A Bill for an Act to amend the Health Insurance Act 1973, and for related purposes
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Health Insurance Amendment (Compliance) Act 2009.
2 Commencement
This Act commences on 1 January 2010.
3 Schedule(s)
Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—Amendment of the Health Insurance Act 1973
1 Subsection 3(1)
Insert:
medicare number has the same meaning as in subsection 84(1) of the National Health Act 1953.
2 After section 129AAC
Insert:
129AAD Notice to produce documents
When section applies
(1) This section applies if the Medicare Australia CEO:
(a) has a reasonable concern that an amount paid, purportedly by way of benefit or payment under this Act, in respect of one or more professional services, may exceed the amount (if any) that should have been paid; and
(b) has taken into account advice given to him or her by a medical practitioner who is an employee of Medicare Australia about the types of documents that contain information relevant to ascertaining whether amounts paid in respect of professional services of the same kind or kinds as the service or services referred to in paragraph (a) should have been paid.
Note: For the purposes of paragraph (a), the CEO may, for example, have a reasonable concern about benefits or payments made in respect of:
(a) professional services rendered by individual practitioners; or
(b) professional services rendered by particular kinds of practitioners; or
(c) the rendering of services to which specific items, or groups of items, relate.
CEO may require person to produce document etc.
(2) If the CEO believes on reasonable grounds that:
(a) a person:
(i) who rendered a professional service in respect of which an amount has been paid that is the subject of the CEO’s concern; or
(ii) on whose behalf such a professional service was rendered; or
(b) subject to subsection (7), another person;
has possession, custody or control of one or more documents relevant to ascertaining whether the amount paid in respect of the professional service should have been paid, the CEO may, by written notice given to the person, require the person to do any or all of the things mentioned in subsection (5).
(3) The CEO may only give a notice to a person under subsection (2) in respect of a professional service if the CEO has given the person a reasonable opportunity to respond to a request (other than under this section) to produce to the CEO, or an employee of Medicare Australia, documents relevant to ascertaining whether the amount paid, purportedly by way of benefit or payment under this Act, in respect of the service, should have been paid.
(4) A notice may only be given in respect of a professional service that was rendered in the period of 2 years immediately before the notice is given.
(5) The CEO may require the person, in relation to each professional service specified in the notice:
(a) subject to subsection (6), to produce to the CEO, or an employee of Medicare Australia, any document, or extract of any document, that is relevant for the purpose set out in subsection (2); or
(b) to make a copy of any such document or extract and to produce that copy to the CEO or employee.
Note: For a person referred to in paragraph (2)(a), failure to comply with a notice may lead to recovery action (see section 129AC) and an administrative penalty may be applied (see sections 129AEA, 129AEB and 129AEC). For a person referred to in paragraph (2)(b), failure to comply with a notice may lead to a civil penalty (see section 129AAE).
(6) If a document, extract or copy contains clinical details relating to an individual, the person to whom the notice is given is not required to produce the document, extract or copy to a person other than an employee of Medicare Australia who is a medical practitioner.
CEO not to give notice to certain persons
(7) A person referred to in paragraph (2)(b) does not include:
(a) the person in respect of whom the professional service was rendered; or
(b) the person who incurred the medical expenses in respect of the service.
Content of notice
(8) The notice must:
(a) specify details of each professional service (including the item, date on which the service was rendered and medicare number of the person in respect of whom the service was rendered) in relation to which the document, extract or copy is to be produced; and
(b) specify the reason or reasons for the CEO’s concern that an amount paid, purportedly by way of benefit or payment under this Act, in respect of each such service may exceed the amount (if any) that should have been paid; and
(c) specify how the document, extract or copy is to be produced; and
(d) contain a statement to the effect that the person to whom the notice is given is not expected to produce a document, extract or copy containing clinical details relating to an individual unless the document, extract or copy is necessary to ascertaining whether the amount paid in respect of the service should have been paid; and
(e) specify the period within which, and place at which, the document, extract or copy is to be produced.
The period specified under paragraph (e) must be a period ending at least 21 days after the day on which the notice is given.
Health information
(9) The power under this section to require a document, extract or copy to be produced includes the power to require the production of a document, extract or copy containing health information (within the meaning of the Privacy Act 1988) about an individual.
Section not limited
(10) This section is not limited by:
(a) any other provision of this Act; or
(b) any provision of the Medicare Australia Act 1973 or any other Act;
that relates to the powers of the CEO to require the production of documents.
129AAE Civil penalty—failure to comply with requirement in notice
(1) A person referred to in paragraph 129AAD(2)(b) contravenes this section if:
(a) the person is given a notice under section 129AAD requiring the person to do something in respect of a professional service; and
(b) the person fails to comply with the requirement within the period specified in the notice.
Civil penalty:
(a) for an individual—20 penalty units; and
(b) for a body corporate—100 penalty units.
(2) It is a defence in proceedings for a contravention of subsection (1) if:
(a) the failure to comply is brought about by another person over whom the person has no control or by a non‑human act or event over which the person has no control; and
(b) the person could not reasonably be expected to guard against the failure.
Note: The defendant bears the onus of proving the matters necessary to establish the defence.
129AAF Self‑incrimination etc.
(1) A person is not excused from producing a document, extract or copy when required to do so under section 129AAD on the ground that doing so would tend to incriminate the person or expose the person to a penalty.
