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2013-2014
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
PRIVATE HEALTH INSURANCE AMENDMENT BILL (NO. 2) 2014
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health, the Hon Peter Dutton MP)
PRIVATE HEALTH INSURANCE AMENDMENT BILL (NO. 2) 2014
OUTLINE
The purpose of the Private Health Insurance Amendment Bill (No. 2) 2014 is twofold.
The Bill will transfer the functions of the Private Health Insurance Ombudsman to the
Office of the Commonwealth Ombudsman by amending both the Private Health
Insurance Act 2007 and the Ombudsman Act 1976 with effect from 1 July 2015
(dependent on passage of the Bill). The Bill will also operate to ensure that provisions
of the Private Health Insurance Act 2007 relating to the calculation of the Australian
Government Rebate on private health insurance that were intended to be repealed by
the Private Health Insurance Legislation Amendment Act 2014 will be taken never to
have commenced.
Policy Background
Transfer of functions of the Private Health Insurance Ombudsman
As part of the 2014-15 Budget: Smaller Government - additional reductions in the
number of Australian Government bodies, it was announced that the statutory agency
of the Office of the Private Health Insurance Ombudsman would be merged into that
of the Office of the Commonwealth Ombudsman. These changes are expected to
reduce duplication, improve coordination and increase efficiency in how public funds
are used to deliver services to the community.
The Private Health Insurance Ombudsman will remain a separate statutory office,
however the person who holds the position of the Commonwealth Ombudsman will
automatically also hold the position of the Private Health Insurance Ombudsman.
This is consistent with the approach taken for other industry ombudsmen created
under the Ombudsman Act 1976. As part of the transfer of functions, the opportunity
has been taken to streamline some of the investigative procedures of the Private
Health Insurance Ombudsman with those of the Commonwealth Ombudsman.
Removal of references to the Base Premium measure inadvertently included in the
PHI Act
The previous Labor Government intended that the Australian Government Rebate on
private health insurance (the Rebate) be calculated by reference to a base premium`.
The Private Health Insurance Legislation Amendment (Base Premium) Act 2013 was
enacted to implement this policy with effect from 1 April 2014, although some
provisions took immediate effect in 2013.
Prior to the full commencement of the base premium measure the Government
decided to use a different, simpler mechanism for calculating the Rebate.
In March 2014 the Private Health Insurance Legislation Amendment Act 2014 was
passed with the intent of removing all references to a base premium from the Private
Health Insurance Act 2007. However, due to an unintended delay in the granting of
Royal Assent it was only partially effective in doing so. The Bill will provide for
references to the base premium inadvertently included in the Private Health Insurance
Act 2007 to be taken never to have been so included.
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Financial Impact Statement
The transfer of functions of the Private Health Insurance Ombudsman is estimated to
result in net savings to industry of approximately $0.6 million over three years. Any
savings will be reflected in levies payable by the private health insurance industry.
The removal of the Base Premium provisions will not have any financial impact.
Although reference to base premiums remains in a small number of provisions in the
Private Health Insurance Act 2007, the removal of remaining references to the
concept of a base premium will not affect how the premiums reduction scheme is
applied for insurers and relevant policy holders.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
PRIVATE HEALTH INSURANCE AMENDMENT BILL (NO.2) 2014
This Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview of the Bill
Transfer of functions of the Private Health Insurance Ombudsman
As part of the 2014-15 Budget: Smaller Government - additional reductions in the
number of Australian Government bodies it was announced that the functions of the
Private Health Insurance Ombudsman will be transferred to the Office of the
Commonwealth Ombudsman as of 1 July 2015. The Private Health Insurance
Amendment Bill (No. 2) 2014 (the Bill) amends the Private Health Insurance Act
2007 and the Ombudsman Act 1976 to implement this measure.
Removal of references to the Base Premium measure inadvertently retained in the
PHI Act
The Private Health Insurance Legislation Amendment (Base Premium) Act 2013 was
intended to amend the Private Health Insurance Act 2007 to provide for the private
health insurance premium reduction, for the purpose of the Australian Government
Rebate on private health insurance, to be calculated by reference to a base premium`
from 1 April 2014. The Private Health Insurance Legislation Amendment (Base
Premium) Act 2013 had a staggered commencement, with some provisions
commencing from June 2103 and some from
1 April 2014.
Prior to the full commencement of the base premium measure from 1 April 2014, the
Australian Government decided to use an alternative mechanism for calculating the
rebate that was simpler for insurers to implement.
In March 2014 the Private Health Insurance Legislation Amendment Act 2014 was
passed with the intent of removing all references to a base premium from the Private
Health Insurance Act 2007 before 1 April 2014. However, due to an unintended delay
in the granting of Royal Assent, which occurred on 9 April 2014, it was only effective
to remove those references that had commenced in June 2013. The Bill will provide
for amendments to the Private Health Insurance Act 2007 relating to base premiums`
that took effect on 1 April 2014 to be taken never to have been made.
Human rights implications
The right to health
The right to health - the right to the enjoyment of the highest attainable standard of
physical and mental health - is contained in article 12(1) of the International
Covenant on Economic, Social and Cultural Rights. The United Nations Committee
on Economic, Social and Cultural Rights (the Committee) has stated that health is a
fundamental human right indispensable for the exercise of other human rights`, and
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that the right to health is not to be understood as a right to be healthy, but rather
entails a right to a system of health protection which provides equality of opportunity
for people to enjoy the highest attainable level of health.
The Committee states that the notion of the highest attainable standard of health`
takes into account both the condition of the individual and the country`s available
resources. The right may be understood as a right of access to a variety of public
health and health care facilities, goods, services, programmes and conditions
necessary for the realisation of the highest attainable standard of health.
Discussion of the Bill
The Private Health Insurance Ombudsman operates to protect the interests of people
who have or wish to obtain private health insurance by:
(a) assisting to resolve complaints made against private health insurers, private
health insurance brokers or health care providers relating to private health
insurance arrangements;
(b) investigating the practices and procedures of insurers, brokers or health care
providers;
(c) mediating between private health insurers and health care providers; and
(d) disseminating information about private health insurance and the rights and
obligations of people who hold insurance, including through the
privatehealth.gov.au website.
The Private Health Insurance Ombudsman may also make recommendations to
Government about general changes in regulatory or industry practices and provide
advice on possible means for dealing with problems identified through investigations.
The Private Health Insurance Ombudsman is not the appropriate forum for dealing
with clinical matters or commercial negotiations and where a complaint primarily
relates to either of these matters the Ombudsman may decline to deal with the
complaint.
The Office of the Private Health Insurance Ombudsman is currently established under
the Private Health Insurance Act 2007. In order to reduce the size of government and
streamline its operations the Bill will transfer the functions of the Private Health
Insurance Ombudsman to the Office of the Commonwealth Ombudsman from 1 July
2015 (dependent on passage of the Bill).
The Office of the Private Health Insurance Ombudsman will be established by the
Ombudsman Act 1976 and the person who holds the position of the Commonwealth
Ombudsman will also hold the position of the Private Health Insurance Ombudsman.
As part of the transfer of functions, the opportunity has been taken to streamline some
of the investigative procedures of the Private Health Insurance Ombudsman with
those of the Commonwealth Ombudsman.
However, the basic schema of the Private Health Insurance Ombudsman functions
will be retained under the Ombudsman Act 1976:
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(a) the same classes of individuals and organisations will be able to make
complaints to the Private Health Insurance Ombudsman, namely current or
prospective policy-holders, private health insurers and brokers, and health care
providers;
(b) complaints may be made against the same classes of individuals and
organisations, namely insurers, brokers and health care providers;
(c) complaints may be made to the Private Health Insurance Ombudsman on the
same grounds, in particular complaints about health care providers will still
need to be in relation to private health insurance arrangements and either:
(i) also involve a complaint against an insurer,
(ii) be made by an insurer or policy-holder; or
(iii) if the complainant is another health care provider or a private health
insurance broker, must include an insurer or policy-holder as a
complainant.
The Private Health Insurance Ombudsman will also retain the current mechanisms for
dealing with a complaint, which are conducting mediation, referring a complaint to
the subject of the complaint, or investigating the complaint. As was the case under the
Private Health Insurance Act 2007, the Private Health Insurance Ombudsman cannot
take or continue to take any of these actions without the agreement of the
complainant. The Private Health Insurance Ombudsman also cannot commence or
continue to conduct mediation or investigate a complaint once it is withdrawn.
The Private Health Insurance Ombudsman will also continue to be able to undertake
own-motion investigations into the practices and procedures of a private health insurer
or private health insurance broker, or into the practices and procedures of a health care
provider where there is a nexus with private health insurance arrangements or an
insurer.
The Private Health Insurance Ombudsman promotes the enjoyment of the right to
health, as the Ombudsman provides an independent, accessible and timely complaints
handling mechanism, supporting the Government`s commitment to the private health
insurance industry in Australia.
Right to privacy
Article 17 of the International Covenant on Civil and Political Rights prohibits the
unlawful or arbitrary interference with a person's privacy, subject to a limited power
to derogate from this obligation to an extent necessary in the circumstances.
Because the Private Health Insurance Ombudsman's main role is responding to
complaints, individuals will usually provide relevant personal information to the
Private Health Insurance Ombudsman as part of their complaint. However in order to
be capable of dealing effectively with complaints it may be reasonably necessary for
the Private Health Insurance Ombudsman to require personal information about a
complainant from an insurer, broker or health care provider about whom a complaint
has been made.
In line with current provisions in the Private Health Insurance Act 2007 and the
Ombudsman Act 1976, the Private Health Insurance Ombudsman will have the power
to compel the production of information and records relating to a complaint or
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investigation from any person the Private Health Insurance Ombudsman reasonably
believes capable of giving them.
Under the Private Health Insurance Act 2007, the Private Health Insurance
Ombudsman was not, as part of handling a complaint, able to request information
about the complainant's dealings with the subject of the complaint without the
complainant's consent. The Private Health Insurance Ombudsman also was not, as
part of an own-motion investigation, able to request information or records relating to
a particular individual without the consent of the individual. These limits on the
information gathering-power are not maintained under the Ombudsman Act 1976 to
better align with current limitations on the Commonwealth Ombudsman`s information
gathering-powers.
However, information and records including personal information provided to the
Private Health Insurance Ombudsman will be protected from inappropriate disclosure
by the general secrecy provisions applying to the Ombudsman Act 1976. That Act will
make it an offence for the Private Health Insurance Ombudsman, a member of staff of
the Office of the Commonwealth Ombudsman or a person appointed by the Private
Health Insurance Ombudsman to undertake mediation, to record or disclose to any
other person any information disclosed to or obtained under the Ombudsman Act
1976. This general prohibition on recording and disclosure is subject to a number of
exceptions to enable the Private Health Insurance Ombudsman to effectively perform
its role, including:
(a) where the recording or disclosure is in the performance of the person`s powers
and functions under the Ombudsman Act 1976;
(b) where the disclosure is made as part of a report made under the Ombudsman
Act 1976 and, in the Ombudsman`s opinion, the matters ought to be disclosed
in the course of setting out grounds for the findings and recommendations in
the report;
(c) providing records and information to the Australian Competition and
Consumer Commission (ACC) for the purposes of referring a complaint to the
ACC, which can only be done with the consent of the complainant.
The Ombudsman Act 1976 also authorises the disclosure of information relating to a
subject of a complaint or own-motion investigation who is not an individual (eg a
private health insurer or corporate health care provider) provided by the staff of that
subject with the consent of the individual primarily responsible for the management of
the subject. In all other cases, disclosure may be made with the consent of the person
who provided the information to the Private Health Insurance Ombudsman.
The Private Health Insurance Ombudsman will also have the power to share certain
information with specified agencies including the Department of Health and the
Department of Human Services. However, this information can only be information
that relates to a private health insurer, an applicant to become a private health insurer,
a person carrying on health insurance business or a director or officer of one of the
bodies mentioned.
