AMA submission to the Health Insurance Amendment (Professional Services Review) Bill 2010 - Explanation For AMA Members

19 May 2010

Summary

The Commonwealth Government plans to introduce this Bill to make amendments to the legislation that underpins the Professional Services Review (PSR) scheme. Some of the amendments arise from the review of the scheme in 2006-07; others arise from court cases that have questioned the clarity of the current legislation; others correct typographical errors and unintended inconsistencies.

The AMA was represented on the committee that reviewed the scheme in 2006-07 and supported the recommendations arising from that review. It was also consulted in 2003 and 2005 about earlier versions of some of the proposed amendments. The Department of Health and Ageing has met more recently with the AMA to discuss and explain the current proposed amendments.

The primary objective of the Bill is to extend the PSR scheme to all health professionals whose services attract Medicare benefits. Other key changes are to: allow cases currently referred to the Medicare Participation Review Committee to be dealt with entirely under the PSR scheme; and to allow the PSR Committee to compel the production of objects as well as documents.

The AMA supports most of the amendments proposed in the exposure draft. However we:

  • oppose the amendments under Part 6 that would compel persons under review to produce ‘objects’;
  • seek to confirm that the effect of the amendments under Part 8 would allow the Director of PSR and the Determining Authority (DA) to disqualify for up to five years those practitioners who would otherwise have been referred to the Medicare Participation Review Committee (MPRC) under section 106X of the current legislation; and
  • wish to be consulted on the development of regulations concerning the various circumstances that would warrant the Director of PSR making referrals to the chief medical officers or equivalent in each state and territory rather than the Australian Medical Board.

The remaining amendments do not change the intent, purpose or effect of the current legislation or disadvantage doctors.

Background

The PSR scheme is a peer-review process for investigating inappropriate practice by practitioners who services attract Medicare benefits, or who prescribe medications under the PBS. There are four elements in the peer review process: Medicare Australia conducts an initial analysis and on that basis may make a referral to the PSR scheme; the Director of PSR undertakes a review and may either deal with the person under an ‘agreement’ arrangement or refer the person to the PSR committee; the PSR committee conducts a peer review and reports to the Determining Authority (DA); the DA considers the report from the committee and imposes the sanction, or in the case of an ‘agreement’ with the Director, ratifies it before it can take effect.

The DA or the Director may impose a range of sanctions including full or part disqualification from Medicare and/or the PBS for up to three years. More information about the PSR Scheme is available on the PSR website. More information about the amendments is available on the  Department of Health and Ageing''s website.

Another committee, the Medicare Participation Review Committee (MPRC), also deals with the right to participate in Medicare but is not part of the PSR scheme and usually deals with criminal cases. This committee is a statutory committee established to make determinations about whether a practitioner should retain the right to participate in Medicare in certain circumstances.

A practitioner must be referred to the MPRC if they have been found to have engaged in inappropriate practice under the PSR scheme on two or more separate occasions. Sanctions imposed by the MPRC can include full or part disqualification from Medicare and/or PBS services for up to five years.

Part 1 – Prescribed pattern of services

The proposed amendments provide that the CEO of Medicare Australia must request a PSR review of any practitioner who provides a ‘prescribed pattern of services’ and that this pattern may be the sole reason for the request for review.

The amendments clarify the existing intention of the Act for practitioners who have provided services that exceed a prescribed pattern to be automatically referred to the PSR scheme for review solely on that basis. A court decision made in 2003 determined that the Act was not clear as currently worded.

The current Act already refers to a prescribed pattern of services. For general practitioners the prescribed pattern of services is 80 or more services rendered on each of 20 days or more in a twelve month period.

The AMA does not oppose these amendments.

Part 2 – Allied health practitioners

These amendments will ensure that the PSR scheme applies to all allied health practitioners whose services attract Medicare benefits. The PSR scheme currently only applies to medical practitioners, dental practitioners, optometrists, chiropractors, physiotherapists, podiatrists and osteopaths. The scheme will not apply any differently to allied health practitioners than it does to medical practitioners.

The AMA does not oppose these amendments.

Part 3 – Meaning of service

The proposed amendments clarify the meaning of ‘service’ to include services that are known as ‘initiated’ services. The existing legislation already refers to ‘initiated’ services. The amendment does not change the meaning or scope of the Act.

The amendment clarifies that Medicare Australia could investigate a situation where, for example, a practitioner advertises that every new patient will get a ‘free’ x-ray. In this circumstance, the service has not been rendered but there is a clear intention to do so if the opportunity arises.

The Department of Health and Ageing has confirmed verbally that a practitioner would not be required to ‘repay’ benefits that have not in fact been paid.

The Department has also confirmed that an advertisement alone will not trigger a referral to the PSR scheme but would be considered as an element of other inappropriate practice.

The AMA does not oppose these amendments.

Part 4 – Extension of time for certain processes

The proposed amendments provide for extensions of the reporting time for the Director of PSR, the PSR committee and the DA in certain circumstances when the review is unavoidably halted or suspended, for example, because a court order suspends the PSR committee’s investigation. They also provide for an automatic extension of time for the DA to report in certain circumstances, for example, if an injunction halts proceedings.

The proposed amendments allow the Director of PSR to give additional information up until the time the DA makes a draft determination; currently this is allowed only up until the day the PSR Committee gives its final report to the DA. If this occurs, the person under review is invited to respond to the additional information and given time to do so.

