Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
1998-1999-2000-2001
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 458871
The Health Legislation Amendment (Medical Practitioners’
Qualifications and other Measures) Bill 2001 (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 Medicare Benefits
Scheme (MBS) which will apply to both public and private sectors, from a day to
be fixed by Proclamation;
• 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 2000 which would replace the licence fee payable in respect
of a licensed collection centre.
FINANCIAL IMPACT STATEMENT
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 would
have a high financial impact upon expenditure under the MBS if this Bill is not
passed by Parliament.
REGULATION IMPACT STATEMENT
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;
and
• 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 30/6/2004. 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.
2. PROBLEMS
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 problems 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
4.1 OPTION 1
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 eligible 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. Any APA who owns a category G laboratory is eligible
to apply for collection centres. Under the Licence Collection Centre Scheme
there was no eligibility requirements based on laboratory ownership. 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. The new arrangements are to be
phased in to minimise the immediate impact of the changes on the industry. The
phase-in arrangements are:
Year 1: Existing eligible APAs, participating in
the LCC Scheme, will be allocated what they have, plus 10% depending on their
episode activity (no APAs can lose centres)
New Entrants, defined as other
eligible APAs which did not participate in the LCC Scheme, will receive 50% of
their allocation based on episode activity, or 2, which ever is greater;
Year
2 Existing eligible APAs, participating in the LCC Scheme will be eligible for
their allocation in year 1 plus 10% (again, no APAs can lose centres)
New
Entrants, defined as other eligible APAs which did not participate in the LCC
Scheme, are eligible for 75% of their allocation based on episode activity, or
2, which ever is greater;
Year 3 Existing eligible APAs, participating in the
LCC Scheme will be eligible for their allocation in year 2 plus or minus 10%
(APAs can now lose centres)
New Entrants, defined as other eligible APAs
which did not participate in the LCC Scheme, eligible for allocation based on
episode activity, or 2, which ever is greater;
Year 4 Existing eligible APAs
participating in the LCC Scheme will be eligible for their allocation in year 3
plus or minus 10% (again, APAs can lose centres)
New Entrants, defined as
other eligible APAs which did not participate in the LCC Scheme, eligible for
allocation based on episode activity, or 2, which ever is greater; and
Year 5
and onwards – allocation based on episode activity.
New APAs who
enter the market will be eligible for 2 collection centres upon entry. At the
beginning of their second year of operation, their allocation will be based on
their episode activity, or they will be allocated 2 centres, whichever is
greater. At the beginning of their third year of operation, their eligibility
will be solely based on their episode activity.
If new APAs enter the
market during the phase-in arrangements, they will receive 2 collection centres
in their first year and 2 or centres based on episode activity, whichever is
greater in their second year. In their third year, they will be subject to the
conditions that apply to ‘other APAs’ during the particular year of
the phase-in arrangements.
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 for collection centres that are located separately from category G
laboratories. This $1,000 tax will not be payable for collection centres that
are on the same premises as category G laboratories. This exemption provides
for parity between public sector and private sector APAs, as collection centres
that are located on the premises of a recognised hospital (ie a hospital owned
by a State/Territory) are exempt from this collection centre tax.
The tax
has been set at $1,000 as this is the level of the current licence fee for
collection centres under the LCC Scheme. The current licence fee is being
reinstated as a tax under the Health Insurance (Approved Pathology Specimen
Collection Centres) Tax Act 2000.
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 are being reviewed as part of the broad review of
Commonwealth legislation relating to pathology . This Review is due to report
before the end of 2001.
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
6.1 OPTION 1
Maintain current
regulatory arrangements.
6.1.1 Costs
a) Pathology
industry
• The number of new entrants into the pathology market has
increased demand for units of entitlement. Under the current arrangements, this
would lead to some existing APAs losing units of entitlement despite increasing
their activity. This could result in instability, requiring ongoing
intervention such as the floor introduced for the 1999 licensing
year.
• 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.
b) Government
• 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.
6.1.2 Benefits
a) Pathology
industry
• 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.
c) Consumers
• No benefits
to consumers have been identified from the retention of the LCC
Scheme.
6.2 OPTION 2
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.
6.2.1 Costs
a) Pathology
industry
• 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 eligible 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.
6.2.2 Benefits
a) Pathology
industry
• 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;
• Those collection centres located on the same
premises as category G laboratories will be exempt from the $1,000 collection
centre tax.
