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1999
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF REPRESENTATIVES
EXPLANATORY
MEMORANDUM
(Circulated
by the authority of the Minister for Health and Aged Care,
the Hon Dr
Wooldridge MP)
ISBN: 0642 426686
The Health Legislation Amendment Bill (No. 4) 1999 (the Bill) makes a
number of amendments to the Health Insurance Act 1973 (the
Act).
The main items contained in the Bill will:
• provide
the legislative framework for the new collection centre arrangements under the
MBS which will apply to both public and private sectors from 1 July
2000;
• simplify and clarify the rules relating to temporary
resident doctors (TRDs) and overseas trained doctors (OTDs) and the
circumstances in which they can access Medicare; and
• remove the 1
January 2002 sunset clause from section 19AA.
In addition the Bill makes
a number of technical machinery amendments which do not raise significant issues
of policy. These include amendments to:
• the definition of
“quality assurance activity” in subsection 124W(1) of the Act to
include a reference to the Health Care (Appropriation) Act
1998;
• the definition of “professional services”
in subsection 3 (1) to clarify that a dental practitioner who is able to render
a Medicare-payable service (in respect of oral and maxillofacial surgery) must
have been approved for this purpose by the Minister in
writing.
• the definition of “relevant offence” in
section 124B of the Act to include offences under sections 23DR and 23DS;
and
• subsection 128A(4) of the Act to delete the reference to
section 21 of the Crimes Act 1914.
The Bill substantially amends Division 4A of Part IIA of the Act, and
related provisions, which deal with the licensed collection centre scheme in
relation to the collection of pathology specimens for Medicare purposes. These
amendments give effect to new arrangements for approved collection centres.
Subsection 16A(5AA) of the Act provides that medicare benefit is not
payable in respect of a requested pathology service unless the pathology
specimen for the service is collected in one of the ways specified. These
include collection at a licensed collection centre by the pathologist who
renders or refers the pathology service, or by an employee of the approved
pathology authority which is the proprietor of the relevant laboratory. Such
collection would in future need to be undertaken at an approved collection
centre.
The present arrangements relating to licensed collection
centres would be replaced with simplified arrangements for approved collection
centres. Presently, approved pathology authorities are allocated units of
entitlement, in accordance with principles determined under the Act, for a
calendar year beginning on 1 February, and must seek the grant of licences for
individual specimen collection centres. Under the new arrangements, approvals
will be granted to approved pathology authorities for particular approved
collection centres on a financial year basis.
Approval Principles will
apply to the granting of approvals. These may provide for various matters
including a system for determining the maximum number of approvals that may be
granted to particular approved pathology authorities; application procedures;
the giving of undertakings regarding compliance with Collection Centre
Guidelines; and review of decisions made under the Principles. The Collection
Centre Guidelines are guidelines relating to quality of practice published by
the National Pathology Accreditation Advisory Council.
The
restriction that prevents approved pathology authorities constituted by a State
or Territory, or a State or Territory authority or undertaking, from operating
licensed collection centres will not apply in relation to approved collection
centres. The Bill also clarifies that the collection of pathology specimens
“at a recognised hospital” must be at the premises of the hospital
where accommodation and nursing care is provided.
The grant of an
approval for an approved collection centre would be subject to payment of a tax
imposed under the Health Insurance (Approved Pathology Specimen Collection
Centres) Tax Act 1999 which would replace the licence fee payable in respect
of a licensed collection centre.
HEALTH INSURANCE (APPROVED PATHOLOGY SPECIMEN COLLECTION
CENTRES) TAX BILL 1999
OUTLINE
The Health Insurance (Approved Pathology Specimen Collection Centres)
Tax Bill 1999 (the Tax Bill) provides for the tax which must be paid before the
Minister can grant an approval to an approved pathology authority for an
eligible collection centre under section 23DNBA of the Act as it would be
amended by the Bill.
A Medicare benefit is not presently payable in
respect of a pathology service rendered following a request by a treating
practitioner or referring approved pathology practitioner unless the pathology
specimen for the service has been collected in a licensed collection centre, or
as otherwise permitted under the legislation. However, from 1 July 2000, the
legislation will provide in respect of approved collection centres in place of
licensed collection centres.
The Tax Bill sets the tax payable at the
same rate of $1000 for a full year as that presently payable under the Health
Insurance (Pathology) (Licence Fee) Act 1991 in respect of the grant of a
licence for a licensed collection centre under section 23DNE of Act. The
Health Insurance (Pathology) (Licence Fee) Act 1991 would be repealed
with effect from 1 July 2000.
FINANCIAL IMPACT STATEMENT
The Tax Bill replaces equivalent measures under the Health Insurance
(Pathology)(Licence Fee) Act 1991, with no significant financial impact.
Section 19AA of the Health Insurance Act
1973 is an existing savings measure, which was introduced into legislation
as part of the Budget of 1996. The proposed repeal of the current sunset clause
in section 19AA, by item 40 of the Health Insurance Legislation Amendment Bill
(No.4) 1999, would have a high financial impact upon expenditure under the
Medicare Benefits Scheme if it is not passed by
Parliament.
NEW ACCREDITATION ARRANGEMENTS FOR PATHOLOGY SPECIMEN COLLECTION CENTRES
1. BACKGROUND
The sites where pathology specimens are
collected are currently regulated under the Health Insurance Act 1973 for
the purposes of Medicare benefits payments.
