Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

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

Leave granted.

The speech read as follows—

The National Health Amendment (Pharmaceutical Benefits) Bill 2016 amends the National Health Act1953 to support the efficient operation of the Pharmaceutical Benefits Scheme (PBS).

The PBS has been providing affordable access to medicines for Australians for over sixty years and is rightly respected for the high quality, cost-effective services it delivers. In the past year, over 291 million PBS prescriptions have been dispensed through almost 5,900 PBS approved suppliers, including community pharmacies and hospitals, and over 10.8 billion dollars has been paid in tax-payer funded subsidies for those medicines.

For the PBS to maintain its ability to support an increasing number and range of services, it is essential that it embraces change and new technologies. The legislative changes being proposed today are part of a process of renewal for the rules and systems that underpin it.

This Bill proposes amendments which will support the PBS in three different ways. Specifically, the changes will improve efficiency across the entire Scheme by:

Use of computer programs for administrative actions and decision-making

The first of the amendments provides the opportunity for the PBS to take a major leap forward in its use of technology. The new provisions support the use of computers for fully automated processing of administrative decisions.

The functions that could be automated include any function for which the decision-making power is held by the Minister for Health, the Secretary of the Department of Health, or the Chief Executive Medicare.

The advantages of using automated processing to determine whether an incoming application, request, or claim meets certain criteria are many. Computer programs handle complex algorithms with ease, are available whenever required, are not subject to bias, and respond instantaneously.

Automated processing reduces errors, increases accountability and generates easily auditable transaction records. Users can be confident that decisions are uniform and fair.

Substitute decision for computer decisions

However, as a safeguard, the amendments also provide for the person who holds responsibility for a function, or their delegate, to make a decision personally or make a substitute decision to replace the computer decision, if required. This is important to ensure that if a computer program is not operating correctly or has taken an action that is different from the decision that would have been made by the responsible person, that action can be over-ruled and replaced without the need for formal review under administrative law.

Appeals for computer decisions and substitute decisions

An added protection is that where merits review by the Administrative Appeals Tribunal is currently available for a PBS decision, this will continue to apply regardless of whether the decision has been made by a computer or a person, or has been substituted by a person.

Use of computer decision-making

The first administrative functions to transition to computer decision-making are the assessment of payments to pharmacies for dispensing PBS medicines and the processing of requests from prescribers for approval to write certain prescriptions.

Online PBS claims processing

Since 2004, PBS Online has provided real-time connectivity between pharmacies and the Department of Human Services. This interaction allows patient entitlements, prescription details and special authorities to be validated, and the claim payment to be assessed, during the dispensing process.

Computerised decision-making will enable the claims computer system to match payment assessments against a pharmacy's certification of supply and take the administrative actions that would otherwise be taken by the Chief Executive Medicare.

Online PBS prescribing authorities and approvals

For prescribers, computerised decision-making will mean that requests to prescribe 'authority-required' PBS medicines will be able to be processed online via prescribing software.

At present, most prescribers contact the Department of Human Services by telephone or in writing for approval by a government officer.

When requesting authority prescriptions for their patients, prescribers are asked a number of questions by the Department of Human Services in order to confirm patient eligibility.

The questions are based on the restriction that has been recommended by PBAC and approved by the Minister as part of the listing of medicines on the PBS.

The questions can vary from checking appropriate age, sex and weight of the patient to more complex queries such as the result of the patient's last platelet count or whether the requested medication will be used in conjunction with another medication or as a monotherapy.

The telephone approval system has been an on-going concern for doctors for many years. It is one of the health processes most often nominated for red tape reduction.

In 2015-16, the Department of Human Services received 6.8 million requests for prescribing approvals by telephone and post.

Because the approval number must be included on the prescription, telephone requests are made during the patient consultation. The average time taken per call is 1 minute 27 seconds.

With the introduction of the Online PBS Authorities system, the majority of telephone requests will be able to go online. For requests not suitable for online processing, the prescriber will be able to speak to a person. For complex therapies, most requests will still need to be in writing, at least for the time being. As online capability expands, more complex requests will be handled online.