• 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.
b) Government
• 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
8.1 OPTION 1
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.
8.2 OPTION 2
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 LCC Scheme arrangements for the period
1 February 2000 until the commencement of the proposed new arrangements.
These would maintain the units of entitlement allocated for 1999 at the same
levels until 31 January 2002 (should the new arrangements not commence prior to
that date). 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.
10. REVIEW
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 2000/2001. This broad review will examine a
range of aspects of this regulatory framework, including competition issues.
REGULATION IMPACT STATEMENT
REMOVAL OF
SUNSET CLAUSE IN SECTION 19AA OF THE HEALTH INSURANCE ACT 1973
1. BACKGROUND
Section 19AA of the Health Insurance Act
1973 (the Act) provides that a Medicare benefit is only payable in respect
of professional services provided by a medical practitioner with a postgraduate
specialist or general practice qualification, or as part of a prescribed
training course or program. The section provides an incentive to doctors to
seek adequate training before moving out of the public hospital system and into
unsupervised private practice. Section 19AA will cease to operate on 1 January
2002.
The proposal to delete the sunset clause in section 19AA would
allow the qualification incentives for new medical practitioners to continue
beyond 1 January 2002.
A doctor subject to section 19AA can do the
following things in order to access Medicare rebates for professional services
in private practice:
• Obtain a general practice (GP) or specialist
fellowship, in which case he or she ceases to be subject to section
19AA;
• Take part in a relevant training program (eg: GP training); or
• Be a participant in supervised programs such as the Rural Locum
Relief Program, which is confined to rural areas.
A doctor will take from
5 to 9 years from the time of graduation from medical school to completion of
postgraduate education, noting that the first two years are spent in achieving
an internship and generalist experience in the hospital system, and depending on
the vocation selected. Much of that time is spent in a salaried hospital
position and/or working in the field in which the doctor is training. There is
a single training program for general practice and a number of available courses
for specialist trainees, including training placements in anaesthesia, intensive
care, dermatology, emergency medicine, medical administration, obstetrics and
gynaecology, opthalmology, pathology, adult medicine, paediatrics, occupational
medicine, public health medicine, rehabilitation medicine, psychiatry,
radiodiagnosis, oncology and surgery.
2. PROBLEMS
Prior to
the introduction of section 19AA of the Act in 1996, a number of problems had
been identified in the way that the Medicare system was providing financial
incentives for particular doctor behaviours:
• Doctors graduated
from medical schools with basic training but not the expertise needed to
practice independently without further specialised training or supervision in a
field.
• There was widespread agreement that general practice
should be recognised as a distinct discipline requiring specific training, but
there was no mechanism to promote this as young graduates were able to set
themselves up as general practitioners accessing Medicare immediately upon
completing their internship. Successive reports to Government, such as the 1992
General Practice Strategy and General Practice: changing the future through
partnerships, the 1998 Report of the General Practice Strategy Review Group,
had supported the principle that vocational training in general practice helped
to recognise general practice as a distinct discipline requiring specific skills
and experience. This principle has had acceptance over a long period, for
example by the Senate Select Committee on Health Legislation and Health
Insurance, in its assessment of arrangements to promote vocational recognition
of general practitioners in August 1989.
• There was a growing
oversupply of general practitioners in metropolitan Australia and a growing
undersupply in rural and remote areas.
Section 19AA was designed to work
in conjunction with other major Government initiatives to address areas of
doctor shortage and over-supply and to improve the training of doctors, thereby
enhancing the quality of health care delivery in Australia and patient access to
services.
At the time section 19AA was introduced there was concern,
mainly due to a lack of available data on medical postgraduate training, that
the effect of the legislation be monitored. Three mechanisms were placed into
the Act to ensure adequate monitoring would occur:
• The Medical
Training Review Panel was established to collect information and table an annual
report on postgraduate training.
• Section 19AD required that a
Mid-Term Review of sections 19AA, 3GA and 3GC of the Act be tabled before
Parliament.
• A sunset clause was inserted into the legislation so that
Parliament would need to approve the continuation of the
measures.
3. OBJECTIVES
The objective of the Government in
removing the sunset clause from section 19AA is to continue the initiatives
implemented in section 19AA.
