2002

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

HEALTH INSURANCE AMENDMENT

 (DIAGNOSTIC IMAGING, RADIATION ONCOLOGY AND OTHER MEASURES) BILL 2002

 

 

EXPLANATORY MEMORANDUM

 

 

 

(Circulated by authority of the Minister for Health and Ageing,

Senator the Hon. Kay Patterson)

 

 

HEALTH INSURANCE AMENDMENT

 (DIAGNOSTIC IMAGING, RADIATION ONCOLOGY AND OTHER MEASURES) BILL 2002

 

OUTLINE

 

The Health Insurance Amendment (Diagnostic Imaging, Radiation Oncology and Other Measures) Bill 2002 contains a number of amendments to the Health Insurance Act 1973 (the Act) in relation to the payment of Medicare benefits for diagnostic imaging services (that is, diagnostic radiology, ultrasound, computed tomography, magnetic resonance imaging and nuclear medicine imaging) and radiation oncology services.

 

The main purposes of the amendments are to:

 

·        require the registration of practice sites at or from which diagnostic imaging procedures are undertaken and practice sites at or from which radiation oncology services are rendered in order for Medicare benefits to be payable;

·        implement the recommendations requiring legislative amendment resulting from the Diagnostic Imaging Referral Arrangements Review in relation to the referral arrangements for diagnostic imaging services funded through Medicare; and

·        restore referral access for osteopaths to diagnostic imaging services.

 

Amendments relating to the registration of diagnostic imaging and radiation oncology practice sites

 

These amendments provide for the registration of practices at which diagnostic imaging procedures (that is, the capturing of the image used by the medical practitioner for reading and report) are undertaken, practices at which radiation oncology services are rendered and bases for mobile diagnostic imaging and radiation oncology equipment.

 

Registered premises and mobile bases will be allocated a unique location specific practice number.

 

Details of the equipment located at these practices will need to be listed either on the Diagnostic Imaging Register or the Radiation Oncology Register for the practice site.

 

The main purpose of these amendments is to provide a mechanism to collect information about the rendering of diagnostic imaging and radiation oncology services.  This will then assist the Commonwealth and the diagnostic imaging industry to:

 

·        monitor the nature of services provided (and the growth in these areas) by a number of different factors, such as practice type (for example stand-alone; co-located with a primary care practice, public hospital, mobile) and practice size and structure for the purpose of planning and developing the Commonwealth Medicare benefits program. 

·        assess compliance for benefits by ensuring, for example, that equipment used in relation to a Medicare claim meets eligibility requirements.

 

A similar registration and information collection system already exists under the Commonwealth Health Program Grant (HPG) requirements for radiation oncology.  These apply to private radiation oncology facilities only. 

 

While the existing system provides comprehensive data on private radiation oncology sites, there is very little data available on public radiation oncology facilities, which form the majority of service providers. This restricts the ability of providers and government to adequately plan and provide appropriate access to these services.

 

The introduction of Location Specific Practice Numbers for radiation oncology practice sites was recommended by the Radiation Oncology Inquiry Committee in its report provided to the Minister on 8 June 2002, to bring public and private facilities under the one umbrella to help address planning, service provision, workforce, age of equipment and other issues identified in the report.

 

Location Specific Practice Numbers for radiation oncology will supersede the current Health Program Grants registration requirements, thus streamlining the arrangements.

 

Amendments relating to the referral arrangements for diagnostic imaging services

 

These amendments implement the recommendations requiring legislative amendment resulting from the Diagnostic Imaging Referral Arrangements Review for improving the referral arrangements for diagnostic imaging services.  The amendments involve:

 

·        Enabling the provider of the imaging service to substitute a more appropriate imaging service when a patient is referred for an inappropriate service;

 

·        Requiring a further referral where a service provider wishes to provide additional necessary services to those specified in the original request and the additional services are of the type that would have otherwise required a referral from a specialist or consultant physician.  The provision of additional necessary services without a request from another medical practitioner is referred to as ‘self determining’ those services; and

 

·        Prohibiting the stationing of diagnostic imaging equipment or employees at the premise of another practitioner by all diagnostic imaging service providers.  This measure currently applies to specialist radiologists only. 

 

To ensure that patients in rural and remote areas are not disadvantaged by prohibiting the stationing of equipment or employees at the premises of another practitioner, there will be provision for exemptions in remote areas.

 

Amendments relating to the referring arrangements for osteopaths

 

Under current legislation, practitioners registered as chiropractors under state or territory registration laws can request specified diagnostic imaging services under the Medicare arrangements.

 

Osteopaths registered as chiropractors under those laws are also able to request diagnostic imaging services. 

 

Some states now have separate legislation governing the registration of chiropractors and osteopaths.

 

The amendments contained in this Bill will recognise osteopaths as a separate profession for the purpose of requesting diagnostic imaging services.  As such, the amendments will restore the rights of affected osteopaths to request diagnostic imaging services.  The amendments will also allow state or territory registered osteopaths, who were not previously registered as chiropractors under relevant state or territory legislation, to request these services.

 

 

 

FINANCIAL IMPACT STATEMENT

 

The measures in this Bill relating to the requirement for diagnostic imaging and radiation oncology facilities to be registered have been estimated to save the Commonwealth in the order of $11 million annually through improved compliance.

 

The other measures contained in this Bill should result in efficiency gains through reducing the number of:

 

·        diagnostic imaging tests that may need to be re-ordered by allowing substitution of services;

·        additional diagnostic imaging services that can be self determined by the service provider by placing further restriction on these services; and

·        general practitioner visits where osteopaths currently need to refer patients to a general practitioner to order the diagnostic imaging test on the osteopath’s behalf.

 

 

REGULATION IMPACT STATEMENTS

 

 

rEGULATION IMPACT STATEMENT FOR THE AMENDMENTS RELATING TO THE REGISTRATION OF DIAGNOSTIC IMAGING AND RADIATION ONCOLOGY PRACTICES

 

 

BACKGROUND

 

The Department of Health and Ageing is proposing that diagnostic imaging and radiation oncology practices are registered with the Health Insurance Commission (HIC) and allocated a Location Specific Practice Number (LSPN).  It is intended that, in order for diagnostic imaging and radiation oncology services to be eligible for a Medicare benefit, services must be rendered through a registered practice.

 

The Diagnostic Imaging Agreement calls for the identification of diagnostic imaging locations through the introduction of LSPNs, to assist with the monitoring of expenditure patterns and to increase our understanding of the types of practices offering imaging services under Medicare.  The introduction of the LSPN system will allow the tracking of behaviour and trends, and improve the HIC’s ability to assess claims and monitor compliance with Health Insurance Regulations.

 

The number of diagnostic imaging practices is unknown because the HIC’s databases do not contain practice details. But based on the fact that there are about 900 full time equivalent diagnostic imaging specialists nationally, and assuming that there are on average 1.2 full time equivalent diagnostic imaging specialists per practice, it is reasonable to assume that there are approximately 750 practices or sites.

 

In relation to radiation oncology, practices are currently required to apply to be an approved health service in order to receive capital reimbursement under the Radiation Oncology Health Program Grant (HPG).  This process provides similar information on location and equipment to the LSPN, therefore it makes sense to streamline registration processes under one system.  This approach will also address inconsistencies between the information that is collected from public and private radiation oncology practices.  In addition, there is significant overlap between diagnostic imaging and radiation oncology service provision with diagnostic imaging equipment used frequently to provide radiation therapy planning and monitoring services.

 

There will be 44 radiation oncology practices by the end of 2002 (both private and public).  Existing practices are currently registered as approved organisations for eligibility for the radiation oncology HPG.  For administration purposes they received a HPG number which they need to lodge with their monthly HPG claims.

 

The collection of LSPN details will provide activity data that was not previously available.  There are a number of factors which highlight the need for this information, such as:

-         identifying where growth is occurring, ie in the public sector versus the private sector;

-         the medical business sector is dynamic and its nature and structure is rapidly changing in response to such factors as the increasing trend to corporatisation, increasing mergers/takeovers and horizontal and vertical integration;

-         the government seeks to provide incentives via its remuneration and other supporting arrangements to promote business efficiency as well as appropriate, quality and cost effective service provision;

-         a key government concern is ensuring the appropriateness of its remuneration
arrangements in reflecting the costs attributable to individual practitioners and to the medical practice and business; and

-         the equipment used by radiation oncology and diagnostic imaging practices has a high capital cost; access to improved data will allow for better planning of equipment distribution and replacement.

 

LSPNs are intended to allow the identification and addressing of any problems of overservicing, cost-shifting, claiming errors and fraud by making it possible to analyse claiming patterns either by type of practice or individual practice.  The diagnostic imaging industry’s concerns about these problems have heightened with the introduction of capped funding under the Diagnostic Imaging Agreement between the Commonwealth and the profession.  The LSPN system will allow monitoring and intervention to be undertaken where necessary in order to ensure clinically appropriate levels of service provision.

 

1.       Problems

 

What are the problems being addressed?

 

The Department of Health and Ageing, the HIC and the profession have been concerned about various inadequacies in HIC databases in relation to practices.  In particular, the database which captures information at provider level, is unable to accurately provide the following details regarding individual diagnostic imaging and radiation oncology practices:

·        practitioners who collectively work at a specific location;

·        the nature or type of location (ie public or private hospital, clinician’s office etc);

·        the diagnostic imaging and/or radiology equipment held at any location;

·        ownership of a practice; and

·        whether a practice is part of a corporate structure.

 

Additionally, there is concern over the implications of the increasing levels of corporatisation of health services.  These developments may be significantly changing the way health care is being delivered.  The Department is concerned that corporatisation should not adversely affect patient access through Medicare to high quality health care.  There is a perception that the changing ownership structure in medical practice may lead to pressures on practitioners to adopt methods that favour corporate profits to the detriment of access to, and quality of care; eg high throughput of patients, unnecessary return consultations, and/or excessive ordering of diagnostic imaging services from the same corporation.

 

The diagnostic imaging industry’s concerns about the problems of overservicing, cost-shifting and claiming errors have heightened with the introduction of capped funding for diagnostic imaging.  Practices that perpetuate overservicing, claiming errors or fraud place pressure on diagnostic imaging funding which is borne by the industry as a whole.  The incidence of these problems is difficult to estimate but they are widely believed to represent a significant percentage of Medicare outlays.

 

For radiation oncology practices there are inconsistencies between information provided by the public and private sectors.  These inconsistencies make it difficult to keep track of the age and volume of equipment being used within the public sector.

 

Why is government action needed to correct these problems?

 

All the problems identified above seriously limit the cost-effectiveness of Medicare.

 

The market is unlikely to solve these problems.  There is little incentive for practices that engage in inappropriate activities to mend their ways, because they cannot be readily identified by the government, professional or industry peak bodies, or by consumers.  The Medicare databases do not currently include practice details at a practice level, and this makes detection of these problems almost impossible.

 

2.       Objectives

 

What are the objectives of government action?

 

The objectives of government action are to:

 

·        increase the accuracy and the usefulness of the HIC’s databases;

·        monitor the impact of corporatisation of diagnostic imaging and radiation oncology services;

·        reduce overservicing, claiming errors and fraud in the diagnostic imaging and radiation oncology industry;

·        standardise the collection of data across public and private radiation oncology practices.

 

What legislation is currently in place?

 

The Health Insurance Act 1973 (the Act) and its regulations set the conditions under which services provided by the diagnostic imaging industry are eligible for Medicare benefits.  It is administered by the Health Insurance Commission (HIC).  Currently, the Act and its regulations do not require diagnostic imaging practices to be registered.

 

Radiation Oncology HPG arrangements are covered under Part IV of the Act.

 

3.       Identification of Options

 

Several options were considered to achieve the objectives of reducing inappropriate payments to the diagnostic imaging industry:

 

Option 1:     Not strengthening existing regulation;

 

Option 2:     Strengthening existing regulation through self-regulation;

 

Option 3:     Strengthening existing regulation through quasi-regulation; and

 

Option4:      Strengthening existing regulation through explicit government regulation.

 

4.             IMPACT ANALYSIS

 

4.1     Affected parties

 

Parties most likely to be affected are:

 

·        the Royal Australian and New Zealand College of Radiologists (incorporating the Faculty of Radiation Oncology) (RANZCR);

·        the Australian and New Zealand Association of Physicians in Nuclear Medicine (ANZAPNM);

·        the Australian Diagnostic Imaging Association (ADIA);

·        the Health Insurance Commission (HIC);

·        the Department of Health and Ageing (DoHA); and

·        consumers.

 

4.2     Evaluation of options

 

Option 1:   Not strengthening existing regulation

 

The problems of overservicing, claiming errors and fraud in the diagnostic imaging industry while difficult to measure are thought by some to be significant and, if so, they are unlikely to be fixed in the marketplace.  There do not appear to be any market forces that would discourage practices from submitting questionable or false claims.  Furthermore, existing regulation is unlikely to reduce inappropriate payments as there is no provision to collect relevant practice details that could be used to assess the basis for payment of claims. 

 

While not affected by not changing the current arrangements, consumers will not benefit from the proposed changes which would include a better allocation of Medicare funds and increased information on the structure of the diagnostic imaging practice that they attend.

 

The option of not strengthening existing regulation would save both the industry and regulators additional compliance and administrative costs.

 

Option 2:    Strengthening existing regulation through self-regulation

 

There are two key reasons why problems with the existing regulations are unlikely to be resolved by self-regulation.  They are:

 

·        none of the peak professional or industry bodies (ie. RANZCR, ANZAPNM or ADIA) have any means of applying effective sanctions;

 

·        those practices that submit questionable claims would not be able to be readily identified by the peak professional and industry bodies.

 

As per Option 1, consumers would not be disadvantaged by this approach but the opportunity to benefit is lost.

 

Option 3:    Strengthening existing regulation through quasi-regulation

 

Introduction of quasi-regulation would be ineffective for similar reasons, which are:

 

·        even with government support, the peak professional and industry bodies would not be able to develop sanctions to the level of effectiveness required to prevent the inappropriate use of public funds;

 

·        the peak professional and industry bodies would not be able to readily identify practices that engage in inappropriate activities.  The government would not be able to assist these bodies in this matter because the Medicare data sets do not contain the necessary practice details.

 

As per Options 1 & 2, consumers would not be disadvantaged but the opportunity to benefit is lost.

 

Option 4:   Introduce explicit government regulation

 

Introduction of explicit government regulation would have the following impacts:

 

·        the certainty provided by legal sanctions would act as a deterrent against the  inappropriate use of public funds;

 

·        the effective identification of practices that perpetrate overservicing, claiming errors and fraud is dependent upon the introduction of mandatory reporting of practice details.

