Changes considered to the Health Insurance Act

This article was co-authored by Laura Skazlic, Paralegal.

The Australian Federal Department of Health (the Department) is considering amendments to the Health Insurance Act 1973 (the Act) to alter the powers of the Director of Professional Services Review (PSR) to enter into agreements with corporate entities that are found to have engaged in inappropriate practice.

In cases where inappropriate practices are referred for review, section 92 of the Act permits the Director of PSR to enter into an agreement with an individual practitioner under review upon an acknowledgement of inappropriate practice in connection with their rendered services. The person under review is often subject to specified action as a part of the agreement (known as a Section 92 Agreement). Section 92(2) of the Act states that “specified action” could include a reprimand, requirement for repayment of the whole or a specific part of the benefit/debt, and a period of partial or full disqualification from the MBS or PBS. A Section 92 Agreement generally requires the Determining Authority’s ratification before it takes effect. As it is currently worded, section 92 of the Act implicates medical/dental practitioners, optometrists, midwives and nurse practitioners participating in the MBS/PBS. The main benefits of a Section 92 Agreement is that it avoids the time and expense of proceeding to the PSR Committee and the process and outcome is confidential.

The AMA has been in talks with the Federal Department of Health over the potential to extend s92 agreements to corporate entities, recognising that this could provide a means to avoid protracted proceedings. The AMA has emphasised the need to consult carefully on the proposed changes to ensure there are no unintended consequences for practitioners and will make further submissions to the Department once more detail is released.

Although the nature and scope of the proposed changes to section 92 of the Act is yet to be revealed in any detail, the anticipated amendments are not without concern to both practitioners and corporates. Recently, the Royal Australian College of General Practitioners (RACGP) wrote to the Department in July 2021 raising issues regarding the potential expansion of the PSR’s powers with respect to corporate entities. The RACGP submitted amongst other things, that the Department needed to consider any inadvertent consequences of compliance action taken against corporates on practitioners who have little or no control over billing practices required at an organisational level, as well as increased timeframes for compliance investigations if there is a further line of investigation at the PSR level against the corporate. The RACGP also suggested that different approaches be taken when dealing with smaller corporates with less capacity, who might find it challenging to continue to provide good care to patients whilst under investigation.

At present, only practitioners are able to enter into a Section 92 Agreement with the Director of PSR, and the Act does not extend to corporates or employers. Currently when an employer or corporate entity is referred to the Director by a delegate of the Chief Executive Medicare, the Director must refer the matter to the PSR Committee if it is determined that there are grounds on which a PSR Committee could ‘reasonably conclude’ that there was inappropriate practice during the review period. The ability for the Director of PSR to negotiate or accept a repayment is currently not available and this may create unnecessary delay in recovering benefits rendered inappropriately and legal costs where there is no option but to proceed by way of the PSR Committee process. On face value, allowing corporates the ability to negotiate repayments under a Section 92 Agreement where they have identified errors appears to also offer benefits in reducing legal fees and in protecting their reputation through confidential agreements.

However the devil is always in the detail and it is unlikely that section 92 of the Act can be applied to corporates as it is currently worded. Hence more broad ranging changes are likely to be required to the Act. As aforementioned, section 92 of the Act relates to “specified action”, which sometimes translates to partial or full disqualification for practitioners from the MBS or PBS. Given that some of the specified actions relate specifically to a practitioner’s provider number/s, it is anticipated that any changes to section 92 will need to be tailored to corporate and specific types of action that corporates can practically be subjected to. It remains to be seen whether any proposed action applicable to corporates under section 92 could potentially affect practitioners who are engaged by that particular corporate, as well as other end users who rely on the corporate to access subsidised services.

In any event, for practitioners who might be subject to undesirable billing processes or pressures, an expanded section 92 may shift some of the compliance burden onto the relevant corporate entity to assist in confidential and negotiated repayments. However such amendments would need to be carefully worded. Conversely, for corporates who are generally compliant with billing practices but there is some deviation in the billing practices of some of their practitioners, this could conceivably result in audits, added scrutiny and additional costs.

If corporates are afforded the opportunity to enter into a Section 92 Agreement, it might avoid the stress associated with the PSR Committee. However it is likely to still require time reviewing individual practitioner records and seeking practitioner input in order to respond to the Director’s concerns. Regardless of any changes to be made to the process of review by the Department, the PSR review process will likely continue to be stressful and time consuming for the practitioners involved. We urge practitioners to review their use of MBS item numbers, keep up to date with changes in item numbers and seek external training on the proper use of these numbers (rather than adopting processes used by colleagues or corporates).

We await to hear further regarding the proposed changes to the Act following Parliament’s sitting this month. We also refer you to our article in VicDoc March 2021, which details the obligation on practitioners to notify the Medical Board of Australia if specified action such as a disqualification from rendering or initiating specified services under the MBS or the PBS has occurred in accordance with section 130 of the National Law.

If you have any concerns about potential exposure, either as someone who renders professional services or a corporate entity who contracts with persons who provide professional services, you should seek legal advice about your specific circumstances.

 

This article was originally published in AMA Victoria's blog, Stethoscope

 

Read other items in the Australia Healthcare Brief - September 2021

Read other items in the Australian Insurance Brief - October 2021