The amendments allow the DA to extend the time for a person under review to make a submission in broader circumstances.

The AMA does not oppose these amendments.

Part 5 – No further action to be taken in certain circumstances

These amendments allow the PSR Committee or DA to take no further action in certain circumstances, for example, if the person under review dies or becomes permanently incapacitated or when it is clear that no further investigation or action is possible. The amendments effectively allow the case to be closed.

The AMA does not oppose these amendments.

Part 6 – Power to require production of objects

These amendments would allow the Director or a PSR committee to compel a person to produce ‘relevant’ objects as part of a review process. There are already powers in the existing legislation to compel the production of documents. The amendments add ‘objects’ to the legislation where it already refers to ‘documents’.

The penalties that would apply if the person refuses to comply with a request to produce an object are the same penalties which currently apply if a person refuses to produce a document.

It appears that this amendment is not supported by evidence that it is necessary. The Department has referred to ‘one occasion’ where a person under review wanted to present an object as evidence but was not able to do so because the current legislation did not allow it. However, no examples have been provided to the AMA where the need to examine objects has been necessary in past investigations or where it has impacted on the ability of the PSR committee to complete an investigation of inappropriate practice.

Without any evidence or examples, the AMA cannot support the amendment as drafted. Given the rationale provided for the amendments was based on allowing a person under review to produce an object as part of their defence, the AMA believes the Bill should be amended so that the PSR Committee can receive and examine objects, but that there be no provision for the Director or PSR Committee to compel the production of an object.

Part 7 – Date of effect for final determinations

The proposed amendments allow a final determination to be made after 7 days if an appeal is discontinued or withdrawn. Currently the determination cannot be finalised for 35 days, which includes a 28 days appeal period.

These amendments allow an earlier determination if the person under review has withdrawn or discontinued an appeal and therefore the 28 day additional period is no longer relevant.

The AMA does not oppose these amendments.
 
Part 8 – Powers to disqualify a person for up to five years

Currently, a person who has been found to have engaged in inappropriate practices under the PSR scheme on two or more occasions must be referred to the MPRC. The MPRC may conduct another separate hearing to consider applying sanctions such as a period of Medicare disqualification of up to five years.

The AMA agreed to recommendation 9 of the 2007 report of the PSR review that ‘PSR cases currently referred to the MPRC be directly referred to the Determining Authority (DA) and that the DA be given the power to enforce relevant sanctions equivalent to those currently available to the MPRC’.

The PSR review report made this recommendation because it was considered that doctors dealt with under the PSR scheme should not be referred to the MPRC, a body that usually deals with criminal cases. The recommendation sought to ensure that doctors could be dealt with entirely under the PSR scheme and reviewed by their peers rather than be subject to an additional formal regulatory system.

The amendments give effect to the recommendation but also allow the Director of PSR to disqualify people from the Medicare arrangements for up to five years.

The Director and the DA already have powers to disqualify people for up to three years. The AMA understands that the amendments would allow the Director and the DA to disqualify for up to five years only those practitioners who would otherwise have been referred to the MPRC under section 106X of the current legislation, i.e. only people with an effective determination of inappropriate practice on two or more separate occasions.

The AMA also understands the proposal to allow the Director as well as the DA to disqualify someone of up to five years is so that persons dealt with by ‘agreement’ with the Director, and persons dealt with by a determination of the PSR Committee, can be dealt with equally. The AMA notes that when the Director makes an agreement with a person under review (which may include disqualification from Medicare), this agreement must be ratified by the DA before it can take effect.

If this understanding is correct, the AMA supports these amendments.

Part 9 – Referrals to appropriate regulatory bodies

The proposed amendments will allow the Director of PSR to notify a range of external agencies or bodies if there is a significant threat to the health and safety of a patient of a person under review. The legislation already allows the Director to notify the Australian Medical Board. The main purpose of the amendments is to allow the listing of bodies in regulations that are relevant to allied health professionals.

The Department has verbally advised that for the medical profession it also intends to include state and territory chief medical officers or their equivalent in the regulations. Currently, under the Privacy Act, the Director can make referrals to a state or territory chief medical officer or equivalent. The amendment will formalise this within the PSR legislation.

The AMA does not oppose these amendments given the need to list bodies relevant to allied health professionals, however, the amendments needs careful consideration about the various circumstances that would warrant the Director to refer to a chief medical officer rather than the Medical Board of Australia. The AMA will discuss this with the Department when the regulations are developed.

Part 10 – Disqualified practitioners and display of notices

The proposed amendments do not introduce any new requirements regarding the display of notices informing patients that Medicare rebates are not payable for all or some doctors’ services.

The amendments seek to correct inconsistencies and errors in the current legislation which mean that the requirement for practitioners disqualified from Medicare to display notices, does not apply consistently to fully and partly disqualified practitioners, or to those disqualified under the PSR scheme compared to those disqualified by the MPRC.

The AMA does not oppose these amendments.

Part 11 – Patient referrals

These amendments are required to allow allied health professionals to be included in regulations which prescribe the way in which a patient is referred to services which attract a Medicare benefit. Currently, regulations can only be made in relation to referrals to consultant physicians and specialists.

The AMA does not oppose these amendments.

AMA Submission

The AMA has made a submission to the Department of Health and Ageing in respect of the Health Insurance Amendment (Professional Services Review) Bill 2010 exposure draft.