Alan Cadman (Mitchell, Liberal Party) Share this | Hansard source

The Health Insurance Amendment (Inappropriate and Prohibited Practices and Other Measures) Bill 2007 has been approached in a very unusual way. We have in the explanatory memorandum the setting out of options and choices available to the government in the pathology area. Then we have the pros and cons: doing nothing, minor fiddling and redrafting proposals, which are the key options. They are set out in tabular form, together with the impact on Commonwealth, state and other authorities. And then, by a process of deduction, the explanatory memorandum takes the reader through the process to finally announcing the government’s decision, which is to wipe out sections of the act and redraft and reattempt the management of this area.

In early 2000, the Commonwealth initiated a review of Commonwealth legislation for pathology arrangements under Medicare. That was supposed to report back in December 2000. The problem with some of these things is that, when you send them off to an expert group, they can have a life of their own. This one certainly did. It was supposed to take them nine months to meet that December deadline; it took them two years and nine months. They finished the job in December 2002.

The review concluded that the legislative arrangements for regulating pathology services needed to be updated and streamlined because they wanted to have bribery and prohibited offences provisions in the Health Insurance Act. As a result, the Commonwealth commissioned Phillips Fox to evaluate the effectiveness of the current enforcement, to identify the compliance arrangements that also apply to providers of pathology services, to identify different options for compliance regimes and to evaluate each of the identified options. That provision has been moved into the explanatory memorandum, which really runs the argument of the ‘do nothing’ proposal. Option B is to amend the existing provisions, and option C is to repeal and replace the existing provisions.

What the government wanted to achieve with this was to reduce the inappropriate expenditure for pathology and diagnostic imaging services provided under the MBS and to ensure that competition between providers of pathology and diagnostic imaging services was based on quality of service and cost to patients and not skewed in favour of those who provided the benefits to requesters of pathology and diagnostic imaging services. They were saying that the radiologists and radiographers are the providers of the service and so this service should not be set up to suit them but be set up on the basis of quality of service and cost to patients. That requirement of the government was a very sensible approach.

In order to achieve these objectives, the government decided it would revise the existing provisions to clarify the intention of the current prohibitions and it would extend the current provisions to include requesters of pathology and diagnostic imaging services. So, for the first time, the requesters of pathology were going to be included in the group that must comply with some sort of regime of integrity so that you would not have anybody through the back door requiring more requests of diagnostic imaging and pathology services than was sensible.

We went through this at the beginning of Medibank. The case of Dr Geoffrey Edelsten was notorious. As the House may remember, he had a regime of his own. My office, incidentally, was right next-door to his first surgery. There were deep pink carpets, a grand piano was played day and night for those who visited, there was a playground for the children and there were all of these very salubrious—

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