Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2002-2003
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
SENATE
HEALTH AND AGEING LEGISLATION
AMENDMENT BILL 2003
EXPLANATORY
MEMORANDUM
(Circulated by authority of the Minister for Health and
Ageing,
Senator the Hon Kay Patterson)
The Health and Ageing Legislation Amendment Bill 2003 proposes a number
of amendments to various Acts within the Health and Ageing portfolio, and a
minor consequential amendment to the Veterans’ Entitlements Act
1986.
SCHEDULE 1 — AMENDMENTS RELATING TO THE
PHARMACEUTICAL BENEFITS SCHEME
The Pharmaceutical Benefits Advisory Committee (PBAC) is a committee of
experts that makes recommendations to the Minister as to the drugs and medicinal
preparations that are to be subsidised through the PBS.
At present the
PBAC consists of a Chairperson and eleven other members. Eight members must be
selected from the following groups: consumers, health economists, practising
community pharmacists, general practitioners, clinical pharmacologists, and
specialists – with at least one member selected from each of these groups.
Members from these groups must be appointed from nominations made from bodies
prescribed by the National Health (Pharmaceutical Benefits) Regulations 1960
(the Regulations). The Minister appoints remaining members whom the
Minister is satisfied have qualifications or experience in a field relevant to
the functions of the Committee, and qualifications or experience that would
enable them to contribute meaningfully to the deliberations of the
Committee.
This Bill provides that the PBAC membership be increased to
consist of a Chairperson, with no less than 11 and no more than 15 other
members. In order to retain the current ratio of the number of members
nominated by external organisations to the number of members appointed by the
Minister, the amendments provide that not less than two-thirds of the members
are to be selected from nominations by the organisations prescribed in the
Regulations.
Section 100 of the National Health Act 1953 provides an important
mechanism to enable special distribution arrangements for pharmaceutical
benefits where, in particular circumstances, the normal PBS supply arrangements
are not convenient or efficient.
These amendments will make it clear that
these special arrangements can be used for the funding of particular medicines
that are not available through the normal operation of the PBS.
The National Health Act 1953 requires that a pharmacist must
obtain approval to supply pharmaceutical benefits from particular premises, and
must apply for approval to relocate to other premises. In the occasional
instance where a pharmacist relocates without applying for approval, the
pharmacist cannot be paid for any pharmaceutical benefits supplied from the
unapproved premises.
These amendments will give the pharmacist an
entitlement to receive the 90% payment or waiver of recovery in such cases, once
the relocation is approved, without the need to proceed under the act of grace
provisions.
Under current arrangements an application for a PBS safety net concession
or entitlement card, or for an additional or replacement card, must be made and
signed by the applicant. These amendments to the National Health Act
1953 will allow an agent to make and sign the application on behalf of the
applicant.
Amendments to the National Health Act 1953 will provide that
determinations of forms, brands, maximum quantities, maximum numbers of repeats
and manner of administration of PBS medicines will apply to the supply of
pharmaceutical benefits by approved hospital authorities in the same way that
they do to pharmaceutical benefits supplied by approved pharmacists and approved
medical practitioners. This has become necessary due to the introduction of new
arrangements with some States for the supply of pharmaceutical benefits to
public hospital out-patients, day-admitted patients and admitted patients on
discharge.
Section 98 of the National Health Act 1953 provides the Secretary
with the power to cancel approvals to supply pharmaceutical benefits given to
pharmacists and medical practitioners under sections 90 and 92 respectively.
Section 98AA provides the Minister with a similar power in regard to approvals
to supply pharmaceutical benefits given to hospital authorities under section
94.
It is proposed to amend sections 98 and 98AA by inserting after the
word “may”, the words “(at his or her
discretion)” in the following relevant subsections:
• subsections 98(2), (3) and (3A); and
• subsections
98AA(2) and (3).
The proposed amendments will put beyond doubt that the
decision-maker has the discretion whether or not to cancel the relevant
approvals.
For example, the Secretary might decide not to cancel an
approval where an approved pharmacist has ceased to trade temporarily through
illness or other unanticipated circumstances. If the discretion were not
available the Secretary would be obliged to cancel the approval in such
circumstances and there would be a requirement for the pharmacist to reapply for
a new approval, which may not be appropriate in all cases.
The amended
section 98AA will make the Minister’s discretion whether or not to cancel
an approval given to a hospital authority similarly explicit.