Part IIA of the Health
Insurance Act 1973 and the Health Insurance (Pathology Licence Fee) Act
1991 set out the current arrangements for the licensing of pathology
specimen collection centres for private sector pathology providers under the
Licensed Collection Centre (LCC) Scheme. In order to claim Medicare benefits
for pathology services, Approved Pathology Practitioners (APPs) must operate in
an Accredited Pathology Laboratory (APL), which is owned by an Approved
Pathology Authority (APA). APAs require a licence for each pathology specimen
collection centre they operate.
The LCC Scheme was established in
February 1992 in response to concerns about a proliferation of collection
centres causing inefficiencies in pathology sector and higher costs to Medicare,
and the community. It aimed to:
• reduce the number of collection
centres by limiting the number of LCCs;
• increase the efficiency of
pathology specimen collection;
• ensure that future growth of
collection centres occurred in an orderly manner; and
• ensure that all
collection centres were of a reasonable standard.
To a large extent these
aims have been achieved:
• In February 1992 there were 2,246 collection
centres, but by February 1995 there were only 1,037 LCCs.
• The rate of
growth of expenditure on pathology services under Medicare was reduced from
approximately 13% per annum in 1990/91 to an annual average growth rate of 6% in
1998/99.
• Increased efficiency in the pathology sector as shown by a
simultaneous growth in pathology use and fall in the number of
LCCs.
• Quality standards of collection centres have been
ensured.
Eligible APAs are allocated units of entitlement from a fixed
pool known as the global entitlement, on the basis of a formula. One
unit of entitlement allows an APA to open one LCC. The units of entitlement can
be converted into licences or held by an APA. An annual fee of $1,000 applies
for each licence.
An APA can use one unit of entitlement to operate three centres in rural and remote Australia to encourage the operation of pathology services in these areas.
The Government, the Royal College of Pathologists of Australasia (RCPA)
and the Australian Association of Pathology Practices (AAPP) entered into a
second agreement, the Pathology Quality and Outlays Agreement in May 1999
for the period 1/7/1999 to 30/6/2002. It sets out a framework for managing
growth in pathology expenditure under Medicare, facilitating further structural
reform in the pathology sector and improving quality in pathology testing, use
and practice. Possible alternatives to the LCC Scheme were considered and new
arrangements for pathology specimen collection centres which have a reduced
level of regulation were agreed.
The pathology industry in Australia consists of a range of companies, from individual general practitioners who are accredited to undertake simple pathology tests within their consulting rooms, up through small/medium sized businesses to medium/large companies. A relatively small number of large companies undertake a significant proportion of market activity which reflects the capital intensive nature of pathology arising from the need to establish and maintain laboratories and employ appropriately qualified staff.
A number of problems associated with the operation of the LCC Scheme had
been identified:
• Application of the formula for allocating units of
entitlement would lead to significant changes in entitlements between APAs due
to mergers and takeovers, and the entry of privatised public sector service
providers and not for profit denominational APAs into the market. This would
result in instability in the market;
• Continuing the application of
the ‘floor arrangement’ which guaranteed that no APA would lose
entitlement resulted in an increase in the global pool of entitlement negating
one of the aims of the LCC Scheme, namely to maintain orderly growth in the
number of collection centres;
• The legislation and administration of
the LCC Scheme has proved complex and time consuming for both the industry and
government;
• The LCC Scheme was identified as needing review under the
National Competition Policy; and
• The LCC Scheme excluded public
sector APAs.
One of the major aspects of the LCC Scheme which created the
conditions under which these problem emerged was that allocation of units of
entitlement is based on:
• the size of the global pool of entitlement;
and
• the total number of APA’s participating in the LCC
Scheme.
An APA’s share of the global entitlement is relative to the
number of participants, rather than being based on the APA’s individual
performance. This has created the potential for the significant shifts in
entitlement caused by the entry of new APAs into the LCC Scheme resulting in
instability in the market. Should significant shifts in entitlement occur,
currently operating collection centres could be forced to close, whilst
replacement collection centres would not be established as quickly. This could
result in a lack of access to services, and also potential risks to quality of
service as pressure on remaining collection centres increased. This is an
undesirable environment for the government and the community due to the need to
ensure that quality pathology services are available to all
Australians.
3. OBJECTIVES
During negotiations on the
Pathology Quality and Outlays Agreement a framework for new arrangements
for pathology specimen collection centres was developed to address these
problems identified. Any new arrangements should:
• assure quality of
pathology specimen collection services provided in approved pathology collection
centres and ensure patient access to pathology specimen collection
services;
• reduce government regulation of pathology specimen
collection centres and restriction on competition;
• ensure allocation
of collection centres is based on the activity and performance of individual
APAs;
• achieve a balance between access, cost, and affordability and
allow sectoral adjustment to the new arrangements;
• be open to public
as well as private sector APAs; and
• simplify administrative
arrangements, promote accountability and
transparency.
4. OPTIONS
Maintain current level of regulation.
4.2 OPTION
2
Reduced level of government regulation.
A national
approach to pathology specimen collection centres, which incorporates both the
public and private sector APAs under the MBS. This option is fully consistent
with the objectives identified for new arrangements for pathology specimen
collection centres and set out in the Pathology Quality and Outlays
Agreement.