 

Voluntary reporting of practice details was demonstrated to be ineffective in this regard with the Radiology Pilot Scheme.  This one-off project was implemented in late 1999, and the HIC was only able to collect data for 38 percent of radiology practice sites.

 

Option 4 does not rule out the use of some elements of self- and quasi-regulation.  The HIC already employs a wide variety of regulatory techniques in its efforts to reduce inappropriate payments.  For example, the HIC places a high priority on educating practitioners, principally by mailing feedback letters twice a year.  These letters enable practitioners to statistically compare their individual practise with the practise of other members of their peer group.  These efforts would be greatly enhanced if practice data, in addition to provider data, became available through mandatory reporting of practice details.  Counselling is also widely employed by the HIC.  Prosecution is only undertaken as a last resort.

 

If existing regulations were not strengthened, the funds that could be recovered by reducing these inappropriate payments would not be available for other Medicare payments.  Given that the HIC suspects that approximately 10 percent of Medicare outlays are inappropriate payments, and that Medicare benefits for diagnostic imaging are approximately $1.1 billion annually, the amount that could be recovered is around $110 million each year.  Even if only 10 percent of this amount is realised, it is envisaged that approximately $11 million per annum could be redistributed to other clinically appropriate services under Medicare, thereby benefiting both patients and the industry. Compliance and administrative costs incurred by the industry and regulators would need to exceed an estimated $14,700 annually per practice to be greater than the estimated amount recovered.  This would be extremely unlikely.

 

Consumers are not expected to be adversely affected as this measure will not change the structure for the delivery of health care services or Medicare benefits to patients.  Consumers may benefit from a better understanding of corporate involvement in health care and the implications for them as taxpayers.

 

4.3     Effect on existing regulations

 

The requirement to register practices will not affect current regulations relating to diagnostic imaging or radiation oncology practices.  Provider number arrangements will remain unaffected. 

 

Practice registration will provide an avenue for enforcing a number of existing regulations relating to standards of equipment and professional supervision requirements for practitioners.

 

The existing radiation oncology HPG payment arrangements will run parallel to the LSPN.  This means no radiation oncology practice should be disadvantaged by the introduction of this scheme.  It is intended that the HPG number will become, where possible, the LSPN.

 

Based on current assumptions, compliance and administration costs saved by the industry and regulators would have to exceed $14,700 per annum, per practice, to be greater than the potential amount of $11 million annually which could be recovered in inappropriate Medicare payments.  This is extremely unlikely, particularly as the compliance costs (not the HIC’s administrative costs) are estimated to be no more than $180 per practice initially and $120 per year afterwards (see Implementation and review).

 

 

5.       Consultation

 

Extensive consultation was undertaken with the main affected parties (RANZCR, the ANZAPNM, the ADIA and the HIC) in the development of the current proposal, and they are represented on the Location Specific Practice Number (LSPN) Sub-Committee of the Diagnostic Imaging Management Committee.  This Sub-Committee was established to provide guidance to the HIC and the Department of Health and Ageing on the development of the LSPN concept, and has continued to provide guidance on key policy issues.

 

What are the views of those parties?

 

The main affected diagnostic imaging parties have expressed strong support for the concept of mandatory reporting of practice details by requiring every diagnostic imaging practice to register for a LSPN.

 

The 1998 Diagnostic Imaging Agreement between the government and the listed professional bodies calls for LSPNs to be introduced.  It was also a focus of the Consultative Committee on Diagnostic Imaging, which comprised the same groups and predated the 1998 Agreement.

 

Radiation oncologists support the introduction of LSPNs.  To provide reassurance to radiation oncology practices that there will be no interruption to HPG payments, the Department of Health and Ageing has agreed that the current HPG register will run in tandem with the LSPN register until the LSPN register is fully implemented.

 

6.       Conclusion & recommended option

 

In summary, Option 1 will not meet the objectives of government action as existing regulation will not allow for the identification of inappropriate activity and therefore cause the industry to address problems of overservicing, claiming errors or fraud.   Savings from not having to comply with and administer strengthened regulation are likely to be less than the savings that could be gained by strengthening existing regulation.  Similarly, Options 2 and 3 will not provide the industry with the ability to identify inappropriate activity, nor the power to apply sanctions.

 

Option 4 is the preferred option as it is most likely to be effective in meeting government objectives for the reasons summarised below.

 

-        That the certainty provided by legal sanctions is required to prevent the inappropriate use of public funds.

 

-        That the identification of practices that perpetuate overservicing, claiming errors and fraud is dependent upon the introduction of mandatory reporting of practice details.

 

-        That the ability to analyse Medicare data by practice identifiers would allow for the recovery of approximately 10 percent of those Medicare outlays inappropriately paid because of overservicing, claiming errors and fraud.

 

Option 4 is the only option which will be sure to increase the probability of identifying those practices that may engage in overservicing, claiming errors or fraud.  Furthermore, the certainty provided by legal sanctions will act as a deterrent against the inappropriate use of public funds.  The collection of practice details would allow the HIC to audit and monitor practice activities and identify any inappropriate Medicare outlays.

 

The collection of LSPN details will also provide activity data that was not previously available such as tracking of behaviour and trends, eg identifying where growth is occurring, and any increasing trends in corporatisation, mergers/takeovers, and horizontal and vertical integration etc.  Statistical analysis of the LSPN details will greatly assist informed debate on a number of these issues.  It will also allow the situation in diagnostic imaging to be monitored, provide mechanisms for countering adverse effects and take advantage of opportunities to improve the quality of diagnostic imaging services.

 

Even with government support, none of the other options would provide the required level of effectiveness to deal with these problems.

 

7.       Implementation and review

 

The HIC will administer the LSPNs and make them a permanent feature of the Medicare Provider File, as outlined in a detailed and costed business case prepared by the HIC.  An estimate of the initial set-up cost involving modification of the Medicare Provider File is around $750,000, and the annual maintenance cost should be around $270,000 per annum.

 

It is proposed to have the Health Insurance Amendment (Diagnostic Imaging and Other Measures) Bill introduced for passage during the Parliamentary Spring sittings, prior to commencement of the scheme on 1 May 2003.  The main thrust of these amendments will be to make registration for LSPNs mandatory.  Action will be taken to have the necessary regulations proclaimed shortly after passage of the legislation.

 

What is the impact on business?

 

The following estimates of on-going annual compliance costs are considered to be an upper limit for a larger practice providing a range of diagnostic imaging services and employing a number of practitioners.  Beyond the initial registration requirements for a sole practitioner, on-going compliance would only involve a yearly check of practice information held by the HIC unless there were changes in proprietorship or equipment held at the site.

 

Proprietors of practices would be required to initially submit a LSPN application, and then keep the HIC updated in regard to any changes.  The application and information update forms would be designed in consultation with the LSPN Sub-Committee to ensure that it would take no more than two hours each year for a practice manager or proprietor to complete the forms, and comply with the requirements of the LSPN system.  These labour costs and the normal associated overheads are expected to be the only significant compliance cost faced by practices.  Annual costs would amount to no more than $120 per practice (at a rate of $60 per hour, including overheads).  With an estimated 750 practices, total compliance costs for the diagnostic imaging industry should amount to no more than $90,000 per annum.  In the first year, compliance costs are likely to involve perhaps an extra hour of time when completing the application for the first time.  The additional one-off compliance costs for the industry should therefore amount to approximately $45,000.

 

In addition, some service providers or practice proprietors will have enforcement action taken against them and incur associated costs and penalties.

 

In terms of diagnostic imaging alone, it is estimated that around $11 million per annum of Medicare funding could be recovered and redistributed to other clinically appropriate services under Medicare.  This is approximately one per cent of the Medicare benefits paid for diagnostic imaging.

 

The Department of Health and Ageing and the HIC would be working closely with the LSPN Sub-Committee to ensure the impact on business, particularly small business, is minimised.

 

How will the effectiveness of the preferred option be assessed?

 

The effectiveness of the preferred option will be assessed by the LSPN Sub-Committee twelve months after the scheme is introduced.  Effectiveness would be measured against the main objective of being able to detect inappropriate payments, using evidence supplied by the HIC’s Program Review Division.

 

The Diagnostic Imaging Management Committee would then take responsibility for reviewing the effectiveness of LSPNs on an annual basis and ensuring the administration burden remains as small as possible.

 

 

rEGULATION IMPACT STATEMENT FOR THE AMENDMENTS RELATING TO THE REFERRAL ARRANGEMENTS FOR DIAGNOSTIC IMAGING SERVICES

 

 

BACKGROUND

 

In 1998/99, the Commonwealth, through Medicare, paid approximately $1.1 billion to approximately 1,200 service providers who delivered around 11 million diagnostic imaging services.

 

The majority of these services were provided by radiologists (or by persons working on their behalf) who had a patient referred to them for the service by another medical practitioner (or other identified professional).

 

Since 1991, “arms length” legislation has been in place to prohibit any benefit flowing from one party to another as a result of these referral arrangements.

 

In August 2000, the Minister for Health and Aged Care, the Hon Dr Michael Wooldridge, accepted the final recommendations of a review of the current “arms length” arrangements. The Diagnostic Imaging Referral Arrangements Review (DIRAR) was undertaken to evaluate the current arrangements.

 

The August 2000 review concluded that the referral arrangements provide overall an acceptable and workable process in the passage of patient care from the referring practitioner to the diagnostic imaging service provider.

 

However, the review did identify improvements that could be made to the existing arrangements to overcome deficiencies in the current legislative framework and to ensure more equitable application of these arrangements.

 

The Diagnostic Imaging Referral Arrangements Review Committee made the following recommendations.

 

Recommendation 1:        The model for accountable substitution proposed within its report be implemented.

 

Recommendation 2:        Procedures be identified to ensure that services currently requiring “specialist only” referrals, such as those for Magnetic Resonance Imaging (MRI) scans, are not able to be undertaken as “additional necessary services” without such specialist referral being provided.

 

Recommendation 3:        Procedures be identified to ensure that specialists practising in the speciality of diagnostic radiology cannot be the referring specialist practitioners for MRI.

 

Recommendation 4:        That the scope (or intent) of the legislation contained in subsection (g) of section 23DZG be expanded to include other diagnostic image providers as well as diagnostic radiologists.

 

In recognition of the potential of the legislation to disadvantage some patients in particular areas of defined need, alternative arrangements may need to be considered in certain circumstances.

 

Recommendation 5:        In order to encourage optimal clinical outcomes for patients, the relevant clinical colleges be asked to maintain and, where necessary, develop and increase diagnostic imaging educational programs for both requestors and providers of diagnostic imaging services.

 

Recommendation 6:        That the issue of “arms length” referral be further considered within the next four years to assess the impact of any changes including the Diagnostic Imaging Agreement, the introduction of the cap on growth in diagnostic imaging benefits, corporatisation, vertical integration and any other changes that have had an effect on these arrangements.

 

Recommendations 1,2 and 4 require amendments to Health Insurance Act 1973.

 

Recommendation 3 requires changes to the Health Insurance (Diagnostic Imaging Services Table) Regulations.

 

Recommendations 5 and 6 will be dealt with by the Department and appropriate industry organisations.

 

 

Current Legislation

 

The Health Insurance Act 1973 establishes conditions that must be met to receive the payment of a Medicare benefit for the provision of a diagnostic imaging service.

 

The existing legislative framework for arms length referral was introduced on 1 May 1991 in response to a review of diagnostic imaging undertaken in 1989.

 

The 1989 Review indicated there was a case for the provision of legislation to formalise acceptable relationships between those medical practitioners requesting imaging services and practitioners providing the services.

 

Current Regulation & Policy

 

The Health Insurance Commission administers the payment of Medicare benefits in accordance with Health Insurance Act 1973 and the Health Insurance (Diagnostic Imaging Services Table) Regulations.

 

Section 4AA of the Act provides that the regulations may prescribe a table of diagnostic imaging services that sets out the items of R-type (ie services that are subject to a written request) and NR-type (ie services that are not subject to a written request) diagnostic imaging services, the amount of fees applicable in respect of each item and rules for interpretation of the table.

 

The DIST Regulations are regulations made for the purposes of section 4AA.

 

The items contained in Part 3 of Schedule 1 of the DIST Regulations are grouped by modalities (ultrasound, computed tomography, diagnostic radiology, nuclear medicine imaging and MRI) and sub-grouped as appropriate.

 

Arms Length Referral Arrangements

 

Section 16B of the Act provides that Medicare benefits for R-type diagnostic imaging services will generally not be payable for these services unless they have been requested by another practitioner who determined that the service was necessary.  This ‘arms length’ referral requirement is subject to exemptions in the following cases:

 

·        consultant physicians and specialists practicing in their speciality are able to perform R-type diagnostic imaging services without a request or referral;

 

·        R-type diagnostic imaging services rendered in remote areas by practitioners who have a ‘remote area exemption’ under Part IIB of the Act and are participating in an approved continuing medical education and quality assurance program;

 

·        in emergencies and other exceptional circumstances, for example, where the referral has been lost; and

 

·        where the providing practitioner forms the opinion, based on the results of an earlier diagnostic imaging service, that an additional diagnostic imaging service is necessary.

 

Section 23DZG, sets out activities which, if undertaken by a person, constitute prohibited diagnostic imaging practices.

 

Section 23DZF, defines the terms “practitioner” and “service provider” for the purposes of the division.

 

Section 23DZH and section 23DZJ, establish the powers the Minister can exercise in relation to the provisions contained in section 23DZG.

 

THE PROBLEM

 

The review identified the following problems.

 

Inappropriate Service Requests

 

Section 16B of the Act does not allow diagnostic imaging service providers to substitute more appropriate service requests for inappropriate service requests.

 

The absence of a consultative relationship between the referring practitioner and the diagnostic imaging service provider can result in clinically inappropriate servicing, delays in patient care and unnecessary costs on both individuals and the health system.

 

If a referrer orders a test that the diagnostic service provider considers inappropriate or not in the patient’s best interests, the diagnostic imaging provider has no option but to provide the requested service. 

 

Best practice requires that diagnostic imaging specialists, having clearly understood the intent of the referring practitioner, should identify with the referrer, the appropriate clinical relevance of the service requested (Recommendation 1).

 

Use of exemption to requirement for written requests in relation to MRI services

 

Section 16B of the Act sets out the circumstances in which a Medicare benefit is payable for diagnostic imaging services. The general rule contained in s16B(1) requires that a diagnostic imaging service must be rendered by or on behalf of a medical practitioner pursuant to a written request made by either another medical practitioner or by certain other professionals, who determine that the service was necessary.

 

Section 16B(10) contains an exemption to s16B(1).  It is provided that s16B(1) does not apply if the diagnostic imaging service provider considers that additional diagnostic imaging services are necessary.  The provider is therefore able to render the service without a referral in these circumstances.