More specifically, by continuing section
19AA of the Act, the Government intends to:
• ensure that medical
practitioners have a strong incentive to become suitably qualified to provide
medical services in private practice within distinct medical vocations; and
• ensure that Medicare funds are directed toward supporting quality
services;
• increase patient access to quality services, especially in
undersupplied rural areas.
4. OPTIONS
4.1 MAINTAIN
CURRENT LEVEL OF REGULATION BY REMOVING THE SUNSET CLAUSE
The current
scheme of regulation imposed by section 19AA of the Act provides that in order
to access Medicare benefits, doctors must take steps to gain proficiency and
training in their chosen vocation. In May 2000, there was an estimated total of
5680 vocational training positions/programs in Australia. Prior to selecting a
vocation, the doctors may also choose to participate in a short-term workforce
program and fulfill a community need in one of the identified areas of need,
such as a rural area. An example of such a program is the Rural Locum Relief
Program, which provided over 600 short-term placements in supervised rural
general practice in the 1999/2000 financial year.
The
“addition” to training requirements that section 19AA imposes is the
financial incentive for doctors who want to work in independent private practice
to gain a Fellowship qualification in either general practice or a specialty.
Doctors are not compelled to follow this path.
Postgraduate training
courses vary in length, for example the Royal Australian College of General
Practitioners Training Program takes three years to complete while the Royal
Australian College of Surgeons Training Course requires approximately four years
of advanced training. Trainees are paid a salary while they train and some
training courses also allow the trainee access to Medicare
benefits.
4.2 ALLOW THE SUNSET CLAUSE TO TAKE EFFECT
This would be a return to the situation that existed in 1996. At
that time, new graduates could set up in private general practice upon
completion of internship.
This situation is contrary to the principle
that general practice is a distinct discipline requiring specific skills and
training.
This meant that in 1996, a significant number of doctors
working in general practice were new graduates who were not required to
undertake continuing medical education or quality assurance activities in order
to work in general practice. The immediate financial incentive of Medicare
rebates available for this type of work meant that there was a strong inducement
for new graduates not to undertake either specialist or general practice
training, even though the training was widely accepted as necessary for quality
private practice services.
5. AFFECTED PARTIES
Parties
affected by the proposed legislation would
be:
• Consumers
• Medical
practitioners
• Government
6. IMPACT OF THE
LEGISLATION
Option 1: Maintain current arrangements by removing
sunset clause
6.1.1 Costs
(a) Consumers
• Section
19AA of the Act does not impose a cost on consumers and so repealing the sunset
clause would not have a negative impact on them.
(b) Medical
practitioners
• The current arrangements do not impose a hardship on
medical practitioners, who are paid while they undertake postgraduate training
or supervised work while participating in a short-term workforce program or in
the public hospital system. However, a cost in the range indicated below as a
saving to Government (see 6.1.2(c)) would be imposed on those new medical
graduates who, in the absence of section 19AA of the Act, would have set up in
independent private general practice despite their lack of
training.
• Doctors who wish to become general practitioners, and an
increasing number of specialist trainees, need to do a part of their training in
a rural location so as to gain experience of issues relevant to rural practice.
Some doctors may not wish to relocate for the term of the rural
training.
(c) Government
• In the long term, this legislation
should mean that more specialists and GPs train in their vocations and prevent
future medical workforce shortages in various disciplines. While the Government
would pay a higher rebate for the services provided by these medical
professionals, this would be in line with population needs. The Government
currently provides funding to the Royal Australian College of General
Practitioners for a maximum of 450 trainees and also pays an amount for
specialist training indirectly through its Health Care Agreements with various
States. Again, it is anticipated that any increase in such funding would only
be in line with the population need for more
doctors.
6.1.2 Benefits
(a) Consumers
• The
legislation has enabled patients to be confident that doctors they consult are
adequately trained in the areas in which they practise. Doctors who have
achieved a postgraduate qualification are also generally required to undertake
Continuing Medical Education, which means that their skills are refreshed and
updated regularly. This helps both doctors and patients.
• It has also
enhanced patient access to doctors in rural areas as a number of workforce
programs under the legislation, for example the Rural Locum Relief Program, give
doctors the opportunity to experience supervised general practice work in a
rural or remote area. Over 600 doctors participated in the Rural Locum Relief
Program in the 1999/2000 financial year.