Under this option, the number of collection centres an APA
could operate would be based on its pathology episode activity in relation to
MBS and MBS type services over a specified 12 month period. An APA would be
eligible to have one collection centre per designated number of patient episodes
conducted.
This allows for market activity, in contrast to the existing
arrangements whereby allocation of collection centres is based on the relative
position of APAs within a global entitlement.
The three for one incentive would continue to encourage the retention of pathology collection services in designated areas of rural and remote Australia and would help to ensure equitable and fair provision of pathology services throughout Australia.
Allocation of the number of pathology specimen collection centres to APAs
on the basis of MBS and MBS type episode activity, and approval of all
collection centres according to guidelines developed by the profession. This
would be phased in over four years to allow the pathology sector to adjust to a
less regulated environment.
This is in line with the aim of any new arrangements to assure quality of pathology specimen collection services provided in approved pathology collection centres.
Allocation would occur annually with a four year phase-in
period:
• Yr1 – existing APAs will be allocated what they have,
plus 10% depending on their episode activity (no APAs will have fewer centres)
and new APAs will receive an allocation based on episode activity, or 2, which
ever is greater;
• Yr2 – existing APAs will be eligible for their
Yr1 allocation plus 10% (no APAs will have fewer centres), new APAs eligible for
allocation based on episode activity, or 2, which ever is
greater;
• Yr3 - . existing APAs will be eligible for their Yr2
allocation plus or minus 10%, new APAs eligible for allocation based on episode
activity, or 2, which ever is greater;
• Yr4 - existing APAs will be
eligible for their Yr3 allocation plus or minus 10%, new APAs eligible for
allocation based on episode activity, or 2, which ever is greater;
and
• Yr5 and onwards – allocation based on episode activity or
2, which ever is greater.
APAs would be required to apply to the HIC
annually and approval of collection centres would be based on self-assessment
and random audit by the HIC in accordance with the guidelines.
Under
these arrangements, APAs would be required to continue to pay an annual tax of
$1,000, the level of the current licence fee under the LCC Scheme, for each
collection centre they operate. This tax is being reinstated under the
Health Insurance (Approved Pathology Specimen Collection Centres) Tax Bill
1999.
Annual public reporting would be undertaken by the Pathology
Consultative Committee. The guidelines for approval of pathology specimen
collection centres would be subject to review every 3 to 5 years and the new
arrangements would be reviewed as part of the broad review of Commonwealth
legislation relating to pathology to be undertaken in 2000.
The
transition arrangements provide for:
• stability in the pathology
sector, which is in the interests of all parties concerned;
• a gradual
move to allocation on the basis of individual activity rather than on relative
position within a global pool;
• the maintenance of the quality of the
pathology services that are provided because of the guidelines on collection
centre facilities and operations; and
• the distribution of collection
centres under this option is far more likely to be able to ensure equity of
access to pathology services throughout Australia through the three for one
incentive and through a more open and les regulated set of
arrangements.
This option is consistent with current government policy to
reduce regulation and support more competitive markets, while maintaining a
level of regulation, which takes account of the government’s public policy
interests in managing growth in outlays on pathology under Medicare at an annual
average rate of 5%, and ensuring that high quality pathology services are
available to Australians.
5. AFFECTED PARTIES
Parties
affected by the proposed regulation would be:
• Pathology industry
(including public sector/not for profit
providers)
• Government
• Consumers
6. ASSESSMENT
OF IMPACT OF OPTIONS
Maintain current regulatory arrangements.
• An APA’s units of entitlement are currently based on its
relative position in the market rather than on its own
performance.
• Administration of the LCC Scheme is
complex.
• This option would not reduce the level of government
regulation of pathology specimen collection centres and so is inconsistent with
the objectives agreed for any new system as set out in the Pathology Quality
and Outlays Agreement.
• Only the private sector can participate in
the LCC Scheme.
• There is a potential for a negative outcome for some consumers if the
current arrangements were maintained as there is potential for:
- a reduction
of access to pathology services in rural and remote areas; and
- a reduction
in the total availability of pathology services because some APAs could lose
units of entitlement that are currently being utilised should the floor
arrangement not be maintained.
• The current arrangements are
inconsistent with the government’s broader policies regarding regulation
and competition as the LCC Scheme is closed to public sector
APAs.
• The retention of the floor would maintain the current
artificial market conditions whereby allocation cannot fall and so put pressure
on the expenditure cap:
- the environment created by the LCC Scheme has
resulted in units of entitlements taking on a commodity value, with some APAs
not converting their units of entitlement into licences but are holding them as
capital.
• The LCC Scheme as it stands is inconsistent with the aims
and underlying principles identified by the government and the pathology
industry in the Pathology Quality and Outlays Agreement for new
arrangements for pathology specimen collection
centres.
c) Consumers
• Instability in the pathology sector
arising from unpredictable losses in units of entitlement could lead to the
closure of collection centres with a consequent reduction in access for some
consumers who would need to travel further distances for the collection of
pathology specimens and incur greater costs.
• The industry would only benefit if the floor arrangement were to
continue, as some APAs would retain entitlements for which they would otherwise
be ineligible.
• There is a growing number of public sector APAs that
are privatising their services and denominational/not for profit APAs that are
changing their status to private and so gaining access to the LCC
Scheme.
b) Government
• No benefits to the Commonwealth
Government have been identified.
• No benefits to consumers have been identified from the retention of
the LCC Scheme.
Reduced level of Commonwealth Government
regulation.