The application of these provisions will not limit the protections previously provided
to individuals under the Private Health Insurance Act 2007.
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Fair trial and fair hearing rights
Fair trial and fair hearing rights are contained in article 14 of the International
Covenant on Civil and Political Rights (ICCPR) to which Australia is a signatory.
Article 40 of the Convention on the Rights of the Child (CRC) and article 13 of the
Convention on the Rights of Persons with Disabilities (CRPD) also apply.
The right to a fair and public criminal trial or a fair and public hearing in civil
proceedings is one of the guarantees in relation to legal proceedings. Fair trial and fair
hearing rights include:
that all persons are equal before courts and tribunals, and
the right to a fair and public hearing before a competent, independent and
impartial court or tribunal established by law.
The other guarantees are the presumption of innocence, and minimum guarantees in
criminal proceedings, such as the right to counsel and not to be compelled to self-
incriminate.
It should be noted that under the Private Health Insurance Act 2007, the only
statutory process available to the Private Health Insurance Ombudsman to gather
information was to make a formal written request for information or records to the
subject of a complaint. Failure to comply with such a request was an offence of strict
liability. However, consistent with information gathering powers in the Ombudsman
Act 1976, the Private Health Insurance Ombudsman will now be able to either request
information and documents from a person, or formally require the production of
information or records by written notice. This will allow for a more graduated
information gathering approach.
Further, while it will still be an offence to fail to produce information or documents
pursuant to a written notice the offence will not be one of strict liability, although the
evidentiary burden will be upon the defendant to prove that they had a reasonable
excuse for failing to comply. The transition away from strict liability offences is due
to the understanding that a defendant should be able to establish a reasonable excuse
for their failure to comply with the requirements of the Ombudsman Act 1976.
Persons providing information or producing documents to the Private Health
Insurance Ombudsman in the reasonable belief it will assist the Ombudsman, whether
following a request or compelled by the Private Health Insurance Ombudsman by
written notice, will continue to have protections in relation to the provision of the
information.
A person will not be liable to any penalty under the provision of any enactment by
reason of giving the information or documents to the Private Health Insurance
Ombudsman. As under the Private Health Insurance Act 2007, for the purposes of
the Privacy Act 1988 and State and Territory laws which provide that personal
information may be disclosed where authorised by law, the disclosure of personal
information to the Private Health Insurance Ombudsman will be taken to be
authorised by the Ombudsman Act 1976.
If a person provides information or produces a record to the Private Health Insurance
Ombudsman and by doing so:
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contravenes any other Commonwealth law;
might tend to incriminate himself or herself;
might tend to disclose legal advice given to the subject of a complaint or an
own-motion investigation;
might tend to disclose a communication between officers, employees or
contractors of the subject and another person that are subject to legal
professional privilege; or
otherwise acts contrary to the public interest;
the information or record, the giving of the information or record and anything
obtained as a direct or indirect result of the giving of the information or record will be
inadmissible against the person, other than in proceedings for an offence under
sections 137.1, 137.2 or 149.1 of the Criminal Code 1995 that relate to the
Ombudsman Act 1976.
Claims of legal professional privilege in relation to a document or information are not
otherwise affected.
These protections ensure that a person furnishing the Private Health Insurance
Ombudsman with necessary information is not unfairly disadvantaged by doing so,
including by having that information used against them in other proceedings.
In relation to mediations, the Private Health Insurance Ombudsman will continue to
be able to mandate attendance at mediation by insurers, brokers or health care
providers. Failure to attend some or all of a mediation where directed, and where the
other party attended or was willing to attend, remains an offence. However, where a
medical practitioner is required to attend mediation he or she will still be able to
appoint a representative to attend on his or her behalf.
Additionally, evidence of anything said by a person during mediation, whether their
participation is voluntary or has been ordered by the Private Health Insurance
Ombudsman, will remain inadmissible in any Federal or State or Territory court or in
any proceedings to hear evidence under Commonwealth, State or Territory law. This
protection will continue to encourage parties to mediation to participate frankly in
order to encourage a speedy resolution to a complaint. Mediations are most commonly
conducted between health care providers and insurers.
Review of decisions
Currently some decisions made by the Private Health Insurance Ombudsman under
the Private Health Insurance Act 2007 are reviewable by the Administrative Appeals
Tribunal.
The Private Health Insurance Ombudsman may refer a complaint to the insurer,
private health insurance broker or health care provider who is the subject of the
complaint to investigate the matter and report back to the Ombudsman on the
outcome. Under the Private Health Insurance Act 2007 the subject of the complaint
has a statutory power to ask the Private Health Insurance Ombudsman to extend the
time for reporting back to the Ombudsman and, if the Ombudsman refused, could
seek review of the decision by the Administrative Appeals Tribunal. This express
power for the subject of a complaint to request additional time to report to the Private
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Health Insurance Ombudsman has not been included in the Ombudsman Act 1976 to
better align with current Commonwealth Ombudsman complaint handling processes.
Accordingly, the associated power of Tribunal review has also not been included.
Under the Private Health Insurance Act 2007 a person who has been issued with a
notice to produce information or records to the Private Health Insurance Ombudsman
has a statutory power to request additional time to comply with the notice and a right
to have a decision to refuse additional time reviewed by the Administrative Appeals
Tribunal. This express power for the recipient of a notice to request additional time to
provide information or records to the Private Health Insurance Ombudsman has also
not been included in the Ombudsman Act 1976 to better align with current
Commonwealth Ombudsman complaint handling processes. Accordingly, the
associated power of Tribunal review has also not been included.
Judicial review of decisions about the issuing of notices to report to the Private Health
Insurance Ombudsman or provide information or documents to the Ombudsman
remains available, along with all other decisions of the Private Health Insurance
Ombudsman, has not been affected. This gives persons affected by such decisions an
avenue to have the legality of the decisions reviewed.
The amendments to the Private Health Insurance Act 2007 will not affect any human
rights or freedoms recognised or declared in the international instruments listed in
section 3 of the Human Rights (Parliamentary Scrutiny) Act. As mentioned, these
amendments will give full effect to the intention of the Private Health Insurance
Legislation Amendment Act 2014 by removing any remaining references to the
concept of a base premium` from the Private Health Insurance Act 2007.
Conclusion
There is no incompatibility with the right to health as the legislation is for a legitimate
objective and reasonable, necessary and proportionate in the circumstances.
The existence of protections for individuals under the Ombudsman Act 1976 as well
as the ability to seek review of decisions made by the Private Health Insurance
Ombudsman by the Federal Court of Australia is compatible with the fair trial and fair
hearing rights.
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Conclusion
This Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011. The Bill promotes the right to health and while there are
limitations on the right to privacy, these limitations are reasonable and proportional to
enable the Private Health Insurance Ombudsman to fulfil his or her functions for the
benefit of private health insurance policy-holders and the industry. Additionally, the
potential for the Private Health Insurance Ombudsman to request or compel the
production of information or records to assist the Ombudsman deal with complaints
and investigations has been recognised. In response, the Bill has provided adequate
protections for individuals from penalties resulting from the provision of information
or records to the Ombudsman and the use of that information or those records in
proceedings against the person.
The Hon Peter Dutton MP, the Minister for Health
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PRIVATE HEALTH INSURANCE AMENDMENT BILL (NO. 2) 2014
NOTES ON CLAUSES
Clause 1 - Short Title
This clause provides that the Bill, once enacted, may be cited as the Private Health
Insurance Amendment Act (No. 2) 2014.
Clause 2 - Commencement
This clause sets out when the Private Health Insurance Amendment Bill (No. 2) 2014
and various provisions within it commence.
Sections 1 to 3 and Schedule 2, which set out the formal aspects of the Act and
remove references to base premium from the Private Health Insurance Act 2007,
respectively, will commence on Royal Assent.
Schedule 1, which transfers the functions of the Private Health Insurance Ombudsman
from the Private Health Insurance Act 2007 to the Ombudsman Act 1976 and includes
associated transitional provisions, will commence as follows:
if the Bill receives Royal Assent prior to 1 July 2015, on 1 July 2015;
if the Bill receives Royal Assent on or after 1 July 2015, on a single day to be
fixed by Proclamation.
However, if Schedule 1 has not commenced by the end of 6 months after Assent, it
will automatically commence on the next day after the end of the 6 month period.
Clause 3 - Schedules
This clause provides that legislation that is specified in a Schedule to the Act is
amended or repealed as set out in the applicable items in the Schedule concerned, and
any other item has effect according to its terms.
SCHEDULE 1 - Private Health Insurance Ombudsman
Part 1--Main Amendments
Ombudsman Act 1976
Item 1 amends the title of the Ombudsman Act 1976 to replace and an Overseas
Students Ombudsman with an Overseas Students Ombudsman and a Private Health
Insurance Ombudsman to reflect the Commonwealth Ombudsman`s new
responsibilities to also act as the Private Health Insurance Ombudsman.
Item 2 inserts a number of definitions relevant to the operations of the Private Health
Insurance Ombudsman into subsection 3(1) of the Ombudsman Act 1976. These
include: adult, Chief Executive Medicare, complying health insurance policy,
complying health insurance product, health care provider, health insurance business,
medical practitioner, personal information, private health insurance arrangement,
private health insurance broker, Private Health Insurance (Information Disclosure)
11
Rules, private health insurance policy, private health insurer and product, all of
which have the same meaning as in the Private Health Insurance Act 2007.
Of particular importance to the functions of the Private Health Insurance Ombudsman
are the concepts of a private health insurer, a private health insurance broker, a health
care provider and a private health insurance arrangement.
A private health insurer is a registered insurer who carries on health insurance
business.
A health care provider is a person who:
provides goods or services as, or as part of, hospital or general treatment; or
manufactures or supplies goods provided as, or as part of, hospital or general
treatment
A private health insurance broker is a person who:
deals in insurance policies that cover hospital or general treatment (other than
by being a registered private health insurer); and
acts on behalf of persons seeking to be insured under such policies.
A private health insurance arrangement includes any of:
a private health insurance policy or a product;
an agreement or arrangement between a private health insurer and a health
care provider, or an arrangement between a private health insurer and a private
health insurance broker;
an agreement or arrangement between a private health insurer and another
person who is not a health care provider, or an agreement or arrangement
between two or more health care providers, that relates to insurance in relation
to hospital treatment or general treatment;
Private Health Insurance (Complying Product) Rules made for the purposes of
item 1 or 5 of the table in subsection 72-1(2);
Private Health Insurance (Prostheses) Rules;
an arrangement between a private health insurance broker and a person
seeking to become insured under a private health insurance policy.
A definition of PHI records is also added. The PHI records of the subject of a
complaint or investigation are any of the following documents (whenever they came
into existence) in the possession or control of the subject:
the constitution and rules (if the subject is an insurer);
internal training manuals and related documents;
documents relevant to a private health insurance arrangement to which the
subject is a party or that applies to the subject; and
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to the extent that a complaint or investigation relates to the subject`s dealing
with a particular person, the subject`s documents relating to those dealings.
Item 3 repeals the note at the end of the definition of officer from subsection 3(1) of
the Ombudsman Act 1976 and substitutes a note. The new note provides that for the
meaning of officer in Parts IIB, IIC and IID of the Ombudsman Act 1976 (which deal
with the Postal Industry, Overseas Students and Private Health Insurance
Ombudsmen, respectively), the reader should see sections 19G, 19ZF and 20A of the
Ombudsman Act 1976.
Item 4 amends paragraph 4A(e), which sets out the functions of the Commonwealth
Ombudsman for the purposes of the finance law within the meaning of the Public
Governance, Performance and Accountability Act 2013. Item 4 adds new
subparagraph 4A(e)(v), providing a reference to the functions of the Private Health
Insurance Ombudsman as specified in section 20D.
Item 5 inserts Part IID--Private Health Insurance Ombudsman after Part IIC of the
Ombudsman Act 1976 as follows.