• An increasing number of
general practice and specialist trainees perform part of their training in a
rural area, for example, around 200 of the 450 general practice trainees will
participate in a Rural Training Pathway. This enhances rural consumer access to
services and familiarises doctors to rural practice.
• Vocational
recognition encourages and rewards GPs, who participate in Continuing Medical
Education and quality assurance activities, thereby maintaining and improving
the quality of their practice.
• The current arrangements provide an
incentive for doctors who wish to work in private practice to gain relevant
general practice or specialist qualifications. Doctors who do this then provide
services that attract a higher Medicare rebate in recognition of their
commitment to postgraduate training. Patients therefore get a higher quality
service and a higher Medicare rebate when they visit such
doctors.
• Many doctors who choose not to undertake postgraduate
medical training work under supervision within the public hospital hospital
system, and this supports patient access to hospital services.
(b)
Medical practitioners
• The independent Mid-Term Review of the Provider
Number Legislation ‘Recommendation 10’ states:
“This review
finds no reason why the Sunset Clause should remain in the legislation. In fact
the review finds that it would be counterproductive to morale amongst junior
doctors to maintain the illusion that the legislation will ever be repealed. It
would also provide certainty for medical students” (page 32).
The
removal of the sunset clause is thus a way to signal to newly graduating medical
practitioners the Government’s intent that incentives to promote
achievement of a qualification standard will continue. Removal of the sunset
clause would therefore provide certainty to new medical
practitioners.
• Doctors who gain postgraduate training to support
their work in private practice are able to provide a better service to their
patients and have the benefit of Continuing Medical Education to refresh their
skills. They also have access to higher levels of Medicare rebate once they
achieve these qualifications. Once they achieve a postgraduate qualification,
doctors are generally able to earn more for their work in private practice
because they can see patients outside the public hospital
setting.
• The Government is committed to supporting this legislation
by making sure that medical graduates have real opportunities to enter training
courses. New graduates can be confident that there will be enough training
places available for them due to the work of the Medical Training Review Panel
(MTRP) and the Australian Medical Workforce Advisory Committee (AMWAC). The
MTRP has reported for four subsequent years that the number of first year
advanced training positions outstrips the number of graduates. The MTRP’s
November 2000 report stated that for 2001, there are projected to be 1518
training places available for around 1250 graduates.
• Doctors are
able to experience supervised rural general practice in such programs as the
Rural and Remote Area Placement Program and the Rural Locum Relief Program,
before they commit to formal training in general practice.
• Although
the qualification requirement does affect the earning capacity of doctors
entering private practice, it is effectively a self-regulating system as doctors
are able to choose their level of training and thus their earning capacity,
similar to other industries.
(c) Government
• The Government is
able to ensure that taxpayer’s money is spent on quality services and not
on substandard ‘general practice’ services provided by inexperienced
doctors in areas already well supplied with medical services. The incentive to
achieve postgraduate qualifications means that the Government is not paying
Medicare rebates to inexperienced, untrained doctors setting up in general
practice in the metropolitan areas. Doctors with postgraduate training were
seen by the 1998 Report of the General Practice Strategy Review as having a
better awareness of their role as ‘gatekeeper’ for primary care and
specialist services. This responsibility related to the provision of services
is likely to reduce the potential for supply side created demand to occur in
this field.
• The Government is able to monitor medical education and
training pathways in support of the legislation, which helps with future
workforce planning. It has recently funded a number of projects to help
identify and address problems faced by new medical graduates, thus enhancing the
quality of pathways to postgraduate training.
• The Australian Medical
Workforce Advisory Committee (AMWAC) found that in 1994 the
GP workforce was in considerable oversupply in capital cities, apart from
Darwin. The latest AMWAC analysis, based on 1998 data and using quite different
methodology, produced an estimate of metropolitan practitioner supply in excess
of benchmark levels of approximately 2,300 GPs. This number is the oversupply in
the number of general practitioners in metropolitan Australia. Both demand and
supply side indicators are cited in support of this oversupply.
• The qualification requirements are helping to reduce the
metropolitan oversupply by preventing new, untrained graduates from entering
general practice in the cities. Instead, doctors entering formal training for
general practice, or one of the workforce shortage programs are given the
opportunity to experience rural practice. These doctors are able to become
familiar with rural practice and so growing numbers will return to rural areas
and take advantage of the rural incentives that the Government has made
available.