Approval of all collection centres according to agreed
professional guidelines and allocation of the number of pathology specimen
collection centres to APAs on the basis of their level of MBS and MBS type
episode activity. Details of this option are set out above.
• APAs with less episode activity could see a reduction in the number
of specimen collection centres they could operate.
• This option would
increase competition through allowing all APAs to participate in the new
collection centre arrangements, instead of only private sector
APAs.
• The $1,000 tax will be a new cost to public sector APAs. This
will not be a cost to private sector APAs as this tax reinstates the existing
$1,000 licence fee they are required to pay under the LCC
Scheme.
b) Government
• HIC would be required to redesign
aspects of its administrative arrangements to support the operation of the new
arrangements set out under this option.
• Should the number of
collection centres fall significantly, the revenue from the collection centre
tax would be reduced.
c) Consumers
Consumers could see some
increased costs should APAs close collection centres in rural and remote areas
on the basis of business decisions, despite the operation of the three for one
incentive.
• Reduction in the level of government regulation of pathology specimen
collection centres and simplified administration and reduction of costs to
industry and increased flexibility in business decision
making;
• Ongoing stability in the pathology market by providing for
transitional arrangements to assist the pathology industry to make any necessary
structural adjustments;
• The public sector APAs are included, unlike
the LCC Scheme; and
• These arrangements are consistent with the
principles set out in the objectives for a new system and the policy framework
agreed in the Pathology Quality and Outlays Agreement.
• The Government would be able to assure the community that the quality
and efficiency of the pathology collection centres is being
maintained.
• The maintenance of incentives, such as the three for one,
assist in ensuring equitable and fair provision of services and access to
pathology services in rural and remote Australia, consistent with the objectives
of any system as set out in the Pathology Quality and Outlays
Agreement;
- regulation of the allocation of collection centres provides
the mechanism through which this incentive operates and has an important role in
maintaining access to quality pathology services throughout
Australia.
• This option is consistent with the governments policy of
reducing regulation and supporting competitive markets while maintaining a level
of regulation that ensures its public policy responsibilities towards managing
outlays on pathology and ensuring quality services are not
compromised.
• A transitional period is planned between the LCC Scheme
and the new arrangements to provide for stability in the pathology
market.
• Units of entitlement would no longer exist thereby removing
the commodification of entitlement that has been occurring within the
industry.
• Should the number of collection centres increase, there
would be an increase in revenue from the collection centre
tax.
c) Consumers
• Consumers would benefit from a stable
pathology sector that provides the Australian community with access to high
quality, affordable services.
• The introduction of professionally
agreed guidelines would help to ensure the safety and quality of pathology
collection services provided to
consumers.
7. CONSULTATION
One element of the first
pathology agreement between the pathology industry and the government was a
review of the LCC Scheme.
Possible options for addressing the concerns
about the LCC Scheme were considered by the government, HIC and representatives
of both the public and private sector pathology industries through the Pathology
Consultative Committee. A policy framework for new arrangements was developed
within the context of negotiating a second agreement.
8. CONCLUSION
AND RECOMMENDED OPTION
Both government and the pathology sector do not support the retention of the
LCC Scheme for the reasons outlined above. The Pathology Quality and Outlays
Agreement reflects the agreement between the industry and the government on
the attributes of the new system.
For these reasons, option one is not
recommended.
This option is entirely consistent with the objectives set out for new
arrangements for pathology specimen collection centres. It reflects the
agreement reached between the two principals most affected by the proposed
changes, the government and the pathology industry that is set out in the
Pathology Quality and Outlays Agreement. The proposed option addresses
the key concerns that have been raised about the LCC Scheme and provides for the
allocation of collection centres to be made on the basis of individual business
activity and the development of improved quality practices.
Option two is
therefore recommended.
9. IMPLEMENTATION
The Minister for
Health and Aged Care, the Hon. Dr Michael Wooldridge, signed the Pathology
Quality and Outlays Agreement on 6 May 1999. Dr Wooldridge wrote to all
APAs in June 1999 informing them of the new agreement and its key elements,
including the plan to replace the LCC Scheme with new arrangements.
A
timetable has been developed for interim arrangements for the period 1 February
– 30 June 2000, for the LCC Scheme in the lead up to the commencement of
the proposed new arrangements. These would maintain the units of entitlement
allocated for 1999 at the same levels. New entrants to the market would also be
accommodated.
A separate communication strategy has not been developed as
the access to pathology services is not expected to be significantly affected.
Also, the parties directly affected by the proposed regulatory changes
negotiated the framework for new arrangements for pathology specimen collection
centres.
The new arrangements will be reviewed regularly by the Department of
Health and Aged Care in conjunction with the Pathology Consultative
Committee.
The agreement includes provision for a review of this new
system within the first three years of the system’s operation.
A broad review of the Commonwealth legislation relating to pathology is to be conducted during 2000. This broad review will examine a range of aspects of this regulatory framework, including competition issues.
NOTES ON CLAUSES
This section cites the short title of the proposed legislation as the
Health Legislation Amendment Act (No. 4) 1999.
This section provides that, except for the amendments dealing with
pathology collection centres and temporary resident doctors, the Act commences
on the day on which the legislation receives Royal Assent.
Subclause
2(2) specifies that some of the amendments relating to the new pathology
specimen approved collection centre arrangements commence on 1 July 2000 when
the new arrangements generally come into effect. Other amendments relating to
these arrangements commence on Royal Assent to allow applications for approval
to be dealt with before 1 July 2000.