Division 1--Preliminary
Section 20
Section 20 provides that the object of Part IID is to establish the office of the Private
Health Insurance Ombudsman and set out his or her powers and functions, so that the
Private Health Insurance Ombudsman may protect the interests of people with private
health insurance. Previously this provision was set out in section 235-1 of the Private
Health Insurance Act 2007.
The Private Health Insurance Ombudsman fulfils his or her role of protecting the
interests of people with private health insurance by:
assisting people who have made complaints relating to private health
insurance to resolve those complaints;
investigating the practices and procedures of private health insurers, private
health insurance brokers and healthcare providers;
mediating between private health insurers and health care providers; and
disseminating information about private health insurance and the rights and
obligations of privately insured people.
Section 20A
Section 20A sets out two definitions applicable for Part IID of the Ombudsman Act
1976. An officer of a private health insurer for Part IID has the same meaning as in
the Private Health Insurance Act 2007, specifically a director or chief executive
officer of the insurer or a person who makes, or participates in making, decisions that
affect the whole, or a substantial part, of the business of the insurer.
An officer of a subject of a complaint to the Private Health Insurance Ombudsman
under Division 3 or the subject of an investigation undertaken at the initiative of the
Ombudsman under Division 4 is:
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if the subject is an individual--the individual; or
if the subject is a private health insurer--a person who is an officer of the
insurer; or
if the subject is a company within the meaning of the Corporations Act
2001--a director of the company; or
if the subject is an incorporated association--a member of the management
committee of the association; or
if the subject is an unincorporated entity--a member of the governing body of
the entity; or
if the subject is a partnership--a partner in the partnership.
This definition is being transferred from the Dictionary to the Private Health
Insurance Act 2007.
Section 20B
Section 20B provides that matters relevant to Part IID are also dealt with in the
Private Health Insurance Ombudsman Rules. Previously this provision was set out in
section 235-5 of the PHI Act.
A note to section 20B provides that the Private Health Insurance Ombudsman Rules
are made by the Commonwealth Ombudsman under 20ZJ.
Division 2--Establishment and functions of the Private Health Insurance
Ombudsman
Section 20C
Section 20C establishes the office of the Private Health Insurance Ombudsman.
Subsection 20C(1) provides that for the purposes of the Ombudsman Act 1976 there is
to be a Private Health Insurance Ombudsman.
Subsection 20C(2) provides that the person who holds the office of the
Commonwealth Ombudsman also holds the office of the Private Health Insurance
Ombudsman.
Subsection 20C(3) provides that for the purposes of subsection 20C(2), a reference to
the person who holds the office of the Commonwealth Ombudsman includes a person
who is acting in that office at the time because of an appointment under section 29 of
the Ombudsman Act 1976.
Section 20D
Section 20D details the functions of the Private Health Insurance Ombudsman. These
are:
to deal with complaints made under Division 3 of the Ombudsman Act 1976);
to conduct investigations at the initiative of the Ombudsman in accordance
with Division 4 of the Ombudsman Act 1976);
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to publish (in written form and on the Private Health Insurance Ombudsman`s
website) a report called the State of the Health Funds Report, providing
comparative information on the performance and service delivery of all private
health insurers during a financial year, as soon as practicable after the end of
each financial year;
to collect and publish (in written form and on the internet) information about
the complying health insurance products available to people, in order to assist
them to understand the entitlements and benefits available under those
products;
to publish, in aggregate form, information (excluding personal information)
about complaints made to the Private Health Insurance Ombudsman;
to report and make recommendations to the Minister for Health in relation to
investigations undertaken by the Private Health Insurance Ombudsman
(whether as a result of complaints or at the Ombudsman`s own initiative);
to report to the Minister for Health or to the Department of Health about the
practices of particular private health insurers or private health insurance
brokers;
to report (as part of the report mentioned above) to the Minister for Health or
to the Department of Health about the practices of particular health care
providers. However, the Private Health Insurance Ombudsman may only
report on the practices of particular providers to the extent they relate to:
o the application of private health insurance arrangements or classes of
arrangements to services or goods provided, or to goods manufactured
or supplied, by the health care providers; or
o private health insurance arrangements or classes of arrangements to
which those kinds of health care providers may be party;
to make recommendations to the Minister for Health or the Department of
Health about regulatory practices or industry practices relating to private
health insurers or private health insurance brokers;
to make recommendations (as part of a recommendation mentioned above) to
the Minister for Health or the Department of Health about regulatory practices
or industry practices relating to health care providers. However, the Private
Health Insurance Ombudsman may only report on the regulatory or industry
practices relating to health care providers to the extent to which those practices
relate to:
o the application of private health insurance arrangements or classes of
arrangements to services or goods provided, or to goods manufactured
or supplied, by the health care providers; or
o private health insurance arrangements or classes of arrangements to
which those kinds of health care providers may be party;
to promote a knowledge and understanding of the Private Health Insurance
Ombudsman`s functions; and
to perform any other functions that are incidental to the performance of any of
the functions listed above.
15
Previously this provision was set out in section 238-5 of the Private Health Insurance
Act 2007.
Division 3--Complaints
Subdivision A--Relevant Complaints
Section 20E
Subsection 20E(1) details who may make a complaint to the Private Health Insurance
Ombudsman. These are:
a person who is, or was at the time of the incident to which the complaint
relates, insured or seeking to be insured under a private health insurance policy
a private health insurer;
a health care provider; or
a private health insurance broker.
A note to subsection 20E(1) provides that section 7 of the Ombudsman Act 1976 also
deals with making complaints. The note also provides that the application of section 7
to the Private Health Insurance Ombudsman is provided for in section 20ZK.
Subsection 20E(2) provides that a complaint may be made by a person on behalf of
another person.
Previously this provision was set out in section 241-1 of the Private Health Insurance
Act 2007.
Section 20F
Section 20F sets out the classes of persons against whom complaints may be made to
the Private Health Insurance Ombudsman. These are private health insurers, health
care providers and private health insurance brokers. These are the same classes of
persons against whom a complaint could be made under section 241-5 of the Private
Health Insurance Act 2007.
Section 20G
Section 20G establishes the grounds on which complaints may be made to the Private
Health Insurance Ombudsman. Previously this provision was set out in section 241-10
of the Private Health Insurance Act 2007.
Subsection 20G(1), which is applicable to all complaints, provides that a complaint
may be about any matter arising out of or connected with a private health insurance
arrangement, or any matter arising out of or connected with Chapter 2 of the Private
Health Insurance Act 2007. Chapter 2 of that Act deals with the lifetime health cover
and premium reductions scheme.
Paragraph 20G(2)(a) provides that when a complaint is against a health care provider,
it must also be about either or both of;
16
the application of a private health insurance arrangement to goods or a service
provided, or goods manufactured or supplied, by the health care provider; or
a private health insurance arrangement to which the health care provider is, or
was at the time of the incident to which the complaint relates, a party.
Paragraph 20G(2)(b) further provides that a complaint against a health care provider
must also:
be made against a private health insurer;
be made by a private health insurer or a person insured under a private health
insurance policy; or
if the complaint is made by another health care provider or a private health
insurance broker, a private health insurer or a policy-holder must also be a
complainant.
Subsection 20G(3) provides that the Private Health Insurance Ombudsman Rules may
prescribe matters about which complaints cannot be made.
Subdivision B--Dealing with Complaints
Section 20H
Section 20H provides for the actions of the Private Health Insurance Ombudsman
upon the initial receipt of a complaint. Previously this provision was set out in section
241-15 of the Private Health Insurance Act 2007.
Section 20H provides that on receiving a complaint, the Private Health Insurance
Ombudsman may inform the subject of the complaint of the nature of the complaint
and also may request or require information from the subject of the complaint under
Division 6 of the Ombudsman Act 1976.
Section 20J
Section 20J provides for the ways in which the Private Health Insurance Ombudsman
may deal with complaints. Previously this provision was set out in section 241-20 of
the Private Health Insurance Act 2007.
Subsection 20J(1) provides that the Private Health Insurance Ombudsman may deal
with a complaint by:
conducting mediation under Division 5 of the Ombudsman Act 1976;
referring the complaint to the private health insurer, private health insurance
broker or health care provider who is the subject of the complaint under
Subdivision C of the Ombudsman Act 1976; or
if the complaint is not resolved to the complainant`s satisfaction by mediation,
or the Private Health Insurance Ombudsman is not satisfied with the outcome
of a referral to the subject of a complaint and section 20P of the Ombudsman
Act 1976 therefore applies, by investigating the complaint in accordance with
Subdivision D of the Ombudsman Act 1976.
17
Subsection 20J(2) provides that the Private Health Insurance Ombudsman must not
take any of the above actions unless the complainant agrees.
Subsection 20J(3) provides that the Private Health Insurance Ombudsman must not
undertake, or continue to undertake, an investigation or mediation if the complainant
withdraws the complaint.
Subsection 20J(4) provides that the Private Health Insurance Ombudsman must not
take any action mentioned in subsection 20J(1) if the complaint is about a matter
prescribed by the Private Health Insurance Ombudsman Rules as a matter about
which a complaint may not be made.
Section 20K
Section 20K provides for the referral of complaints from the Private Health Insurance
Ombudsman to the Australian Competition and Consumer Commission. Previously
this provision was set out in section 241-25 of the Private Health Insurance Act 2007.
Subsection 20K(1) provides that the Private Health Insurance Ombudsman must refer
a complaint to the Australian Competition and Consumer Commission if, in the
Ombudsman`s opinion, a complaint raises a matter that could be dealt with more
effectively or conveniently by the Australian Competition and Consumer
Commission. This is subject to subsections 20K(2) and 20K(3).
Subsection 20K(2) provides that the Private Health Insurance Ombudsman must not
refer a matter to the Australian Competition and Consumer Commission unless the
complainant agrees to the referral.
Subsection 20K(3) provides that the Private Health Insurance Ombudsman must not
refer a matter to the Australian Competition and Consumer Commission if the
complainant withdraws the complaint.
Subsection 20K(4) provides that if the Private Health Insurance Ombudsman refers a
matter to the Australian Competition and Consumer Commission, the Private Health
Insurance Ombudsman must:
tell the complainant that the matter has been referred; and
give the Australian Competition and Consumer Commission any information
or documents that relate to the complaint in the Private Health Insurance
Ombudsman`s possession or under his or her control.
Subsection 20K(5) provides that the Australian Competition and Consumer
Commission may investigate a matter. If the Commission does investigate it must
report to the Private Health Insurance Ombudsman within 30 days after the referral on
the conduct of the investigation and any findings that it has made.
Subsection 20K(6) provides that if the Australian Competition and Consumer
Commission decides not to investigate a matter it must, within 30 days after the
referral, give the Private Health Insurance Ombudsman a written notice informing the
Private Health Insurance Ombudsman and giving its reasons for the decision.
18
Section 20L
Section 20L provides for the Private Health Insurance Ombudsman to refer
complaints to other bodies.
Subsection 20L(1) provides that if, in the Private Insurance Ombudsman's opinion, a
complaint raises a matter that could be dealt with more effectively or conveniently by
another body, the Private Health Insurance Ombudsman must, subject to section 20L,
refer the matter to that body.
Subsection 20L(2) provides that the Private Health Insurance Ombudsman must not
refer a matter to another body unless the complainant agrees to the referral.
Subsection 20L(3) provides that the Private Health Insurance Ombudsman must not
refer a matter to another body if the complainant withdraws the complaint.
Subsection 20L(4) provides that if the Private Health Insurance Ombudsman refers a
matter to another body, the Private Health Insurance Ombudsman must tell the
complainant of the matter's referral and give the other body any information or
documents that relate to the complaint that are in the Private Health Insurance
Ombudsman's possession or under his or her control.
Subsections 20L(1) to (3) were previously set out in section 241-30 of the Private
Health Insurance Act 2007. Subsection 20L(4) has been added for consistency of style
with similar provisions in the Ombudsman Act 1976.
Section 20M
Section 20M sets out the grounds on which the Private Health Insurance Ombudsman
may decide not to deal with a complaint. Previously this provision was set out in
section 241-35 of the Private Health Insurance Act 2007.
