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2019-2020
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
HEALTH INSURANCE AMENDMENT (COMPLIANCE
ADMINISTRATION) BILL 2020
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health, the Hon Greg Hunt MP)
HEALTH INSURANCE AMENDMENT (COMPLIANCE ADMINISTRATION) BILL 2020
OUTLINE
The Health Insurance Amendment (Compliance Administration) Bill 2020 amends the Health
Insurance Act 1973 (Health Insurance Act).
The Bill supports the integrity of the Medicare program by modernising the circumstances in which
the Commonwealth can recover a Medicare benefit or payment from a person when it should not have
been paid under the Health Insurance Act. The amendment clarifies that a Medicare benefit or
payment can be recovered as a debt due to the Commonwealth in circumstances where an incorrect
amount is paid (purportedly by way of Medicare benefit or payment) as a result of a person giving
false or misleading information. The amendment allows a Medicare benefit or payment under the
Health Insurance Act to be recovered where it was not payable and/or a person was not entitled to be
paid the Medicare benefit or payment.
This amendment supports current, emerging and future technological advancements to electronic
Medicare claiming, which are aimed at achieving efficiencies in Medicare claiming and payment
services. The amendment streamlines the way in which the Commonwealth identifies incorrect
claiming of the Medicare Benefits Schedule (MBS) and raises debts.
Background
The Health Insurance Act and the legislative instruments made under it provide the legislative
framework for the Medicare program.
The MBS lists the professional services for which Medicare benefits are payable and is sourced from
the legislative instruments made under the Health Insurance Act. The MBS includes information
about professional services such as MBS item numbers, MBS item descriptors (including any
restrictions or other special conditions attached to the usage of the item), schedule fees and Medicare
benefit amounts. The MBS item number is relied on for Medicare claiming purposes.
A patient can make a claim to Medicare for the payment of a Medicare benefit if they have incurred
an expense in relation to receiving a professional service listed on the MBS. Alternatively, a health
provider can bulk bill a patient which means that the patient can assign their Medicare benefit directly
to the health provider. The health provider can claim the Medicare benefit directly from the
Government for that service.
Medicare claims can be made using the approved paper form but in most cases, Medicare claims are
made electronically through a variety of processing systems either online, through mobile applications
or where a bank's EFTPOS terminal (known as Easyclaim) is available in a medical practice.
Medicare claims are processed and paid by Services Australia, but the Department of Health (on
behalf of the Chief Executive Medicare) is responsible for health provider compliance functions,
which includes conducting post payment compliance activities to identify incorrect claiming and the
recovery of debts.
Amendments to sections 129AC(1) and 129ACA(1)
Section 129AC(1) of the Health Insurance Act provides that if, as a result of the making of a false or
misleading statement, an amount paid, purportedly by way of benefit or payment under the Act,
exceeds the amount (if any) that should have been paid, the amount of the excess is recoverable as a
debt due to the Commonwealth from the person by or on behalf of whom the statement was made.
The Bill amends section 129AC(1) and section 129ACA(1) to provide that an amount can be
recovered from a person in circumstances when a Medicare benefit or payment was paid under the
Health Insurance Act as a result of a person giving false or misleading "information" such that it
should not have been paid at all. The Chief Executive Medicare will no longer be required to identify
a false or misleading "statement" made by a person that resulted in the Medicare benefit being paid.
As the design parameters of electronic claiming mechanisms are built to achieve efficiencies, these
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mechanisms may no longer support the inclusion of a specific statement or declaration being made by
a person in relation to a Medicare claim which is submitted electronically.
"Information" will be false or misleading where it is factually incorrect, and regardless of whether the
person giving the information knew that it was false or misleading, or whether the information given
was purposely or intentionally untrue. This includes circumstances where a person gives false or
misleading information either intentionally or unintentionally.
To ensure that the Department of Health's post-payment compliance activities are not constrained by
technological advances with electronic Medicare claiming mechanisms, the amendment now captures
broad circumstances in which false or misleading information may be given, regardless of whether a
person makes manual or electronic Medicare claims. The Bill outlines that information can be given
in a document; in a statement; through a representation; or in any other form. For example, a person
who makes an electronic Medicare claim would be giving information by entering values into the
system in order to communicate a fact in relation to the claim, i.e. the MBS item number. That
information would be false or misleading where, for example, the service in relation to the MBS item
number was not rendered in accordance with the legislative requirements. Where a health provider
authorises another person (such as a receptionist) to submit a Medicare claim for payment on their
behalf, the health provider remains the person responsible for the claims under their provider number.
Under the amendment, the Chief Executive Medicare can recover directly from a health provider
where a patient made the Medicare claim, but an incorrect amount was paid due to the actions of the
health provider. The amendment specifies that information can be given through a representation.
This covers a situation where a patient made the Medicare claim, but it can be shown that the health
provider gave false or misleading information to the patient through some kind of representation to
the patient that a Medicare benefit was payable. If that representation is shown to have resulted in an
incorrect claim and payment was made, then the incorrect amount can be recovered from the health
provider. For example, the health provider did not comply with the legislative requirements and billed
the patient for a different MBS item to the professional service that was actually rendered, but
instructed the patient at the end of their appointment to use the Easyclaim machine in the medical
practice to make the Medicare claim for the different MBS item.