The temporary resident doctor
amendments commence on the 90th day after the day on which the Act
receives the Royal Assent.
Clause 3: Schedule(s)
This
section notes that each Act that is specified in the Schedule is to be as set
out in the applicable items in the Schedule concerned.
Clause 4
– Application and transitional provisions
Subclause 4(1)
contains transitional provisions relating to the amendment made by Item 2 of the
Schedule. The provision enables the benefit of the Item 2 amendment (in
ensuring the Minister’s ability – relying on subsection 33(3) of the
Acts Interpretation Act 1901 – to revoke the approval of dental
practitioners in appropriate circumstances) to extend to operate also to
practitioners who in fact were approved by the Minister in writing before the
commencement of Item 2.
Subclause 4(2) contains transitional provisions
relating to the amendments made by items 3, 8 and 10-14 of the Schedule. This
provision preserves exemptions granted to individuals under section 3J following
the repeal of that provision. Individual exemptions are given for a specified
duration. The transitional provisions do not preserve class exemptions which
are open-ended. The delayed commencement of these amendments will enable the
class exemptions to be remade under section 19AB(3).
Subclause 4(3)
continues the operation of section 23DNAA of the Act until 1 July 2000 for
the purposes of section 23DND which provides for applications for the grant of
licences for licensed collection centres. Section 23DNAA, which excludes
approved pathology authorities which are State or Territory bodies from making
such applications, would be repealed by the Bill. This repeal would be from
Royal Assent to permit applications by such bodies to be dealt with before 1
July 2000. This transitional provision is required to prevent applications by
such bodies for licences under the present arrangements during the
interim.
Subclause 4(4) prevents the coming into effect before
that date of approvals granted in advance of the commencement of the main
provisions relating to approved collection centres for pathology specimen
collection on 1 July 2000.
Subclause 4(5) maintains the
eligibility for medicare purposes of pathology services performed after 1 July
2000 but using specimens collected before that date notwithstanding that they
were collected at a licensed collection centre or recognised hospital and not,
as otherwise required after that date, at an approved collection centre or the
premises of a recognised hospital where hospital treatment is
provided.
Subclause 4(6) permits inspections of licensed collection
centres under section 23DNJ of the Act between Royal Assent and 1 July 2000
notwithstanding that the section is amended to refer to approved collection
centres with effect from Royal Assent to permit inspections of proposed approved
collection centres before 1 July 2000.
This item repeals the note at the end of the definition of “medical
practitioner”. This amendment is consequential upon the repeal of section
3J (item 3).
This item adds words to the definition of “professional
service” in subsection 3(1) to clarify that a dental practitioner who is
able to render a Medicare-payable service (in respect of oral and maxillofacial
surgery) must have been approved for this purpose by the Minister in
writing. The Medical Benefits (Dental Practitioners) Advisory Committee
(the Committee) recommends to the Minister practitioners who should be so
approved.
The effect of the amendment is to ensure that the Minister,
calling on the operation of subsection 33(3) of the Acts Interpretation Act
1901 and acting on a recommendation of the Committee, has the power to
revoke the approval of a practitioner in appropriate circumstances (for
example, where a practitioner is guilty of fraud, where the practitioner’s
name is removed from the State Dental Register, or where a practitioner ceases
to work in his or her speciality or retires).
This item repeals section 3J. Section 3J excludes temporary residents
from the definition of “medical practitioner” unless they have
certain qualifications and are granted an exemption under paragraph 3J(1)(d).
Exemptions are generally granted to alleviate medical workforce shortages in
rural areas.
Following the repeal of section 3J temporary resident
doctors will be dealt with under section 19AB which will be amended to include
temporary resident doctors. This will provide a simple streamlined process for
overseas trained doctors (both permanent and temporary resident) to access
Medicare benefits for work in districts of workforce shortage. These amendments
will also significantly reduce inequities between the treatment of temporary and
permanent resident doctors, who often work with the same areas of workforce
shortage.
This item repeals section 3K. Section 3K provides for a reconsideration
and review of decisions under section 3J. This amendment is consequential upon
the repeal of section 3J (item 3).
Item 5
This item
replaces the reference to a “licensed collection centre” in
subparagraph 16A(5AA)(d)(ii) of the Act by “an approved collection
centre”. Subsection 16A(5AA) sets out the places at which a specimen
collection must take place for medicare benefit to be payable in respect of an
associated pathology service. Under the arrangements to apply from 1 July 2000,
approved collection centres will replace licensed collection centres.
Item 6
This item qualifies the existing reference to a
“recognised hospital” in subparagraph 16A(5AA)(d)(iii) as a place at
which, for medicare benefit to be payable in respect of an associated pathology
service, a pathology specimen can be collected. Collection under the amended
provision will need to be at premises of a recognised hospital at which hospital
treatment is provided. Subsection 3(1) of the Act defines “hospital
treatment” as “accommodation and nursing care, whether provided for
the purpose of permitting the provision of professional attention or, in the
case of a nursing-home type patient, as an end in itself”. This amendment
is intended to remove doubt about the premises, which could be considered to be
part of the recognised hospital for the purposes of this provision. In
particular, it is directed at preventing claims that pathology specimen
collection centres established in locations having little or no geographical
connection with the principal premises of a recognised hospital are nevertheless
part of that hospital. It is expected that approved pathology authorities
conducting such collection centres will seek approval for them as approved
collection centres under the new arrangements put in place by the Bill.