 

In consideration of ‘specialist only’ referrals for MRI services (Health Insurance (Diagnostic Imaging Services Table) Regulations 2000, Rule 27), the Review Committee identified the Commonwealth’s need to maintain the current intent of the legislation requiring the appropriate line of referral.(Note that Regulation 27 of the Diagnostic Imaging Services Table (DIST) Regulations provides that eligible MRI services are those performed ‘on request, in accordance with Rule 28, by a specialist or consultant physician’.(Note that Regulation 27 of the Diagnostic Imaging Services Table (DIST) Regulations provides that eligible MRI services are those performed ‘on request, in accordance with Rule 28, by a specialist or consultant physician’.(Note that Regulation 27 of the Diagnostic Imaging Services Table (DIST) Regulations provides that eligible MRI services are those performed ‘on request, in accordance with Rule 28, by a specialist or consultant physician’.(Note that Regulation 27 of the Diagnostic Imaging Services Table (DIST) Regulations provides that eligible MRI services are those performed ‘on request, in accordance with Rule 28, by a specialist or consultant physician’.(Note that Regulation 27 of the Diagnostic Imaging Services Table (DIST) Regulations provides that eligible MRI services are those performed ‘on request, in accordance with Rule 28, by a specialist or consultant physician’.(Note that Regulation 27 of the Diagnostic Imaging Services Table (DIST) Regulations provides that eligible MRI services are those performed ‘on request, in accordance with Rule 28, by a specialist or consultant physician’. The Review Committee proposed that, by virtue of s16B(10), there is a mechanism which can circumvent this line of referral (Recommendation 2).

 

Stationing of service employees and equipment in premises of the referring practitioner

 

Section 23DZG (g) makes it a prohibited practice for a specialist in diagnostic radiology to station equipment or employees of the specialist at the requesting practitioner’s premises to enable diagnostic imaging services to be provided to the practitioner’s patients by or on behalf of the specialist. 

 

The Review highlighted an inconsistency in this requirement in relation to the provision of ultrasound.

 

Currently, stationing employees or an ultrasound machine in another practitioner’s practice would only be prohibited practice if a specialist in diagnostic radiology were to station the ultrasound or employees.

 

If the service provider were any other medical practitioner or ultrasonographer this would not be prohibited.

 

The review considered this practice inappropriate irrespective of the qualification of the person providing the service and recommended that this prohibition be extended to all service providers (Recommendation 4).

 

The review, however, acknowledged that a change to this requirement had the potential to disadvantage patients in particular geographic areas, and suggested that appropriate arrangements be included for exemptions to be provided for identified areas of need.

 

OBJECTIVES

 

What is the objective of government action?

 

The proposed legislative changes are intended to enhance the operation of the “arms length” legislation and consequently contribute to improving the delivery of cost effective medical services for Australians. The DIRAR identified the following areas that would benefit from amendments.

 

Reduce the cost of inappropriate referral

 

The objective of the introduction of accountable substitution arrangements is to enable the redundant service to be omitted.  The changes allow this arrangement to be monitored to ensure the providing practitioner is accountable for this action (Recommendation 1).

 

Closing a loop hole in relation to exemptions to the requirement for arms length specialist referral

 

The objective of amending s16(10) of the Act is to ensure that MRI services are not undertaken as additional necessary services and remain subject to ‘arms length’ specialist referral (Recommendation 2).

 

Closing a loophole with regard to the stationing of service employees or equipment in the premises of the referring practitioner

 

The objective of amending s23DZG(g) of the Act is to make this provision that prohibits a radiologist from stationing equipment at the premises of another practitioner, apply to all medical practitioners and not only radiologists (Recommendation 4).

 

OPTIONS

 

There exist two options:

 

·        retain the existing legislative framework; or

 

·        implement limited amendments in line with recommendations of the DIRAR report.

 

The two major parties includes ‘practitioners’ that make referrals and the ‘diagnostic imaging service providers’ who claim Medicare rebates for the provision of diagnostic imaging services.

 

Section 23DZF of the Act extends the definition of medical practitioner to include chiropractors, physiotherapists and podiatrists.

 

Section 23DZF of the Act defines a diagnostic imaging service provider as a person who:

 

·        renders diagnostic imaging services; or

·        carries on the business of rendering diagnostic imaging services; or

·        is a proprietor of premises at which diagnostic imaging services are rendered; or

·        employs a person who renders diagnostic imaging services or carries on the business of rendering diagnostic imaging services.

 

This includes general practitioners, dental practitioners, chiropractors, physiotherapists, podiatrists, prosthodontists, oral and maxillofacial surgeons, chiropractors and physiotherapists.

 

The third affected party is the taxpayer, through the Commonwealth, who provides payments for the provision of diagnostic imaging services via Medicare rebates.

 

IMPACT ANALYSIS

 

Option 1 – Retain the existing legislative framework

 

The Review of the arms length legislation noted that the current arrangements provide overall an acceptable and workable process in the passage of patient care from the referring practitioner to the diagnostic imaging service provider. Consequently, it is possible to ignore the areas of concern identified in the Review and continue with the existing arrangements. This would not address the potential circumvention of specialist referral requirements for MRI, would ensure that accountable service substitution remains impossible and retain an inequitable rule regarding the location of imaging equipment in the practice of the referring practitioner.

 

Option 2 – Implement limited amendments in line with recommendations of the Diagnostic Imaging Referral Arrangements Review

 

The most significant changes would be the proposed introduction of service substitution arrangements and the amendments of the “additional necessary service” requirements, and even these have a relatively small impact. It is anticipated that both these changes would fall within a group of services currently identified as self determined services.  Self determined services include a number of other practice arrangements and currently constitute 1.5% (approximately 185,000 services @ approximately $17.3 million) of all diagnostic imaging services (approximately 12.3 million @ approximately $1.15 billion). The proposed changes would make cost savings within this budget. This option will ensure that the original legislation operate as intended, closing off potential avenues of circumvention produce cost savings with the provision of diagnostic imaging services and does not expose the Commonwealth to undo risk in relation to cost or adverse publicity.

 

CONSULTATION

 

Extensive consultation has been carried out in the development of the current proposal. This includes both consultation that preceded the Diagnostic Imaging Referral Arrangements and consultation undertaken as part of the review process.

 

The Royal Australian and New Zealand College of Radiologists (RANZCR), the Australian and New Zealand Association of Physicians in Nuclear Medicine, and the then Department of Health and Family Services together formed a joint consultative committee on diagnostic imaging, the Consultative Committee on Diagnostic Imaging (CCDI).

 

In early 1997, the CCDI established a sub-group. This sub-group developed proposed terms of reference and an approach for undertaking a review of diagnostic imaging referral arrangements. In September 1997, the Minister approved the terms of reference and established a review committee as a fully independent committee reporting directly to the Minister.

 

In June 1999, representatives from the Royal Australian and New Zealand College of Radiologists, the Committee of Presidents of Medical Colleges, the Australian and New Zealand Association of Physicians in Nuclear Medicine, the Royal Australia College of General Practitioners, the Health Insurance Commission, and the Department of Health and Aged Care were appointed to the Diagnostic Imaging Referral Arrangements Committee. The Review sought comment from an extensive number of groups and drew on the comments of these groups in the development of the final report.

 

There were only three industry groups that raised concerns about the DIRAR report: the Chiropractors Association of Australia, the Chiropractic and Osteopathic College of Australia and the Australian Physiotherapy Association. The issues raised by these organisations were concerned with reviewing limitations currently imposed on these health care providers regarding referral entitlements and the range and designation of services that they are currently able to request. The DIRAR committee considered these issues outside the review’s terms of reference and referred them onto the Consultative Committee on Diagnostic Imaging for their consideration.

 

CONCLUSION & RECOMMENDED OPTION

 

It is recommended that Option 2 be implemented. This recommendation is made on the grounds that it will produce cost savings with the provision of diagnostic imaging services and does not expose the Commonwealth to undo risk in relation to cost or adverse publicity.

 

IMPLEMENTATION & REVIEW

 

If the proposed option is implemented, “arms length” referral arrangements will be further considered within the next four years to consider whether they continue to perform their intended role in light of any changes that have had an affect on these arrangements.

HEALTH INSURANCE AMENDMENT

(DIAGNOSTIC IMAGING, RADIATION ONCOLOGY AND OTHER MEASURES) BILL 2002

 

 

NOTES ON CLAUSES AND ITEMS

 

Clause 1:  Short title

 

This clause provides that this Bill, when enacted, will be known and cited in official documents as the Health Insurance Amendment (Diagnostic Imaging, Radiation Oncology and Other Measures) Act 2002.

 

Clause 2:  Commencement

 

This clause provides for when provisions in the Act will come into force. 

 

There are four Schedules to this Bill. 

 

Schedule 1 commences on Royal Assent.

 

Schedule 2, which relates to the Radiation Oncology Register, commences immediately after Schedule 1 is enacted.

 

This is a technical distinction only.  It has been necessitated because the numbering of a section (section 16F) inserted by Schedule 2 of the Bill follows a new section (section 16E) inserted by Schedule 1 of the Bill.  There are also definitions introduced by Schedule 1 which will be amended by Schedule 2.  For example, the definition of ‘listed’ will be amended by Schedule 2 to include references to radiation oncology premises and bases for mobile radiation oncology equipment.

 

In addition, Items 12 and 13 in Schedules 1 and 2 respectively provide for transitional arrangements so that the operative provisions relating to the payment of Medicare benefits do not commence until 1 May 2003.

 

The relevant new sections are:

 

·        16D, which is introduced by Item 10 of Schedule 1 and 23DZZF, 23DZZG and 23DZZH of Schedule 1, which are being introduced along with a number of other provisions in Item 11 that Schedule; and

 

·        16F, which is introduced by Item 11 of Schedule 2 and 23DZZZE, 23DZZZF and 23DZZZG, which are being introduced along with a number of other provisions by Item12 of that schedule.

 

The transitional provisions mean that while registration of diagnostic imaging and radiation oncology premises and bases for mobile equipment can commence immediately on Royal Assent, claims for Medicare benefit will not be assessed using the registration system until 1 May 2003.

 

Schedule 3 commences on Royal Assent, except the amendments described in Item 16 of that Schedule do not commence until 1 July 2003.  Item 19 in Schedule 3 provides for this transitional arrangement.

 

Schedule 4 commences on Royal Assent.

 

Clause 3:  Schedules

 

This clause provides that the Schedules to the Bill contain the provisions amending the Health Insurance Act 1973.

 

 

 

.
HEALTH INSURANCE AMENDMENT

(DIAGNOSTIC IMAGING, RADIATION ONCOLOGY AND OTHER MEASURES) BILL 2002

 

 

NOTES ON CLAUSES AND ITEMS

 

 

SCHEDULE 1 – DIAGNOSTIC IMAGING REGISTER

 

Health Insurance Act 1973

 

 

Item 1 – inserts a definition of ‘ABN’ (Australian Business Number) into the Act.

 

The ABN will be required to be included in an application for registration as a diagnostic imaging premises or base for mobile diagnostic imaging equipment.  It will form part of the information that will be recorded on the Register.

 

Note:  the ABN will also be required to be included in an application and it will form part of the information recorded on the Register for registered radiation oncology premises and bases for mobile radiation oncology equipment.  This Register is introduced by Schedule 2 of this Bill.

 

Item 2 – inserts a definition of ‘base for mobile diagnostic imaging equipment’ into the Act.  The definition refers to section 23DZL, which is a new section inserted by this Bill. This section is discussed later in this Explanatory Memorandum.

 

Bases for mobile diagnostic imaging equipment need to be registered on the diagnostic imaging register in order for Medicare benefits to be payable for diagnostic imaging services rendered using diagnostic imaging procedures undertaken on the equipment used from these bases.  Diagnostic imaging procedures are defined in the Act as procedures ‘for the production of images (for example, X-rays, computerised tomography scans, ultrasound scans, magnetic resonance imaging scans and nuclear scans) for use in the rendering of diagnostic imaging services.’

 

Item 3 – inserts a definition of ‘diagnostic imaging premises’ into the Act.  The definition refers to section 23DZM, which is a new section inserted by this Bill.  This section is discussed later in this Explanatory Memorandum.

 

As for bases for mobile diagnostic imaging equipment, diagnostic imaging premises need to be registered on the diagnostic imaging register in order for Medicare benefits to be payable for services rendered using diagnostic images procedures undertaken using equipment ordinarily located at the premises.  The concept of ‘ordinarily located at’ is discussed under Items 6 and 10.

 

Item 4 - inserts a definition of ‘Diagnostic Imaging Register’ into the Act.  It refers to the Register established under section 23DZK introduced by Item 11 of this Schedule to register bases for mobile diagnostic imaging equipment and diagnostic imaging premises.  This section is discussed later in this Explanatory Memorandum.

 

Item 5 - inserts into the Act a definition of ‘listed’ when referring to another defined term ‘diagnostic imaging equipment’.  Diagnostic imaging equipment is already defined in the Act as ‘equipment primarily used in the carrying out of a diagnostic imaging procedure.’

 

The definition of ‘listed’ refers to subsections 16D(4) and 16D(5), which are new subsections inserted by this Bill.  These are discussed later in this Explanatory Memorandum.

 

Diagnostic imaging equipment is to be included on the Register for registered diagnostic imaging premises and mobile bases by type (including x-ray equipment, ultrasound equipment, computed tomography equipment, angiography equipment, magnetic resonance imaging equipment and nuclear medicine equipment).

 

In order for Medicare benefits to be payable for diagnostic imaging services, there must be equipment of the appropriate type listed on the Register for the premises or base.  This is discussed fully under Item 10.

 

Item 6 – inserts a definition of ‘ordinarily located’.  The definition is used in the context of diagnostic imaging equipment being ‘ordinarily located’ at a diagnostic imaging premises or a base for mobile diagnostic imaging equipment.

 

The term ‘ordinarily located’ is what would normally be understood to be equipment ‘ordinarily located ‘ at a premises or mobile base but is also extended to include the circumstances set out in subsections 16D(6) and 16D(8).  These circumstances cover equipment temporarily at the premises or mobile base for periods of up to three months as substitute for equipment that is non-operational or is on trial.

 

Item 7 – inserts into the Act a definition of ‘primary information’ when referring to the information that is to be included in an application for registration as a diagnostic imaging premises or mobile base and on the Register for the premises or base.  The definition refers to new section 23DZR, which is discussed later in this Explanatory Memorandum.

 

Primary information includes such things as proprietorship details, the business name of the premises or base, including the ABN, and the types of equipment ordinarily located at the premises or base.

 

The significance of information being defined as primary information is that changes to it are notifiable within 28 days of the change occurring.  The registration of a premises or mobile base can be cancelled for failure to notify within the 28 days.