SCHEDULE
2 — NEW HIC CLAIMING MODEL
The Health Insurance Commission (HIC) is implementing an electronic
simplified claiming process using an electronic business solution. The proposed
simplified claiming process involves a provider of medical services sending a
claim to the Health Insurance Commission directly rather than to a registered
health benefits organisation.
The Medicare rebate covers 75% of the
Medical Benefits Schedule (MBS) fee for in-hospital medical expenses while
private health insurance, through a Registered Health Benefits Organisation
(RHBO), covers the remaining 25%. The "gap" is the difference, paid by the
policy-holder, between fees charged by doctors for in-hospital medical services
and the combined health insurance benefit and Medicare benefit.
The
current legislation allows the gap to be covered only in circumstances where the
service is rendered by or on behalf of a medical practitioner:
- with whom the RHBO has a medical purchaser-provider agreement (MPPA), or
- who has a practitioner agreement that applies to the professional service provided, with the hospital where treatment occurred, and that hospital has a hospital purchaser-provider agreement (HPPA), with the RHBO, or
- where the practitioner elects to participate in a Gap Cover Scheme
conducted by a RHBO and approved under the Act, Division 4A.
Where a
service is provided as part of a MPPA the existing paragraph 73BDA(2)(a) of the
Act requires that the provider of medical services forward all accounts to the
RHBO. If this provision is not complied with the registered organisation is
prevented from paying benefits in excess of 25% of the MBS fee. The Bill
repeals this paragraph thereby removing this requirement.
This
requirement establishes an anomaly as between MPPA arrangements and other gap
cover arrangements, which functions to the detriment of consumers. There is a
preference by some practitioners to present the account directly to the RHBO
member for forwarding to the RHBO. If the member is not aware of the above
anomaly and claims the Medicare Rebate prior to lodging the claim with the RHBO,
the benefit payable by the RHBO is limited to 25% of the MBS fee. The RHBO is
prohibited from extending coverage to any gap that may exist, and the member is
left with an unexpected out-of-pocket expense.
The amendment is necessary
because the HIC will be implementing an electronic medical claiming model using
an electronic business solution. In brief, the proposal would involve the
medical provider sending the claim to the HIC rather than to a health fund.
This arrangement also facilitates eligibility checking for Medicare and RHBO
Benefits and enhances the obtaining of informed financial consent by providers
of medical services from the consumer.
The proposal is in line with the HIC’s electronic commerce strategic
direction and the Commonwealth Government’s On-Line strategy, and will
include stringent confidentiality and privacy requirements.
The system
proposed by the HIC will be “fee free” to users. Enhanced data
flow, data collection and administrative offsets are expected make the project
cost neutral for the HIC.
SCHEDULE 3 — RESTORING SPECIALIST
RECOGNITION
An unintended consequence of the Health Legislation Amendment Act
(No.2) 2001 is that those medical practitioners who had been recognised as
specialists for the purposes of the Health Insurance Act 1973 under the
former section 3D were not captured under the new sections 3D-3DC. The
important implication is that as a result of the Health Legislation Amendment
Act (No.2) 2001 a number of medical practitioners who were recognised as
specialists prior to 28 June 2001 are no longer so recognised.
The
transitional provision in Schedule 3 captures those specialists and restores
their specialist recognition, whilst retaining appropriate revocation provisions
for the new deemed specialist recognition.
SCHEDULE 4 — MEDICARE
BENEFITS AND OVERSEAS DOCTORS ETC
Before the commencement of the Health Legislation Amendment (Medical
Practitioners Qualifications and Other Measures) Act 2001, the professional
services of overseas trained doctors (as defined by subsection 19AB(7)) were not
eligible for the payment of a Medicare benefit unless the overseas trained
doctor was the holder of an exemption under subsection 19AB(3). An unintended
consequence of the 2001 amendment (which relied on the definition of
‘professional service’ in section 19AA) was that all overseas
trained doctors became eligible to assist at operations without any need for an
exemption under subsection 19AB(3).
SCHEDULE 5 — TECHNICAL
AMENDMENTS
The items in Schedule 5 correct formal errors in the
Aged Care Act 1997 that either existed at the time the Act was passed or
have since been introduced into the Act by amending legislation. The kinds of
errors being corrected in this Schedule are typographic errors, punctuation
errors, incorrect cross-references and other minor consequential
changes.