Subsection 20M(1) provides that the Private Health Insurance Ombudsman may
decide not to deal, or not to continue to deal, with a complaint in accordance with the
section. If the Private Health Insurance Ombudsman decides not to deal with a
complaint he or she must tell the complainant of the decision and the reasons for it. If
requested by the complainant, the Private Health Insurance Ombudsman must give
written notice of the decision and the reasons for it.
Subsection 20M(2) provides that the Private Health Insurance Ombudsman may
decide not to take any action in relation to a complaint if the incident complained
about occurred more than 12 months before the complaint is made.
Subsection 20M(3) provides that the Private Health Insurance Ombudsman may
decide not to deal with a complaint if satisfied that the complainant has not taken
reasonable steps to negotiate a settlement of the complaint with the private health
insurer, private health insurance broker or health care provider who is the subject of
the complaint.
Subsection 20M(4) provides that the Private Health Insurance Ombudsman may
decide not to deal, or not to continue to deal, with a complaint if the complainant does
19
not agree to a matter relating to the complaint being referred to another body under
section 20L of the Ombudsman Act 1976.
Subsection 20M(5) provides that the Private Health Insurance Ombudsman may
decide not to deal, or not to continue to deal, with a complaint, if he or she believes
that:
the subject of the complaint has dealt, or is dealing, adequately with the
complaint, or has not yet had an adequate opportunity to do so;
he or she has already dealt adequately with the complaint;
the complainant is capable of assisting the Private Health Insurance
Ombudsman in dealing with the complaint but does not do so on request;
the complainant does not have a sufficient interest in the subject matter of the
complaint;
the matter is trivial;
the complaint is frivolous or vexatious or not made in good faith;
the complaint is mainly about commercial negotiations and, having regard to
the object of Part IID of the Ombudsman Act 1976, it is not appropriate to
deal, or to continue to deal, with the complaint;
the complaint is mainly about clinical matters and, having regard to the object
of Part IID of the Ombudsman Act 1976, it is not appropriate to deal, or
continue to deal, with the complaint;
the complainant has exercised, or exercises, a right to have the matter to which
the complaint relates reviewed by a court or tribunal constituted by or under a
law of the Commonwealth or of a State or Territory;
both of the following apply:
o the complainant has, or had, a right to have the matter to which the
complaint relates reviewed by a court or tribunal constituted by or
under a law of the Commonwealth or of a State or Territory, but has
not exercised that right; and
o it is, or would have been, reasonable for the complainant to exercise
that right; or
to deal, or to continue to deal with the complaint is not warranted having
regard to all of the circumstances - this particular power has been added to
provide consistency with the discretion of the Commonwealth Ombudsman
not to investigate other complaints under the Ombudsman Act 1976.
Subdivision C--Referral to subjects of complaints
Section 20N
Section 20N deals with the referral of a complaint to the subject of a complaint.
Previously this provision was set out in section 241-40 of the Private Health
Insurance Act 2007.
20
Subsection 20N provides that the Private Health Insurance Ombudsman may, at any
time and whether or not mediation has been conducted, refer a complaint to the
subject of the complaint (i.e. a private health insurer, private health insurance broker
or health care provider) and request the subject:
investigate the complaint; and
report to the Private Health Insurance Ombudsman on the outcome of the
investigation and any action that the subject proposes to take as a result, before
the end of the period specified in the request.
A note to subsection 20N provides that the Private Health Insurance Ombudsman
must have the complainant`s agreement to act under section 20N.
The capacity that existed under section 241-40 of the Private Health Insurance Act
2007 for the subject of a complaint to request additional time to report to the Private
Health Insurance Ombudsman has been removed to provide consistency with the
existing powers and administrative processes of the Commonwealth Ombudsman
under the Ombudsman Act 1976.
Subdivision D--Investigation of complaints
Section 20P
Section 20P deals with the investigation of complaints by the Private Health Insurance
Ombudsman. Previously this provision was set out in section 241-45 of the Private
Health Insurance Act 2007.
The section provides that the Private Health Insurance Ombudsman may investigate a
complaint if the complaint is not resolved to the complainant's satisfaction by
mediation, or the Private Health Insurance Ombudsman is not satisfied with the
outcome of a referral to the subject of the complaint under Subdivision C.
A note to section 20P provides that the Private Health Insurance Ombudsman must
have the complainant`s agreement to act under the section and cannot continue if the
complaint is withdrawn.
Subdivision E--Recommendations and reports
Section 20Q
Section 20Q provides for the Private Health Insurance Ombudsman to make
recommendations to private health insurers, private health insurance brokers or health
care providers as a result of referring a complaint to the subject of the complaint or
investigating a complaint. Previously this provision was set out in section 241-55 of
the Private Health Insurance Act 2007.
Subsection 20Q(1) provides that the Private Health Insurance Ombudsman may make
recommendations under section 20Q after:
receiving a report from the subject of a complaint after referral under
Subdivision C; or.
investigating a complaint under Subdivision D.
21
Subsection 20Q(2) provides that the Private Health Insurance Ombudsman may
recommend any or all of:
to a private health insurer, that the insurer take a specific course of action in
relation to the complaint or make changes to its rules, or both;
to a private health insurer, that the insurer request a health care provider or
private health insurance broker to take a specific course of action in relation to
the complaint;
to a health care provider or private health insurance broker, that the provider or
broker take a specific course of action in relation to the complaint.
Subsection 20Q(3) provides that the Private Health Insurance Ombudsman may by
written notice given to the person to whom the recommendation was made, or an
officer of that person, require the person to report to the Private Health Insurance
Ombudsman on the action proposed to be taken to give effect to the recommendation,
before action is taken. The notice must specify the period within which the report is to
be given.
The specific offence for failing to report to the Private Health Insurance Ombudsman
on the action proposed to be taken that was previously found in subsection 241-55(4)
of the Private Health Insurance Act 2007 has not been included in section 20Q. Item
13 of Schedule 1 to the Bill amends section 36 of the Ombudsman Act 1976 so that
failing to give a report when required to do so under that Act will constitute an
offence. This will be relied on in the event of non-compliance with section 20Q.
Section 20R
Section 20R provides for the Private Health Insurance Ombudsman to report and
make recommendations to the Minister for Health following an investigation arising
from a complaint to the Ombudsman. Previously this provision was set out in section
241-60 of the Private Health Insurance Act 2007.
Subsection 20R(1) provides that the Private Health Insurance Ombudsman may report
and make recommendations under section 20R after completing an investigation of a
complaint against a particular subject under Subdivision D.
Subsection 20R(2) provides that the Private Health Insurance Ombudsman may report
to the Minister for Health on the outcome of the investigation (including any
recommendations made to the subject of the complaint and any responses to those
recommendations from the subject).
Subsection 20R(3) provides that the Private Health Insurance Ombudsman may
recommend to the Minister for Health either or both:
general changes in regulatory practice or industry practices relating to the kind
of subject of the complaint (i.e. private health insurance broker, private health
insurer or health care provider);
possible means of dealing with specific problems arising in relation to the
particular subject of the complaint.
22
Subsection 20R(4) provides that the Private Health Insurance Ombudsman may make
recommendations about possible means of dealing with specific problems arising in
relation to health care providers or a particular health care provider only to the extent
to which the recommendations relate to:
the application of a private health insurance arrangement or a class of private
health insurance arrangements to services or goods provided, or goods
manufactured or supplied, by that kind of health care provider; or
a private health insurance arrangement or a class of private health insurance
arrangements to which that kind of provider may be party.
Subsection 20R(5) provides that before reporting to the Minister for Health the
Private Health Insurance Ombudsman must both:.
inform the subject of the complaint that the Private Health Insurance
Ombudsman proposes to make the report and of the nature of any criticism of
the subject`s conduct that will appear in the report; and
invite the subject of the complaint to comment on such criticism, before the
end of the period specified in the invitation.
Subsection 20R(5) further provides that any comments made by the subject of the
complaint must be included in the report made to the Minister for Health.
Subdivision F--Miscellaneous
Section 20S
Section 20S deals with keeping complainants informed about the Private Health
Insurance Ombudsman`s handling of the complaint. Previously this provision was set
out in section 241-65 of the Private Health Insurance Act 2007.
Subsection 20S(1) provides that the Private Health Insurance Ombudsman must keep
a complainant informed about the Ombudsman`s handling of the complaint.
Subsection 20S(2) provides that the Private Health Insurance Ombudsman must
inform the complainant in writing of:
any action taken by a private health insurer, health care provider or private
health insurance broker as a result of the Ombudsman`s handling of the
complaint, and also of any recommendations made by the Ombudsman under
section 20Q; and
the reasons for any action or recommendation.
Division 4--Investigations
Subdivision A--Investigations
Section 20T
Section 20T provides for the initiation of investigations by the Private Health
Insurance Ombudsman at the Ombudsman`s own initiative. Previously this provision
was set out in section 244-1 of the Private Health Insurance Act 2007.
23
Subsection 20T(1) provides that the Private Health Insurance Ombudsman may, on
his or her own initiative, investigate the practices and procedures of a private health
insurer or a private health insurance broker.
Subsection 20T(2) provides that the Private Health Insurance Ombudsman may, on
his or her own initiative, investigate the practices and procedures of a health care
provider together with an investigation of a private health insurer under
subsection 20T(1). However, the Private Health Insurance Ombudsman may only do
so if:
the investigation relates to a matter arising out of or connected with a private
health insurance arrangement; and
the practices and procedures relate to the application of a private health
insurance arrangement to services or goods provided, or to goods
manufactured or supplied, by the health care provider, or to a private health
insurance arrangement to which the health care provider is, or was in the
period to be investigated, a party; and
the Private Health Insurance Ombudsman considers, having regard to the
object of Part IID, that investigation of the health care provider together with
the private health insurer is necessary or appropriate in order to consider the
matter effectively.
A note to subsection 20T(2) provides that an investigation may include mediation.
Subdivision B--Recommendations and reports
Section 20U
Section 20U provides for the Private Health Insurance Ombudsman to make
recommendations to private health insurers, private health insurance brokers or health
care providers as a result of own-motion investigations made by the Private Health
Insurance Ombudsman. Previously this provision was set out in section 244-10 of the
Private Health Insurance Act 2007.
Subsection 20U(1) provides that the Private Health Insurance Ombudsman may make
recommendations under section after conducting an investigation under Division 4
(i.e. an investigation at the initiative of the Ombudsman).
Subsection 20U(2) provides that the Private Health Insurance Ombudsman may
recommend either or both of the following:
to a private health insurer, that the insurer take a specific course of action or
make changes to its rules;
to a health care provider or private health insurance broker, that the provider or
broker take a specific course of action.
Subsection 20U(3) provides that the Private Health Insurance Ombudsman by written
notice given to the person to whom a recommendation is made, or an officer of that
person, require the person to report to the Private Health Insurance Ombudsman on
the action proposed to be taken to give effect to the recommendation, before the
24
action is taken. The notice must specify the period within which the report is to be
given.
The specific offence for failing to report to the Private Health Insurance Ombudsman
on the action proposed to be taken that was previously found in subsection 244-10(4)
of the Private Health Insurance Act 2007 has not been included in section 20U. Item
13 of Schedule 1 to the Bill amends section 36 of the Ombudsman Act 1976 so that
failing to give a report when required to do so under that Act will constitute an
offence. The offence in section 36 will be relied on in the event of non-compliance
with this section.
Section 20V
Section 20V provides that the Private Health Insurance Ombudsman may report to the
Minister for Health on outcomes of own-motion investigations under Division 4.
Previously this provision was set out in section 244-15 of the Private Health
Insurance Act 2007.
Subsection 20V(1) provides that the Private Health Insurance Ombudsman may, after
completing an investigation under section 20T:
report to the Minister for Health on the outcome of the investigation and any
mediation conducted as part of the investigation (including any
recommendations made to the subject of the investigation);
make recommendations to the Minister for Health concerning:
o general changes in regulatory practice or industry practices relating to
that kind of subject of investigation; or
o possible means of dealing with specific problems arising in relation to
the particular subject of the investigation.