 

Item 8 – includes in the existing definition in the Act of ‘proprietor’ in relation to pathology laboratories a definition of ‘proprietor’ in relation to the defined terms ‘base for mobile diagnostic imaging equipment’ and ‘diagnostic imaging premises’ (also see Items 2 and 3).  The definition refers to section 23DZO, which is a new section inserted by this Bill.  This provision is discussed later in this Explanatory Memorandum.

 

It is the proprietor who applies to register a premises or mobile base.  The proprietor of a registered premises or base will have responsibilities under the Act to advise of changes to registration information.  To ensure that patients are not disadvantaged, the proprietor of an unregistered premises or base will have a responsibility to advise the patient before the patient undertakes a diagnostic imaging procedure, either by displaying a sign or in writing, that no Medicare benefit is payable for a service rendered using that procedure.

 

Item 9 - inserts into the Act a definition of ‘registered’ when referring to the defined terms ‘diagnostic imaging premises’ and ‘base for mobile diagnostic imaging equipment’ (also see Items 2 and 3).  The definition refers to subsections 16D(2) and 16D(3), which are new subsections inserted by this Bill.  These provisions are discussed later in this Explanatory Memorandum.

 

Registered premises and mobile bases will be allocated a Location Specific Practice Number (LSPN). 

 

Item 10 – Inserts new sections 16D and 16E.

 

Section 16D:  Medicare benefits not payable for certain diagnostic imaging services

 

New section 16D precludes the payment of Medicare benefits (unless the Minister otherwise directs) for diagnostic imaging services, unless the diagnostic imaging procedures are undertaken on equipment ordinarily located at the premises or base and equipment of that type is listed on the Register for the registered premises or mobile base. 

 

Subsection (1) sets out three requirements which must be met before a Medicare benefit is payable: 

 

1.      The premises or mobile base must be registered; and

2.      The equipment used in the diagnostic imaging procedure must be ordinarily located at the premises or mobile base (the use of the term ‘ordinarily located’ caters for all variations in diagnostic imaging practice, for example, the use of fully mobile equipment in mobile facilities or where the equipment is ordinarily located at a premises but is occasionally used elsewhere); and

3.      The Register must have recorded on it at least one item of the same type of equipment as was used in the procedure.  It is not necessary for the actual piece of equipment used in the procedure to be listed on the Register for the premises or base at the time the procedure is carried out.

 

The other provisions inserted by Item 11 as described below provide for the registration of, and the listing of equipment for, premises or mobile bases.

 

Subsections (2) and (3) define what is meant by the term ‘registered’ when referring to a registered diagnostic imaging premises and a registered base for mobile imaging equipment.  These subsections state that a premises or base is registered if its registration is in effect under Division 4 of Part IIB.  This is a new Division introduced by Item 11 of this Schedule.

 

In association with subsection (1) and the provisions in Item 11, the effect of this definition is that Medicare benefits are not payable if the premises or mobile base is not registered or the registration has been suspended or cancelled.  In addition, the patient must be informed of this prior to undergoing the diagnostic imaging procedure.

 

Subsections (4) and (5) define the term ‘listed’ in respect of diagnostic imaging equipment for registered diagnostic imaging premises and registered bases for mobile imaging equipment.

 

Details of the types and number of pieces of diagnostic imaging equipment for a registered premises or mobile base needs to be recorded on the Register for that premises or base.  The equipment is then ‘listed’ for the premises or base for the purpose of this section.

 

Subsections (6) and (8) broaden what would be commonly understood to be equipment that would be ordinarily located at a premises or base, to include equipment that is temporarily at the premises or base for up to 3 months, where the equipment is on trial or is being substituted for other equipment ordinarily located at the premises. 

 

In essence, these provisions also mean equipment located at the premises or base for more than 3 months is to be regarded as ‘ordinarily located’ at the premises or base as a matter of course notwithstanding the equipment being on trial or being substituted for another appliance of the same type. 

 

However, subsections (7) and (9) provide that while ‘ordinarily located’ includes the trial and substitution circumstances in subsections (6) and (8), they do not limit the definition of ‘ordinarily located’ in any way.

 

The following examples may help to illustrate how the provisions in relating to ‘ordinarily located’, ‘type of equipment’ and ‘listed’ for a premises or base in this section will operate.

 

 

Example 1

 

A claim is made for an ultrasound service where the examination carried is out at a registered diagnostic imaging premises.  The equipment used is new, but there is ultrasound equipment already listed on the Register as a type of equipment ordinarily located at the premises.

 

Subject to any other assessing rules not related to these new provisions (for example, the person is eligible for Medicare benefits), a Medicare benefit would be payable for the claim.

 

Example 2

 

A claim is made for an ultrasound service where the examination is carried out at a registered premises on newly purchased equipment, but there is no ultrasound equipment listed on the Register for that premises.

 

There will be no Medicare benefit payable for the service because there is no ultrasound equipment listed on the Register as being ordinarily located at the premises. That is, the claim does not meet the requirements of subparagraph 16D(1)(a)(ii).  However, benefits will be paid as soon as the Register for that premises or base is updated.

 

 

The provisions in new section 16D allow the Minister to direct that a Medicare benefit be paid in respect of a diagnostic imaging service where the premises or mobile base was not registered or the type of equipment used was not listed on the Register for a registered premises or base.  The intention of this power is so that the Minister can give consideration as to whether the patient has been disadvantaged in a particular case through no fault of their own.  Examples of when it would be envisaged that this power would be exercised include:

 

·        where there was a delay in the processing of the registration; or

·        when the patient was unable to use a registered practice to have the diagnostic imaging procedure, which in similar circumstances would be eligible for a Medicare benefit.

 

Where the Minister does direct a benefit to be paid in accordance with this provision and the proprietor has failed to notify the patient that the premises or base was not registered, the benefit paid is a debt recoverable from the proprietor of the premises or mobile base under new section 23DZZH.

 

Section 16E:  Medicare benefit is payable once a suspension of a registration is lifted

 

New section 16E provides for Medicare benefits to be paid for any claims made during a period of suspension of registration of a diagnostic imaging premises or mobile base once the premises or mobile base supplies the information that led to the suspension.  New section 23DZX discussed under Item 11 covers suspension of registration. 

 

 

Sections 16D and 16E come into effect for diagnostic imaging services rendered on or after 1 May 2003.  See Item 12.

 

Item 11 – Adds a new Division to Part IIB (Special provisions relating to diagnostic imaging services).  The new Division sets out a scheme for the registration of diagnostic imaging practices and the collection of information about these practices, including the diagnostic imaging equipment located at or connected with them.

 

The new Division also provides for the suspension and cancellation of registration of practice sites.  In addition, it provides for offences by proprietors of unregistered practice sites, who do not advise the patient prior to undertaking a diagnostic imaging procedure that no Medicare benefit will be payable for the diagnostic imaging service.

 

Note:  A diagnostic imaging service consists of two distinct parts:  the procedure, which is the capturing of the images (for example, the x-ray film); and reading of, and report on, those images by a medical practitioner.  For many diagnostic imaging services, these two components need not necessarily be done at the same time or at the same location.  The Medicare benefit payable for a diagnostic imaging service covers both the procedure and reading and report by the medical practitioner.

 

The terms ‘diagnostic imaging procedure’ and ‘diagnostic imaging service’ are already defined in the Act.

 

A detailed explanation of each of the provisions follows.

 

Section 23DZK:  Diagnostic Imaging Register

 

Subsection (1) provides that a Register be kept of diagnostic imaging premises and bases for mobile diagnostic imaging equipment as defined in sections 23DZL and 23DZM respectively.

 

Subsection (2) lists the purposes for which the Register is to be kept and identifies the scope of the Location Specific Practice Number arrangements.

 

Paragraph (a) provides that the information on the Register can be used for the purpose of planning and developing the Commonwealth Medicare benefits program in the area of diagnostic imaging.  For example, the information gathered about proprietorship and type of equipment in combination with the practice location will assist in identifying the factors that impact on service delivery and patient access in different areas.

 

Paragraphs (b), (c) and (d) are for compliance purposes. 

 

Paragraph (b) covers the assessment of Medicare benefits for claims for diagnostic imaging services against the information held on the Register. 

 

Paragraph (c) provides that the information in the Register can be used to assist in identifying whether ‘inappropriate practice’ is taking place in relation to the provision of a diagnostic imaging service by a practitioner to a patient.  As specified in the provision, inappropriate practice is practice defined for the purposes of Part VAA of the Act.  Part VAA provides for the Professional Service Review Scheme.  It encompasses such things as overservicing, inappropriate itemisation and inappropriate referring by a practitioner.

 

Paragraph (d) provides that information on the Register can be used to assist in identifying diagnostic imaging practice that is prohibited under the Act.  Section 23DZG of the Act specifies the types of practices that are prohibited.  They cover financial or other arrangements between the referring practitioner and the providing practitioner relating to flow of referrals/services from one to the other.

 

Section 23DZL:  What is a base for mobile diagnostic imaging equipment?

 

This section defines a ‘base for mobile diagnostic imaging equipment’.  The intent of this definition is to identify the premises at which mobile equipment is located when not being used.  If the equipment remains in a mobile unit (ie a vehicle, aircraft or vessel) when not in use, the base is the premises at which the mobile unit is ordinarily stationed when not in use.  For example, in the case of a vehicle, the base would be where the vehicle is garaged.

 

If the equipment is ordinarily removed from a mobile unit after use, the base is the premises at which the equipment is ordinarily stationed.

 

The base is to be registered, rather than the locations at which equipment is used or the units in which it is carried, because the information collected by registering the base only will be sufficient for the purposes for which the Register is being kept.  It will also streamline administrative processes for operators of mobile equipment.

 

Section 23DZM:  What are diagnostic imaging premises?

 

This section defines a ‘diagnostic imaging premises’.  The definition encompasses any location undertaking diagnostic imaging procedures but seeks to identify individual businesses undertaking those procedures where the location contains a number of business operations.  For example, a number of independent businesses undertaking diagnostic imaging procedures may be located at the one premises.  Each of those businesses would be a premises for the purpose of this definition and, for example, each would be allocated a Location Specific Practice Number, should they register under this Division of the Act.

 

The definition is about the business of undertaking the procedure (for example, the capturing of the x-ray image), not the business of reading and reporting on the procedure.  For example, in the situation where a practitioner is exercising rights of private practice in a public hospital using images captured in the hospital’s radiology facilities, the hospital itself would be the premises under this definition and its LSPN would need to be shown on claim documents.

 

Under this definition the same premises can have more than one Location Specific Practice Number.  This would apply where each business operates certain type of equipment at the same premises, for example, one business might operate computed tomography and magnetic resonance imaging equipment and another might operate the x-ray equipment.

 

Section 23DZN:  Who may apply for registration?

 

This section provides that it is the ‘proprietor’ of the premises or mobile base as defined in Section 23DZO who has the authority to apply for registration of the premises or base.

 

It is expected that the proprietor may delegate the administrative process of applying for registration, but the ultimate responsibility for the application lies with the proprietor.

 

Section 23DZO:  Who is a proprietor?

 

This section defines a proprietor of a diagnostic imaging premises and a proprietor of a base for mobile imaging equipment.

 

This definition has been based on the definition of proprietor in relation to pathology laboratories in subsection 3(1) of the Act.

 

The proprietor is the individual person, corporate entity, or government agency, as the case may be, who has effective control of the premises or base, including the use of the equipment, and the employment of staff at or connected with the premises or base.  The definition seeks to establish who has the ultimate legal responsibility for the business of the premises or base.  New section 23DZZI deals with the situation in which a partnership is the proprietor of a premises or base.  This section is discussed later.

 

Subsection (3) of section 23DZO clarifies the meaning of the terms ‘employment’ and ‘government agency’ used in the definition.

 

It is only the proprietor who can register a premises or mobile base.  The proprietor of a registered premises or base will have responsibilities under the Act to advise of changes to the primary information and provide other information related to the purposes for which the Register is kept, as may be requested from time to time.  The proprietor of an unregistered premises or base risks a fine if they do not advise the patient, by either displaying a sign or in writing, that the premises or base is unregistered.

 

Section 23DZP:  Application procedure

 

This section sets out how an application for registration of a diagnostic imaging premises or mobile base must be made.  It also provides for the information that is required to be included in the application as listed in new section 23DZR and any other information prescribed in the Regulations. 

 

Subsection (2) specifies that the information sought in the application can only be relevant for the purpose for which the Register is kept – see also the note on subsection 23DZK(2). 

 

No application fees apply.

 

It is anticipated that the following types of information will be prescribed in the Regulations or included in the approved application form, for the purpose of this section:

 

·        In addition to the details required by sections 23DZR , the practice contact details including, for example, a contact person at the site, practice telephone number and email address;

·        Details of an agent to act for and on behalf of the proprietor, where the proprietor has authorised such a person to be an agent;

·        Nature and type of practice, for example a stand-alone radiology/nuclear site, a public hospital, a private hospital, primary care practice or group;

·        The type of practitioners at the practice, for example, radiologist, nuclear medicine physician, cardiologist, vascular surgeon;

·        The number of each type of equipment ordinarily located at a premises or base.  Note – equipment ‘types’ will be prescribed pursuant to section 23DZR;

·        The date the equipment was first installed (in the case of new equipment) or the date of manufacture of the equipment’s oldest component (in the case of pre-used equipment) where, by virtue of other Medicare regulations, the age of the equipment has a bearing on the amount of Medicare benefits payable, for example, computed tomography equipment.

 

Section 23DZQ:  Registration

 

This section provides that if an application has been properly made, details of the premises or mobile base must be placed on the Diagnostic Imaging Register established for this purpose under section 23DZK.  It is intended that an application is properly made if it:

 

·      contains all the required information.  That is, the primary information specified in section 23DZR and any other information prescribed pursuant to paragraph 23DZP(1)(d); and

·      is accurate and truthful.

 

There are no other conditions precedent to registration (such as specified qualifications and the like) that a premises or base needs to meet in order to be registered under this Scheme.

 

Section 23DZQ also provides that a Location Specific Practice Number (LSPN) be allocated to the premises or base. The LSPN will be a further detail that will be prescribed as being required to be shown on accounts/receipts and assignment forms.  This will apply to all methods of claiming.

 

Registration takes effect from the date the application is received by the Minister or any later date specified in the application.

 

The registration remains in force unless it has been suspended or cancelled.  In other words, a premises or base needs to register once only.

 

Sections 23DZX and 23DZY, 23DZZ and 23DZZA cover suspension and cancellation of registration.

