I move:

That this bill be now read a second time.

The Health Legislation Amendment (Improved Medicare Integrity and Other Measures) Bill 2026 introduces important reforms to strengthen the integrity and effectiveness of Australia's health system.

Australia has a world-class health system that offers affordable, high-quality, accessible health care to all Australians. This is due in large part to the various health benefit schemes—including Medicare and the Pharmaceutical Benefits Scheme—that help Australians pay for the health care they need.

The reforms in this bill build on the government's broader response to the Independent Review of Medicare Integrity and Compliance (the Philip review) which identified that some aspects of the current legislative framework can limit the timely and effective responses to noncompliance and fraud.

Regulatory powers

The review identified a gap between voluntary compliance options, such as asking someone to provide information about payments, and more serious regulatory responses. This means regulators do not always have a practical middle option when Medicare rules may not have been followed.

Schedule 1 of this bill introduces new regulatory powers to allow decision-makers to respond to matters in a way that is more practical and proportionate.

For example, infringement notices will give regulators an option to respond to low- to mid-level compliance concerns where Medicare rules have not been followed. Enforceable undertakings will enable a person or company to agree to address a problem and meet certain conditions to prevent further noncompliance.

This bill applies parts 4, 5 and 6 of the Regulatory Powers (Standard Provisions) Act 2014(Regulatory Powers Act). Those parts provide standardised frameworks for civil penalties, infringement notices and enforceable undertakings.

These changes will ensure the Department of Health, Disability and Ageing can respond proportionately and will support the earlier resolution of matters to protect the integrity of Medicare without resorting to more serious regulatory options.

Reforms of offences and civil penalties

Some existing offences and penalties are limiting the ability of the department to appropriately respond to some Medicare and PBS concerns. For example, the department currently have limited practical options to respond when someone fails to keep records relevant to Medicare and PBS services.

Separately, some existing penalties do not allow regulatory responses that differentiate between less serious concerns and more deliberate behaviour, and some provisions have not responded to changes in technology.

Schedule 2 of this bill introduces a graduated system of offences that will enable lower-level conduct of concern to be subject to lower penalties than more serious and deliberate conduct. This will increase flexibility and allow more timely and proportionate responses.

The bill will improve the information-gathering powers of Pharmaceutical Services Committees of Inquiry so they can more effectively undertake their role in investigating concerns about the conduct of approved pharmacists in supplying PBS medicines.

Other updates to the National Health Act will improve processes for PBS Safety Net cards and enable the approval of forms relating to the supply of pharmaceutical benefits.

Other changes will update offences so they work better with current technology, including electronic claiming systems, and extend the timeframes for prosecution so serious fraud matters do not have to be detected and investigated within three years.

Updates will ensure that offence provisions are clearer and more consistent with equivalent Commonwealth offences and aligned with the guide to framing Commonwealth offences and the Crimes Act 1914 (Crimes Act).

These reforms will provide the department with more practical ways to deal with Medicare and PBS concerns to better protect the integrity of Australia's publicly funded health programs.

Administrative inquiries and recovery of overpayments

Existing inquiry powers relating to the PBS are making it difficult for the department to consider concerns early and make the most appropriate regulatory decisions.

Current recovery powers only apply in some situations, which can make it difficult to recover PBS payments even if they did not meet framework requirements. These challenges are limiting the ability of the department to protect PBS health payments and benefits.

Changes in schedule 3 in this bill will address these limitations by ensuring decision-makers can access the information they need to make informed compliance decisions and take appropriate action when concerns are identified.

This will enable PBS payments to be recovered if they did not meet requirements. For example, a PBS payment could be recovered if a medicine was supplied without meeting relevant requirements under the National Health Act.

Payments that do not meet requirements risk the financial sustainability of the PBS, which is a critical component of Australia's health system.

This bill will strengthen the department's ability to protect PBS payments and make sure decision-makers can get the information they need to make better regulatory decisions.

Professional Services Review

Schedule 4 of this bill also introduces targeted reforms to improve the operation of the Professional Services Review.

The Professional Services Review plays a critical role in protecting patients, the community and the Commonwealth from the risks and costs of inappropriate practice.

However, aspects of the current legislative framework can give rise to inefficiencies, delays and unintended consequences that impact the effectiveness of the scheme.

This bill addresses those issues.

Changes in the bill will allow the Professional Services Review director or committee chair to apply directly to the Federal Court for civil penalty orders.

The bill will also address unintended consequences from a provision that results in Medicare benefits not being payable to any practitioners who are employed or otherwise engaged by a person under review, ensuring that the provision only applies to the person who is under review.

Furthermore, the bill will introduce some practical improvements to enhance the efficiency and operation of the PSR scheme.

This includes clarifying when a hearing is considered to have commenced, ensuring continuity of proceedings, allowing for corrections for referrals, expanding grounds for a challenge of a committee member in appropriate circumstances and enabling a more realistic timeframe for the completion of committee reports.

Together, these reforms will support a more efficient, proportionate and effective Professional Services Review process—one that better protects patients and the community while reducing unnecessary administrative burden.

Medicare Participation Reviews

The independent review of Medicare said current regulatory processes need to work better.

The Medicare participation review process was introduced in 1985 and no longer fits well with current regulatory approaches.

The role of Medicare participation reviews has largely been overtaken by other regulatory mechanisms, including the Professional Services Review and the Australian Health Practitioner Regulation Agency.

Schedule 5 of the bill will replace the Medicare Participation Review Committee process with powers that will allow action to be taken where a practitioner or entity is charged or convicted of a health related offence and in relation to breaches of pathology undertakings.

For example, a person could be suspended from participating in Medicare if they were charged with a fraud related offence involving a Medicare or dental service.

These changes will ensure the department can take appropriate action to protect Medicare if a practitioner is charged with a health related offence and address existing administrative burdens to ensure compliance activities remain appropriate and relevant to protecting the Medicare program.

The reforms do not affect the obligation of decision-makers to afford procedural fairness, including by providing practitioners and other affected persons with an appropriate opportunity to respond to relevant information and to consider the individual facts and circumstances of each matter. Applicable review requirements will also continue to apply.

The measures in this bill will continue to ensure robust processes and mechanisms are in place to identify and respond to noncompliance and fraud so that Commonwealth resources are directed to necessary health services and Medicare remains sustainable.

These measures will also continue the government's commitment to respond to recommendations from the review.

The government is committed to protecting and strengthening Medicare and the PBS, and this includes strengthening the integrity of Medicare and the PBS.

By supporting the integrity of Medicare and the PBS, this bill will ultimately benefit all Australians.

Debate adjourned.