• Section 19AA has generated savings of approximately $556
million over 4 years, with ongoing savings of approximately $250million per
year. These ongoing savings are a result of doctors remaining in hospitals
and/or undertaking postgraduate training, rather than adding to the
over-supplied GP workforce in metropolitan areas.
Option 2: Allow the
sunset clause to lapse – remove the qualification
requirements
6.2.1 Cost
(a) Consumers
• New
graduates entering general practice without training would not be obliged to
reveal their lack of relevant training and experience to patients. Patient
confidence that the doctors they consult are adequately trained in the areas in
which they practise will be eroded. This is borne out in the independent
Mid-Term Review of the Provider Number Legislation and also by the 1998 Report
of the General Practice Strategy Review, which notes the importance that
consumers place on access to well-trained general practitioners.
• Services rendered by such doctors would not attract the full GP rate
of Medicare benefit and so patients could be asked to pay more than they would
if they saw a properly qualified GP in the same practice. The oversupplied
metropolitan areas would thus not necessarily provide lower cost services to
city consumers.
• The numbers of specialist trainees will drop as
potential trainees would be attracted by the incentive of entering general
practice with no training. Specialist shortages will therefore increase.
Australian Medical Workforce Advisory Committee recommendations about specialist
training numbers are rendered useless if there is no mechanism to channel
graduates into specialist training.
• There could be an exodus of
junior doctors from public hospitals seeking to avoid the shift-work of busy
hospital environments. This would reduce the availability of
services.
(b) Medical practitioners
• This would not impose a
direct cost on medical practitioners, however, the removal of an incentive to
engage in postgraduate training could lead a large number of inexperienced
doctors to enter general practice in already oversupplied metropolitan areas.
Many of these doctors would leave public hospitals to work in the cities,
placing increased pressure on doctors remaining in the hospital
system.
• If the qualifying requirements are removed, many doctors
could immediately leave rural areas to work in the cities, precipitating a
crisis in medical services for those doctors who rely upon the services of rural
locums and trainees to help them out.
• Lack of postgraduate training
in their chosen field of practice would mean that doctors would not have access
to College run continuing medical education or quality assurance activities.
This would reduce such doctors’ ability to keep up to date with new
developments and could in time affect their confidence and possibly their
competence to practice in their chosen field. It is possible that such doctors
would need to pay higher professional indemnity insurance due to their lack of
specific skills.
(c) Government
• It is expected that the shift
of the existing junior doctor pool into private general practice will add
approximately $250 million per year to the overall cost of Medicare over the
long term.
• In addition, at the moment the sunset clause lapsed,
up to 6,000 junior doctors currently subject to the qualification requirements
would regain the unrestricted right to access taxpayer-funded Medicare rebates
in a location of their choice, irrespective of areas of greatest need. This
could significantly increase the cost of the Medicare
system.
6.2.2 Benefits
(a) Consumers
• The expiration
of the qualification requirements does not benefit consumers.
(b) Medical
practitioners
• New medical graduates would be able to set up in
independent private general practice in the location of their choice without
gaining general practice qualifications and the services they provided would
attract a Medicare rebate. These doctors would be able to avoid requirements
such as continuing medical education.
(c) Government
• The
Government would not benefit if the sunset clause were to take
effect.
7. CONSULTATION
• Doctors with postgraduate
training were seen by the 1998 Report of the General Practice Strategy Review as
having a better awareness of their role as ‘gatekeeper’ for primary
care and specialist services. This responsibility related to the provision of
services is likely to reduce the potential for supply side created demand to
occur in this field.
• The 1998 Report of the General Practice
Strategy Review also contains discussion of the role of postgraduate training
for general practitioners as equipping them to provide comprehensive,
whole-patient care. It also recognises that the vocational recognition of
general practitioners has the potential to lead to better health outcomes for
consumers. Recommendation 19 of that Report specifically endorses the approach
contained in section 19AA of the Act, as follows:
“That provider
numbers for doctors wishing to enter general practice continue to be restricted
to doctors who are in or have completed a training program leading to Fellowship
of the RACGP or equivalent”.
The Mid-Term Review of Provider Number
Legislation was conducted by an independent consultant, Mr Ron Philips. There
were three primary sources of information for this review, which included
responses to a public advertisement calling for submissions, consultations with
key stakeholders and a literature and data review. It was tabled before
Parliament on 8 December 1999.