 

Section: 23DZR:  Primary Information

 

The information specified under this section is the ‘primary information’ that is to be collected in an application for registration of a premises or base.  It is the key information that is crucial to the successful operation of the registration scheme and the payment of Medicare claims.  For example and without limiting the purpose of each:

 

·          the proprietor details under paragraph (a) are necessary so that any notices under other parts of this legislation can be served;

·          the business name under paragraphs (b) and (c) is required for the purpose of determining individual premises at a multipractice location;

·          the equipment information under paragraphs (d) and (e) is required to establish the type and location of equipment at a premises or base for the purpose of assessing claims; and

·          the information under paragraph (f) will assist in determining whether a diagnostic imaging provider has stationed equipment at the place of another practitioner, which is a prohibited diagnostic imaging practice under section 23DZG.

 

Subsection 2 of this new section provides that types of equipment for the purpose of subparagraphs 23DZR(1)(d)(ii) and 23DZR(1)(e)(iii) may be prescribed in the Regulations.

 

Equipment types will include: ultrasound equipment, x-ray equipment, computed tomography equipment, magnetic resonance imaging equipment, angiography equipment, fluoroscopy equipment and photon emission tomography equipment.

 

Section 23DZS:  Register may be maintained electronically

 

This section will allow the Minister keep the Register in electronic format.

 

Section 23DZT:  Extract of the Register to be made available on request

 

This section provides that an extract of the Diagnostic Imaging Register be made available to any person who requests it.  The information will only be available on request under this section and then only where the purpose of the request is to establish eligibility for Medicare benefits.

 

Subsection (2) specifies which information is to be available in the extract.  This information includes whether the registration of the premises or base is under suspension or has been cancelled.

 

This provision will allow anyone, including the referring doctor, to check the registration status (including whether the registration is currently suspended or cancelled) of a premises or mobile base to establish whether a Medicare benefit will be payable for services rendered using diagnostic imaging procedures undertaken on the equipment of that premises or mobile base. 

 

It is important to note that a request for an extract can only be made in respect of a premises or base specified in the request.  A person cannot simply seek a list of sites and their registration status under this section (but see also see new section 23DZU, which is discussed below).

 

Section 23DZU:  The Minister may publish an extract of the Register on the Internet

 

This section allows a list of registered sites to be published and to be available to anyone who wishes to access it.  This list will contain the following information:

 

·        the name and address of each registered premise or mobile base;

·        the Location Specific Practice Number of the premise or base;

·        the date of registration; and

·        a registration end date where the registration of the premises or base is under suspension or has been cancelled.

 

This information will be available through the internet.

 

Unlike the extract available on request under the previous section, the internet extract will not identify whether the registration of a particular site is under suspension or cancelled, only whether the registration is current.  This is to protect the business interests of the practices listed on the internet.

 

Section 23DZV:  Proprietors to notify the Minister of changes to primary information

 

This section provides that the proprietor of a registered premises or mobile base will need to notify the Minister in writing of changes to registered primary information for the premises or base.  What constitutes primary information is specified in section 23DZR.  The proprietor will be required notify of changes within 28 days of the change.

 

Because the primary information is essential to the successful operation of the Register, failure to notify of changes to it can result in suspension or cancellation of registration.

 

Section 23DZW:  Minister may request further information

 

This section allows the Minister to seek information in relation to a registered premises or base.  This information must be relevant to the Register.

 

The purpose of this section is to allow additional information to be sought to clarify, substantiate or augment information contained in an application for registration or already on the register for a premises or mobile base.  For example, information may be sought from the proprietor of a mobile base regarding the location at which the mobile equipment is being used, where it is suspected that the equipment has been set up at a referring doctor’s practice.

 

As another example, it may come to the attention of the Minister through a claim that the type of equipment listed on the Register for the premises or mobile base may not be up to date.  The Minister may then write to the proprietor of that premises seeking details of that equipment.

 

Premises or mobile bases risk suspension or cancellation if they do not comply with a request within the specified timeframe (see sections 23DZX and 23DZY).

 

Section 23DZX:  Suspension for failure to comply with request

 

This section provides for automatic suspension of the registration of a premises or mobile base if the information requested under section 23DZW is not provided within the time specified in the Minister’s request for the information.  As suspension applies automatically if the information is not supplied as requested, there is no provision for review by the Administrative Appeals Tribunal. 

 

A suspension is lifted once the information requested has been supplied.

 

The effect of a suspension is that no Medicare benefits are payable during a period of suspension.  However, unless the registration is subsequently cancelled, any claims during the period of suspension will be payable when the suspension is lifted (see new section 16E discussed earlier). 

 

There is no limit on the number of times a registration can be suspended.  However, a registration will be cancelled after a continuous period of three months suspension.  Cancellation is explained under the following sections 23DZY, 23DZZ and 23DZZA.  The intention of this provision is to provide every reasonable opportunity for a practice to comply with the request before cancellation takes effect.

 

So that patients will be informed of the consequences of a premises or base being suspended, the proprietor of a suspended premises or base must advise the patient, either by displaying a sign or in writing, before the procedure is undertaken, that no Medicare benefit will be payable for the diagnostic imaging service. 

 

The date the suspension takes effect will be recorded on the Register.  This date will be shown in publicly available extracts of the Register – see sections 23DZT and 23DZU.  However, if a suspension is subsequently lifted, there will be no record on the extracts of a suspension being in force at any time.

 

Section 23DZY:  Cancellation for failure to provide information within 3 months after the response period

 

This section means that the registration of a premises or base will be cancelled after the registration has been suspended under section 23DZX for a continuous period of 3 months. 

 

The effect of cancellation of registration is that no Medicare benefits are payable in respect of that premises or mobile base for diagnostic imaging services rendered on or after the date of cancellation.  The cancellation will have effect from the beginning of the three month suspension period.  The following example illustrates how this provision will operate.

 

The Minister seeks further information from the proprietor of a registered diagnostic imaging premises under section 23DZW on 1 September 2003.  The proprietor is asked to supply the information by 1 October 2003.  The proprietor fails to respond to the request by 1 October and the registration is then suspended from 2 October 2003 pursuant to section 23DZX.  Three months then elapses (it is now 1 January 2004) and there is no response from the proprietor to the original request from the Minister.  The registration is then cancelled, pursuant to section 23DZY.  However, the cancellation takes effect from the original date of suspension, ie 2 October 2003.

 

Unless extenuating circumstances exist, a premises or mobile base cannot be re-registered within 12 months of being cancelled under this section  - see new section 23DZZC.

 

As there is no discretionary element to cancel the registration under this provision, there is no need for review by the Administrative Appeals Tribunal.

 

Section 23DZZ:  Cancellation at the request of the proprietor

 

Under this section, the registration of a registered premises or mobile base must be cancelled at the request of the proprietor of the premises or base.

 

The cancellation takes effect the day after the request is received or such later date as requested by the proprietor.

 

Section 23DZZA:  Cancellation on other grounds

 

This section allows the Minister to cancel the registration of a registered premises or mobile base in the following circumstances:

 

·        Where a registration was obtained improperly; or

·        Where the proprietor fails to notify changes to the primary information under section 23DZR within 28 days of the information changing.

 

In relation to cancellation for failure to notify of changes to primary information, situations that may result in such action being taken to include failure to notify changes to proprietorship, business name, or installation of new types of equipment.

 

Unlike the previous two sections providing for cancellation of a registration, cancellation under 23DZZA is discretionary.  However, the Minister must invite a submission from the proprietor under section 23DZZD before cancelling.

 

The section also provides that notice in writing setting out the reasons for the cancellation must be provided to the proprietor of the premises or mobile base. 

 

A decision by the Minister to cancel a registration will be reviewable by the Administrative Appeals Tribunal.

 

Unless extenuating circumstances exist, a premises or mobile base cannot be re-registered within 12 months of being cancelled as the result of a decision by the Minister - see section 23DZZC.

 

Section 23DZZB:  Cancellation to be noted on the Register

 

This section provides that the date of cancellation is to be recorded on the Register where the registration of a premises or mobile base has been cancelled.

 

This date will be included in the public extracts of the Register.

 

Section 23DZZC:  Limits on registration after cancellation under section 23DZY of 23DZZA

 

This section provides that, unless permitted by the Minister and having regard to the extenuating circumstances as specified in subsection (2), a premises or mobile base whose registration has been cancelled cannot be re-registered for 12 months if the cancellation was the result of:

 

·        suspension for continuous period of three months under section 23DZY; or

·        a decision by the Minister under section 23DZZA.  As mentioned under section 23DZZA, cancellation as a result of the Minister’s decision can only be made where a registration was obtained improperly or where the proprietor fails to notify of changes to the prescribed primary information.

 

The 12 month cancellation period was struck to prevent proprietors of diagnostic imaging premises and mobile bases from re-applying for registration immediately following a previous cancellation.  The 12 month period was felt to be an appropriate incentive for a proprietor to remain compliant with the registration provisions of this Bill.

 

Where the registration has been cancelled following three continuous months of suspension under section 23DZY, the 12 month cancellation period commences from the date the registration of the premises or mobile base was suspended.  The following example demonstrates how this provision will operate.

 

The Minister seeks further information from the proprietor of a registered diagnostic imaging premises under section 23DZW on 1 June 2003.  The proprietor is asked to supply the information by 1 July 2003.  The proprietor fails to respond to the request by 1 July and the registration is then suspended from 2 July 2003 pursuant to section 23DZX.  Three months then elapses (it is now 2 October 2003) and there is no response from the proprietor to the original request from HIC.  The registration is then cancelled pursuant to section 23DZY.  However, the cancellation takes effect from the original date of suspension, ie 2 July 2003.  The 12 month cancellation period commences from 2 July 2003, which means that the proprietor is entitled to apply for re-registration on 2 July 2004 unless permitted at an earlier date by the Minister.

 

Where the Minister does not permit the proprietor to re-apply, the Minister must write to the proprietor setting out the reasons for the decision.  Such decisions will be reviewable by the Administrative Appeals Tribunal.

 

Section 23DZZD:  Minister must invite submissions before cancelling registration

 

This section applies where there are grounds for cancellation of the registration of a premises or mobile base under section 23DZZA (Cancellation on other grounds) where the Minister has a discretion to cancel or not cancel the registration.  That is, where the registration was obtained improperly or where the proprietor has failed to notify of changes to primary information.

 

The section imposes an obligation on the Minister to invite the proprietor of the premises or mobile base to state a case prior to the registration being cancelled and sets out the response timeframes.

 

This provision ensures that a proprietor is given every reasonable opportunity to comply with provisions in the Act before the registration is cancelled.

 

Section 23DZZE:  Application to Administrative Appeals Tribunal for review of a decision to cancel a registration

 

This section provides that decisions to cancel the registration of a premises or mobile base or a decision to not allow a re-registration within 12 months of cancellation are subject to appeal to the Administrative Appeals Tribunal.  It also sets out the timeframe in which an appeal can be made.

 

Sections 23DZZF and 23DZZG:  Proprietor of unregistered diagnostic imaging premises or base for mobile imaging equipment must notify patients that medicare benefit not payable

 

These sections make it an offence against the proprietor of an unregistered premises or mobile base if the patient is not informed before undertaking the diagnostic imaging procedure that a Medicare benefit is not payable.  Unregistered for the purpose of this section is clarified in new subsections 23DZQ(3) and (4) discussed earlier and includes premises or bases whose registration has been suspended or cancelled.

 

A proprietor may discharge their obligations under this section by either providing an individual notice in writing to the patient or displaying a suitable sign in a prominent position at the premises.  In the case of mobile diagnostic imaging equipment, such a sign may be displayed in a prominent position within a mobile unit carrying the equipment, for example, a van or aircraft, or at the location at which it is used.

 

These sections do not come into effect until 1 May 2003 – see Item 12.

 

Section 23DZZH:  Debt recovery where the proprietor fails to inform patients that premises or base is not registered

 

This section establishes as a debt, recoverable from the proprietor of an unregistered premises or mobile base (including those premises or bases where the registration has been suspended or cancelled), any Medicare benefit paid to a patient where:

 

·        the proprietor has failed the obligation imposed on them under section 23DZZF or 23DZZG to notify the patient that the premises or mobile base is unregistered; and

·        the Minister has directed the benefit be paid under the discretionary power given to the Minister by new subsection 16D(1).

 

This debt will be in addition to any fine imposed on the proprietor if they fail to notify the patient that no Medicare benefit would be payable for a service involving a procedure undertaken on the equipment of the premises or base.

 

Section 23DZZI:  Application of this Division to partnerships

 

Section 23DZO defines a proprietor of a diagnostic imaging premises or mobile base for the purpose of the new registration provisions.  Under that section, a proprietor can be a natural person, a corporate entity or state or federal agency or statutory authority.

 

Section 23DZZI covers the circumstances in which a partnership is the proprietor of the premises or mobile base.

 

It provides that each partner is a proprietor and as such each partner will need to be recorded on the Register for a registered premises or mobile base.

 

It also provides that each partner will be equally responsible for the obligations imposed by the provisions contained in this Bill, notwithstanding anything contained in a partnership agreement to the contrary. For example, should a patient have an x-ray at a premises that was not registered and the patient was not informed that a Medicare benefit would not be payable, a fine could be imposed any one of the partners.  However, no more than one partner may be fined for the one offence.

 

The section also provides, however, that any of the partners can discharge an obligation or exercise a right on behalf of the other partners.  In other words, it is intended that any partner in the partnership can:

 

·        apply for registration of the premises or mobile base; 

·        notify of changes to primary information on the register;

·        notify patients whether a premises or base is unregistered;

·        pay fines that may be imposed for failure to notify patients that a premises or base is unregistered.

 

Item 12 - As described in the Commencement Clause in the preliminary part of the Bill, the provisions in this Schedule come into effect on the day the Act receives Royal Assent. 

 

This item introduces transitional provisions that provide that the operative provisions of the Bill relating to the payment of Medicare benefits do not come into effect until 1 May 2003.

 

This means Medicare benefits will not be payable for diagnostic imaging services rendered using procedures carried on the equipment of unregistered premises or mobile bases on or after 1 May 2003.  From 1 May 2003, proprietors of unregistered premises or mobile bases will also need to inform patients that their premises or base is not registered.

 

However, premises and mobile bases can become registered from any date on or after Royal Assent. 

 

HEALTH INSURANCE AMENDMENT

(DIAGNOSTIC IMAGING, RADIATION ONCOLOGY AND OTHER MEASURES) BILL 2002

 

 

NOTES ON CLAUSES AND ITEMS

 

 

SCHEDULE 2 – RADIATION ONCOLOGY REGISTER

 

Health Insurance Act 1973

 

 

Item 1 – inserts a definition of ‘base for mobile radiation oncology equipment’ into the Act.  The definition refers to section 23DZZK, which is a new section inserted by this Schedule. This section is discussed later in this Explanatory Memorandum.