However, subsection 20T(2) provides that the Private Health Insurance Ombudsman
may make recommendations concerning changes in regulatory or industry practices
relating to health care providers, or possible means of dealing with specific problems
arising in relation to a particular health care provider that is the subject of an
investigation only to the extent to which the recommendations relate to:
the application of a private health insurance arrangement or a class of private
health insurance arrangements to services or goods provided, or to goods
manufactured or supplied, by that kind of health care provider; or
a private health insurance arrangement or a class of private health insurance
arrangements to which that kind of health care provider may be party.
Subsection 20T(3) provides that before reporting to the Minister for Health the Private
Health Insurance Ombudsman must:
inform the subject of the investigation that the Ombudsman proposes to make
the report and the nature of any criticism of the conduct of the subject that will
appear in the report; and
invite the subject of the investigation to comment on any criticism that appears
in a report before the end of the period specified in the invitation.
25
Subsection 20T(3) further provides that a report must include any comments made by
the subject of the investigation.
Section 20W
Section 20W provides that if the Private Health Insurance Ombudsman considers, as a
result of an investigation under this Division, that there might have been conduct in
the nature of a restrictive trade practice for the purposes of the Competition and
Consumer Act 2010, the Private Health Insurance Ombudsman must, before the
Ombudsman reports on the matter under section 20V:
consult with the Australian Competition and Consumer Commission; and
have regard to the advice of the Australian Competition and Consumer
Commission on the matter.
Previously this provision was set out in section 244-20 of the Private Health
Insurance Act 2007.
Division 5--Mediation
Section 20X
Section 20X provides for the Private Health Insurance Ombudsman to conduct
mediation. Previously this provision was set out in section 247-1 of the Private Health
Insurance Act 2007.
Subsection 20X(1) provides that the Private Health Insurance Ombudsman may, at
any time, try to settle a complaint by mediating between the complainant and the
subject of the complaint.
Subsection 20X(2) provides that the Private Health Insurance Ombudsman may, if he
or she considers it appropriate and consistent with the object of Part IID, try to resolve
a matter being investigated at the initiative of the Ombudsman under Division 4 by
mediating between a private health insurer and a health care provider.
Subsection 20X(3) provides that a party may participate in mediation voluntarily or be
required to participate in mediation by a direction given by the Private Health
Insurance Ombudsman under section 20Y.
A note to subsection 20X(3) provides that the Private Health Insurance Ombudsman
must have the complainant`s agreement to mediation to try to resolve a complaint and
cannot continue if the complaint is withdrawn.
Section 20Y
Section 20Y deals with compulsory attendance at mediation. Previously this provision
was set out in section 247-5 of the Private Health Insurance Act 2007.
Subsection 20Y(1) provides that the Private Health Insurance Ombudsman may direct
the subject of a complaint, or a private health insurer or health care provider that is the
subject of an investigation under Division 4, to participate in mediation.
26
Subsection 20Y(2) provides that the Private Health Insurance Ombudsman Rules may
prescribe matters to which the Private Health Insurance Ombudsman is to have regard
when deciding whether or not to give a direction under subsection 20Y(1).
Subsection 20Y(3) provides that a direction made under section 20Y made by the
Private Health Insurance Ombudsman must:
be in writing;
name either or both the subject of the complaint or investigation, or an officer,
or officers, of the subject;
be given to those named in it;
specify the time of the mediation, which must not be earlier than 14 days after
the day the direction is given; and
specify the place of the mediation.
A note to subsection 20Y(3) provides that subsection 33(3) of the Acts Interpretation
Act 1901 has the effect that the direction may be varied or revoked.
Subsection 20Y(4) provides that a person commits an offence if the person is named
in a direction, the other party to the mediation attends or was willing to attend the
mediation and the person fails to participate in some or all of the mediation. Where a
medical practitioner named in a direction to attend mediation has appointed a
representative under section 20Z, the offence under section 20Y(4) will be made out
where the representative fails to participate in some or all of the mediation (and the
other party does or is willing to attend).
The penalty for an offence is 10 penalty units. This penalty has been reduced from 30
penalty units under section 247-5 of the Private Health Insurance Act 2007.
Section 20Z
Section 20Z enables medical practitioners to appoint representatives to act on their
behalf if the practitioner is directed to attend mediations. Previously this provision
was set out in section 247-10 of the Private Health Insurance Act 2007.
Subsection 20Z(1) provides that if the Private Health Insurance Ombudsman directs a
medical practitioner to participate in mediation, the medical practitioner may appoint
an individual to participate on the practitioner's behalf.
Subsection 20Z(2) provides that an appointment of a medical practitioner's
representative must be in writing, be signed by the medical practitioner and be made
before any mediation begins.
Section 20ZA
Section 20ZA deals with the conduct of compulsory mediation. Previously this
provision was set out in section 247-15 of the Private Health Insurance Act 2007.
Subsection 20ZA(1) provides that if the Private Health Insurance Ombudsman directs
a party to participate in mediation, the mediation may be conducted by the Private
27
Health Insurance Ombudsman or by a person appointed by the Private Health
Insurance Ombudsman under section 20ZC.
Subsection 20ZA(2) provides that mediation in which a party has been directed to
participate by the Private Health Insurance Ombudsman will cease if the parties
involved agree to settle the matter or the Private Health Insurance Ombudsman
concludes that the matter cannot be settled by mediation.
Subsection 20ZA(3) provides that the Private Health Insurance Ombudsman Rules
may prescribe matters to which the Private Health Insurance Ombudsman is to have
regard before concluding that a matter cannot be settled by mediation.
Subsection 20ZA(4) provides that a person appointed by the Private Health Insurance
Ombudsman to conduct mediation must, as soon as practicable after the mediation is
or should have been conducted, report to the Private Health Insurance Ombudsman
about:
whether the mediation was conducted;
if the mediation failed, the reasons for that failure; and
if the parties agreed to settle the complaint, the terms of the settlement,
including any action that was agreed to be taken.
Section 20ZB
Section 20ZB deals with the admissibility of things said by parties to a mediation.
Previously this provision was set out in section 247-20 of the Private Health
Insurance Act 2007.
Subsection 20ZB(1) provides that the evidence of anything said, or any admission
made, during participation in mediation under section 20X is not admissible in any
court (whether exercising federal jurisdiction or not) or in any proceedings before a
person authorised by a law of the Commonwealth or of a State or Territory, or by the
consent of the parties, to hear evidence.
Subsection 20ZB(2) provides that section 20ZB applies whether or not a party has
been directed to participate in the mediation by the Private Health Insurance
Ombudsman.
Section 20ZC
Section 20ZC provides for the appointment of mediators by the Private Health
Insurance Ombudsman. Previously this provision was set out in section 247-25 of the
Private Health Insurance Act 2007.
Subsection 20ZC(1) provides that the Private Health Insurance Ombudsman may
appoint a person to conduct mediation in which a person is or will be directed to
participate.
Subsection 20ZC(2) provides that the Private Health Insurance Ombudsman Rules
may prescribe matters to which the Private Health Insurance Ombudsman is to have
regard when appointing a person to conduct mediation.
28
Subsection 20ZC(3) provides that a person appointed as a mediator is appointed for
the period specified by the Private Health Insurance Ombudsman in the instrument of
appointment.
Subsection 20ZC(4) provides that subject to section 35 of the Ombudsman Act 1976,
which imposes an obligation on officers not to disclose or record information obtained
under the Act (subject to specified exceptions), a mediator appointed under section
20ZC is not personally liable to an action or other proceeding for damages in relation
to anything done or omitted to be done, reasonably and in good faith, in or in relation
to the conduct of the mediation.
Division 6--Information-gathering
Section 20ZD
Section 20ZD deals with the power of the Private Health Insurance Ombudsman to
request records and information.
Subsection 20ZD(1) provides that the Private Health Insurance Ombudsman may, in
accordance with section 20ZD, obtain such information, and make such inquiries, as
he or she thinks fit.
However, subsection 20ZD(2) provides that the Private Health Insurance Ombudsman
may request a person to give a PHI record or information under the section only if the
Ombudsman could require the person to give the record or information to the Private
Health Insurance Ombudsman under section 20ZD.
The PHI records of the subject of a complaint or investigation (see item 2 of Schedule
1) include the constitution and rules of an insurer, internal training manuals and
documents relevant to a private health insurance arrangement to which the subject is a
party or that applies to the subject. To the extent that a complaint or investigation
relates to the subject's dealing with a particular person, PHI records also include the
subject's records relating those dealings.
Section 20ZD has no equivalent in the Private Health Insurance Act 2007, which only
provided for the Private Health Insurance Ombudsman to seek information from the
subject of a complaint by issuing written notices to the subject, failure to comply with
which was an offence. Section 20ZD has been introduced for consistency with
administrative procedures between the operations of the Commonwealth Ombudsman
and the Private Health Insurance Ombudsman.
Section 20ZE
Section 20ZE establishes the power of the Private Health Insurance Ombudsman to
compel the production of PHI records and information.
Subsection 20ZE(1) provides that if the Private Health Insurance Ombudsman
reasonably believes that a person is capable of giving information or PHI records
relevant to deciding whether or how to deal with a complaint, mediating or
investigating a complaint or evaluating actions proposed to be taken by the subject of
a complaint following referral of a complaint to the subject, or from performing an
investigation under Division 4 (including mediating as part of the investigation under
29
Division 5), the Private Health Insurance Ombudsman may, by notice in writing given
to the person, require the person, to give the Private Health Insurance Ombudsman the
information or the PHI records (relating to the complaint or the practices and
procedures being investigated) that are specified in the notice, before the end of the
period specified in the notice.
Subsection 20ZE(2) provides that the Private Health Insurance Ombudsman may give
one or more notices under subsection 20ZE(1) in relation to a complaint or
investigation, at any time while the Private Health Insurance Ombudsman is dealing
with the complaint or investigation.
Subsection 20ZE(3) provides that a person is not excused from giving information or
a PHI record when required to do so under subsection 20ZE(1) on the ground that the
information or PHI record might tend to incriminate the person or expose the person
to a penalty.
A note to section 20ZE provides that section 20ZF deals with matters such as the
person's exposure to penalty and the admissibility of such information or PHI records.
However, section 20ZE limits how information or PHI records provided as the result
of a request or notice may be used against the person who gives the information or
PHI record.
Previously this provision was set out in section 250-1 of the Private Health Insurance
Act 2007. However, the specific offence in that section for failing to provide
information or documents to the Private Health Insurance Ombudsman on request has
not been reproduced. Section 36 of the Ombudsman Act 1976 makes it an offence to
fail to, among other things, furnish information or produce a document or record when
required to do so under the Ombudsman Act 1976 and will be applied to the Private
Health Insurance Ombudsman.
Section 20ZF
Section 20ZF deals with certain implications of providing information or PHI records
to the Private Health Insurance Ombudsman pursuant to a request or notice.
Subsection 20ZF(1) provides that section 20ZF applies when a person gives
information or a PHI record to the Private Health Insurance Ombudsman:
in compliance with a request under section 20ZD or a notice under section
20ZE; or
reasonably believing that this would assist the Private Health Insurance
Ombudsman in:
o mediating a complaint under Division 5 or otherwise dealing with it
under Subdivision B or D of Division 3; or
o referring a complaint under section 20K or 20L; or
o making a decision under section 20M not to deal, or not to continue to
deal, with a complaint; or
o investigating a matter under section 20T.
30
Subsection 20ZF(2) provides that a person is not liable to any penalty under the
provisions of any other enactment by reason of his or her giving information or PHI
records to the Private Health Insurance Ombudsman in compliance with a request
under section 20ZD or a notice under section 20ZE.
Subsection 20ZF(3) provides that for the purposes of the Privacy Act 1988 or any
provision of a law of a State or Territory where the personal information contained in
a record or information may be disclosed if authorised by law, the giving of
information or records to the Private Health Insurance Ombudsman is taken to be
authorised by the Ombudsman Act 1976.