These items amend section 19AA to remove the 1 January 2002 sunset on the
operation of section 19AA.
Section 19AA requires all medical
practitioners who first became medical practitioners after 1 November 1996
(regardless of their citizenship or migration status) to meet certain minimum
proficiency requirements before they can participate in Medicare. This section
provides an incentive to doctors to seek adequate training before moving out of
the public hospital system and into unsupervised private practice. The
amendment to section 19AA will have the effect of extending this restriction
beyond 1 January 2002.
These items substitute a new subparagraphs 19AA(1)(b)(v) and
19AA(2)(b)(v) respectively.
Paragraphs 19AA(1)(b)(v) and 19AA(2)(b)(v)
currently exempt temporary residents who have been granted an exemption under
section 3J from satisfying the minimum proficiency requirements contained in
section 19AA.
Following the repeal of section 3J temporary residents will
require an exemption under subsection 19AB(3) in order to be exempt from the
minimum proficiency requirements contained in section 19AA where they seek
access to Medicare benefits, other than assistance at operations and refer and
prescribe services. which are not restricted by sections 19AA and 19AB.
These items repeal paragraphs 19AB(1)(c) and 19AB(2)(c). Paragraphs
19AB(1)(c) and 19AB(2)(c) provide an exemption from the 10 year moratorium
applying to overseas trained doctors and former overseas medical students for
temporary resident doctors who have been granted exemptions under section 3J.
These amendments are consequential upon the repeal of section 3J (item
3).
These items repeal paragraphs 19AB(1)(d) and 19AB(2)(d) and substitutes
new paragraphs 19AB(1)(d)-(f) and 19AB(2)(d)-(f).
The effect of these
amendments will be to provide a transitional arrangement for medical
practitioners currently within the scope of the restriction on provider numbers
in section 19AB(1)(d). Currently, permanent residents who were recognised as a
medical practitioner whilst still a temporary resident would deem the 10 year
period for the moratorium on access to Medicare benefits to have commenced from
first receipt of an exemption under section 3J(1)(d). This is an unintended
effect of the legislation given that temporary residents who did not hold a
section 3J exemption prior to 1 January 1997 are only able to access Medicare
benefits for the ten years after changing residency status to permanent
residency.
This item inserts new subsections 19AB(4A)-(4D). The effect of these
provisions is to require the Minister (or his or her delegate) to comply with
statutory guidelines in exercising powers under subsections 19AB(3) and
(4).
Subsection 19AB(3) empowers the Minister to grant exemptions from
the operation of subsections 19AB(1) and (2). Subsection 19AB(4) empowers the
Minister to impose conditions on an exemption. Exemptions are granted to
alleviate medical workforce shortages in rural areas.
At present, the
exercise of this discretion is informed by non-statutory guidelines. This
amendment will make the current non-statutory guidelines disallowable
instruments and legally binding on decision-makers.
This item inserts a definition of “permanent Australian” into
subsection 19AB(7).
Item 17
This item inserts in
subsection 23DA(1) for the purposes of Part IIA a definition of
“approval” - an approval granted under new section 23DNBA to an
approved pathology authority in respect of an eligible collection
centre.
Item 18
This item inserts in subsection 23DA(1)
for the purposes of Part IIA a definition of “Approval Principles”
- principles determined by the Minister under section 23DNBA that apply to the
granting of approvals for eligible collection centres.
Item
19
This item inserts in subsection 23DA(1) for the purposes of Part
IIA a definition of “approved collection centre” - a
specimen collection centre for which an approval is in force under section
23DNBA.
Item 20
This item inserts in subsection
23DA(1) for the purposes of Part IIA a definition of “Collection Centre
Guidelines” - the Guidelines for Approved Pathology Collection Centres
published by the National Pathology Accreditation Advisory Council as in force
from time to time.
Item 21
This item inserts in
subsection 23DA(1) for the purposes of Part IIA a definition of “eligible
collection centre” in subsection 23DA(1) - a specimen collection centre on
premises owned, leased, or sub-leased by an approved pathology authority that is
the sole proprietor of at least one eligible pathology laboratory (see
definition below).
Item 22
This item inserts in
subsection 23DA(1) for the purposes of Part IIA a definition of
“eligible pathology laboratory” - a pathology laboratory approved as
an accredited laboratory under section 23DN which is in a category (as specified
in the approval) determined by the Minister under new section 23DBA for the
purposes of this definition.
Items 23-25
These items
repeal the existing definitions of “licence”, “licence
fee”, and “licence collection centre” in subsection 23DA(1)
which are redundant as a result of amendments made by the Bill.
Item
26
This item makes a minor drafting revision to the definition
of “specimen collection centre” in subsection 23DA(1).
Item 27
This item defines the term
“tax”, with a reference to the Health Insurance (Approved
Pathology Collection Centres) Tax Bill 1999.
Item
28
This item repeals the definition of “temporary
collection centre” in subsection 23DA(1). This definition was made
redundant by earlier amendments of the Act.