 

Bases for mobile radiation oncology equipment need to be registered in order for Medicare benefits to be payable for services rendered using equipment ordinarily located at these bases.  The concept of ‘ordinarily located at’ is discussed at Items 3 and 11.

 

Item 2 – includes in the definition of ‘listed’ introduced by Schedule 1 of this Bill a definition of ‘listed’ when referring to another defined term ‘radiation oncology equipment’, which is defined in Item 6.  The definition of listed in relation to radiation oncology equipment refers to subsections 16F(6) and 16F(7), which are new subsections inserted by this Bill.  These are discussed later in this Explanatory Memorandum.

 

Radiation oncology equipment is to be included on the Register for registered radiation oncology premises and mobile bases by type (including linear accelerators, simulators and brachytherapy equipment).

 

In order for Medicare benefits to be payable for radiation oncology services, there must be equipment of the appropriate type used in the service listed on the Register for the premises or base.  This is discussed fully under Item 11.

 

Item 3 – amends the definition of ‘ordinarily located’ to be inserted into the Act by Schedule 1 of this Bill to include references to radiation oncology premises and bases for radiation oncology equipment.

 

As explained in the notes on Schedule 1, this expands the definition of what would normally be understood to be equipment ‘ordinarily located‘ at a premises or mobile base to include the circumstances set out in subsections 16F(8) and 16F(10).  These circumstances cover equipment temporarily at the premises or mobile base for periods of up to three months as substitute for equipment that is non-operational or is on trial.

 

Item 4 – amends the definition of ‘primary information’ to be inserted into the Act by Schedule 1 of this Bill to include references to radiation oncology premises and mobile bases.

 

The new definition refers to section 23DZZQ for radiation oncology sites.  This section is discussed later in this Explanatory Memorandum.

 

Primary information includes such things as proprietorship details, the business name of the premises or base, including the ABN, and the types of equipment ordinarily located at the premises or base.

 

The significance of information being defined as primary information is that changes to it are notifiable within 28 days of the change occurring.  The registration of a premises or mobile base can be cancelled for failure to notify within the 28 days.

 

Item 5 – amends the definition of ‘proprietor’ as amended by Schedule 1 of this Bill to include references to the defined terms ‘radiation oncology premises’ and ‘base for mobile radiation oncology equipment’ (also see Items 1 and 7).  The definition refers to section 23DZZN, which is a new section inserted by this Bill.  This provision is discussed later in this Explanatory Memorandum.

 

It is the proprietor who applies to register a premises or mobile base.  The proprietor of a registered premises or base will have responsibilities under the Act to advise of changes to registration information.  To ensure that patients are not disadvantaged, the proprietor of an unregistered premises or base will have a responsibility to advise the patient, by either displaying a sign or in writing, that no Medicare benefit is payable for a service rendered by the practice.

 

Item 6 – inserts into the Act a definition of ‘radiation oncology equipment’.

 

As mentioned in Item 2, radiation oncology equipment of the appropriate type needs to ‘listed’ on the Register for registered radiation oncology premises and mobile bases in order for Medicare benefits to be payable for radiation oncology services which have been rendered using the equipment.

 

Item 7 – inserts a definition of ‘radiation oncology premises’ into the Act.  The definition refers to section 23DZZL, which is a new section inserted by this Bill.  This section is discussed later in this Explanatory Memorandum.

 

As for bases for mobile radiation oncology equipment, premises rendering radiation oncology services using equipment ordinarily located at the premises need to be registered in order for Medicare benefits to be payable for their services.

 

Item 8 – inserts a definition of ‘Radiation Oncology Register’ in the Act.  The definition refers to the Register established under new section 23DZZL introduced by Item 12 of this Schedule to register bases for mobile radiation oncology equipment and radiation oncology premises.  This section is discussed later in this Explanatory Memorandum.

 

Item 9 – inserts into the Act a definition of ‘radiation oncology service’ with a meaning as provided for in subsection 16F(2).   This subsection is discussed later in this Explanatory Memorandum.

 

Essentially, a radiation oncology service will be a service prescribed by the Regulations as such.

 

In association with the provisions in new section 16F, this definition means that Medicare benefits will not be payable for services described as radiation oncology services unless the premises at which (or from which in the case of a mobile base) the service is rendered is registered and the appropriate type of equipment used in the rendering of the service is listed on the register for that premises or mobile base.

 

Item 10 - inserts into the Act a definition of ‘registered’ when referring to the defined terms ‘base for mobile radiation oncology equipment’ and ‘radiation oncology premises’ (also see Items 1 and 7).  The definition refers to subsections 16F(4) and 16F(5), which are new subsections inserted by this Bill.  These provisions are discussed later in this Explanatory Memorandum.

 

Registered premises and mobile bases will be allocated a Location Specific Practice Number (LSPN). 

 

Item 11 – Inserts two new sections - 16F and 16G

 

Section 16F:  Medicare benefit not payable for certain radiation oncology services

 

This section precludes the payment of Medicare benefits (unless the Minister directs otherwise) for radiation oncology services unless the service is rendered using equipment listed on the Register for registered premises or mobile bases. 

 

Subsection (1) sets out three requirements which must be met before a Medicare benefit is payable: 

 

1.      The premises or mobile base must be registered; and

2.      The equipment used in the radiation oncology service must be ordinarily located at the premises or mobile base (the use of the term ‘ordinarily located’ caters for all variations in radiation oncology  practice, for example, the use of fully mobile equipment in mobile facilities or where the equipment is ordinarily located at a premises but is occasionally used elsewhere) and

3.      The Register must have recorded on it at least one item of the same type of equipment as was used in the service.  It is not necessary for the actual piece of equipment used in the service to be listed on the Register for the premises or base at the time the service is carried out.

 

The other provisions inserted by Item 12 as described below provide for the registration of, and the listing of equipment for premises or mobile bases.

 

Subsections (2) and (3) define a ‘radiation oncology service’ as services prescribed by Regulation by reference to items in the general medical services table.   The general medical services table is a prescribed table of services for which Medicare benefits are payable.  It covers all services except diagnostic imaging and pathology, which are covered under their own prescribed tables. 

 

The items currently covering radiation oncology services in the general medical services table are items 15000 to 15600.

 

Subsections (4) and (5) define what is meant by the term ‘registered’ when referring to a registered radiation oncology premises and a registered base for mobile radiation oncology equipment.  These subsections state that a premises or base is registered if its registration is in effect under Part IIC.  This is a new part inserted by this Schedule.

 

In association with subsection (1) and the provisions in Item 12, the effect of this definition is that Medicare benefits are not payable if the premises or mobile base is not registered or the registration has been suspended or cancelled.  In addition, the patient must be informed of this prior to undergoing the radiation oncology service.

 

Subsections (6) and (7) define the term ‘listed’ in respect of radiation oncology equipment for registered radiation oncology premises and registered bases for mobile radiation oncology equipment.

 

Details of the types and number of pieces of radiation oncology equipment for a registered premises or mobile base needs to be recorded on the register for that premises or base.  The equipment is then ‘listed’ for the premises or base for the purpose of this section.

 

Subsections (8) and (10) broaden what would be commonly understood to be equipment that would be ordinarily located at a premises or base, to include equipment that is temporarily at the premises or base for up to 3 months where the equipment is on trial or is being substituted for other equipment ordinarily located at the premises. 

 

In essence, these provisions also mean equipment located at the premises or base for more than 3 months is to be regarded as ‘ordinarily located’ at the premises or base as a matter of course notwithstanding the equipment being on trial or being substituted for another appliance of the same type. 

 

However, subsections (8) and (11) provide that while ‘ordinarily located’ includes the trial and substitution circumstances in subsections (8) and (10), they do not limit the definition of ‘ordinarily located’ in any way.

 

The following examples may help to illustrate how the provisions in relating to ‘ordinarily located’, ‘type of equipment’ and ‘listed’ for a premises or base in this section will operate.

 

 

Example 1

 

A claim is made for a brachytherapy item at a registered radiation oncology premises. The equipment used is new, but there is brachytherapy equipment already listed on the Register as a type of equipment ordinarily located at the premises.

 

Subject to any other assessing rules not related to these new provisions (for example, the person is eligible for Medicare benefits), a Medicare benefit would be payable for the claim.

 

Example 2

 

A claim is made for a brachytherapy item at a registered radiation oncology premises on newly purchased equipment, but there is no brachytherapy equipment listed on the Register for that premises.

 

There will be no Medicare benefit payable for the service because there is no brachytherapy equipment listed on the Register as being ordinarily located at the premises. That is, it the claim does not meet the requirements of subparagraph 16F(1)(a)(ii).  However, benefits will be paid as soon as the Register for that premises or base is updated.

 

The provisions in new section 16F allow the Minister to direct that a Medicare benefit be paid in respect of radiation oncology service where the premises or mobile base was not registered or the type of equipment used was not listed on Register for a registered premises or base.  The intention of this power is so that the Minister can give consideration as to whether the patient has been disadvantaged in a particular case through no fault of their own.  Examples of when it would be envisaged that this power would be exercised include:

 

·        where there was a delay in the processing of the registration; or

·        when the patient was unable to use a registered practice to have the radiation oncology service.

 

Where the Minister does direct a benefit to be paid in accordance with this provision and the proprietor has failed to notify the patient that the premises or base was not registered, the benefit paid is a debt recoverable from the proprietor of the premises or mobile base under new section 23DZZZG.

 

Section 16G:  Medicare benefit is payable once a suspension of registrations is lifted

 

New section 16G provides for Medicare benefits to be paid for any claims made during a period of suspension of registration of a radiation oncology premises or mobile base once the premises or mobile base supplies the information that led to the suspension.  New section 23DZZW discussed under Item 12 covers suspension of registration. 

 

 

Sections 16F and 16G come into effect for radiation oncology services rendered on or after 1 May 2003.  See Item 13.

 

Item 12 – Adds a new Part to the Act: Part IIC – Radiation Oncology Register.  This new Part contains a set of almost mirror provisions to those in Schedule 1 to this Bill.  Those provisions establish a scheme for the registration of diagnostic imaging premises and bases for diagnostic imaging equipment and the collection of information about those facilities.  As for diagnostic imaging premises and bases for mobile diagnostic imaging equipment, this new Part also provides for the suspension and cancellation of registration of radiation oncology practices and for offences by proprietors of unregistered practices, who do not advise the patient prior to undertaking a radiation oncology service that no Medicare benefit will be payable for the service.

 

A detailed explanation of each of the provisions in this new Part follows.

 

Section 23DZZJ:  Radiation Oncology Register

 

Subsection (1) provides that a Register be kept of bases for mobile radiation oncology equipment and radiation oncology premises as defined in sections 23DZZK and 23DZZL respectively.

 

Subsection (2) lists the purposes for which the Register is to be kept and identifies the scope of the Location Specific Practice Number arrangements.

 

Paragraph (a) provides that the information on the Register can be used for the purpose of planning and developing the Commonwealth Medicare benefits program in the area of radiation oncology.  For example, the information gathered about proprietorship and type of equipment in combination with the practice location will assist in identifying the factors that impact on service delivery and patient access in different areas.

 

Paragraphs (b) and (c) are for compliance purposes. 

 

Paragraph (b) covers the assessment of Medicare benefits for claims for radiation oncology services against the information held on the Register. 

 

Paragraph (c) provides that the information on the Register can be used to assist in identifying whether ‘inappropriate practice’ is taking place in relation to the provision of a radiation oncology  service by a practitioner to a patient.  As specified in the provision, inappropriate practice is practice defined for the purposes of Part VAA of the Act.  Part VAA provides for the Professional Service Review Scheme.  It encompasses such things as overservicing, inappropriate itemisation and inappropriate referring by a practitioner.

 

Section 23DZZK:  What is a base for mobile radiation oncology equipment?

 

This section defines a ‘base for mobile radiation oncology equipment’.  The intent of this definition is to identify the premises at which mobile equipment is located when not being used.  If the equipment remains in a mobile unit (ie a vehicle, aircraft or vessel) when not in use, the base is the premises at which the mobile unit is ordinarily stationed when not in use.  For example, in the case of a vehicle, the base would be where the vehicle is garaged.

 

If the equipment is ordinarily removed from a mobile unit after use, the base is the premises at which the equipment is ordinarily stationed.

 

The base is to be registered, rather than the location at which equipment is used or the unit in which it is carried, because the information collected will be sufficient for the purposes for which the Register to be kept and will streamline administration processes.

 

Section 23DZZL:  What are radiation oncology premises?

 

This section defines a ‘radiation oncology premises’.  The definition encompasses any location rendering radiation oncology services but seeks to identify individual businesses rendering these services where the location contains a number of business operations.  For example, a number of independent businesses rendering radiation oncology services may be located at the one premises.  Each of those businesses would be a premises for the purpose of this definition and, for example, each would be allocated a Location Specific Practice Number should they register under this Part of the Act.

 

However, where a practitioner is exercising rights of private practice at a facility using radiation oncology equipment of that facility (the equipment of a public hospital, for example), the facility itself would be the premises under this definition and its LSPN would need to be shown on claim documents.

 

Section 23DZZM:  Who may apply for registration?

 

This section provides that it is the ‘proprietor’ of the premises or mobile base as defined in Section 23DZZN who has authority to apply for registration of the premises or base.

 

It is expected that the proprietor may delegate the administrative process of applying for registration, but the ultimate responsibility for the application lies with the proprietor.

 

Section 23DZZN:  Who is a proprietor?

 

This section defines a proprietor of a radiation oncology premises and a proprietor of a base for mobile radiation oncology equipment.

 

The definition is based on the definition of proprietor in relation to pathology laboratories in subsection 3(1) of the Act.

 

The proprietor is the individual person, corporate entity, or government agency, as the case may be, who has effective control of the premises, including the use of equipment and the employment of staff at or connected with the premises or base.  The definition seeks to establish who has the legal responsibility for the business of the premises or base. New section 23DZZZH deals with the situation in which a partnership is the proprietor of a premises or base.  This section is discussed later.

 

Subsection (3) of section 23DZZN clarifies the meaning of ‘employment’ and ‘government agency’ used in the definition.

 

It is only the proprietor who can register a premises or mobile base.  The proprietor of a registered premises or base will have responsibilities under the Act to advise of changes to the primary information and provide other information related to the purposes for which the Register is kept, as may be requested from time to time.  The proprietor of an unregistered premises or base risks a fine if they do not advise the patient, by either displaying a sign or in writing, before a service is rendered that the premises or base is unregistered.

