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1999
PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
(Amendments to be moved on behalf of the Government)
(Circulated by the authority of the Minister for Health and
Aged Care,
The Hon. Dr Michael Wooldridge, MP)
ISBN: 0642 409323
(Amendments to be moved on behalf of the Government)
These amendments will amend the Health Legislation Amendment
Bill (No. 3) 1999 (the Bill) in two discrete areas:
• changes
to Schedules 1 and 2 of the Bill (the prudential regulation amendments);
and
• inserting a new Schedule 4 containing amendments to the
Health Insurance Act 1973 dealing with the professional services review
scheme (the PSR amendments).
The reforms contained in Schedules 1 and 2 of the Bill amend the
National Health Act 1953 so as to improve the prudential regulation
applied to the private health insurance industry, allowing that prudential
regulation to be more flexible and responsive to market changes.
Prudential regulation sets requirements for the prudent management of
registered health benefit organizations to maximise the likelihood that they
remain financially sound and able to meet obligations to consumers.
These
amendments will allow the commencement of Schedules 1 and 2 of the Bill prior to
the implementation of new prudential requirements which will be in the form of
Solvency Standards and Capital Adequacy Standards established by the Private
Health Insurance Administration Council (the Council).
These amendments
require the Council to establish the first Solvency Standard and the first
Capital Adequacy Standard on the same day.
The amendment will also
require the first Standards to be established by no later than
1 January 2001.
Until the Council has established the first
Standards the current prudential requirements - in section 73BAB of the
National Health Act 1953 - and related provisions continue to
apply.
These amendments are transitional arrangements. They will have no
adverse impact upon either health insurance consumers or health funds.
These amendments amend the Bill by adding a new Schedule 4
containing amendments to the Health Insurance Act 1973 dealing with the
professional services review scheme. The amendments address a number of
drafting matters contained in the Health Insurance Amendment (Professional
Services Review) Act 1999. In particular the
amendments:
• Amend section 19B to correct the statutory references
to a final determination;
• Clarify the operation of the deeming
provision in section 106KA; and
• Clarify that regulations made for
the purposes of section 106KA can apply to an identified group or groups of
practitioners in a particular profession and to services of a particular kind or
description.
This amendment will have no financial impact. The amendment is designed
to provide certainty about the transition from one system of prudential
regulation to another. Furthermore, the new system of prudential regulation
proposed in the Bill is expected to have no significant financial impact upon
the Commonwealth.
Amendment (1)
Amendment (2)
This amendment inserts a new savings
provision as Item 47A in Schedule 1. This savings provision delays the
commencement of the amendment to the Principal Act made by Item 11 of Schedule 1
until the ‘new prudential standards day.’
Amendment
(3)
This amendment inserts a new Item 1A into Schedule 2. The new
item amends subsection 4(1) of the Principal Act by inserting a definition of
‘new prudential standards day.’ The ‘new prudential standards
day’ means the day on which the Council establishes the first Solvency
Standard and the first Capital Adequacy Standard.
Amendment
(4)
This amendment amends section 73BCB. Section 73BCB is the
section that requires the Council to establish a Solvency Standard. This
amendment will mean that the Council must have established the first Solvency
Standard by no later than 1 January 2001.
Amendment
(5)
This amendment amends section 73BCG. Section 73BCG is the
section that requires the Council to establish a Capital Adequacy Standard.
This amendment will mean that the Council must have established the first
Capital Adequacy Standard by no later than 1 January
2001.
Amendments (6), (7), (8), (9), (10) and
(11)
These amendments all amend provisions in Schedule 2 that make
reference to the section 73BCB (establishment of Solvency Standards) and section
73BCG (establishment of Capital Adequacy Standards). These amendments modify
the provisions by only allowing a reference to sections 73BCB and 73BCG to occur
on or after the ‘new prudential
standards day.’
Amendment (12)
This
amendment inserts a new savings provision as Item 47A in Schedule 2. This
savings provision means that the current prudential requirements in the
National Health Act 1953 continue to apply until the ‘new
prudential standards day.’
Sub-item 47A(2) means that section 73BAB
(the minimum reserve requirement) continues to apply until the ‘new
prudential standards day.’
