House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Veterans and Defence Personnel, The Honourable Darren Chester MP)

MILITARY REHABILITATION AND COMPENSATION AMENDMENT (SINGLE TREATMENT PATHWAY) BILL 2019

Schedule 1 - Single treatment pathway

Military Rehabilitation and Compensation Act 2004

Background

The amendments to be made by Schedule 1 would amend the Military Rehabilitation and Compensation Act 2004 (MRCA) to simplify the treatment pathways for medical treatment.

Currently in the MRCA, there are two treatment pathways through which the Military Rehabilitation and Compensation Commission (the Commission) provides clients' medical treatment. Pathway one provides for a client to be reimbursed for reasonable medical treatment received, whereas under pathway two, clients are issued with a Department of Veterans' Affairs (DVA) Health Card and access treatment through the card. Treatment pathway two via the DVA Health Card provides clients with a more convenient, timely and efficient method to access treatment as and when they need it.

A 2011 Review of Military Compensation identified that pathway one could be removed and that all eligible clients could be transferred to pathway two, aligning the MRCA with the Veterans' Entitlements Act 1986 (VEA). In 2013, a single treatment pathway model was implemented for clients under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA).

These amendments would remove the dual treatment pathway model under the MRCA and replace it with a single treatment pathway model based on arrangements under the VEA and the DRCA. The amendments would also regularise transitions that have already occurred between treatment pathway one and treatment pathway two.

These amendments would align the treatment pathways across all Veteran portfolio legislation leading to improvements and efficiency for the Commission in processing treatment requests.

For those clients with complex treatment needs, a new discretion may preserve any current arrangement and enables the Commission to provide clients with the clinically necessary treatment required given their individual circumstances.

Notes on Clauses

Part 1 - Main amendments

Item 1 would omit section 269, Simplified outline of this Chapter, and substitute a new section 269 to provide a description of treatment arrangements under Parts 3 and 4 of Chapter 6, proposed to be made below at items 2 to 17. The references to treatment under Part 2 of Chapter 6 have been removed, as item 2 proposes to repeal Part 2 of Chapter 6.

The amended Part 3 deals with a person's entitlement to treatment, some people are entitled to treatment for a service injury or disease while other people are entitled to treatment for any injury or disease.

The amended Part 4 deals with compensation and MRCA supplement. A person may be compensated for the costs of treatment in special circumstances, such as treatment reasonably obtained before the Commission determines that the person is entitled to treatment under Part 3. Compensation for costs incurred in travelling to obtain treatment is also provided for. Part 4 also provides for MRCA supplement for those who are entitled to treatment under Part 3.

Item 2 would repeal Part 2 of Chapter 6 - Treatment for injuries and diseases. Repealing this Part is required to implement a new legislative framework to provide a single treatment pathway and provide for a discretionary mechanism to reimburse costs for treatment to a person in special circumstances. This is consequential amendment to item 16 below, which would insert new Division 1A into Part 4 of Chapter 6 and replicates much of existing Part 2.

Item 3 would omit the second paragraph in section 278, Simplified outline of this Part, and substitute it with an updated statement to reflect the amendment to be made by item 2 (compensation for treatment under part 2 of Chapter 6 is no longer available). It also replaces the reference to the repealed Defence Force Regulations 1952 with a reference to "regulations made under the Defence Act 1903". This amendment enables this provision to have effect where the title of the regulations made under the Defence Act 1903 may be changed or updated.

Item 4 would omit and substitute the last paragraph in section 278 - Simplified outline of this Part. When amended, the last paragraph of section 278 would read "A person who is entitled to treatment under this Part might also be entitled under Part 4 to compensation for the cost of treatment reasonably obtained before the Commission determines that the person is so entitled and for costs incurred in travelling to obtain the treatment. MRCA supplement is also payable under Part 4 for those who are entitled to treatment under this Part".

The purpose of this amendment is to explain what is provided for in Part 3 and how Part 3 is intended to operate. It also alerts the reader that, under Part 4, a person may be entitled to compensation for treatment in certain circumstances. Part 4 provides flexibility for the Commission to approve the reimbursement of treatment after the treatment has been sought. In addition, the amendment clarifies that the travelling costs and supplement under the MRCA are still available to a person in these circumstances.