Subsection 20ZF(4) provides that section 20ZF does not otherwise affect a claim of
legal professional privilege that anyone may make in relation to the information or
PHI record.
Subsection 20ZF(5) provides that if the information or PHI record is given by an
individual and, by giving the information the PHI record the individual:
contravenes any other law;
might tend to incriminate the person or make them liable to a penalty;
discloses a legal advice given to the subject of a complaint made under
Division 3 or an investigation under Division 4; or.
if the subject of a complaint made under Division 3 or an investigation under
Division 4 is an individual--discloses a privileged communication between
the subject and another person or body; or
if the subject of a complaint made under Division 3 or an investigation under
Division 4 is not an individual--discloses a privileged communication
between:
o an officer of the subject and another person or body; or
o a person who is employed in the service of, or engaged to provide
services to, the subject, and another person or body; or
otherwise acts contrary to the public interest;
then none of the following are admissible in evidence against the individual in any
proceedings, other than proceedings for an offence against section 137.1, 137.2 or
149.1 of the Criminal Code that relates to the Ombudsman Act 1976:
the information or PHI record given;
giving the information or PHI record;
any information, document or thing obtained as a direct or indirect
consequence of giving the information or PHI record.
Sections 137.1 and 137.2 of the Criminal Code relate to making false or misleading
statements in certain applications to the Commonwealth or to the Commonwealth or a
31
Commonwealth officer, respectively. Section 149.1 relates to obstructing, hindering
or resisting a Commonwealth official performing public functions.
Subsection 20ZF(6) provides that in section 20ZF privileged communication means a
communication protected against disclosure by legal professional privilege.
Division 7--Provisions relating to the Private Health Insurance
Ombudsman
Section 20ZG
Section 20ZG deals with annual and additional reports to be provided by the Private
Health Insurance Ombudsman.
Subsection 20ZG(1) provides that as soon as practicable after the end of each
financial year, the Private Health Insurance Ombudsman must give an annual report to
the Minister, for presentation to the Parliament, on the operations of the Private
Health Insurance Ombudsman during the financial year. In this case, the Minister
referred to is the Minister responsible for administering the Ombudsman Act 1976.
Subsection 20ZG(2) provides that the Private Health Insurance Ombudsman may,
from time to time, give the Minister, for presentation to the Parliament, a report:
on the operations of the Ombudsman during a part of a year; or
in relation to any matter relating to, or arising in connection with, the exercise
of the powers, or the performance of the functions, of the Private Health
Insurance Ombudsman.
Subsection 20ZG(3) provides that subsections 20ZG(1) and 20G(2) do not affect the
powers and duties of the Private Health Insurance Ombudsman under paragraphs
20D(c) or (g) or sections 20R or 20V. Those provisions deal with the annual State of
the Health Funds Report and reports made by the Private Health Insurance
Ombudsman to the Health Minister.
Subsection 20ZG(4) provides that if the Private Health Insurance Ombudsman gives a
report to the Minister under subsection 20ZG(1) or 20ZG(2), the Minister must cause
the report to be laid before each House of the Parliament within 15 sitting days of that
House after the Minister receives the report.
Subsection 20ZG(5) provides that a report relating to the operations of the Private
Health Insurance Ombudsman during a period may be included in a report made
under section 19 of the Ombudsman Act 1976 or section 46 of the Public Governance,
Performance and Accountability Act 2013 relating to the operation of the Private
Health Insurance Ombudsman during that period.
Subsection 20ZG(6) provides that a report relating to the operations of the Private
Health Insurance Ombudsman during a period must include:
the number and nature of complaints received;
the outcomes of any actions taken, recommendations made or investigations
conducted in relation to such complaints;
32
the outcomes in relation to complaints referred to another body under
section 20L;
the number and nature of investigations (if any) conducted by the Private
Health Insurance Ombudsman under section 20T; and
the outcomes of investigations conducted under section 20T.
Division 8--Miscellaneous
Section 20ZH
Section 20ZH provides that a person commits an offence if he or she subjects, or
threatens to subject, another person to detriment and because the other person has
made, or proposes to make, a complaint under Part IID. The penalty for committing
such an offence is six months imprisonment.
This offence was previously set out in section 256-5 of the Private Health Insurance
Act 2007.
Section 20ZI
Subsections 20ZI(1) and (2) enable the Private Health Insurance Ombudsman to
require private health insurers by written notice to give specified information about
the functions of the Ombudsman to adult policy-holders, or to publish the information
in a specified manner.
Subsection 20ZI(3) provides that if more than one adult is insured under a single
complying health insurance policy of a private health insurer, the insurer is taken to
comply with a notice if the insurer complies with the notice in relation to only one of
those adults.
Previously this provision was set out in section 256-10 of the Private Health
Insurance Act 2007.
Section 20ZJ
Section 20ZJ provides for the making of the Private Health Insurance Ombudsman
Rules. These Rules were previously made under section 333-20 of the Private Health
Insurance Act 2007 by the Minister for Health.
Subsection 20ZJ(1) provides that the Commonwealth Ombudsman may, by legislative
instrument (and subject to subsection 20ZJ(2)), make rules prescribing matters
required or permitted by Part IID to be prescribed by the rules, or necessary or
convenient to be prescribed for carrying out or giving effect to Part IID.
Subsection 20ZJ(2) provides that the Rules may not:
create an offence or civil penalty provision;
provide powers of arrest or detention or entry, search or seizure;
impose a tax;
set an amount to be appropriated from the Consolidated Revenue Fund under
an appropriation in the Ombudsman Act 1976; or
33
amend the Ombudsman Act 1976.
Using rules, rather than regulations, as the form of legislative instrument is consistent
with current drafting practice and the Office of Parliamentary Counsel's Drafting
Direction 3.8 on subordinate legislation. The Office of Parliamentary Counsel's
starting point is that subordinate instruments should be made in the form of legislative
instruments (as distinct from regulations) unless there is good reason not to do so.
This is subject to the qualification that there are some things that should be done in
regulations unless there is a strong justification for prescribing those provisions in
another type of legislative instrument. None of these things are in contemplation for
these rules.
The Commonwealth Ombudsman was deemed to be sufficient to be granted this rule-
making power in lieu of a Minister in light of the Ombudsman`s significant
responsibilities and detailed subject knowledge.
There is no power in the Ombudsman Act 1976 for the Commonwealth Ombudsman
to delegate his or her power to make rules (see item 7 of Schedule 1).
Section 20ZK
Section 20ZK provides for the application to the Private Health Insurance
Ombudsman of a number of provisions of the Ombudsman Act 1976 that are not
contained within Part IID.
Subsection 20ZK(1) provides that subject to section 20ZK, the following provisions
apply in relation to the Private Health Insurance Ombudsman as if a reference in any
of those provisions to the Ombudsman were a reference to the Private Health
Insurance Ombudsman:
the definition of authorized person in subsection 3(1);
section 7 (complaints);
section 11A (powers of Federal Court of Australia);
subsection 31(1) (staff);
section 33 (Ombudsman not to be sued);
Section 34(7) (delegation from State Ombudsman);
section 35 (officers to observe confidentiality);
section 35AA (disclosure of information and documents to Integrity
Commissioner);
35A (disclosure of information by Ombudsman);
section 35B (disclosure of ACC information);
section 35C (disclosure of ACLEI information);
section 36 (offences);
section 37 (protection from civil actions).
34
Application of section 7 of the Ombudsman Act 1976
Paragraph 20ZK(2)(a) provides section 7 applies as if a reference to `investigating a
complaint' should apply as if it were a reference to dealing with a complaint as
mentioned in a subsection 20J(1).
Section 7 of the Ombudsman Act 1976 sets out some procedural provisions for
making complaints to the Ombudsman. As applied, it will provide (among other
things) that complaints to the Private Health Insurance Ombudsman may be made
orally or in writing and that the Private Health Insurance Ombudsman may decline to
investigate an oral complaint further if the complainant refuses to reduce the
complaint to writing where requested to do so.
Application of section 11A of the Ombudsman Act 1976
Paragraph 20ZK(2)(b) provides that:
a reference in section 11A to a requirement made by the Ombudsman by
notice under section 9 to furnish information, to produce documents or other
records or to attend before the Ombudsman to answer questions in relation to
an investigation under this Act` should apply as if it were a reference to a
requirement made by the Private Health Insurance Ombudsman by notice
under section 20ZE to give information or PHI records in relation to a
complaint made under Division 3 of Part IID or an investigation under
Division 4 of Part IID; and
a reference in section 11A to an order directing the person to furnish the
information, produce the documents or attend before the Ombudsman to
answer questions` should apply as if it were a reference to an order directing
the person to give the information or PHI records to the Private Health
Insurance Ombudsman.
Section 11A of the Ombudsman Act 1976, as applied, will enable the Private Health
Insurance Ombudsman to seek an order from the Federal Court ordering a person who
has failed to comply with a requirement to give information or records to the Private
Health Insurance Ombudsman to produce the relevant information or PHI records.
Application of subparagraph 35(3)(b)(i) of the Ombudsman Act 1976
Paragraph 20ZK(2)(c) provides that in subparagraph 35(3)(b)(i), in relation to
information relating to a complaint made under Division 3 of Part IID or an
investigation under Division 4 of Part IID the subject of which is not an individual:
a reference to information given by an officer of a Department or prescribed
authority in the performance of his or her duties should apply as if it were a
reference to information given by an officer of the subject or a person
employed in the service of, or engaged to provide services to, the subject; and
a reference to the principal officer of the Department or authority or the
responsible Minister should apply as if it were a reference to the individual
primarily responsible for the management of the subject.
Subparagraph 35(3)(b)(i) of the Ombudsman Act 1976, as applied, will authorise the
Private Health Insurance Ombudsman or officers assisting the Ombudsman to
35
disclose information given to the Ombudsman by an officer, employee or contractor
of the subject of a complaint (other than a subject who is an individual) with the
consent of the person primarily responsible for the management of the subject (eg the
Chief Executive Officer of an insurer). Where the subject of a complaint is an
individual, that individual can consent to the disclosure of information they have
provided to the Private Health Insurance Ombudsman under subparagraph
35(3)(b)(ii).
Application of subsection 35(6A) of the Ombudsman Act 1976
Paragraph 20ZK(2)(d) provides a reference in subsection 35(6A) to paragraph
6(4D)(e) or 6(18)(d) should apply as if it were a reference to paragraph 20K(4)(b),
20L(4)(b) or section 20W.
Subsection 35(6A) of the Ombudsman Act 1976, as applied, will expressly enable the
Private Health Insurance Ombudsman or an officer acting on his or her behalf to
disclose information or documents to the Australian Competition and Consumer
Commission (ACCC) or to another body where the Private Health Insurance
Ombudsman refers a complaint to the ACCC or other body under sections 20K or
20L, respectively. It will also enable disclosure to the ACCC for the purposes of
consulting with the ACCC on possible restrictive trade practices under section 20W.
Application of section 35AA of the Ombudsman Act 1976
Paragraph 20ZK(2)(e) provides that a reference in section 35AA to the `investigation
of an action as mentioned in paragraph 5(1)(b)' should apply as if it were a reference
to an investigation of, or mediation in relation to, a complaint. Section 35AA deals
with the disclosure of information to the Integrity Commissioner. The section, as
applied, will enable the Private Health Insurance Ombudsman to disclose information
or documents to the Integrity Commissioner if, in the course of an investigation, the
Private Health Insurance Ombudsman obtains information or a document that may be
relevant to a corruption issue.
Application of section 35A of the Ombudsman Act 1976
Paragraph 20ZK(2)(f) provides that a reference in section 35A to an `investigation' by
the Commonwealth Ombudsman should apply as if it were a reference to the Private
Health Insurance Ombudsman's dealing with a complaint or conducting an own-
motion investigation.