Sub-item 47A(3) means that section 73BAC
(exemption from the minimum reserve requirement) continues to apply until the
‘new prudential standards day.’
Sub-items 47A(4) and 47A(5)
means that the Council continues to have the ability to advise the Minister with
regard to the minimum reserve requirements, and exemptions from those
requirements, until the ‘new prudential standards
day.’
Amendment (13)
This amendment inserts a new
Schedule 4 into the Bill. The new Schedule 4 contains amendments to the
Health Insurance Act 1973 (the Act) dealing with the professional
services review scheme. The amendments address a number of drafting matters
contained in the Health Insurance Amendment (Professional Services Review)
Act 1999 (the PSR Amendment Act).
Item 1 of Schedule 4 amends section
19B of the Act to correct the statutory references to a final determination.
Prior to the amendments made by the PSR Amendment Act, a final determination was
made under section 106T. As a result of those amendments final determinations
are now made under new section 106TA. Accordingly, the amendment replaces all
references to section 106T with references to section 106TA.
These
amendments will commence on the same day as the PSR Amendment Act. This
reflects the legal position if the ‘slip rule’ were applied to
interpretation.
Item 2 of Schedule 4 amends subsection 106KA(1) to
introduce the term “relevant period” which is used in the new
subsections 106KA(2) and (2A). This amendment is consequential upon the
amendments made by Item 3.
Item 3 of Schedule 4 repeals subsections
106KA(2) and (3) and substitutes new subsections 106KA(2), (2A) and
(3).
As previously drafted, subsection 106KA(2) would have disapplied the
deeming provision in subsection 106KA(1) if, as a result of demonstrating
exceptional circumstances, a person under review fell below the prescribed
threshold.
New subsections 106KA(2) and (2A) are intended to clarify
that, where this occurs, exceptional circumstances will only reduce the quantum
of inappropriate practice and will not disapply the deeming provision in
subsection 106KA(1).
New subsection 106KA(3) clarifies that regulations
made for the purposes of section 106KA can apply to an identified group or
groups of practitioners in a particular profession and services of a particular
kind or description.
The intended operation of section 106KA is
illustrated by the following example:
• Regulations made for the
purpose of subsection 106KA(3) prescribe 80 or more consultations per day over a
period of 20 or more days in respect of general practitioners. This becomes a
prescribed pattern of services for the purposes of subsection 106KA(1).
• A practitioner is referred on the basis that he/she has
performed more than 80 services a day for a period of 25
days.
• That practitioner is deemed, by operation of subsection
106KA(1), to have engaged in inappropriate practice in respect of each of those
services for each of those days.
• However, the quantum of that
inappropriate practice can be reduced under subsection 106KA(2) if the person
under review can satisfy the Committee that there were exceptional circumstances
on a particular day or days which affected the rendering or initiating of
services. Exceptional circumstances will relate to a particular occurrence on a
particular day or days, which then impacts on the number of services performed
on that day or days; they will not relate to individual
services.
• The practitioner demonstrates, to the satisfaction of a
Committee, an exceptional circumstance in relation to 15 of those days, for
example, his or her partner left the practice unexpectedly and was not replaced
for 15 days.
• As a consequence of the Committee being satisfied that exceptional
circumstances have been made out in relation to 15 days subsection 106KA(2) will
operate to reduce the quantum of the deemed inappropriate practice to each of
the consultations performed on the remaining 10 days.
• Subsection
106K(2A) clarifies that the practitioner is still deemed to have engaged in
inappropriate practice in respect of the remaining 10 days where he or she has
performed 80 or more consultations notwithstanding that the number of days of
overservicing has fallen below the threshold of 20 days.
• The
Committee’s report will record that, of the services referred initially
(80 or more consultations per day over 25 days) the Committee was satisfied that
exceptional circumstances had been made out in respect of 15 of those days. As
a result the Committee’s report would reduce the quantum of the deemed
inappropriate practice to the 80 or more consultations per day performed over
the remaining 10 days.
• The Determining Authority will then make a
determination containing a direction/s under section 106U which pertains only to
the services performed on the remaining 10 days.