The Review found that there
was:
“overwhelming agreement with the objective that General Practice
be recognised as a vocational specialty (ie. that graduates without further
training should not be practising unsupervised).”
Mr Philips also
found that:
“claims made at the time the bill was passed that there was
a lack of training positions that would result in young doctors being unemployed
or ‘stranded’ in hospitals have not materialised.”
The Review found no evidence of adverse impacts on newly graduated
doctors and recommended the removal of the sunset clause.
At the time the
legislation was passed, the Australian Medical Association (AMA) claimed that
hundreds of doctors would be unemployed or unable to find training positions.
The Review explained that these fears might have been based on the lack of data
available back in 1996. This is no longer a problem due to the work of the
Medical Training Review Panel, which was set up to monitor and collect
information about the effects of the restrictions. The Medical Training Review
Panel consults with representatives of the affected medical practitioners and
the AMA.
8. CONCLUSION AND RECOMMENDED OPTION
Option
1
• The Mid-Term Review of the Provider Number Legislation and the
reports of the Medical Training Review Panel have both shown that concerns that
the qualification requirements would lead to unemployment or shortage of
training places have not materialised; and
• Section 19AA incentives
encourage improvement in the quality of general practice services and also
provide an incentive for doctors to undertake specialist training;
and
• Medicare funding for this option will expand with population
needs for vocational services, with reduced potential for funding to be spent on
lower standard services in oversupplied areas.
• Under this option,
doctors retain choice over their career pathway, however the choice to set up in
independent general practice does not attract a financial incentive from
Government.
On balance, this measure promotes the public interest in
higher quality medical services and so Option 1 is recommended.
Option
2
• This option would provide an incentive for newly graduated
doctors to abandon postgraduate training pathways for an immediate financial
gain, with negative consequences for future workforce
planning.
• Medicare funding would be spent on services that it has
been widely agreed are not the preferred means for delivery of quality general
practice services.
Due to its cost and the potential for deterioration
in the quality of medical services that it represents, Option 2 is not
recommended.
9. IMPLEMENTATION
Section 19AA is already
fully implemented. Undergraduate medical studies currently prepare doctors as
generalists ready to undertake vocational training. The removal of the sunset
clause would occur by amendment of section
19AA.
10. REVIEW
The Mid-Term Review of the Provider Number
Legislation provided a comprehensive assessment of the effects of the
legislation and concluded that the sunset clause should be removed as the
negative consequences of the legislation had not materialised.
Since
the introduction of the provider number legislation, the Commonwealth has been
actively identifying and supporting the training needs of medical graduates.
Each year it funds a number of initiatives under the Medical Workforce
Readjustment Funding Program to address these needs. The Government continues to
be committed to continuous improvement in medical workforce training and supply.
Thus no formal review mechanism is included in the proposal to remove the sunset
clause but ongoing monitoring activity will occur.
NOTES ON CLAUSES
This section cites the short title of the proposed legislation as the
Health Legislation Amendment (Medical Practitioners’ Qualifications and
Other Measures) Bill 2001.
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 a day to be fixed
by Proclamation, or should they not be proclaimed within six months after this
Act receives the Royal Assent, then on the first day after the end of that
period.
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 the approved
collection centre regime commencement, 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 commencement. 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 the approved collection centre regime
commencement.
Subclause 4(5) maintains the eligibility for
medicare purposes of pathology services performed after the approved collection
centre regime commencement date but using specimens collected before that
commencement date notwithstanding that they were collected at a licensed
collection centre or recognised hospital and not, as otherwise required after
that commencement 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 the approved collection centre regime commencement
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 the approved collection centre regime commencement
date.
Subclause 4(7) provides that ‘approved collection centre
regime commencement’ means the day on which the items referred to in
subsection 2(2) are proclaimed to commence.
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 Act 2000.
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 of premises specified in an approval under section
23DN of the Act 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 Health Insurance (Approved Pathology Specimen Collection Centres) Tax
Act 2000 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.
Item 47
This item amends
paragraph 23DO(2H)(b) of the Health Insurance Act 1973 by omitting
‘licence’ and substituting ‘approval’.
Items
48, 49
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
52
This item addresses the anomaly in subsection 128A(4) by deleting
the now-superfluous reference to section 21 of the Crimes Act
1914.
Item 53
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 54, 55
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
56
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 Health Insurance (Approved Pathology Specimen Collection Centres) Tax Act
2000.