 

Section 23DZZO:  Application procedure

 

This section sets out how an application for registration of a radiation oncology premises or mobile base must be made and provides for the information that is required to be included in the application as listed in new section 23DZZQ and any other information prescribed in the Regulations 

 

Subsection (2) specifies that the information sought in the application can only be relevant for the purpose for which the Register is kept – see also the note on subsection 23DZZJ(2). 

 

It is anticipated that the following types of information will be prescribed in the Regulations or included in the approved application form, for the purpose of this section:

 

·        In addition to the details required by sections 23DZZQ, the practice contact details, for example, a contact person at the site, practice telephone number and email address;

·        Details of an agent to act for and on behalf of the proprietor where the proprietor has authorised such a person to be an agent;

·        Nature and type of practice, for example, stand-alone, a public hospital, a private hospital, primary care practice or group.

·        The number of each type of equipment ordinarily located at a premises or base.  Note – equipment ‘types’ will be prescribed pursuant section 23DZZQ.

·        The age of the equipment.

 

Section 23DZZP:  Registration

 

This section provides that if an application has been properly made, details of the premises or mobile base must be placed on the Radiation Oncology Register established for this purpose under new section 23DZZJ.  It is intended that an application is properly made if it:

 

·        contains all the required information.  That is, the primary information specified in section 23DZZQ and any other information prescribed pursuant to subparagraph 23DZZO(1)(d); and

·        is accurate and truthful.

 

There are no conditions precedent to registration (such as specified qualifications and the like) that a premises or base needs to meet in order to be registered under this Scheme.

 

Section 23DZZP also provides that a Location Specific Practice Number (LSPN) be allocated to the premises or base.  The LSPN will be a further detail that will be prescribed as being required to be shown on accounts/receipts and assignment of benefit forms.  This will apply to all methods of claiming.

 

Registration takes effect from the date the application is received by the Minister or any later date specified in the application.

 

The registration remains in force unless it has been suspended or cancelled.  In other words, a premises needs to register once only.

 

Sections 23DZZW and 23DZZX, 23DZZY and 23DZZZ cover suspension and cancellation of registration.

 

Section 23DZZQ:  Primary Information

 

The information specified under this section is the ‘primary information’ that is to be collected in an application for registration of a premises or base.  It is the key information that is crucial to the successful operation of the registration scheme and the payment of Medicare claims.  For example and without limiting the purpose of each:

 

·        the proprietor details under paragraph (a) are necessary so that any notices under other parts of this legislation can be served;

·        the business name under paragraphs (b) and (c) is required for the purpose of determining individual premises at a multipractice location; and

·        the equipment information under paragraphs (d) and (e) is required to establish the type of equipment and location for the purpose of assessing claims.

 

Subsection 2 of this new section provides that types of equipment for the purpose of subparagraphs 23DZZQ(1)(d)(ii) and 23DZZQ(1)(e)(iii) may be prescribed in the Regulations.

 

Equipment types will include: linear accelerators, simulators and brachytherapy equipment.

 

Section 23DZZR:  Register may be maintained electronically

 

This section will allow the Minister to keep the Register in electronic format.

 

Section 23DZZS:  Extract of the Register to be made available on request

 

This section provides that an extract of the Radiation Oncology Register be made available to any person who requests it.  The information will only be available on request and then only where the purpose of the request is to establish eligibility for Medicare benefits.

 

Subsection (2) specifies which information is to be available in the extract.  This information includes whether the registration of the premises or base is under suspension or has been cancelled.

 

This provision will allow anyone, including the referring doctor, to check the registration status (including whether the registration is currently suspended or cancelled) of a premises or mobile base to establish whether a Medicare benefit will be payable for services rendered on the equipment of that premises or mobile base. 

 

It is important to note that a request for an extract can only be made in respect of a premises or base specified in the request.  A person cannot simply seek a list of sites and their registration status under this section (but see also see new section 23DZZT, which is discussed below).

 

Section 23DZZT:  The Minister may publish an extract of the Register on the Internet

 

This section allows a list of registered sites to be published and to be available to any person who wishes to access it.  This list will contain the following information:

 

·        the name and address of each registered premise or mobile base;

·        the Location Specific Practice Number of the premise or base;

·        the date of registration; and

·        a registration end date where the registration of the premises or base is under suspension or has been cancelled.

 

This information will be available through the internet.

 

Unlike the extract available on request under the previous section, the internet will not identify whether the registration of a particular site is under suspension or cancelled, only whether the registration is current.  This is to protect the business interests of the practices listed on the internet.

 

Section 23DZZU:  Proprietors to notify the Minister of changes to primary information

 

This section provides that the proprietor of a registered premises or mobile base will need to notify the Minister in writing of changes to registered primary information for the premises or base.  What constitutes primary information is specified in section 23DZZQ.  The proprietor will be required notify of changes within 28 days of the change.

 

Because the primary information is essential to the successful operation of the Register, failure to notify of changes to it can result in suspension or cancellation of registration.

 

Section 23DZZV:  Minister may request further information

 

This section allows the Minister to seek information in relation to a registered premises or base.  This information must be relevant to the Register.

 

The purpose of this section is to allow additional information to be sought to clarify, substantiate or augment information contained in an application or already on the Register for a premises or mobile base.  For example, it may come to the attention of the Minister through a claim that the type of equipment listed on the Register for the premises or base may not be up to date.  The Minister may then write to the proprietor seeking details of the equipment.

 

Premises or mobile bases risk suspension or cancellation if they do not comply with a request within the specified timeframe (see sections 23DZZW and 23DZZX).

 

Section 23DZZW:  Suspension for failure to comply with request

 

This section provides for automatic suspension of the registration of a premises or mobile base if the information requested under section 23DZZV is not provided within the time specified in the Minister’s request for the information.  As suspension applies automatically if the information is not supplied as requested, there is no provision for review by the Administrative Appeals Tribunal. 

 

A suspension is lifted once the information requested has been supplied.

 

The effect of a suspension is that no Medicare benefits are payable during a period of suspension.  However, unless the registration is subsequently cancelled, any claims during the period of suspension will be payable when the suspension is lifted (see new section 16G discussed earlier). 

 

There is no limit on the number of times a registration can be suspended.  However, a registration will be cancelled after a continuous period of three months suspension.  Cancellation is explained under the following sections 23DZZX, 23DZZY and 23DZZZ.  The intention of this provision is to provide every reasonable opportunity for a practice to comply with the request before cancellation takes effect.

 

So that patients will be informed of the consequences of a premises or base being suspended, the proprietor of a suspended premises or base must advise the patient, either by displaying a sign or in writing, before the service is undertaken that no Medicare benefit will be payable for the service. 

 

The date the suspension takes effect will be recorded on the Register.  This date will be shown in publicly available extracts of the Register – see sections 23DZZS and 23DZZT.  However, if a suspension is subsequently lifted, there will be no record on the extracts of a suspension being in force at any time.

 

Section 23DZZX:  Cancellation for failure to provide information within 3 months after the response period

 

This section means that the registration of a premises or base must be cancelled after the registration has been suspended under the Section 23DZZW for a continuous period of three months. 

 

The effect of cancellation of registration is that no Medicare benefits are payable, in respect of that premises or mobile base, for radiation oncology services rendered on or after the date of cancellation.  The cancellation will have effect from beginning of the three month suspension period. The following example illustrates how this provision will operate.

 

The Minister seeks further information from the proprietor of a registered radiation oncology premises under section 23DZZV on 1 September 2003.  The proprietor is asked to supply the information by 1 October 2003.  The proprietor fails to respond to the request by 1 October and the registration is then suspended from 2 October 2003 pursuant to section 23DZZW.  Three months then elapses (it is now 1 January 2004) and there is no response from the proprietor to the original request from the Minister.  The registration is then cancelled, pursuant to section 23DZZX.  However, the cancellation takes effect from the original date of suspension, ie 2 October 2003.

 

Unless extenuating circumstances exist, a premises or mobile base cannot be re-registered within 12 months of being cancelled under this section  - see new section 23DZZZB.

 

As there is no discretionary element to cancel the registration under this provision, there is no need for review by the Administrative Appeals Tribunal.

 

Section 23DZZY:  Cancellation at the request of the proprietor

 

Under this section, the registration of a registered premises or mobile base must be cancelled at the request of the proprietor of the premise or base.

 

The cancellation takes effect the day after the request is received or such later date as requested by the proprietor.

 

Section 23DZZZ:  Cancellation on other grounds

 

This section allows the Minister to cancel the registration of a registered premises or mobile base in the following circumstances:

 

·        Where a registration was obtained improperly; or

·        Where the proprietor fails to notify changes to the primary information under section 23DZZQ.

 

In relation to cancellation for failure to notify of changes to primary information, situations that may result in such action being taken to include failure to notify changes to proprietorship, business name, or installation of new types of equipment.

 

Unlike the previous two sections providing for cancellation of a registration, cancellation under section 23DZZZ is discretionary. However, the Minister must invite a submission from the proprietor under section 23DZZZC before cancelling.

 

The section also provides that notice in writing setting out the reasons for the cancellation must be provided to the proprietor of the premises or mobile base. 

 

A decision by the Minister to cancel a registration will be reviewable by the Administrative Appeals Tribunal.

 

Unless extenuating circumstances exist, a premises or mobile base cannot be re-registered within 12 months of being cancelled as the result of a decision by the Minister - see section 23DZZZB.

 

Section 23DZZZA:  Cancellation to be noted on the Register

 

This section provides that the date the registration is cancelled be recorded on the Register where the registration of a premises or mobile base has been cancelled.

 

This date will be included in the public extracts of the Register.

 

Section 23DZZZB:  Limits on registration after cancellation under section 23DZZX or 23DZZZ

 

This section provides that, unless permitted by the Minister and having regard to the extenuating circumstances as specified in subsection (2), a premises or mobile base whose registration has been cancelled cannot be re-registered for 12 months if the cancellation was the result of:

 

·        suspension for continuous period of three months under section 23DZZX; or

·        a decision by the Minister under section 23DZZZ.  As mentioned under section 23DZZZ, cancellation as a result of the Minister’s decision can only be made where a registration was obtained improperly or where the proprietor fails to notify changes to the prescribed primary information.

 

The 12 month cancellation period was struck to prevent proprietors of radiation oncology premises and mobile bases from re-applying for registration immediately following a previous cancellation.  The 12 month period was felt to be an appropriate incentive for a proprietor to remain compliant with the registration provisions of this Bill.

 

Where the registration has been cancelled following three continuous months of suspension under section 23DZZX, the 12 month cancellation period commences from the date the registration of the premises or mobile base was suspended.  The following example demonstrates how this provision will operate.

 

The Minister seeks further information from the proprietor of a registered radiation oncology premises under section 23DZZV on 1 June 2003.  The proprietor is asked to supply the information by 1 July 2003.  The proprietor fails to respond to the request by 1 July and the registration is then suspended from 2 July 2003 pursuant to section 23DZZW.  Three months then elapses (it is now 2 October 2003) and there is no response from the proprietor to the original request from the Minister.  The registration is then cancelled pursuant to section 23DZZX.  However, the cancellation takes effect from the original date of suspension, ie 2 July 2003.  The 12 month cancellation period commences from 2 July 2003, which means that the proprietor is entitled to apply for re-registration on 2 July 2004 unless permitted at an earlier date by the Minister.

 

Where the Minister does not permit the proprietor to re-apply, the Minister must write to the proprietor setting out the reasons for the decision.  Such decisions will be reviewable by the Administrative Appeals Tribunal.

 

Section 23DZZZC:  Minister must invite submissions before cancelling registration

 

This section applies where there are grounds for cancellation of the registration of a premises or mobile base under section 23DZZX (Cancellation following suspension after 3months) or 23DZZZ (registration obtained improperly or failure to notify of primary information). 

 

The section imposes an obligation on the Minister to invite the proprietor of the premises or mobile base to state a case prior to the registration being cancelled and sets out the response timeframes.

 

This provision ensures that a proprietor is given every reasonable opportunity to comply with provisions in the Act before the registration is cancelled.

 

Section 23DZZZD:  Application to Administrative Appeals Tribunal for review of a decision to cancel a registration

 

This section provides that decisions to cancel the registration of a premises or mobile base or decisions to not allow a proprietor to re-apply for registration within 12 months of cancellation are subject to appeal to the Administrative Appeals Tribunal.  It also sets out the timeframe in which an appeal can be made.

 

Sections 23DZZZE and 23DZZZF:  Proprietor of unregistered radiation oncology premises or base for mobile radiation oncology that Medicare not payable.

 

These sections make it an offence against the proprietor of an unregistered premises or mobile base if the patient is not informed before undertaking the radiation oncology service that a Medicare benefit is not payable.  Unregistered for the purpose of this section includes premises or bases whose registration has been suspended or cancelled (see subsections 23DZZP(3) and 23DZZP(4).

 

A proprietor may discharge their obligations under this section by either providing an individual notice in writing to the patient or displaying a suitable sign in a prominent position at the premises.  In the case of mobile diagnostic imaging equipment, such a sign may be displayed in a prominent position within a mobile unit carrying the equipment, for example, a van or aircraft, or at the location at which it is used.

 

These sections do not come into effect until 1 May 2003 – see Item 13.

 

Section 23DZZZG:  Debt recovery where the proprietor fails to inform patient that premises or base is not registered

 

This section establishes as a debt, recoverable from the proprietor of an unregistered premises or mobile base (including those premises or bases where the registration has been suspended or cancelled), any Medicare benefit paid to a patient where:

 

·        the proprietor has failed the obligation imposed on them under section 23DZZZE or 23DZZZF to notify the patient that the premises or mobile base is unregistered; and

·        the Minister has directed the benefit be paid under the discretionary power given to the Minister by new subsection 16F(1).

 

This debt will be in addition to any fine imposed on the proprietor if they fail to notify the patient that no Medicare benefit would be payable for a service using equipment of the premises or base.

 

Section 23DZZZH:  Application of this Part to partnerships

 

Section 23DZZN defines a proprietor of a radiation oncology premises or mobile base for the purpose of the new registration provisions.  Under that section, a proprietor can be a natural person, a corporate entity, or state or federal agency or statutory authority.

 

Section 23DZZZH covers the circumstances in which a partnership is the proprietor of the premises or mobile base.

 

It provides that each partner is a proprietor and as such each partner will need to be recorded on the Register for a registered premises or mobile base.

 

It also provides that each partner will be equally responsible for the obligations imposed by the provisions contained in this Bill, notwithstanding anything contained in a partnership agreement to the contrary. For example, should a patient have a radiation oncology service at a premises that was not registered and the patient was not informed that a Medicare benefit would not be payable, a fine could be imposed any one of the partners.  However, no more than one partner may be fined for the one offence.