The amendment to section 129AC(1) and section 129ACA(1) applies in relation to an amount paid
before, on or after the commencement of the Bill and which has not yet been the subject of finally
determined proceedings, or proceedings in which judgment is reserved, before a court. The
amendment is necessary to align with technological advancements in a modernised Medicare claiming
and payments regime, as well as improved service delivery for health providers and patients.
The legislative requirements in the Health Insurance Act, as well as the legislative instruments made
under it which provide the lawful basis for which Medicare benefits are payable, are unaffected by the
Bill and there is unlikely to be any adverse impact on the legitimate expectations of health providers
who continue to be responsible for complying with their obligations in respect of providing
professional services, claiming and receiving Medicare benefits, under the MBS. A person who has
given false or misleading information and received Medicare benefits that they were not entitled to,
should not be allowed to unjustly enrich themselves at the expense of the Australian community.
There is a public interest imperative to ensure that Commonwealth money is protected, and is able to
be recovered, to be reinvested towards Health initiatives for the Australian community. Additionally,
in specific circumstances where the number of services per patient may be limited by the MBS (for
example, for individual allied health services for people with chronic conditions and complex care
needs), incorrect claiming can adversely affect individual patients and prevent their access to vital
health services. It is important for these circumstances to be responded to by the Government
efficiently and effectively, to ensure that the MBS continues to operate for the benefit of the
Australian community.
Financial Impact Statement
There is no financial impact from this Bill.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Health Insurance Amendment (Compliance Administration) Bill 2020
The Bill is compatible with human rights and freedoms recognised or declared in the international
instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The Bill amends the Health Insurance Act 1973 (Health Insurance Act). The Bill implements
measures to support the integrity of the Medicare program by making clear the circumstances, under
current and future claiming technologies, in which a Medicare benefit or payment can be recovered
from a person. The amendment clarifies that where an incorrect amount is paid (purportedly by way
of Medicare benefit or payment) as a result of a person giving false or misleading information, that
incorrect amount can be recovered as a debt due to the Commonwealth. The amendment allows a
Medicare benefit or payment made under the Health Insurance Act to be recovered where it was not
payable and/or a person was not entitled to be paid the Medicare benefit or payment because the
relevant legislative requirements were not satisfied.
Human Rights Implications
Right to Social Security
The Bill engages Article 9 of the the International Covenant on Economic, Social and Cultural Rights
(ICESCR). Article 9 of the ICESCR recognises the right of everyone to social security, including
social insurance.
The Bill protects the sustainability of Australia's program of universal health care, ensuring that
Australians will continue to have access to affordable, high-quality medical and health services
funded by Government benefits. The Bill clarifies current arrangements for health compliance
activities, and ensures that recovery of incorrectly paid Medicare benefits may be made effectively.
Right to Health
The Bill engages Article 12(1) of the ICESCR. Article 12(1) of the ICESCR promotes the right of all
individuals to enjoy the highest standard of physical and mental health.
The Bill assists with the progressive realisation by all appropriate means of the right of everyone to
the enjoyment of the highest attainable standard of physical and mental health because the
amendments are clarifying the existing arrangements to support compliance activities to reduce
incorrect claiming of Medicare benefits. This will mean that the sustainability of the Medicare
program is protected. This Bill will help ensure that Medicare continues to provide support to
Australian patients.
The Bill does not engage any other rights or freedoms.
Conclusion
The Bill is compatible with human rights and promotes the right to health as it does not raise any
human rights issues.
The Hon Greg Hunt MP, Minister for Health
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HEALTH INSURANCE AMENDMENT (COMPLIANCE ADMINISTRATION) BILL 2020
NOTES ON CLAUSES
Clause 1 - Short Title
Clause 1 provides for the short title of the Act to be the Health Insurance Amendment (Compliance
Administration) Act 2020.
Clause 2 - Commencement
This clause provides that the Bill commences on the day after the Act receives the Royal Assent.
Clause 3 - Schedules
This clause provides that legislation that is specified in a Schedule to the Act is amended or repealed
as set out in the applicable items in the Schedule concerned, and any other item has effect according
to its terms. This is a technical provision which gives operational effect to the amendments contained
in the Schedule.
SCHEDULE 1 - AMENDMENT TO THE HEALTH INSURANCE ACT 1973
Schedule 1 amends the Health Insurance Act by inserting provisions that make amendments to the Act
in relation to recovery of statutory debts due to the Commonwealth.
Item 1 - Subsection 129AAI(1)
This item amends subsection 129AAI(1) of the Health Insurance Act by omitting the reference to
"subsection 129AC(1)" and substituting that reference with "subsection 129AC(1AA)".
Item 2 - Subsections 129AC(1) and (1AA)
This item repeals subsections 129AC(1) and 129AC(1AA) of the Health Insurance Act and substitutes
the repealed subsections with new subsections 129AC(1), 129AC(1AA), 129AC(1AB), 129AC(1AC),
and 129AC(1AD).