None of the amendments proposed in the Schedule will alter the
content of the law. The notes on clauses explain how some items that may appear
to be altering the content of the law are not in fact doing so.
The increase in the size of the Pharmaceutical Benefits Advisory
Committee is estimated to increase departmental expenditure by approximately
$13,500 per year for each additional member.
The other amendments have no
financial impact.
HEALTH AND AGEING LEGISLATION AMENDMENT BILL 2003
NOTES ON CLAUSES
This is a formal provision that specifies the short title of the Bill as
the Health and Ageing Legislation Amendment Act 2003.
Sub-clause 2(1) provides that the various provisions take effect
on Royal Assent or as specified in the table.
This clause provides that various Acts are amended or repealed in
accordance with the applicable items in the Schedules.
SCHEDULE 1
— AMENDMENTS RELATING TO THE PHARMACEUTICAL BENEFITS
SCHEME
Part 1 — Pharmaceutical Benefits Advisory Committee
Membership
Item 1 amends subsection 100A(2) to provide that
the membership of the PBAC is to be increased, from the Chairperson and 11 other
members currently, to the Chairperson and at least 11, but not more than 15,
other members.
Item 2 amends subsection 100A(3) to provide that
the number of members selected from specified interests or professions, as
nominated by organisations prescribed in the Regulations, must be maintained at
a minimum of two-thirds of the total number of members of the enlarged
Committee.
Item 3 amends subsection 100A(4) to allow for a
situation in which all the members have been selected from the interests or
professions specified in subsection 100A(3).
Item 4 amends
subsection 100B(3) to provide that, where the membership falls below the minimum
number of 12 for a period not exceeding 6 months, the PBAC is still able to
perform its functions and exercise its powers during that period. Section 100B
sets out the manner in which the members of the PBAC are to be
appointed.
Part 2 — Special Supply Arrangements
Items 5 and 6 amend subsection 81(1) of the Health Insurance Act
1973 and subsection 3(1) of the Health Insurance Commission Act 1973
to include a special pharmaceutical product, as provided for by item 9,
within the meaning of “pharmaceutical benefit” for the purpose of
the Professional Services Review Scheme and the powers and functions of the
Health Insurance Commission respectively.
Item 7 amends subsection
84(1) by inserting a definition of “special pharmaceutical product”,
to have the same meaning given by subsection 100AA(1), as provided for by item
9.
Item 8 adds a note to subsection 85(1) to provide that drug subsidy
may also be provided in respect of medicines covered by subsection 100AA(1),
that is, special pharmaceutical products.
Item 9 repeals section
100 and substitutes new sections 100 and 100AA. Subsection 100(1) makes it
clear that special arrangements may be made by the Minister for the supply of
medicines, including medicines that are not otherwise available through the
normal PBS supply arrangements, to provide an adequate supply of medicines.
Subsection (2) gives the Minister the power to vary or revoke special
arrangements made under subsection (1).
Subsection (3) provides that Part
VII of the Act has effect subject to any special arrangements made under
subsection (1). That is, special arrangements made under section 100 may be
inconsistent with some of the provisions governing the normal operation of the
PBS.
Subsection 100AA(1) provides a definition of “special
pharmaceutical product”, to mean a drug or medicinal preparation
specifically made available for the purposes of this section, or a medicine
composed of one or more such drugs combined with one or more additives and made
available for the purposes of this section, or a pharmaceutical benefit declared
as such under subsection 85(2).
Subsection (2) enables the Minister to
declare in writing the drugs and medicinal preparations that are to be made
available only under special arrangements, and not through normal PBS supply
arrangements. Subsection (3) enables the Minister to vary or revoke in writing
a declaration made under subsection (2).
Subsection (4) provides that,
the Minister may not declare a drug or medicinal preparation to be added to the
list of medicines made available only under special arrangements unless the PBAC
has so recommended. Subsection (5) provides that the Minister must obtain the
written advice of the PBAC before removing a medicine from this list. These
provisions are consistent with those governing the addition and deletion of
pharmaceutical benefits.
Subsection (6) provides that an instrument made
under subsection (2) or (3) is a disallowable instrument, and, in the case of an
instrument that removes a drug from the list made available only under special
arrangements, the written advice of the PBAC provided under subsection (5) must
be tabled with the relevant instrument.