Item 5 would amend section 279 to repeal the heading and substitute it with "279 Treatment for members entitled to treatment under Defence regulations".

This is a technical amendment and replaces the reference to the repealed Defence Force Regulations 1952 with a reference to "regulations made under the Defence Act 1903". This amendment enables this provision to have effect where the title of the regulations made under the Defence Act 1903 may be changed or updated.

Item 6 would amend paragraph 279(b) to replace the reference to the repealed Defence Force Regulations 1952 with a reference to "regulations made under the Defence Act 1903". This amendment enables this provision to have effect where the title of the regulations made under the Defence Act 1903 may be changed or updated.

Item 7 would amend paragraph 279(d) to omit "the Defence Force Regulations 1952" and substitute it to "those regulations". This amendment is a minor technical and consequential amendment and flows from the amendment made at item 6.

Items 8, 11 - 14 would amend Note 1 at sections 279, 280, subsection 281(1) section 282 and the Note at subsections 284(1) and (2). This amendment would remove the reference to "section 273" and substitute it to "subsection 288A". This is a consequential technical amendment required due to the amendment made by items 2 and 16.

Item 9 would amend paragraph 280(c) to omit "319; and" and substitute it to "319.". This amendment is a technical consequential amendment required due to the amendment proposed to be made by item 10, below.

Item 10 would repeal paragraph 280(d). This is a consequential technical amendment required due to the amendment proposed to be made by item 23. Item 23 would delete section 327. Therefore, it is no longer necessary to refer to it in paragraph 280(d).

Item 15 would amend section 288 - Simplified outline of this Part, before the paragraph relating to Division 2 to insert an outline of new Division 1A. The outline for new Division 1A would state that compensation for the cost of treatment may be provided in special circumstances. This includes treatment that a person reasonably obtains before the Commission determines that the person is entitled to treatment under Part 3 or if the person dies after receiving treatment.

The inclusion of the new outline makes it clear that a person may be reimbursed for the cost of treatment only in special circumstances or where the person has since died. The intent of the amendment is to provide a discretionary power to the Commission to reimburse the cost of treatment obtained only in special circumstances.

Item 16 would insert, after Division 1 of Part 4 of Chapter 6, new Division 1A - Compensation for treatment obtained in special circumstances.

New Division 1A would consist of new sections 288A to 288G. These sections would replicate some of the existing provisions of Part 2 of Chapter 6, and set out the circumstances in which treatment obtained in special circumstances may be compensated.

New section 288A would replicate existing section 273 and would provide for compensation for treatment where the person is entitled under Part 3 to treatment for a service injury or disease, the treatment was received prior to a determination made by the Commission that the person was entitled to the treatment, it was reasonable for the person to obtain the treatment and the person has made a claim for compensation under section 319. This would continue to ensure that the reasonable costs of treatment obtained between lodging a claim and the date a DVA Health Card being provided, can be compensated.

New section 288B would replicate existing subsection 271(2) and would provide that compensation may be paid where the person dies of their service injury or disease after obtaining treatment, the Commission has accepted liability for the service death, it was reasonable in the circumstances to obtain the treatment and a claim for compensation was made under section 319. This would ensure that, where a person incurred treatment costs and later dies from the injury or disease, compensation for the cost of the treatment may also be paid where the injury or disease is determined to have caused the death.

New section 288C would replicate parts of existing section 272, and would insert a discretion that would enable the Commission to provide compensation for treatment for a service injury or disease where the Commission has accepted liability and is satisfied that special circumstances exist in relation to the person and their treatment.

This new section is intended to ensure the amendments cover compensation for treatment in special circumstances. Treatment under Part 3 of Chapter 6 is governed by the MRCA Treatment Principles, which sets out the places at which, the circumstances in which, and the conditions subject to which, a particular kind or class of treatment may be provided for entitled persons under Part 3 of Chapter 6.

Where a person clinically requires treatment outside of the MRCA Treatment Principles, the Commission could consider reimbursing a person the cost of this treatment. There is a small cohort of clients with complex-high needs who may require treatment outside of the MRCA Treatment Principles. This would be done on a case by case basis with reference to any clinical advice where necessary.