The development of online transactions for authority approvals has involved many contributors. These include medical software providers, medical and pharmacy organisations, the Pharmaceutical Benefits Advisory Committee and the Department of Human Services. I acknowledge their skill and hard work in delivering this project.

Supply of PBS medicines at alternative premises following a disaster

The second group of amendments in the Bill will reduce administrative requirements for PBS pharmacies following a disaster.

The current legislative provisions for supplying PBS medicines at other premises reflect that life does not always go to plan and that pharmacies, like any other business, can find themselves caught up in catastrophes and events beyond their control.

In the aftermath of a disaster, the ability for a pharmacy to resume operating without delay can be important, not only to the business, but to the recovery of the community and to individuals who may have lost possessions, including medicines.

Operation of pharmacy location rules

Since 1990, the ability for a pharmacist to obtain approval to supply PBS medicines has been subject to pharmacy location rules. Their purpose is to ensure that access to PBS medicines is available via a suitable geographic spread of PBS-approved pharmacies, including in rural and remote regions of Australia.

The operation of the location rules is being considered separately as part of the Review of Pharmacy Remuneration and Regulation led by Professor Stephen King. The changes in this Bill are not related to the Review.

The location rules also include limits on how frequently and how far a PBS pharmacy can move from its current site. This helps to keep pharmacies connected to their local areas and communities.

However, for exceptional events some flexibility is required. Refusing to allow a pharmacy to move to other premises could make an already difficult situation worse and would not be in the interests of the local community.

Current provisions for supply at other premises

Under the current legislation, a PBS-approved pharmacist can supply PBS medicines from other premises prior to obtaining PBS approval. Claims are paid at 90 per cent of the full amount until approval for the other premises is obtained. The current provisions allow a pharmacist to set up quickly at another site in an emergency and supply PBS medicines while the approval process for the new location is being sorted out.

Because a PBS approval number is tied to specific premises and cannot be transferred, obtaining PBS approval for the new site involves submitting a relocation application to the Australian Community Pharmacy Authority, even if the move is only temporary.

The application must contain full documentation, including evidence of legal right to occupy, council approval, public access, and distance measurements from other pharmacies. In addition, it must contain evidence of the exceptional circumstances or event.

In a disaster situation, preparing an application of this kind can be onerous. The pharmacy proprietor may need to recover in conditions where local government services and other businesses are also disrupted. It may be weeks before the required information can be compiled. This compounds the losses for the pharmacy as the flat 10 per cent reduction on payments for PBS claims continues until the approval is in place. The lost PBS subsidies cannot be recovered later.

Moving back to the original pharmacy means repeating the process in reverse. Overall, two full applications and two new PBS approval numbers are involved. For each new approval number, dispensing labels and pharmacy stationery need to be reprinted and a new public key infrastructure software certification is required for claiming.

The process carries high administrative overheads in a stressful situation and for what is usually a temporary move.

Another problem with the current arrangements is that although they are intended to be used in exceptional circumstances, experience has shown that that is not always the case.

Instead, the provisions are sometimes used where a PBS pharmacy is relocating for any reason. In these situations, supply of PBS medicines commences at the unapproved premises while the approved pharmacy is still operating. PBS claims are made from the approved pharmacy at the full rate, and from the unapproved premises at the 90 per cent rate, using the same PBS approval number. This continues until an application for PBS approval at the new site is successful, which may take several months. Use of a PBS approval number at two sites simultaneously in this way is contrary to the policy intention of the current law.

New provisions for supply at alternative premises following disaster

The proposed amendments will improve arrangements for PBS pharmacies genuinely affected by disaster. The changes will allow an affected pharmacy's PBS approval number to be used to supply PBS medicines at alternative premises in substantially the same locality for up to six months until, either supply resumes at the original pharmacy, or a new PBS approval number is obtained for a different site.

PBS claims will be paid at the full rate, not at 90 per cent, while an approved pharmacy is operating from alternative premises after a disaster.

