Tanya Plibersek (Sydney, Australian Labor Party, Minister for Human Services) Share this | Hansard source

I rise to support the Health Insurance Amendment (Compliance) Bill 2010. This bill represents a major step forward for the compliance and auditing functions of Medicare Australia. It delivers essential new powers for the enforcement of Medicare’s audit processes, while protecting patient privacy and the integrity of clinical information.

Commonwealth spending under the Medicare program is currently around $15 billion a year—a $4 billion increase since Labor’s election in 2007. Under the previous government, Medicare was left to stagnate, health funding was slashed and bulk billing rates declined. Australia’s universal healthcare system became weaker and less fair. Since 2007, this government has restored fairness and growth to Medicare. Rebates have increased, bulk billing is up, and more Australians are receiving assistance with their healthcare needs than ever before. Medicare has also been extended to a range of new allied healthcare providers and to additional dentistry services. Last year, more than 101,000 health professionals provided over 308 million services, claimed against nearly 6,000 Medicare item numbers.

Coupled with this expansion of services is the need for a strong compliance function that protects the Commonwealth’s investment. Medicare Australia already operates a rigorous system of auditing and investigation, acting on tip-offs and its own investigations, to identify incorrect claims. Audits check that the practitioner and the patient were eligible for Medicare benefits and that the service was actually provided. These are strict questions of fact. Medicare audits do not examine clinical decision making or the appropriateness of services provided but only whether they were legitimately charged for and actually delivered.

In 2008 this government provided funding for Medicare Australia to audit around four per cent of providers—up from one per cent under the coalition. In 2009-10 Medicare completed 3,600 audits and identified more than $10 million in incorrect claims. Some 159 formal investigations were completed and involved 21 medical practitioners, seven pharmacists and 131 members of the public. In one case, a medical practitioner was ordered to repay $180,000 after bulk-billing patients for procedures not discussed during patient visits.

Medicare’s audit team is regarded in the healthcare industry as highly professional and fair. A 2010 survey of 200 Australian health professionals found that 93 per cent agreed or strongly agreed that they were treated in a professional manner during the audit, and three-quarters found the information provided to them to be helpful in correctly interpreting the MBS.

However, under laws inherited from the previous government, health professionals are not required to assist with Medicare audits and can simply refuse to produce documents that substantiate their claims. Up to 20 per cent of health professionals refuse to co-operate with Medicare auditors. This refusal can jeopardise audit outcomes. Unless Medicare Australia can identify and interview the patients of these practitioners directly, it can be unable to complete the audit or determine whether Commonwealth funds have been correctly claimed.

The bill before the House addresses this deficiency in compliance procedures. Under the bill, Medicare Australia may issue notices to practitioners requiring the production of documents to substantiate Medicare claims. Failure to respond may result in a debt to the Commonwealth of the audited amount plus a penalty of up to 20 per cent. Where a practitioner was also unable to substantiate amounts paid for other services in the previous two years, and the total they repaid was more than $30,000, the penalty for the current amount being recovered is increased by 50 per cent. To encourage voluntary compliance, penalties may be reduced if an incorrect payment is identified early by the practitioner and directly refunded. The bill also creates an internal review process so that health professionals can have audit outcomes re-examined in case of dispute.

The government has worked closely with medical stakeholders and professional bodies in developing this bill to ensure that its provisions are fair to practitioners. Under the bill, Medicare must establish a ‘reasonable concern’ in relation to the services being audited and communicate this to the health professional. Medicare must also take the advice of an internal medical adviser about the types of documents it may seek for auditing purposes and regularly consult with a relevant professional body on the issue. Notices to produce documents may only relate to services that were rendered in the two-year period immediately prior to the notice being issued. Where clinical documents are required to be produced, a health practitioner may elect to forward these to a Medicare medical adviser, who will themselves be a qualified health professional.

As my colleague the Minister for Health and Ageing has already outlined, the bill does not introduce any new record-keeping requirements for health professionals or their practice staff. It will be up to the person who receives the audit notice to decide what documents they have available to substantiate the services for which they have claimed.

The bill also has strong regard for patient privacy and was developed in consultation with the Office of the Privacy Commissioner and with healthcare consumer organisations. A comprehensive privacy impact assessment was conducted in 2008, and this assessment was examined in further detail during the 2009 inquiry by the Senate Community Affairs Legislation Committee.

Amendments have been made to the bill to strengthen privacy controls. Risks to patient privacy have been mitigated through the requirement that clinical information need only be provided when it is strictly necessary to substantiate a claim and by enabling health professionals to elect to provide this information directly to Medicare medical advisers. The actions of Medicare Australia in conducting its audits are also subject to the secrecy provisions set out in the Health Insurance Act as well as the information privacy principles set out in the Privacy Act 1988.

A strong compliance regime is an essential part of Labor’s approach to Medicare and to government spending generally. This bill delivers that stronger compliance but balances it with practitioner safeguards and privacy protections for patients. It is the product of exhaustive consultation with healthcare stakeholders, consumers and privacy advocates and it has broad support across the health and medical community. Every dollar saved by the prevention of incorrect claims is a dollar that can be reinvested in government services and service delivery. The vast majority of health professionals are honest and accurate in their Medicare claims, as are the vast majority of patients. This bill will ensure that the minority of incorrect claims are identified and swiftly repaid.

I commend the bill to the House.

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