New subsection 288D(1) would provide that the Commonwealth is not liable to pay compensation under sections 288A to 288C where the person may be provided compensation under another section of the MRCA. New subsection 288D(2) would provide that, where the person is entitled to compensation for the cost of treatment under more than one section within Division 1A, then they may only receive compensation under one of those sections. The purpose of this amendment is to prohibit a person being compensated twice for treatment of the same injury or disease. For example, where a person may also be entitled to compensation of the loss of, or damage to, medical aids under section 226.

New section 288E, would replicate existing section 275, and would provide that there is no liability for compensation for an aggravated injury or disease if, at the time of treatment, the aggravation or material contribution has ceased. This would continue to ensure that liability to pay compensation for the treatment of an aggravated injury or disease ends once the aggravation ceases and the injury or disease returns to its pre-aggravation status.

New section 288F would replicate existing section 276. New subsection 288F (1) provides that the Commission must determine that compensation payable under new sections 288A to 288C must be reasonable for the cost of treatment of the person's injury or disease. In all cases, the compensation payable must not be more than the actual cost of the treatment obtained.

This new section would ensure that the cost of the treatment is reasonable and that a person or another cannot profit when obtaining treatment. For clarity, the Note provides that the amount determined by the Commission must not take into account increases in the cost of a particular treatment after the treatment has been obtained.

Subsection 288F(2) would provide that the compensation or treatment includes the amount to replace or repair a medical aid used by the person. This may include any reasonable fee or charges for a consultation, examination, prescription or service rendered by a practitioner or qualified person in connection to the replacement or repair.

New subsection 288F(2) would ensure that, where a medical aid requires replacement or repair, these costs may be reimbursed.

New section 288G would replicate existing section 277. New subsection 288G(1) would specify to whom the compensation for treatment is payable. Where compensation is payable under sections 288A, 288B or 288C, the costs may be payable to the person who made the claim for compensation, or where the person who received the treatment directs, then to the person who provided the treatment or another person who incurred the cost of the treatment. The Note clarifies that where a trustee is appointed under section 432, special rules apply under sections 433 and 434 of the MRCA.

New subsection 288G(2) would provide that a payment under sections 288A, 288B or 288C to a person who provided the treatment discharges any liability of any other person for the cost of the treatment to the extent of the payment. This subsection ensures that, where a service provider who provided a treatment has received payment under sections 288A to 288C, there is no entitlement to any other payment. This ensures that where a service provider has been paid for treatment that they are unable to require an additional payment for that treatment.

Item 17 would repeal and substitute paragraphs 289(a) and (b) of the definition of "compensable treatment". The new definition of "compensable treatment" provides that it would be a treatment to which a person is entitled under Part 3 (other than section 280A (treatment for certain injuries covered by the DRCA)) or treatment in respect of which compensation is payable under Division 1A of Part 4.

This amendment is a technical consequential amendment required as a result of the commencement of the DRCA and items 2 and 16, where Part 2 was repealed and Division 1A of Part 4 inserted.

Item 18 would amend subsection 305(1) of the definition of "treatment under this Chapter" to omit "Part 2" and insert "Division 1A of Part 4". This is a technical consequential amendment as a result of the amendment made at items 2 and 16.

Item 19 would amend subparagraphs 306(1)(c)(i) and (3)(b)(i) to omit "2 or". This is a technical consequential amendment as a result of the amendment made at item 2 and replaces "Part 2" with "Division 1A of Part 4".

Item 20 would amend section 318, Simplified outline of this Part, to omit "The Commission decides under section 327 whether the person should be paid compensation for treatment under Part 2 of Chapter 6 or whether the person should be provided with treatment under Part 3 of Chapter 6."

This amendment would remove the reference to the two treatment pathways, as treatment pathway one has been removed. This is a consequential technical amendment required as a result of the amendments made at item 2.

Item 21 would amend the Note at subsection 320(1) to omit "section 266 and subsection 271(2)" and substitute it with "sections 266 and 288B". This is a consequential technical amendment required as a result of the amendments made at items 2 and 16.

Item 22 would amend paragraph 326(c) to repeal the paragraph and substitute it to provide that "the person's medical needs, including but not limited to any treatment (including ongoing treatment) that the person needs or is likely to need".

Existing subparagraph 326(c)(ii) is no longer required as item 23 would repeal section 327, which is the section under which the Commission must decide whether a person is compensated for their treatment under Part 2 of Chapter 6, or receives treatment under Part 3 of Chapter 6.