Item 10 is a savings
provision which provides that an arrangement in effect under section 100 before
the date of effect of these amendments, will be taken to be in force on or after
the date of effect of these amendments.
Item 11 amends section 101
to provide that the functions of the PBAC also apply to special pharmaceutical
products as provided for by item 9.
Items 12 and 13 amend sections
114 and 116 so that the power of the Federal and State Pharmaceutical Services
Committees of Inquiry respectively to inquire into the conduct of approved
pharmacists in connection with the supply of pharmaceutical benefits applies
also to the supply of special pharmaceutical products.
Item 14
amends subsection 133(1) so that the power of the Secretary to suspend an
approval or authority, if a medical practitioner, participating dental
practitioner or approved pharmacist is charged with an offence relating to the
supply of pharmaceutical benefits, applies also in the case of an offence
relating to the supply of special pharmaceutical products.
Item 15
amends section 134 (as amended by item 44) so that the offences relating to the
writing of prescriptions by a prescriber whose authority to do so has been
suspended or revoked, or the supply of pharmaceutical benefits on such
prescriptions by approved pharmacists and other approved suppliers, apply also
to prescriptions for the supply of special pharmaceutical
products.
Items 16 to 20 amend subsections 135A(5A), (5C) and (8)
so that the provisions of these sections, relating to circumstances in which
information relating to pharmaceutical benefits may be released, apply also to
information relating to special pharmaceutical products.
Item 21
amends subsection 135A(24) by inserting a definition of “special
pharmaceutical product”, to have the same meaning as provided for by item
9.
Item 22 amends subsection 135AA(11) to include special
pharmaceutical products within the definition of “Pharmaceutical Benefits
Program”, for the purpose of the privacy guidelines made by the Privacy
Commissioner to ensure functional separation between claims information relating
to the Pharmaceutical Benefits Program and the Medicare Benefits
Program.
Item 23 amends the definition of “pharmaceutical
benefit” in subsection 118K(7) of the Veterans’ Entitlements Act
1986 to include a special pharmaceutical product, as provided for by item 9,
for the purpose of counting expenditure on medicines by a person claiming an
advance pharmaceutical allowance under subsection 118K(6) of that Act.
Item 24 adds a note after paragraph 84C(4)(a) to provide that the
supply of a pharmaceutical benefit may be counted towards the safety net if it
was supplied at or from a relocated pharmacy where the approval of a pharmacist
in respect of the pharmacy had not been granted at the time of supply, but has
been subsequently obtained.
Item 25 adds a note after paragraph
89(a) to provide that the entitlement of a person to receive a pharmaceutical
benefit remains if it was supplied at or from a relocated pharmacy where the
approval of a pharmacist in respect of the pharmacy had not been granted at the
time of supply, but has been subsequently obtained.
Item 26
inserts subsection 99(3A) to provide for payment and/or waiver of recovery of
90% of the value of pharmaceutical benefits supplied from an unapproved
relocated pharmacy where the pharmacist subsequently has applied for and
obtained approval in respect of the relocated pharmacy.
It also inserts
subsection (3B) to provide that where a pharmacist has subsequently obtained
approval in respect of an unapproved relocation of a pharmacy and becomes
entitled to a payment under subsection (3A), pharmaceutical benefits supplied
before the approval are taken to have been supplied in accordance with the Act
as it applies to the entitlement of persons to receive pharmaceutical benefits
and to have such supplies counted towards the safety net.
Part 4
— Safety Net Provisions
Items 27 to 32 amend these
sections to provide that an application for a safety net concession card or
pharmaceutical benefits entitlement card, or an additional or replacement safety
net concession card or pharmaceutical benefits entitlement card, may be made and
signed by the applicant’s agent. Under sections 84DA and 84E of the Act
an application for a safety net concession card or a pharmaceutical benefits
entitlement card respectively must by made and signed by the
applicant.
Part 5 — Approved Hospital
Authorities
Item 33 repeals subsection 94(5C), a now obsolete
provision relating to the revocation of such an approval. Under section 94 a
hospital authority must be approved by the Minister to enable the supply of
pharmaceutical benefits by the hospital authority.
Item 33 also
repeals subsection 94(6), so that determinations made under sections 85 and 85A
of the forms, brands, maximum quantities, maximum numbers of repeats and manner
of administration of PBS medicines apply to the supply of pharmaceutical
benefits by approved hospitals in the same way that they do to pharmaceutical
benefits supplied by approved pharmacists and approved medical practitioners.
