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Limebite 02/24

Pills, bills and policy thrills: Unpacking the Health Insurance Amendment (Professional Services Review Scheme No. 2) Bill 2023

Ingrid Nunnink
Ingrid Nunnink, Victoria Pechlivanis

In September 2023, the Federal Government passed, without any alterations, the Health Insurance Amendment (Professional Services Review Scheme No. 2) Bill 2023 (Bill), which amends the Health Insurance Act 1973 (Cth).

The amendments aim to refine the Professional Services Review (PSR) Scheme.

The PSR is an independent body that was established under the Health Insurance Act, and is responsible for protecting the integrity of the Medicare program by investigating practitioners who are deemed to have engaged in inappropriate practice. In doing so, the PSR is also responsible for protecting patients, and the wider community from the risks associated with inappropriate practice, as well as the Commonwealth who ultimately has to meet the cost of services inappropriately provided by a practitioner.

What was the catalyst for change?

The Bill forms part of the Federal Government’s response to the Independent Review of Medicare Integrity and Compliance conducted by Dr Pradeep Philip (Report). Dr Philip released the final report in April 2023 and made a series of key findings and recommendations in relation to the integrity and compliance aspects of the Medicare system.

The Report estimated that the value of non-compliance with Medicare resulted in a loss of approximately $1.5 billion to $3 billion annually.

It also considered that the loss was more likely a result of unintentional non-compliance errors, rather than fraudulent billing or “rorting”. The Report observed that with 6,000 items currently listed on the Medicare Benefits Schedule (MBS), and its inherent complexities, coupled with fears of PSR, practitioners were more likely to make errors, or be non-compliant, in their billing.

There were a total of total of 23 recommendations made. Some of the key recommendations include:

  • Strengthened oversight and compliance measures: strengthening the governance model overseeing Medicare by establishing an oversight committee comprised of agency stakeholders and industry experts;
  • Improved operational processes: enhance claims processing to enable continuous monitoring of claims by departmental officers;
  • Modernised technology: increasing data checks and compliance in practice management, and validity of MBS claims; and
  • Legislative change: reviewing legislation to ensure it effectively meets the recommendations made.

So what has changed?

 The Bill has introduced the following changes:

  • Amending the requirements for qualifications of PSR Committee members;
  • Strengthening the operation of the PSR by addressing the ambiguities contained within the Health Insurance Act;
  • Clarifying that a reference to a practitioner includes a practitioner who is not currently registered;
  • Clarifying the requirement for a practitioner under review to notify the PSR Committee if they are unable to attend a hearing due to a medical reason, including the practitioner producing a medical certificate in support; and
  • Providing the Director of the PSR with the power to extend the statutory timeframe of 12 months for deciding a matter if the practitioner under review leaves Australia or if there are ongoing Court proceedings in relation to the matter.

What does it all mean?

The Medicare system is Australia’s health insurance scheme which subsidises certain medical services for Australians (and some international visitors). The PSR reviews practitioners who may have acted inappropriately with respect to their billing within this system.

By making amendments to the PSR scheme, the Bill aims to fortify the integrity of Medicare and the operation of the PSR to foster a more resilient and adaptable healthcare system in Australia.

As a result of some measures, the system and its processes may operate more efficiently or capture more information, including non-compliance and increase the numbers referred for review.

Of note for individual practitioners or insurers:

  • this applies to practitioners who may not, at the time of the review, be registered; and
  • the strict time limit for the PSR to decide on a review has been extended, in some circumstances. This time limit may have impact on both the process and pressure placed on a practitioner in engaging with the PSR, as well as the PSR in meeting its statutory functions and making its decisions.
This publication constitutes a summary of the information of the subject matter covered. This information is not intended to be nor should it be relied upon as legal or any other type of professional advice. For further information in relation to this subject matter please contact the author.