Item 23 would repeal section 327 in its entirety as this section is no longer required.

Section 327 required the Commission to determine whether section 271 or 280 applied to the person, following any needs assessment. Should these amendments be enacted, all future clients with an accepted MRCA claim would receive treatment via the DVA Health Card model. Section 327 would not be required as the Commission would not need to choose which treatment pathway to place a person on.

Item 24 would repeal paragraphs 345(2)(g) and (k). This is a consequential technical amendment required as a result of the amendments made at item 2. Paragraphs 345(2)(g) and (k) meant that a determination under existing section 272 or 327 was not reviewable. With the repeal of those sections, it is no longer necessary to specify them as non-reviewable decisions.

Part 2 - Consequential amendments

Income Tax Assessment Act 1997

Item 25 would amend table item 19 at section 52-114 to omit "(sections 271, 272 and 273)" and substitute it with (sections 288A, 288B and 288C)". This is a consequential technical amendment required as a result of the amendments made at items 2 and 16.

Veterans' Entitlements Act 1986

Item 26 would amend paragraph 5H(8)(zz) to omit "Part 2 of Chapter 6, or Division 2", and substitute it to "Division 1A, 2". This is a consequential technical amendment required as a result of the amendments made at items 2 and 16.

Item 27 would amend subsection 85A(3) and 85B(3) to omit "section 273" and substitute it to "section 288A". This is a consequential technical amendment required as a result of the amendments made at items 2 and 16.

Part 3 - Application and transitional provisions

Item 28 would provide that "MRCA" means the Military Rehabilitation and Compensation Act 2004. This is a clarifying provision.

Item 29 is an application provision. Subitem (1) would provide that the amendments made to section 280 apply to claims for compensation made after the commencement date of Schedule 1 and claims made but not determined before the commencement date of Schedule 1. The amendment to section 280 (item 10) is to remove paragraph 280(d), which required the Commission to determine (under section 327) that section 280 applied to the person.

This item explains that the amendments to be made to section 280 by Schedule 1 apply to a claim for compensation after the commencement date and to all claims for compensation where the Commission has not made a determination before the commencement date.

Subitem (2) provides that new section 288C applies to a claim for compensation made after the commencement of Schedule 1, regardless of whether the treatment was obtained before or after that commencement.

This item clarifies that compensation may be provided under section 288C even where the treatment was obtained prior to or after the commencement of Schedule 1.

Item 30 contains transitional provisions and would provide that any claim for compensation under subsection 271(2) or section 273 that was made but not determined by the Commisison, by the commencement date, will be taken to be a claim for compensation under new sections 288B and 288A, respectively, after the commencement date. This would ensure that an outstanding claim for compensation under subsection 271(2) or section 273 on commencement of the Bill could be determined under new sections 288B or 288A.

Subitem 3 would mean that, if the Commission had made a determination under section 327 specifying that section 271 applied to a person then, on or after the commencement date of this Schedule, the Commission is taken to have determined that section 280 applies to the person. This means that existing treatment pathway one clients (compensation/reimbursement) would be taken to be treatment pathway two clients (DVA Health Card) from the commencement date of the amendments in Schedule 1.

Item 31 would regularise a pre-commencement determination in relation to moving a person from one treatment path to another. This provision would regularise actions taken prior to this Schedule's commencement and validate 'things done' and render the 'things done' as valid and effective. In addition, this provision would not affect the rights or liabilities between the parties of proceedings heard and finally determined by a court on or before the commencement of Schedule 1 to the extent the right or liability arose or was affected by the 'thing done'.

The intent is to ensure that any determination made to move a person from one treatment pathway to another, and the administration of that determination, is valid and does not impact on the right of either party and that the determination and action taken under the determination is valid and effective.

Item 32 would validate any payments made to treatment providers before the commencement of Schedule 1 where the amounts were not payable at the time they were made but which would have been payable had the amendments in Schedule 1 been in force at the time they were made. The provisions would have the effect that a debt would not be raised against a treatment provider and would not provide a treatment provider with another entitlement to payment for treatment previously paid.

Commencement

The amendments in Schedule 1 commence the day this Act receives the Royal Assent.