Enhanced Compliance for Pathology Approved Collection Centres

28 Mar 2019

AMA members are advised that the Department of Health is in the process of writing to some Approved Pathology Authorities (APA) regarding new Approved Collection Centre (ACC) lease arrangements as part of its compliance activities. The letters will be a request for further information.

AMA members are encouraged to familiarise themselves with The Red Book - Guidance on Laws Relating to Pathology and Diagnostic Imaging - Prohibited Practices. The compliance strategy being pursued by the Department to enforce these laws is outlined in the Red Book.

Rents for co-located ACCs are among the areas already regulated by the Prohibited Practice Provisions of the Health Insurance Act, with the Act stating that they should not be substantially different from market value. “Not substantially different” from the market value means not more than 20 per cent variance from the market value. The current definition of market value has been in existence for several years.

The AMA does not support egregious rental arrangements for ACCs as they pose a significant reputational risk to the profession. While the AMA argued against proposed changes to the market value definition, we have supported greater education and, where appropriate, targeted compliance activity to tackle clearly egregious rents.

The compliance strategy being pursued by the Department of Health is targeted at ACC rents which, on the basis of data, represent the greatest risk to the integrity of Medicare benefits claims. Importantly, the Department also makes it clear that it will focus on outlier rents for ACCs, assessing this in comparison to rents paid by other pathology providers for a similar space.

The Department will take a measured approach to enforcement by working with parties who may be in breach and seeking voluntary undertakings from the parties to move to comply. Legal action will only be considered where there is continuing concern of a breach.

The AMA is confident that the vast majority of practices with ACCs are already doing the right thing and are unlikely to be targeted under the new compliance strategy.

Questions and concerns can be sent to pathology.rents.section@health.gov.au

The AMA has always encouraged members considering renting space for a co-located ACC to consider seeking an independent valuation. This will provide an idea of an appropriate rent and provide some assurance of compliance with the Prohibited Practices Laws as well as help satisfy any audit process.

More information is available at the Department of Health website.