 

The section also provides, however, that any of the partners can discharge an obligation or exercise a right on behalf of the other partners.  In other words, it is intended that any partner in the partnership can:

 

·        apply for registration of the premises or mobile base; 

·        notify of changes to primary information on the Register;

·        notify patients whether a premises or base is unregistered;

·        pay fines that may be imposed for failure to notify patients that a premises or base is unregistered..

 

Item 13 - As described in the Commencement Clause in the preliminary part of the Bill, the provisions in this Schedule come into effect on the day the Act receives Royal Assent. 

 

This item introduces transitional provisions that provide that the operative provisions of the Bill relating to the payment of Medicare benefits do not come into effect until 1 May 2003.

 

This means that as of 1 May 2003 Medicare benefits will not be payable for radiation oncology undertaken using the equipment of unregistered premises or mobile bases.  From 1 May 2003, proprietors of unregistered premises or mobile bases will also need to inform patients that their premises or base is not registered.

 

However, premises and mobile bases can become registered from any date on or after Royal Assent. 

 

HEALTH INSURANCE AMENDMENT

(DIAGNOSTIC IMAGING, RADIATION ONCOLOGY AND OTHER MEASURES) BILL 2002

 

NOTES ON CLAUSES AND ITEMS

 

 

SCHEDULE 3 – REFERRAL ARRANGEMENTS FOR DIAGNOSTIC IMAGING SERVICES

 

Health Insurance Act 1973

 

Item 1 – the change in item 1 is a consequence of introducing a new section (23DXA) in Division 4 of Part IIB to allow for remote area exemptions for the otherwise prohibited diagnostic imaging practice relating to the stationing of diagnostic imaging equipment and or employees of a providing practitioner at the place of another practitioner.

 

With the introduction of the new section 23DXA, there will now be two classes of remote area exemption:  the existing exemption in respect of the referral arrangements; and the new exemption in respect of the stationing of equipment and or employees by a service provider at the place of another practitioner.

 

Section 23DXA is discussed below under Item 5.

 

The change essentially links paragraph 16B(7)(c), which deals with exemption from the referral requirements in remote areas, to section 23DX, which deals with the granting of remote area exemptions for particular providers in relation to the referral requirements.

 

Item 2 – repeals existing subsection 16B(10) and replaces it with 2 new subsections 16B(10) and 16B(10A).

 

In respect of new subsection 16B(10), the amendment means that services which may only be requested by a specialist or consultant physician cannot be deemed as ‘necessary additional services’ by the provider of the diagnostic imaging service.

 

The reason for this change is that the existing provision places no restriction on the types of items that the service provider can deem to be an additional service.  Certain diagnostic imaging items as specified in the Diagnostic Imaging  Services Table (DIST) can only be requested by specialist or consultant physicians.  Restrictions currently apply to Magnetic Resonance Imaging (MRI) items.  The Diagnostic Imaging Referral Arrangements Review Committee identified that there was a need to maintain the existing lines of referral for specialist only items. 

 

New subsection 16B(10A) implements Recommendation 2 of the Diagnostic Imaging Referral Arrangements Review Committee.  This is to allow a service provider to substitute another service in the place of the service that was originally requested where the service provider formed the opinion that the substituted service would be more appropriate for the diagnosis of the patient’s condition.

 

Paragraphs (c) and (d) set out further conditions that must be met in relation to substituting services.  These conditions are designed to ensure that the substituted service is an appropriate service and that, wherever possible, the requesting practitioner has been consulted before the service is substituted.

 

Paragraph (e) mirrors paragraph (b) of new subsection 16B(10) and provides that that services which would otherwise require a request from a specialist or consultant physician cannot be substituted.

 

Item 3 – Section 23DV is an enabling provision for applications for remote area exemptions.  The provision substituted by this item simply takes into account that there will be now more than one circumstance for the granting of remote area exemptions. 

 

Item 4 – this item will amend the heading of section 23DX to read ‘Grant of remote area exemption – provision of services where the requirements of subsection 16B(1) are not met’.

 

Subsection 16B(1) are the referral requirements for diagnostic imaging services.  The change to the heading creates an easy reference distinction between the remote area exemption in relation to the referral arrangements under section 23DXand remote area exemptions for the stationing of equipment and staff at the place of another practitioner under the new section 23DXA as described below in Item 5.

 

Item 5  - Currently, the stationing of equipment and employees at the place of another practitioner by a specialist in diagnostic radiology is prohibited under paragraph 23DZG(g).  Item 16 of this Schedule will extend that prohibition to any provider of diagnostic imaging services in accordance with Recommendation 4 of the Review Committee.  This provision will be further explained when discussing Item 16. 

 

Item 5 inserts a new section (23DXA) that provides for a remote area exemption to be granted for this otherwise prohibited practice in recognition of the possibility of it disadvantaging patients in areas of defined need.  The provisions in this new sub-section mirror those of section 23DX in regard to the circumstances which must be satisfied in order for the Minister to grant a remote area exemption.

 

A remote area for the purpose of this new section is the same as for the referral exemption.  It is an area within Australia as determined by the Minister under existing section 23DU.  Generally speaking, it is normally regarded as a location that is at least 30 kilometres by road to the nearest radiology practice at which the services are provided.

 

Item 6 – amends the heading of section 23DY to read ‘Restrictions on remote area exemptions under section 23DX’. The change to the heading creates an easy reference distinction between the remote area exemption in relation to the referral arrangements and remote area exemptions for the stationing of equipment and staff at the place of another practitioner under the new section 23DXA as described above in Item 5.

 

The existing provisions in section 23DY already reference back to section 23DX, so there is no need for any further changes to this provision.

 

Item 7 – inserts a new section to allow the Minister to restrict the remote area exemption to stationing of specified types equipment and or the stationing of employees with particular technical and professional qualifications.  The section also sets out the process for the removal of a restriction.

 

Essentially, this new section mirrors the existing section 23DY, which provides for restrictions on remote area exemptions in regard to the referral arrangements.

 

Item 8 - section 23DZ allows the Minister to refuse a remote area exemption in the circumstances specified in that section.  This item amends subsection (1) of that section to include reference to the new provision 23DYA(3).  New section 23DYA allows for remote area exemptions to be restricted (see item 7) and subsection 23DYA(3) provides for a person to be able to apply for the removal or reduction in scope of a remote area exemption.

 

The effect of this amendment is that the Minister can refuse an application for a restriction or a reduction in scope of a remote area exemption in respect of the stationing of equipment or employees by the provider at the premises of another practitioner.

 

Items 9 and 10 –.  The amendments in Items 9 and 10 are a consequence of the introduction of a provision for remote area exemptions for the stationing of equipment or employees by a provider at the premises of another practitioner.  The amendments point paragraphs 23DZA(2)(i) and 23DZA(2)(ii) to the relevant reference provision.  They do not have any operative effect.

 

Item 11 – This item introduces references to the new remote area exemption provisions into subsection section 2 of section 23DZ.  As mentioned in item 8, section 23DZ deals with refusal of applications for remote area exemptions. 

 

The effect of this amendment is essentially that if the Minister seeks further information about a request from an applicant for the removal or reduction in scope of a remote area exemption for the stationing of equipment or employees by the provider at the premises of another practitioner, it is deemed that the application has been refused if the applicant does not respond to the Minister’s request within 60 days.

 

Item 12 – section 23DZC deals with revocation of remote area exemptions.  Item 13 below introduces a new subsection into that section to cater for the introduction of remote area exemptions for the stationing of equipment and or employees by a provider at the place of another practitioner. 

 

The amendment in Item 12 simply links subsection (1) to the remote area exemptions for the referral arrangements as a consequence of the introduction of subsection 2 as explained in  Item 13. 

 

Item 13 – inserts a new subsection in section 23DZC (Revocation of a remote area exemption) to cater for the introduction of the provisions (in subsection 23DXA) that allow the Minister to grant a remote area exemptions for the stationing of equipment and employees by the provider at the place of another practitioner.  Item 5 deals with that new subsection.

 

The new subsection mirrors the provisions and effect of existing subsection 23DZC(1), which deals with revocation of remote area exemptions granted in relation to the referral arrangements.

 

Item 14 – This amendment takes into account that there will be now more than one circumstance for the granting of remote area exemptions.

 

Item 15 – this item replaces existing section 23DZD (Review of decisions) with a new section incorporating provisions that reflect the introduction of remote area exemptions in relation to the stationing of equipment and employees at another practice in addition to the existing provisions in respect of remote area exemptions for the referral arrangements

 

Essentially, a set of mirror provisions (with the necessary reference changes) has been created in this new subsection: one for the referral arrangements; and one for the stationing of equipment and or employees at the practice of another provider.  Paragraphs (a) and (b), for example, are mirror provisions to allow for an appeal to be made to the Administrative Appeals Tribunal in relation to the Minister’s decision to restrict the remote area exemption to apply only to certain services, or equipment or employees as the case may be.

 

Item 16 – Section 23DZG specifies certain practices as being Prohibited Diagnostic Imaging Practices’.  Existing paragraph 23DZG(g) provides that it is a prohibited diagnostic imaging for a specialist radiologist to station ‘diagnostic imaging equipment or employees of the specialist at the premises of another practitioner . . . so that diagnostic imaging services may be rendered to the practitioner’s patients by or on behalf of the specialist.’

 

The existing paragraph applies to specialists in diagnostic radiology only.  The Review Committee recommended that this provision should apply to all medical practitioners providing diagnostic imaging services.

 

The amendments in Item 16 reflect that recommendation, with the appropriate allowances for remote area exemptions.

 

Item 17 – this item adds a new subsection to section 23DZG to make it clear when a practitioner is ‘covered by a remote area exemption’ for the purpose of that phrase in paragraph 23DZG(g) as replaced by Item 16.

 

Essentially, this subsection provides clarity in relation to remote area exemptions that are restricted to certain equipment or employees with certain qualifications (see Item 7).  The effect is that it would still be a prohibited diagnostic imaging practice to station other equipment and or employees not covered by the restricted remote area exemption.

 

Item 18 – subsection 124FF(6) deals with determinations by the Medicare Participation Review Committee in relation to a medical practitioner who:

·        has a remote area exemption for the purpose of being able to provide ‘R’ type diagnostic imaging services without a written request from another practitioner: and

·        who has engaged, in or caused another person to engage in, a prohibited diagnostic imaging practice.’

 

It provides that the Committee must advise the Minister in its determination whether or not the remote area exemption should be revoked.

 

The amendments proposed by Item 18 are a consequence of the introduction of remote area exemptions in relation to the stationing of diagnostic imaging equipment and or employees by a service provider at premises of another practitioner.  They clarify that subsection 124FF(6) applies to both types of remote area exemptions as provided for in the quoted sections, ie sections 23DX and 23DXA.

 

Item 19 – As described in the Commencement Clause in the preliminary part of this Bill, the provisions in this Schedule commence on Royal Assent.

 

This item introduces application arrangements which provide that diagnostic imaging service providers affected by this Bill who currently have equipment or employees stationed at the premises of another practitioner will have until 1 July 2003 to comply with the provisions of this legislation.

 

HEALTH INSURANCE AMENDMENT

(DIAGNOSTIC IMAGING, RADIATION ONCOLOGY AND OTHER MEASURES) BILL 2002

 

 

NOTES ON CLAUSES AND ITEMS

 

SCHEDULE 4 – OSTEOPATHS

 

Health Insurance Act 1973

 

 

Item 1 defines the term ‘osteopath’ as a person registered under a relevant State or Territory law for the purpose of interpreting later provisions of the Act in which that term is used.

 

Osteopaths as defined will be able to refer patients for specified diagnostic imaging services.      

 

Items 2 and 3 amend paragraph 16(B)(1)(b) to include osteopaths as defined in Item 1 in the written request provisions for ‘R’ type diagnostic imaging services as provided for Section 16B. 

 

Under the current legislation, practitioners registered as chiropractors under State or Territory registration laws can request specified diagnostic imaging services under the Medicare arrangements.  Osteopaths registered as chiropractors under those laws are also able to request these specified diagnostic imaging services. 

 

However, some States now have separate legislation governing the registration of chiropractors and osteopaths.  As such, osteopaths in those States who had been included in the request arrangements are currently not able to participate in these arrangements.

 

In association with the amendment in Item 3, this amendment will restore the rights of affected osteopaths to request specified diagnostic imaging services.  It will also allow State or Territory registered osteopaths who were not previously registered as chiropractors under relevant State or Territory legislation to request these services.

 

Item 4 provides for Regulations to specify the diagnostic imaging items osteopaths may request.  The item also inserts a note to that effect.  

 

Items 5, 6 and 7 are consequential amendments to including osteopaths in the written request provisions of Section 16B.  The provisions being amended relate to lost referrals and the amendments include osteopaths in those provisions.

 

Item 8 amends the definition of ‘practitioner’ to include an osteopath for the purpose of Section 23DQ.  Section 23DQ provides for Regulations to specify the form and content of referrals for diagnostic imaging services.   This amendment is a consequence of the inclusion of osteopaths in the written request provisions in Section 16B and means that osteopaths will be subject to the same provisions regarding form and content of referrals as other practitioners with referral rights.

 

Item 9 amends the definition of ‘practitioner’ to include an osteopath for the purpose of Division 3 of Part IIB of the Act. This Division covers prohibited diagnostic imaging practices. This amendment is a consequence of the inclusion of osteopaths in the written request provisions in Section 16B and means that osteopaths will be subject to the same provisions regarding prohibited practices as other practitioners with referral rights.

 

Item 10 amends the definition of ‘practitioner’ to include an osteopath for the purpose of Part VAA of the Act.  Part VAA provides for the Professional Services Review Scheme and covers such things as overservicing, inappropriate itemisation and inappropriate referring by a practitioner..

 

This amendment is a consequence of the inclusion of osteopaths in the written request provisions in Section 16B and makes osteopaths subject to the same provisions regarding Professional Review Scheme as other practitioners with referral rights.

 

Item 11 amends the definition of ‘profession’ to include osteopathy for the purpose of Professional Services Review Scheme under Part VAA of the Act. As for Item 10, this amendment is a consequence of the inclusion of osteopaths in the written request provisions in Section 16B.

 

Items 12 increases to 8 the number of persons prescribed in paragraph 106ZPA(1)(c) and is required because of the amendment described in Item 13.

 

Item 13 includes an osteopath as one of the persons prescribed in relation to the constitution of the Determining Authority, the relevant peer review group established as part of the Professional Services Review Scheme under Part VAA of the Act.

 

Item 14 includes osteopaths in the definition of ‘practitioner’ in Part VB, which deals with the Medicare Participation Review Committee. This amendment is a consequence of the inclusion of osteopaths in the written request provisions in Section 16B and means that osteopaths will be subject to the same provisions regarding Medicare Participation Review Committee as other practitioners with referral rights.