The amendments make it explicit that the new provisions apply only for disaster or exceptional circumstances, only when the PBS-approved pharmacy cannot operate, and only for one alternative premises at a time.

The pharmacist will be required to provide information to the Secretary of the Department of Health regarding the disaster or event, the reasons the approved pharmacy is beyond use, and the nature and location of the alternative premises. The Secretary will be responsible for determining whether exceptional circumstances and locality requirements are met and for granting permission for up to six months. A permission can be extended for an additional period via a similar process if clean-up or repairs take longer than expected.

What does or does not constitute disaster or exceptional circumstances, what is or is not substantially the same locality, and the kind of documents or evidence required in an application can be set out in legislative instruments, if necessary.

Benefits for pharmacies affected by disaster

The average number of pharmacies affected by disaster annually is usually around three. The number in the past year has been higher, seven in total. One was due to storm damage and six due to fire.

The new provisions will reduce administrative effort, time and costs for pharmacists and support continuity of access to PBS medicines for the communities they serve. The simplified requirements will allow a forced temporary move to be handled accordingly, rather than be treated as two separate full-scale relocations. Payment of PBS claims at the full rate will reduce unnecessary losses to pharmacy businesses.

Repeal of current ' other premises ' provisions

The amendments also repeal entirely the current provisions regarding supply of PBS medicines at other premises prior to PBS approval.

This will mean that the only situation in which it is legal to supply PBS medicines at alternative premises is when the approved pharmacy cannot operate due to disaster or exceptional circumstances, and only for as long as necessary due to the disaster.

The repeal of the current provisions will also provide clarity that supply of PBS medicines must not occur at or from an approved pharmacy and other premises, under the same approval number, concurrently, in any circumstances.

Where current arrangements are being used inappropriately to relocate an approved pharmacy or to supply PBS medicines via a pharmacy which is not PBS-approved, transitional arrangements will allow a maximum of six months for a PBS approval to be obtained, or for supply at, or via, the unapproved pharmacy to cease.

Payment of PBS concessional entitlements on date of death

The third change in the Bill is a technical correction relating to concessional entitlements.

Health policy has always been that concessional entitlements apply for PBS medicines obtained on the day of a person's death. Under social security legislation, where eligibility is decided, concessional entitlements cease on the day prior to death. This timing is to allow the payment of other social services benefits to apply from the date of death.

To account for this difference, claims for PBS prescriptions supplied for a concessional beneficiary on the day they die need to be adjusted. Since streamlined processing of claims was introduced in April 2015, this adjustment no longer occurs.

The proposed amendments modify the definitions of concessional beneficiary and dependant for PBS purposes to ensure that PBS entitlements apply until midnight on the day a concessional beneficiary or a dependant dies.

Over 146 million PBS prescriptions were supplied for concessional beneficiaries last year. Of these, less than a thousand were supplied on the date of death. For these prescriptions, there is a shortfall in the payment to the pharmacist equal to the difference between the general patient co-payment and the concessional co-payment. This is currently a difference of $32.10 per prescription. The amount that would be owing across all PBS pharmacies is estimated to be accruing at around $2,000 per month.

Retrospective commencement of the amendments from 1 April 2015 provides for back payment of outstanding amounts on prescriptions since then.

There is no change to PBS costs as PBS policy and funding has always provided for subsidy of these prescriptions. There is no change to the operation of other social services entitlements.

I acknowledge the patience of the Pharmacy Guild of Australia and its members in relation to these outstanding payments. I trust that this technical change will assist in resolving the situation as soon as possible.

Summary and close

The changes proposed in this Bill will deliver efficiencies that will improve the operation of the PBS. I am confident they will be welcomed by PBS users.

The ability to use computerised decision-making for PBS processes reflects the Government's commitment to e-Government and to using digital health services to improve health outcomes for Australians.

For pharmacists, the changes will reduce payment times and administrative red tape.

For prescribers and patients, online prescribing approvals will return precious minutes lost to telephone calls back to consultation time.

Debate adjourned.