Section 35A deals with the disclosure of information or making of a statement by the
Ombudsman with respect to the Ombudsman's performance of his or her duties.
Section 35A as applied will enable the Private Health Insurance Ombudsman to
disclose information or make a statement with respect to the performance of his or her
duties to any person, or the public or a section of the public if, in the Private Health
Insurance Ombudsman's opinion, it is in the interests of any Department, prescribed
authority or person, or otherwise in the public interest, to do so.
However, the Private Health Insurance Ombudsman cannot disclose information or
make a statement under section 35A with respect to a particular investigation,
mediation or referral to the subject of a complaint if to do so is likely to interfere with
the carrying out of that investigation, mediation or referral.
36
The ability of the Private Health Insurance Ombudsman to disclose information or
make statements under section 35A is affected by section 35B and section 35C of the
Ombudsman Act 1976, both of which have also been applied to the Private Health
Insurance Ombudsman.
Section 35B as applied will prevent the Private Health Insurance Ombudsman from
disclosing information or the content of documents or records that are or were in the
possession of the Australian Crime Commission or the Board of the Commission if
the Attorney-General certifies that the disclosure of the information would be contrary
to the public interest, including because it would prejudice the fair trial of a person or
risk the safety of a person. Section 35C will prevent the disclosure of information or
the contents of documents that are or were in the possession of the Australian
Commission for Law Enforcement Integrity on the same grounds.
Application of subsection 35B(2) and 35C(2) of the Ombudsman Act 1976
Paragraph 20ZK(2)(g) provides that in the definition of listed disclosure method in
subsections 35B(2) and 35C(2) a reference to Division 2 of Part II is to apply as if it
were a reference to section 20R, 20V or 20ZG and a reference to section 6 or 6A is to
apply as if it were a reference to section 20K or 20L.
Application of section 37 of the Ombudsman Act 1976
Paragraph 20ZK(2)(h) provides that a reference in section 37 to a `requirement under
section 9' should apply as if it were a reference to a requirement under section 20ZE.
Section 37 as applied will prevent civil proceedings lying against any person in
respect of loss, damage or injury of any kind suffered by another person because of
a complaint made to the Private Health Insurance Ombudsman in good faith;
or
a statement to, or documents or information given to an officer under the
Ombudsman Act 1976 for the purposes of the Act (whether or not given in
pursuance of a requirement under section 20ZE or section 11A).
Item 6 renumbers section 20 of the Ombudsman Act 1976 as section 20ZL to allow
for the insertion of the new section 20 into the Ombudsman Act 1976.
Item 7 amends subsection 34(1) of the Ombudsman Act 1976, which deals with the
delegations of power by the Commonwealth Ombudsman under the Act. This item
removes 17 and 19 from paragraph 34(1)(a) and substitutes 17, 19 and 20ZJ, with
the effect that the Commonwealth Ombudsman is prohibited from delegating his or
her power to make Private Health Insurance (Ombudsman) Rules,
Item 8 inserts new subsection 34(2C), which provides for the Private Health
Insurance Ombudsman to either generally, or as provided by the instrument of
delegation or instrument in writing, delegate any and all of his or her powers or
functions under the Ombudsman Act 1976 to a member of staff mentioned in section
31 of the Ombudsman Act 1976. However, the Private Health Insurance Ombudsman
may not delegate his or her powers under sections 20R and 20V (reporting on the
outcome of an investigation following a complaint or at the own motion of the Private
Health Insurance Ombudsman, respectively).
37
Item 9 amends the definition of officer` in subsection 35(1) for the purpose of the
secrecy provisions in that section to include reference to a person appointed by the
Private Health Insurance Ombudsman under section 20ZC to mediate a complaint.
Item 10 amends the secrecy provisions in section 35 of the Ombudsman Act 1976 to
insert subsections 35(6B), 35(6C) and 35(6D), which provide for the sharing of
information about private health insurers among agencies.
Subsection 35(6B) provides that subsections 35(2) and 35(5) do not prevent an
officer, in the performance of his or her duties, from disclosing information
mentioned in subsection 35(6C) in accordance with subsection 35(6D).
Subsection 35(6C) provides that the information is information that:
relates to any or all of a private health insurer, an applicant to become a private
health insurer or a person carrying on health insurance business, or a director
or officer of any such person; and
is not information of a kind specified in the Private Health Insurance
(Information Disclosure) Rules as information that must not be disclosed
under section 323-10 of the Private Health Insurance Act 2007.
Subsection 35(6D) provides that the officer may, if the disclosure is made in
accordance with any requirements in the Private Health Insurance (Information
Disclosure) Rules, disclose the information to the following:
the Minister for Health;
the Secretary of the Department of Health;
an APS employee in, or a person holding or performing the duties of an office
in the Department of Health;
a member of the Council (within the meaning of the Private Health Insurance
Act 2007);
a person employed, or a consultant engaged, by the Council (within the
meaning of the Private Health Insurance Act 2007);
the Chief Executive Medicare; or
a Departmental employee (within the meaning of the Human Services
(Medicare) Act 1973).
The Private Health Insurance Ombudsman could previously disclose these categories
of information to the same recipients under section 323-10 of the Private Health
Insurance Act 2007, which also provides for the sharing of information about insurers
between agencies.
Item 11 amends paragraph (a) of the definition of listed disclosure method in
subsection 35C(2) of the Ombudsman Act 1976 to correct a typographical error.
Reference to Part 2` of the Act is amended to Part II`.
Items 12 amends section 36 of the Ombudsman Act 1976, which establishes an
offence for failing to take various actions, including attending before the Ombudsman,
furnishing information or producing documents when required to do so under the Act.
38
Item 12 amends paragraph 36(1)(ba) to refer to a failure to furnish or publish`
information when required to do so under the Act. Under new section 20ZI the
Private Health Insurance Ombudsman can require insurers to publish specified
information about the Ombudsman`s functions.
The penalty for an offence under section 36 is $1,000 or 3 months imprisonment,
however the offence will not apply where a person has a reasonable excuse.
Item 13 amends section 36 to add new paragraph 36(1)(c) which creates an offence
for failing to give a report to the Ombudsman where required to do so under the Act.
Under new section 20N, where the Private Health Insurance Ombudsman refers a
complaint to the subject of the complaint the Ombudsman can ask the subject to
report back to the Ombudsman on the outcome of the investigation and any action that
the subject proposes to take as a result.
Private Health Insurance Act 2007
Item 14 repeals paragraph (a) from section 230-1 of the Private Health Insurance Act
2007, which outlines what Chapter 6 of the Private Health Insurance Act 2007 is
about. Paragraph 230-1(a) referred to the Private Health Insurance Ombudsman`s
role in dealing with complaints and conducting investigations under the Private
Health Insurance Act 2007 and is now redundant.
Item 15 repeals Part 6-2 of the Private Health Insurance Act 2007 in its entirety. Part
6-2 established the Office of the Private Health Insurance Ombudsman and provided
for the functions and powers of the Ombudsman.
Item 16 inserts paragraph (d) into section 323-5 of the Private Health Insurance Act
2007. That section establishes a number of authorised disclosures` of protected
information obtained under the Private Health Insurance Act 2007 to allow for
disclosure in the course of official duties. New paragraph 323-5(d) provides that the
disclosure of protected information for the purpose of enabling a person to perform
functions under part IID of the Ombudsman Act 1976 will also be a type of authorised
disclosure for the purposes of section 323-1 of the Private Health Insurance Act 2007.
Item 17 repeals subsection 323-10(1) of the Private Health Insurance Act 2007 and
substitutes a new subsection 323-10(1) and subsection 323-10(1A).
Section 323-10 establishes an authorised disclosure of protected information
involving the sharing of certain information about private health insurers among
specified agencies. The changes to be made by item 17 and item 18 (see below)
reflect that, as the Private Health Insurance Ombudsman will no longer have functions
or collect information under the Private Health Insurance Act 2007, the disclosure of
information by the Ombudsman and officers assisting the Ombudsman should be
authorised by the Ombudsman Act 1976 rather than the Private Health Insurance Act
2007.
The substituted subsection 323-10(1) provides that section 323-10 applies to
information if it:
39
relates to any of a private health insurer, an applicant to become a private
health insurer or a person carrying on health insurance business, or a director
or officer of any such person; and
is not information of a kind specified in the Private Health Insurance
(Information Disclosure) Rules as information that must not be disclosed
under the section.
This is the same class of information previously covered by section 323-10(1).
Subsection 323-10(1A) makes it an authorised disclosure for subsection 323-1(3) for a
person to whom subsection 323-10(2) applies (including the Minister for Health, the
Secretary of the Department of Health, officers in the Department of Health and the
Chief Executive Medicare but no longer including the Private Health Insurance
Ombudsman) to disclose the information to:
another person to whom subsection 323-10(2) applies;
the Private Health Insurance Ombudsman; or,
an APS employee in, or a person holding or performing the duties of an office
in, the Statutory Agency of the Commonwealth Ombudsman.
However, it will only be an authorised disclosure if the disclosure is made in
accordance with any requirements in the Private Health Insurance (Information
Disclosure) Rules.
Item 18 removes reference to the Private Health Insurance Ombudsman and persons
in the Statutory Agency of the Private Health Insurance Ombudsman from subsection
323-10(2) by repealing subsections 323-10(2)(f) and (g) of the Private Health
Insurance Act 2007.
This means that section 323-10 no longer authorises the Private Health Insurance
Ombudsman or staff to disclose information pursuant to the section. The disclosure
of information collected by the Private Health Insurance Ombudsman and staff while
performing functions under the Ombudsman Act 1976 will be dealt with in that Act.
Item 19 removes the Council, the Minister and the Private Health Insurance
Ombudsman from section 328-1 and substitutes The Council and the Minister in
order to incorporate the removal of the Private Health Insurance Ombudsman form
the Private Health Insurance Act 2007.
Item 20 repeals items 36 and 37 from the table in section 328-5 of the Private Health
Insurance Act 2007. Section 328-5 specifies decisions made under the Private Health
Insurance Act 2007 that are able to be reviewed by the Administrative Appeals
Tribunal (AAT).
Item 36 provided for the review of decisions by the Private Health Insurance
Ombudsman to refuse to extend a period to report to the Private Health Insurance
Ombudsman following referral of a complaint to the subject of the complaint.
Item 37 provided for the review of decisions by the Private Health Insurance
40
Ombudsman to refuse to extend a period to give a record or information to the Private
Health Insurance Ombudsman following written request.
The Ombudsman Act 1976 does not provide for the subject of a complaint to make a
request to the Private Health Insurance Ombudsman extend time to report to the
Ombudsman or to produce a record or information required by the Ombudsman. This
has been done to ensure consistency of administrative processes with the
Commonwealth Ombudsman.
Item 21 repeals item 11 from the table in subsection 333-20(1) of the Private Health
Insurance Act 2007. That item provided for the Minister for Health to make the
Private Health Insurance (Ombudsman) Rules. These rules will now be made under
the Ombudsman Act 1976.
Item 22 repeals from the Dictionary to the Private Health Insurance Act 2007 the
second occurring definition of officer, which applies to the officer of a subject of a
complaint to the Private Health Insurance Ombudsman or an own-motion
investigation by the Ombudsman. This definition will no longer be relevant for the
Private Health Insurance Act 2007.
Item 23 repeals the definition of Private Health Insurance Ombudsman from the
Dictionary to the Private Health Insurance Act 2007 and substitutes a new definition
providing that the Private Health Insurance Ombudsman is the Private Health
Insurance Ombudsman established by section 20C of the Ombudsman Act 1976.
Item 24 repeals the definition of records from the Dictionary to the Private Health
Insurance Act 2007. This definition related only to the records of the subject of a
complaint to the Private Health Insurance Ombudsman or an own-motion
investigation by the Ombudsman and will no longer be relevant for the Private Health
Insurance Act 2007.
Part 2--Transitional provisions
Item 25 provides that for the transitional provisions the commencement day is the day
this item of the Private Health Insurance Amendment Bill (No. 2) 2014 commences.