Item 29
This
item inserts new section 23DBA (Categories of eligible pathology
laboratories) into the Act. This permits the Minister to determine in a
disallowable instrument the categories of laboratory of which an approved
pathology authority must be the sole proprietor for the purposes of the
definition of “eligible pathology laboratory”. The categories
referred to are categories specified in an approval under section 23DN of the
Act of premises as an accredited laboratory. A determination may refer to the
categories provided for in principles under section 23DNA as in force from time
to time. This is intended to overcome the limitation otherwise presented by
section 49A of the Acts Interpretation Act 1901.
Item
30
This item repeals section 23DNAA which presently limits the
meaning of “approved pathology authority” to exclude from the
licensed collection centre arrangements a State or Territory; an authority that
is a corporation established by a law of the Commonwealth, of a State, or of an
internal Territory; or an undertaking that is partly owned or partly operated by
any of these. These bodies if approved pathology authorities will be eligible
under the amended Act to apply for approvals for eligible collection
centres.
Item 31
This item repeals section 23DNB
which provides for the granting of units of entitlement to operate licensed
collection centres and would be redundant under the new
arrangements.
Item 32
This item inserts new
sections 23DNBA and 23DNBB into the Act.
Section 23DNBA (Grant
of approval for collection centre) is the core provision of the new
arrangements in providing for the Minister to grant an approval to an approved
pathology authority for an “eligible collection centre” conducted on
premises of which the authority is the owner, lessee or sub-lessee
(subsection 23DNBA (1)). A “specimen collection centre” for
which such an approval is granted is an “approved collection
centre”. The Minister must not grant an approval unless the tax imposed
by the proposed Health Insurance (Approved Pathology Specimen Collection
Centres) Tax Act 1999 has been paid (subsection 23DNBA(2)). The
Minister in exercising the power of approval must comply with the Approval
Principles determined under subsection 23DNBA (4) (subsection 23DNBA(3)).
Subsection 23DNBA(4) empowers the determination of the Approval
Principles. This determination is a disallowable instrument (subsection
23DNBA(6)).
Subsection 23DNBA(5) sets out some of the matters
with which the Approval Principles can deal. These matters include a system for
determining the maximum number of approvals that may be granted to a particular
approved pathology authority in respect of a financial year; applications for
approvals; the giving of undertakings regarding compliance with Collection
Centre Guidelines; the duration of approvals; and the review of decisions made
under the Approval Principles. It is intended that the Approval Principles be
able to deal comprehensively with the matters set out in the subsection for the
purposes of giving effect to the proposed new arrangements.
Section
23DNBB (Identification Number) provides for the allocation of an
identification number to each approved collection centre when an approval is
granted. The identification number must be included on any document issued by,
or on behalf, an approved pathology authority operating the approved collection
centre and relating to the collection of a specimen at the centre, or the
sending of a specimen to an approved pathology practitioner. This provision is
similar to existing section 23DNF in relation to specimen collection centres.
Failure to comply with section 23DNBB will be a ground for revocation of
approval under new section 23DNG.
Item 33
This item repeals
section 23DND, which relates to applications for the grant of a licence for a
licensed collection centre, and would be redundant under the new
arrangements.
Item 34
This item repeals section 23DNE,
which relates to the granting by the Minister of a licence for a licensed
collection centre, and would be redundant under the new
arrangements.
Item 35
This item repeals section
23DNF, which provides for the specification of identification numbers for
licensed collection centres, and would be redundant under the new
arrangements.
Item 36
This item repeals section
23DNG which provides for revocation of a licence for a licensed collection
centre and substitutes new section 23DNG (Revocation of approval) which
provides in respect of revocation of approvals for an approved collection
centre. Revocation can occur if the Minister is satisfied as to one or more of
the grounds set out. These involve the centre ceasing to be an eligible
collection centre; the centre not complying with the Collection Centre
Guidelines; failing to specify the Centre’s identification number on
documents as required (section 23DNBB); failing to display a notice that the
centre is approved (section 23DNK); breaching an undertaking given under the
Approval Principles; and misusing the Centre’s identification number in
connection with a specimen collected at another specimen collection centre.
The misuse referred to in the latter ground is intended to include the
use of an approved collection centre’s identification number on a document
so as to indicate that a pathology specimen was collected at that centre and not
at a specimen collection centre where it was actually collected. It is also
intended to include the display of an approved collection centre’s
identification in relation to another specimen collection centre so as to
indicate that it is the identification number of that specimen collection
centre.
The Minister is required to give written notice to an approved
pathology authority of a revocation decision, specifying its date of
effect.
Item 37
This item repeals section 23DNH,
which deals with cancellation of a licence at the request of an approved
pathology authority, and substitutes new section 23DNH (Cancellation of
approval) which provides similarly in relation to approvals for approved
collection centres.
Item 38
This item repeals
section 23DNI, which deals with the partial refund of the licence fee where a
licence for a licensed collection centre is cancelled, and substitutes new
section 23DNI (Partial refund of tax for early cancellation of approval)
which provides similarly in relation to partial refund in respect of tax
paid on the grant of an approval for an approved collection
centre.
Items 39, 40
These items amend section
23DNJ, which deals with the inspection of specimen collection centres, to refer
to “approval” and “approved collection centre” in place
of “licence” and “licensed collection
centre”.
Items 41, 42
These items amend
section 23DNK, which imposes a requirement to display a notice at a specimen
collection centre that it is licensed, to refer to an “approved collection
centre” that is “approved”.
