House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Health, the Hon Greg Hunt MP)

OUTLINE

The purpose of the Bill is to amend the National Health Act 1953 (National Health Act) and the Health Insurance Act 1973 (Health Insurance Act) to enable information held by the Chief Executive Medicare to be used in ensuring the integrity of medicare programs including the Medicare Benefits Schedule (MBS) and Pharmaceutical Benefits Scheme (PBS). In doing so, the Bill will make other necessary minor amendments to the Military Rehabilitation and Compensation Act 2004, Privacy Act 1988, Private Health Insurance Act 2007 and Therapeutic Goods Act 1989.

Commonwealth expenditure on Medicare and Department of Veterans' Affairs health services was over $36 billion in 2017-18. The integrity of these programs is material to the Commonwealth's finances, and ensuring that all Australians continue to have access to a world class health system.

While the majority of practitioners claim MBS, PBS and other health benefits appropriately, some practitioners do not. There are also risks that claims are submitted incorrectly by people other than practitioners without the practitioner's knowledge. This Bill will authorise the matching of certain kinds of information to improve the Chief Executive Medicare's ability to confirm whether payments have been correctly made by the Commonwealth and identifying instances where recoveries may be appropriate.

The Bill has two key components:

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Data matching for medicare program integrity purposes

The Bill provides for data matching to be undertaken by the Chief Executive Medicare for specified compliance-related permitted purposes as defined in the Bill. It also provides for the Chief Executive Medicare to authorise another Commonwealth entity to match data on the Chief Executive Medicare's behalf for the same purposes. The Bill also requires the Minister to make, by legislative instrument, principles in relation to the matching of information which will ensure appropriate governance. The Australian Information Commissioner (the Information Commissioner) will have a level of oversight in relation to the data matching scheme.

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Improving the Commonwealth's ability to deal with inappropriate practice

In addition to the MBS and PBS, the Commonwealth funds the provision of services to various persons entitled to receive health treatment under certain laws administered by the Minister for Veterans' Affairs. The Professional Services Review scheme in Part VAA of the Health Insurance Act deals with inappropriate practice by health practitioners. However, this scheme is not permitted to consider these services to be taken into account in determining whether a practitioner has engaged in a prescribed pattern of services which is deemed to be inappropriate practice. This Bill enables services involving a professional attendance provided under certain laws administered by the Minister for Veterans' Affairs to be considered for a prescribed pattern of services, but not unacceptable conduct, for the purposes of the Professional Services Review scheme.

The Bill enables the Chief Executive Medicare to conduct data matching of listed kinds of information, for a defined permitted purpose. The Bill also enables the Chief Executive Medicare to authorise a Commonwealth entity to carry out data matching on the Chief Executive Medicare's behalf, for the same purposes. The information which can be matched includes:

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information that is held or has been obtained by the Chief Executive Medicare for the purpose of a medicare program;

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certain therapeutic goods information;

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information about hospital treatment or general treatment disclosed to the Chief Executive Medicare by a private health insurer;

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information provided to the Chief Executive Medicare in accordance with the Health Practitioner Regulation National Law (uniform laws of the states and territories that provide for the registration or licensing of doctors and other health professionals);

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information provided to the Chief Executive Medicare in accordance with certain legislation administered by the Minister for Veterans' Affairs providing for the funding of health services to eligible persons (mostly veterans of one kind or another); and

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any other information that may be lawfully provided to the Chief Executive Medicare (other than information that is held or has been obtained by the Chief Executive Medicare exclusively for the purpose of performing functions under the My Health Records Act 2012 ).

The compliance-related permitted purposes are:

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identifying whether a person may have, under a medicare program, claimed or been paid a benefit that exceeds the amount of the benefit that was payable to the person;

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recovering overpayments of benefits under a medicare program;

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detecting or investigating contraventions of a law of the Commonwealth relating to a medicare program;

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detecting or investigating whether a person may have engaged in inappropriate practice (as defined for the purposes of Part VAA of the Health Insurance Act);

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analysing services, benefits, programs or facilities that are provided for under a medicare program in relation to the purposes mentioned above; and

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educating healthcare providers about medicare program requirements.

The current restrictions on the matching of MBS and PBS data were set over 25 years ago. The effect of these restrictions prohibit the linkage of MBS and PBS data, even to detect potential fraud, inappropriate practice or incorrect claiming in the modern compliance environment. The authorisation for data matching contained within the Bill will exempt data matching from the current restrictions when the matching is for a permitted purpose as defined in the Bill.

While the remaining aspects of matching authorised by the Bill are not currently subject to these prohibitions, their inclusion within the Bill will ensure that data matching only takes place within a regulated framework for permitted purposes, where potential security and privacy concerns have been considered and addressed.

Overall, the Bill sets out strict privacy, security and transparency safeguards to ensure that information about individuals who are identifiable or reasonably identifiable will not be misused. The Bill expressly provides for the Information Commissioner to have oversight of data matching as it relates to information about an individual, including conducting assessments in relation to the Australian Privacy Principles.

The Bill requires the Minister to make, by legislative instrument, principles in relation to data matching. This will enable appropriate governance of the data matching activities, providing strong privacy protections and setting out effective processes to ensure maintenance of appropriate standards for the protection of and access to data. The principles must:

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require the Chief Executive Medicare to establish and maintain a publicly available register of the kinds of information matched;

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require the Chief Executive Medicare to keep records of information matched;

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require an authorised Commonwealth entity to keep records of information matched;

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require the Chief Executive Medicare and an authorised Commonwealth entity to take reasonable steps to destroy personal information that has been matched, if no longer needed for any purpose for which the information was matched;

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require the Chief Executive Medicare and an authorised Commonwealth entity to take reasonable steps to ensure that personal information matched is accurate, complete and up-to-date; and

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require the Chief Executive Medicare and an authorised Commonwealth entity not to match information unless satisfied that it is reasonably necessary for the purpose for which it is to be matched.

The legislative instrument consultation requirements of the Legislation Act 2003 will apply, to ensure relevant stakeholder engagement in the preparation of the principles.

By enabling greater and more efficient identification of potential non-compliance, the Bill will facilitate recovery of debt where appropriate, contributing to greater access to affordable medicines for the Australian community and ensuring that Medicare continues to provide support to Australian patients.

Financial Impact Statement

The Bill implements aspects of a measure announced by the Australian Government in the 2018-19 Budget Measure Guaranteeing Medicare - Improving quality and safety through stronger compliance, which invested $9.5 million over five years from 2017-18 to continue to improve Medicare compliance arrangements.