This has become necessary due to the introduction of new arrangements with some
States for the supply of pharmaceutical benefits to public hospital
out-patients, day-admitted patients and admitted patients on
discharge.
Part 6 — Cancellation of Approvals
Item
34 inserts the words “(at his or her discretion)” after the word
“may” in subsections 98(2), (3) and (3A) and subsections 98AA(2) and
(3) of the National Health Act 1953. These amendments expressly provide
the Secretary, in the case of decisions under subsections 98(2), (3) and (3A),
and the Minister, in the case of decisions under subsections 98AA(2) and (3),
with the discretion whether or not to cancel the relevant approval.
Item 35 is an application provision. It provides for the
amendments made by item 34 to apply to cancellation for stopping, after the
commencement of this item (that is, after the date of Royal Assent), the
carrying on of a business, or a practice, or the conduct of a hospital.
SCHEDULE 2 — NEW HIC CLAIMING MODEL
Item 1 repeals paragraph 73BDA(2)(a) of the National Health Act
1953. This amendment will enable a medical provider to send the claim to the
HIC instead of to a health fund. This change facilitates a simpler payment
process, making it consumer and doctor friendly, and allows a consolidated
payment incorporating both Medicare and private insurance benefits to be made to
the provider of medical services.
Item 2 makes a minor amendment
to 73BDA(2)(b) to reflect the repeal of paragraph
73BDA(2)(a).
SCHEDULE 3 — RESTORING SPECIALIST
RECOGNITION
Item 1(1) identifies the medical practitioners
captured by this transitional provision as those who were recognised as a
specialist pursuant to paragraph 3D(1)(c) of the Act immediately prior to
the amendments effected by the Health Legislation Amendment Act (No. 2)
2001.
Item 1(2) provides that a Ministerial Determination
under paragraph 3DB(4)(a) of the Act is deemed to have been made in
relation to those medical practitioners identified in Item 1, so that their
previous specialist recognition under the repealed paragraph 3D(1)(c) can
continue under the new paragraph 3DB(4)(a).
Item 1(3)
specifies that the Ministerial Determination is deemed to have been made on the
date of the changes effected by the Health Legislation Amendment Act (No. 2)
2001, and that the deemed determination has effect from the date of the
original determination under paragraph 3D(1)(c) of the old
Act.
Item 1(4) provides that the deemed determination created by
this transitional provision can cease or be revoked, just the same as any
ordinary determination under paragraph 3DB(4)(a).
Item 1(5)
differentiates the Act before and after the amendments effected by the Health
Legislation Amendment Act (No. 2) 2001 for the purposes of identifying those
specialists captured by this transitional provision.
Item 2 makes
it clear that the recognition of a specialist by virtue of the transitional
provision will not cease by operation of subsection 3DA(3).
SCHEDULE 4 — MEDICARE BENEFITS AND OVERSEAS DOCTORS
ETC
Item 1 inserts a self-contained definition of
“professional service” in subsection 19AB(7) with the result that no
Medicare benefit will be payable for the professional services of an overseas
trained doctor who assists at an operation unless the doctor is the holder of an
exemption that has been granted under subsection 19AB(3).
SCHEDULE
5 — TECHNICAL AMENDMENTS
Item 1 provides that tables of
Divisions and Subdivisions do not form part of this Act. Subsection 13(1) of
the Acts Interpretation Act 1901 provides that the headings of the Parts,
Divisions and Subdivisions of any Act are deemed to form part of the Act.
However, the Acts Interpretation Act 1901 is silent on the treatment of
the treatment of tables of Divisions and tables of Subdivisions. The Aged
Care Act 1997 contains many such tables – an example of a table of
Divisions can be found below section 41-1 and an example of a table of
Subdivisions can be found below section 44-1.
Items 2-17 correct
minor typographical errors.
Items 18 and 19 provide an improvement to the clarity of the provisions. They do not represent any change in the content of the cells.
Items 20, 21 and 22 correct minor typographical
errors.
Items 23, 24 and 31 replace the word "speciality" with
"specialty" in the Health Insurance Act 1973. These technical amendments
have been made to improve consistency within the Health Insurance Act
1973.
Items 25 - 30 improve the grammar of paragraphs 19AB(1)
and 19AB(2) of the Health Insurance Act 1973.