New subsection 129AC(1) of the Health Insurance allows the Commonwealth to recover incorrect
amounts paid, purportedly by way of benefit or payment under that Act, where the payment was made
as a result of the giving of false or misleading information.
Subsection 129AC(1) provides that subsection 129AC(1AA) will apply if:
an amount (the incorrect amount) is paid purportedly by way of benefit or payment; and
the incorrect amount exceeds the amount (if any) that should have been paid in respect of a
professional service rendered or purportedly rendered by a person; and
the incorrect amount was paid as a result of the giving of false or misleading information.
The phrase 'false or misleading' captures information that is factually incorrect, regardless of whether
the person giving the information knew that it was false or misleading, or whether the information
given was purposely or intentionally untrue. This includes circumstances where a person gives false
or misleading information either intentionally or unintentionally.
Subsection 129AC(1AA) of the Health Insurance Act provides that the excess amount is recoverable
as a debt due to the Commonwealth from the person who gave the false or misleading information (or
on whose behalf the false or misleading information was given), or from the estate of that person.
Subsection 129AC(1AB) provides that subsection 129AC(1AA) does not apply if subsection
129ACA(1) applies to the amount. This amendment will prevent the same amount being recoverable
more than once.
Subsection 129AC(1AC) clarifies that subsection 129AC(1AA) applies whether or not the amount
was paid to the person who gave the false or misleading information, and whether or not any person
has been convicted of an offence in relation to the giving of the false or misleading information.
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Subsection 129AC(1AD) provides for broad circumstances in which false or misleading information
may be given. False or misleading information can be given in a document; in a statement; through a
representation; or in any other form. For example, a person who makes an electronic Medicare claim
would be giving information by entering values into the system to communicate a fact in relation to
the claim, i.e. the MBS item number.
This amendment is also intended to clarify that the Commonwealth can recover an amount paid to a
health provider where a patient made the Medicare claim, but an incorrect amount was paid due to the
actions of the health provider giving false or misleading information, for example, in the form of a
representation to the patient that a Medicare benefit was payable. For example, the health provider did
not comply with the legislative requirements and billed the patient for a different MBS item to the
professional service that was actually rendered, but instructed the patient at the end of their
appointment to use the Easyclaim machine in the medical practice to make the Medicare claim for the
different MBS item.
Item 3 - Paragraph 129AC(2)(a)
This item amends subsection 129AC(2)(a) of the Health Insurance Act by omitting the reference to
"subsection (1)" and substituting that reference with "subsection (1AA)".
Item 4 - Paragraph 129ACA(1)(a)
This item amends subsection 129ACA(1)(a) of the Health Insurance Act by omitting the reference to
"making of a false or misleading statement" and substituting that reference with "giving of false or
misleading information".
Item 5 - After paragraph 129ACA(1)(b)
This item inserts new subsection (1A) after subsection 129ACA(1)(b) of the Health Insurance Act.
New subsection 129ACA(1A) provides for broad circumstances in which false or misleading
information may be given. False or misleading information can be given in a document; in a
statement; through a representation; or in any other form.
Item 6 - Subparagraphs 129ACA(2)(c)(i) and (ii)
This item amends subsections 129ACA(2)(c)(i) and (ii) of the Health Insurance Act by omitting the
reference to "making of the false or misleading statement" and substituting that reference with "giving
of the false or misleading information".
Item 7 - Paragraph 129ACA(6)(b)
This item amends subsection 129ACA(6)(b) of the Health Insurance Act by omitting the reference to
"making of the statement" and substituting that reference with "giving of the false or misleading
information".
Item 8 - Subsection 129AEA(1)
This item amends the heading to subsection 129AEA(1) of the Health Insurance Act by omitting the
reference to "Subsection 129AC(1)" and substituting that reference with "Subsection 129AC(1AA)".
Item 9 - Paragraph 129AEA(1)(a)
This item amends subsection 129AEA(1)(a) of the Health Insurance Act by omitting the reference to
"subsection 129AC(1)" and substituting that reference with "subsection 129AC(1AA)".
Item 10 - Paragraph 129AEF(1)(a)
This item amends subsection 129AEF(1)(a) of the Health Insurance Act by omitting the reference to
"subsection 129AC(1)" and substituting that reference with "subsection 129AC(1AA)".
Item 11 - Application provision
This item is an application provision which provides that the amendments in this Schedule apply in
relation to an amount that is paid before, on or after the commencement of the Schedule. The basis on
which a person owes a debt to the Commonwealth under section 129AC(1) and section 129ACA(1)
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where false or misleading information has been given, would apply in relation to amounts paid by the
Commonwealth before, on or after the commencement of the Bill and have not yet been the subject of
finally determined proceedings, or proceedings in which judgment is reserved, before a court.
Where a person gives false or misleading information to the Commonwealth and the Commonwealth
pays a benefit that should not have been paid, it is in the public interest to be able to recover the
payment, even where this conduct has occurred prior to the commencement of the Bill. This is
necessary to ensure that Commonwealth money is protected, and is able to be recovered, to be
reinvested towards Health initiatives for the Australian community.
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