This item will commence on 1 July 2015. The item further provides that Health
Minister in the transitional provisions means the Minister administering the Private
Health Insurance Act 2007.
Item 26 deals with things done by, or in relation to, the Private Health Insurance
Ombudsman before the commencement day.
Subitem 26(1) provides that if, before the commencement day, a thing was done by,
or in relation to, the Private Health Insurance Ombudsman under the Private Health
Insurance Act 2007, then the thing is taken, on and after that day, to have been done
by, or in relation to, the Private Health Insurance Ombudsman under the Ombudsman
Act 1976.
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So, for example, a request made by the Private Health Insurance Ombudsman prior to
the commencement day for an insurer to produce documents will be taken have been
made by the Private Health Insurance Ombudsman under the Ombudsman Act 1976.
Subitem 26(2) provides that the Minister for Health may, by writing, determine that
subitem 26(1) does not apply in relation to a specified thing done by, or in relation to,
the Private Health Insurance Ombudsman before the commencement day.
Subitem 26(3) provides that a determination made under subitem 26(2) is not a
legislative instrument within the meaning of the Legislative Instruments Act 2003.
Item 27 deals with things started but not finished by the Private Health Insurance
Ombudsman before the commencement day in the form of four subitems.
Subitem 27(1) provides that item 27 applies if:
before the commencement day, the Private Health Insurance Ombudsman
started doing a thing under the Private Health Insurance Act 2007; and
immediately before the commencement day had not finished doing that thing.
Subitem 27(2) provides that the Private Health Insurance Ombudsman may, on and
after the commencement day, finish doing the thing under the Ombudsman Act 1976.
This will enable the Private Health Insurance Ombudsman to, for example, continue
under the Ombudsman Act 1976 with unfinalised investigations started before the
commencement day under the Private Health Insurance Act 2007.
Subitem 27(3) provides the Minister for Health may, by writing, determine that
subitem 27(2) does not apply in relation to a specified thing started by the Private
Health Insurance Ombudsman before the commencement day.
Subitem (4) provides that a determination made under subitem 27(3) is not a
legislative instrument within the meaning of the Legislative Instruments Act 2003.
Item 28 provides for the application of the Safety, Rehabilitation and Compensation
Act 1988 to the abolition of the Office of Private Health Insurance Ombudsman and
the transfer of any staff to the Office of the Commonwealth Ombudsman.
Subitem 28(1) provides that item 28 applies if, before the commencement day, an
employee of the Private Health Insurance Ombudsman (see subitem 28(4)) suffered
an injury resulting in an incapacity for work or an impairment.
Subitem 28(2) provides that sections 36, 37, 38, 39, 41 and 41A of the Safety,
Rehabilitation and Compensation Act 1988 apply on and after the commencement
day, in relation to the injury, as if the employee were employed by the Office of the
Commonwealth Ombudsman.
A note to subitem 28(2) provides that the main effect of the subitem is that sections
36, 37, 38, 39, 41 and 41A of the Safety, Rehabilitation and Compensation Act 1988
apply in relation to the employee`s injury as if the Commonwealth Ombudsman were
the rehabilitation authority.
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Subitem 28(3) provides that on and after the commencement day, the Office of the
Commonwealth Ombudsman is, for the purposes of section 40 of the Safety,
Rehabilitation and Compensation Act 1988, taken to be the relevant employer of the
employee.
Subitem 28(4) provides that for the purposes of this item, an employee of the Private
Health Insurance Ombudsman means a member of the staff assisting the Private
Health Insurance Ombudsman under the Private Health Insurance Act 2007.
Item 29 provides for the transfer or records between the Private Health Insurance
Ombudsman and the Office of the Commonwealth Ombudsman.
Subitem 29(1) provides that item 29 applies to any records or documents that,
immediately before the commencement day, were in the possession of the Private
Health Insurance Ombudsman or a member of the staff assisting the Private Health
Insurance Ombudsman under the Private Health Insurance Act 2007.
Subitem 29(2) provides that any such records and documents are to be transferred to
the Office of the Commonwealth Ombudsman on or after the commencement day.
A note to subitem (2) provides that the records and documents are Commonwealth
records for the purposes of the Archives Act 1983.
Item 30 provides that for sections 323-1 and 323-40 of the Private Health Insurance
Act 2007, a disclosure of information is an authorised disclosure if the disclosure is:
made in the course of performing a duty or function, or exercising a power,
under Part IID of the Ombudsman Act 1976; or.
one that the person would have been able to make under the Ombudsman Act
1976, had the information been obtained in the course of performing a duty or
function, or exercising a power, under the Ombudsman Act 1976.
Section 323-1 of the Private Health Insurance Act 2007 makes it an offence for a
person who has or at any time had powers, duties or functions under that Act to
disclose protected information unless the disclosure is an authorised disclosure. Staff
of the Private Health Insurance Ombudsman who transfer to the Office of the
Commonwealth Ombudsman will be persons who had powers, duties or functions
under the Private Health Insurance Act 2007 and obtained protected information in
the course of their work.
Section 323-40 of the Private Health Insurance Act 2007 creates an offence for
subsequent disclosure of protected information obtained by a person as a result of
certain types of authorised disclosures under sections 323-10, 323-15 or 323-20 of
that Act, unless the further disclosure is also an authorised disclosure under the
Private Health Insurance Act 2007.
This will ensure that officers transferring to the Office of the Commonwealth
Ombudsman do not commit an offence under the Private Health Insurance Act 2007
if, in the legitimate course of their duties under Part IID of the Ombudsman Act 1976,
or as otherwise provided for under that Act, they disclose information they obtained
under the Private Health Insurance Act 2007.
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It will also ensure that staff of the Commonwealth Ombudsman to whom information
is disclosed pursuant to an authorised disclosure under sections 323-10, 323-15 or
323-20 of the Private Health Insurance Act 2007 do not commit an offence under that
Act where they further disclose that information in the legitimate course of their
duties under Part IID of the Ombudsman Act 1976, or as otherwise provided for under
that Act,
Item 31 allows for transitional rules to be made regarding the transition of functions
of the Private Health Insurance Ombudsman from the Private Health Insurance Act
2007 to the Ombudsman Act 1976.
Using rules, rather than regulations, as the form of legislative instrument is consistent
with current drafting practice and the Office of Parliamentary Counsel`s Drafting
Direction 3.8 on subordinate legislation. Office of Parliamentary Counsel`s starting
point is that subordinate instruments should be made in the form of legislative
instruments (as distinct from regulations) unless there is good reason not to do so.
This is subject to the qualification that there are some things that should be done in
regulations unless there is a strong justification for prescribing those provisions in
another type of legislative instrument. None of these things are in contemplation for
these rules.
The Health Minister has no power in this Schedule to delegate the Minister`s power to
make rules.
Subitem (1) provides that the Health Minister may, by legislative instrument (and
subject to subitem (2)), make rules prescribing matters of a transitional nature
(including prescribing any saving or application provisions) relating to the
amendments or repeals made by this Act.
Subitem (2) provides that to avoid doubt any transitional rules made may not:
create an offence or civil penalty provision;
provide powers of arrest or detention or powers relating to entry, search or
seizure;
impose a tax;
set an amount to be appropriated from the Consolidated Revenue Fund under
an appropriation in this Act; or.
amend this Act.
Subitem (3) provides that this Act (other than subitem (2)) does not limit the rules that
may be made for the purposes of subitem (1).
SCHEDULE 2--Base premium measure
Item 1 provides that items 1, 2, 3, 6 and 13 of Schedule 1 of the Private Health
Insurance Legislation Amendment (Base Premium) Act 2013 are taken to never have
commenced.
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The previous Labor Government intended that the Australian Government`s private
health insurance rebate be calculated by reference to a base premium` from 1 April
2014. The Private Health Insurance Legislation Amendment (Base Premium) Act
2013 was enacted to implement this policy. The Private Health Insurance Legislation
Amendment (Base Premium) Act 2013 had a staggered commencement, with some
provisions commencing in June 2103 and some on 1 April 2014.
Prior to the full commencement of the base premium measure from 1 April 2014, the
Government decided to use an alternative mechanism for calculating the rebate that
was simpler for insurers to implement.
In March 2014 the Private Health Insurance Legislation Amendment Act 2014 was
passed with the intent of removing all references to a base premium from the Private
Health Insurance Act 2007PHI Act before 1 April 2014. However, due to an
unintended delay in the granting of Royal Assent, which occurred on 9 April 2014, it
was only effective to remove those references that had commenced in June 2013.
This item undoes the effects of items 1, 2, 3, 6 and 13 of Schedule 1 of the Private
Health Insurance Legislation Amendment (Base Premium) Act 2013, which amended
various sections of the Private Health Insurance Act 2007 with effect from 1 April
2014.
A note to the item provides that items 1, 2, 3, 6 and 13 of Schedule 1 of the Private
Health Insurance Legislation Amendment (Base Premium) Act 2013 are superseded
by the amendments made by the Private Health Insurance Legislation Amendment Act
2014.
Item 2 effectively provides for the validation of any overpayments that may have
been made to private health insurers by the Commonwealth because of the unintended
inclusion of references to base premiums in the Private Health Insurance Act 2007. It
does this by ensuring that for any debt owed to Government by insurers arising from
the failure to repeal the provisions introduced by the Private Health Insurance
Legislation Amendment (Base Premium) Act 2013 there is also a parallel new
entitlement to insurers. The new entitlement would come out of the relevant standing
appropriation in section 282-40 of the Private Health Insurance Act 2007. This way
the debt may be set-off against the parallel new entitlement.
Subitem 2(1) provides for the scope of the validation of the payment to private health
insurers. The subitem provides that item 2 applies if:
(a) during the period starting on 1 April 2014 and ending immediately before the
commencement of item 2, an amount was purportedly paid to a private health
insurer under a provision of Part 6-4 of the Private Health Insurance Act 2007,
which provides for the Commonwealth to reimburse insurers in respect of
reductions in premium charged by insurers due to the premiums reduction
scheme;
(b) the amount paid to the private health insurer exceeded the amount that,
disregarding item 1, was payable to the private health insurer under the
payment provision; and
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(c) the amount paid to the insurer equalled the amount that, taking account of
item 1, was payable to the private health insurer under the payment provision.
Subitem 2(2) provides that any excess as specified in paragraph 2(1)(b) is a debt due
to the Commonwealth by the private health insurer and may be recovered by action in
a court of competent jurisdiction.
Subitem 2(3) provides that there is payable to the insurer an amount equal to the
excess referred in in paragraph 2(1)(b).
Subitem 2(4) provides that a payment under subitem 2(3) is taken to be a payment to
which section 282-40 of the Private Health Insurance Act 2007 applies. Section 282-
40 creates a standing appropriation for payments made under the premiums reduction
scheme.
Subitem 2(5) provides that a payment under subitem 2(3) is taken to satisfy any
obligation to make a payment to the same private health insurer of the amount that
was payable as described in paragraph 2(1)(c). This ensures that item 2 does not
create a double obligation on the Commonwealth to reimburse insurers in respect of
premium reductions.
Subitem 2(6) provides that the amount payable by the private health insurer as a debt
due to the Commonwealth under subitem 2(2) may be recovered by deduction from
the amount payable to the private health insurer under subitem 2(3). Commonwealth
agencies are required to pursue debts for which they are responsible, except where the
debt has been waived, written off or is not legally recoverable. Subitem 2(6) ensures
that the Commonwealth is not required to pursue private health insurers in respect of
any debts arising from overpayments made to insurers, as these debts can be deducted
from the new entitlement to payment created by subitem 2(3).
Item 3 provides that the amendments made by the Private Health Insurance
Legislation Amendment Act 2014 are to be taken to have commenced on 1 April 2014,
that is, the whole of the adjustment year (within the meaning of the Private Health
Insurance Act 2007), despite the fact that the Private Health Insurance Legislation
Amendment Act 2014 commenced on 9 April 2014.
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