Item 43
This
item amends section 23DNL, which deals with the operation of an
unlicensed collection centre, to refer instead to a specimen collection that is
not an approved collection centre. The approved pathology authority of such a
centre must inform persons before collection of a specimen for the rendering of
a pathology service that a medicare benefit would not be payable in respect of
the service.
Item 44
This item amends section 23DO,
which provides for the review of certain decisions
under Part IIA of the Act,
by the insertion of new subsections 23DO(2DA) and (2DB) to provide for
reconsideration by the Minister on application within 28 days by an approved
pathology authority of a decision not to grant an approval for an approved
collection centre under new section 23DNBA.
Item 45
This
item repeals subsection 23DO(2E) and (2F) which provide for
reconsideration of decisions not to grant a licence for a licensed collection
centre and would be redundant following other amendments by the
Bill.
Item 46
This item amends subsection 23DO(2G),
which provides for reconsideration of a decision to revoke a licence for a
licensed collection centre, to refer to a decision to revoke an approval for an
approved collection centre.
Items 47, 48
These items
amend subsection 23DO(5), which provides for applications to the
Administrative Appeals Tribunal following reconsideration of decisions by the
Minister, to refer to reconsidered decisions under subsection 23DO(2DB) in
relation to approvals for approved collection centres and to delete the
redundant reference to repealed subsection 23DO(2F).
This item inserts an additional paragraph (ab) in the subsection 124B(1)
definition of “relevant offence”. This additional paragraph (ab)
refers to offences against section 23DR or 23DS committed after the commencement
of the item.
The provisions of section 23DR are intended to compel a
medical practitioner, who has rendered an R-type diagnostic imaging service, to
retain the written request for a period of 18 months, and if requested by the
Managing Director of the Health Insurance Commission (HIC) to produce that
request to an officer of the HIC. Likewise, section 23DS relates to retention
and production of other records of diagnostic imaging services. Commission of
an offence under both provisions carries a maximum penalty of $1,000 : this may
be significantly less than the potential financial gain to an offending
practitioner who – by avoiding production of records – escapes audit
and possible recovery of Medicare benefits or prosecution for more serious
offences. Inclusion of these offences as “relevant offences” will
give the Medicare Participation Review Committee an ability to make a
determination against an offending practitioner, which should provide greater
deterrence value.
This item amends the definition of “quality assurance
activity” in subsection 124W(1) of the Health Insurance Act 1973
(the Act) to include a reference to the Health Care (Appropriation) Act 1998.
Currently, a part of the definition of “quality assurance
activity” refers to services in respect of which payments were made, or
that are or would be eligible for payments under Part III of the Act. Part III
of the Act deals with the funding of hospital services. As of 30 June 1998,
Part III ceased to be used to fund the States for hospital services. Part III
has, for the purposes of hospital funding by the Commonwealth, been replaced by
the Health Care (Appropriation) Act 1998. This amendment is
consequential upon the changes in hospital funding arrangements.
Item
51
This item addresses the anomaly in subsection 128A(4) by deleting
the now-superfluous reference to section 21 of the Crimes Act
1914.
Item 52
This item revises references to a
licensed collection centre in subsection 129AAA(3A) to refer to an approved
collection centre. Subsection 129AAA(3A) relates to arrangements entered into
by an approved pathology practitioner with a practitioner or medical
entrepreneur for the use of premises not wholly used for the activities of the
approved pathology practitioner.
Items 53, 54
These
items insert a definition of “approved collection centre”
(which is otherwise only defined for the purposes of Part IIA of the Act) in
subsection 129AAA(9) for the purposes of section 129AAA, and repeal the
redundant definition of licensed collection centre.
Item
55
This items repeals the Health Insurance (Pathology)
(Licence Fee) Act 1991 which specifies the fee payable in respect of the
grant of a licence for a licensed collection centre. The tax payable in respect
of the grant of approval for an approved collection centre will be specified in
the proposed Health Insurance (Approved Pathology Specimen Collection
Centres) Tax Bill 1999.
HEALTH INSURANCE (APPROVED PATHOLOGY
SPECIMEN
COLLECION CENTRES) BILL 1999
NOTES ON CLAUSES
Clause 1 – Short Title
This clause formally provides
for the short title of the Health Insurance (Approved Pathology Specimen
Collection Centres) Tax Act 1999.
Clause 2 –
Commencement
This clause provides for the Act to commence upon Royal
Assent. This is necessary because although the new approved collection centre
arrangements under the Health Insurance Act 1973 do not begin until 1
July 2000, applications for, and grants of, approval can occur before that
date.
Clause 3 – Definitions
This clause defines the
terms “approval” and “approved pathology authority”. An
approval is the approval granted for a specimen collection centre under proposed
new section 23DNA of the Health Insurance Act 1973. The term approved
pathology authority has the same meaning as in that Act.
Clause 4
– External Territories
This clause extends the operation of the
Act to the external Territories of Cocos (Keeling) Islands and Christmas Island.
This coincides with the operation of the Health Insurance Act 1973.
Clause 5 – Imposition of tax
This clause imposes
a tax for the grant of an approval to an approved pathology authority for an
approved collection centre. The tax for 1 year is $1000 and the amount for
lesser periods is pro rata. It is payable by the approved pathology authority
which applied for the approval and is payable before the approval is
granted.
Proposed subsection 23DNI of the Health Insurance Act
1973 will provide for the making of partial refunds of tax in the event of
early cancellation of an approval at the request of the approved pathology
authority to which it relates.