or increases further, the larger the out-of-pocket expense. The larger the out-of-pocket expense the less likely that some people will be able to afford access to often very important healthcare services. Certainly the proposed cut of 50 per cent to the cataract surgery rebate to start off with from Nicola Roxon and the Labor government would have made it nigh impossible for thousands and thousands of mostly senior Australians to afford and access life-changing cataract surgery. Given the number of healthcare procedures that get rebated through the MBS, you can see in a flash what sort of impact this can have on patients across Australia, across a broad spectrum of healthcare services where there is a Medicare rebate which is invariably less than the fee that is being charged by the provider. To have a system in place at the moment where the government can cut those Medicare rebates irrespective of what the Senate or the House of Representatives think about that and not to give the Senate a proper opportunity to disallow any cuts made and to revise the previous rebate which was in place before the government sought to make that cut is a highly unsatisfactory circumstance and one which will have to be resolved at some point in the future. Certainly the coalition will continue to raise this issue moving forward.

The minister refused to support the Senate’s amendments to the original bill on the issue that I have just described, and that prevented the original bill from passing the previous parliament. As far as cataract surgery is concerned, eventually the minister was forced into a backdown. She was forced to negotiate with patient groups and doctors and arrived at a compromise position. The action of the coalition, with the support of the Greens, Senator Xenophon and Senator Fielding, forced the government to go back to the negotiating table to make sure that there was a more reasonable compromise. However, who knows what the circumstances might be in the future if the government tries to pull a similar stunt which would hurt patients across Australia?

The legislation before us provides that the Medicare CEO must have a reasonable concern that the benefit paid for service exceeds the amount that should have been paid. It is important to know that Medicare cannot randomly conduct compliance audits. The audits are only to ascertain that a service claimed was actually undertaken. Under section 129AAD(9), clinical relevance of the service cannot be taken into account. That is a matter that is appropriately a judgment for the relevant healthcare professional. 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(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 129AAD the notice to produce documents must specify the 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 the period within which, and the 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, or reflective of poor administration or decision making. Section 129AEA(1)(d) allows for a higher threshold to be specified by regulation. As Medicare rebates grow, it is important that the threshold is reviewed so that it reflects as accurately as possible the 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 them 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 become 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 exceeds $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 items, it is less forthcoming with transparency when it comes to its own actions and proposals. In fact, the government has directly undermined not only medical practitioners in relation to Medicare but the fundamental principles on which Medicare has been built. Under the government’s first version of health reform last year—or the process that was in place for the review of the review to find out the draft plan which would eventually be put to COAG—GP surgeries would have lost $58 million in Medicare practice incentive payments for after-hours patient care. The then president of the college of GPs, Chris Mitchell, was reported on 15 July 2010 as saying that removal of the 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 fragile availability of after-hours services in some areas and potentially increase the burden on ambulance call-outs and emergency department presentations’.

In her press conference on 22 February 2011, the Prime Minister stated that Medicare Locals will become fund-holding organisations. The government has refused 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 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-care 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 these 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 today is to ensure that taxpayers’ funds are used appropriately. This is from a minister who allocated $29.5 million to advertising health reform proposals that were never delivered. This is from a minister who has spent hundreds of millions of dollars on 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 putting pink batts into people’s roofs 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 savings from this measure look like a rounding error. Whilst the government today is trying to place scrutiny on doctors and those on the front line, it is the Gillard government and Minister Roxon 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 will 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 give rise to waste. The coalition will continue to pursue the unresolved policy issue, which I mentioned earlier in my speech, which effectively makes it impossible for the Senate to pass judgment on decisions by the government to cut patient rebates through the Medicare Benefits Schedule without creating the unsatisfactory consequence of removing those rebates altogether.

We ought to create a circumstance where the Senate has the capacity to disagree with the government’s proposed cuts to Medicare rebates and where any such disagreement, expressed through a successful disallowance motion, would revive the MBS rebates that were in place before that disallowance took effect. With those few words—I am quite surprised that this legislation eventually made it into the noncontroversial slot in this chamber—I confirm that the coalition will not be opposing this bill.