(2) However, the production of the document, extract or copy, and any information obtained as a direct or indirect result of the production of the document, extract or copy, are not admissible in evidence against the person in:
(a) any criminal proceedings, other than:
(i) proceedings for an offence against this Act dealing with false or misleading information or documents; and
(ii) proceedings for an offence against section 137.1 or 137.2 of the Criminal Code (which deals with false or misleading information or documents) that relates to this Act; or
(b) any civil proceedings, other than a civil proceeding arising under Part VIA or this Part.
129AAG CEO or employee of Medicare Australia may deal with documents etc. produced
(1) If a document, extract or copy has been produced under section 129AAD in respect of a professional service, the Medicare Australia CEO, or an employee of Medicare Australia, may do all or any of the things mentioned in subsection (2) for the purpose of ascertaining whether the information contained in the document, extract or copy properly substantiates that an amount paid, purportedly by way of benefit or payment under this Act, in respect of the service, should have been paid.
Note: If the information does not properly substantiate the amount, recovery action may be taken (see section 129AC) and an administrative penalty may be applied (see sections 129AEA, 129AEB and 129AEC).
(2) The CEO or employee may:
(a) inspect the document, extract or copy; and
(b) make a copy of, or take an extract from, the document, extract or copy; and
(c) retain the document, extract or copy in his or her possession for such reasonable period as he or she thinks fit.
(3) The person otherwise entitled to possession of the document or extract is entitled to be supplied, as soon as practicable, with a copy certified by the CEO, or an employee, to be a true copy.
(4) The certified copy must be received in all courts and tribunals as evidence as if it were the original.
(5) Until a certified copy is supplied, the CEO, or an employee, must, at such times and places as he or she thinks appropriate, permit the person otherwise entitled to possession of the document or extract, or a person authorised by that person, to inspect and make copies of, or take extracts from, the document or extract.
(6) This section is not limited by:
(a) any other provision of this Act; or
(b) any provision of the Medicare Australia Act 1973 or any other Act;
that relates to the powers of the CEO, or an employee of Medicare Australia, to deal with a document, extract or copy as described in subsection (2) of this section.
(7) An employee of Medicare Australia referred to in this section may be an employee other than the employee to whom the document, extract or copy was required to be produced.
129AAH Notice of decision: no amount recoverable because amounts paid substantiated etc.
Amount paid substantiated
(1) If:
(a) a person produces to the Medicare Australia CEO, or to an employee of Medicare Australia, a document, extract or copy relating to a professional service after being requested, or required under section 129AAD, to do so; and
(b) the CEO decides that the information contained in the document, extract or copy properly substantiates that the amount paid, by way of benefit or payment under this Act, in respect of the service, should have been paid;
the CEO must give the person written notice of the decision.
Circumstances beyond control exist
(2) If the CEO is satisfied, for the purposes of subsection 129AC(1B) or (1D), that circumstances beyond a person’s control exist, the CEO must give the person written notice of the decision.
(3) If the CEO is satisfied, for the purposes of subsection 129AC(1F), that circumstances exist beyond the control of:
(a) the person from whom the amount concerned is recoverable; and
(b) the recipient of the notice concerned;
the CEO must give written notice of the decision to the person from whom the amount concerned is recoverable.
Notice may include notice of other decisions
(4) The CEO’s written notice to a person of a decision may include written notice of other decisions referred to in this section, or section 129AAI, that also are required to be given to the person.
129AAI Notice of decision: amounts recoverable
(1) If an amount is recoverable under subsection 129AC(1), (1A), (1C) or (1E) as a debt due to the Commonwealth from a person, or from an estate, the Medicare Australia CEO must give written notice to the person or estate of:
(a) the decision to claim the amount as a debt; and
(b) the reasons for the decision; and
(c) the right of the person or estate to seek review of the decision under subsection 129AAJ(1).
(2) The CEO’s written notice to a person or an estate of a decision may include written notice of other decisions referred to in this section, or section 129AAH, that also are required to be given to the person or estate. The written notice may also, as appropriate, state that the CEO was not satisfied, for the purposes of subsection 129AC(1B), (1D) or (1F), that circumstances beyond a person’s control existed.
(3) A failure to comply with the requirements of subsection (1) does not affect the validity of the decision.
(4) The CEO must not serve a notice on a person or an estate claiming an amount as a debt before the end of the period of 28 days after written notice of the decision referred to in subsection (1) is given to the person or estate.
129AAJ Review of decisions to claim amounts as debts
(1) If the Medicare Australia CEO makes a decision referred to in subsection 129AAI(1) about a person or an estate, the person or estate may apply in writing to the CEO, in the form approved in writing by the CEO, for a review of the decision.
(2) An application for review of a decision must be made within 28 days after the person or estate is notified of the decision.
(3) On receiving an application for review of a decision, the CEO must:
(a) review the decision; and
(b) confirm, vary or revoke the decision.
(4) The CEO must give to the applicant written notice of the decision on the review within 28 days after receiving the application for review.
(5) A failure to comply with subsection (4) does not affect the validity of the CEO’s decision on the review.
(6) To avoid doubt, a decision referred to in subsection 129AAI(1) (including such a decision varied under this section) may be reviewed under this section once only.
3 Application
Sections 129AAD, 129AAH and 129AAI of the Health Insurance Act 1973 apply in respect of a professional service that is rendered on or after the commencement of those sections.
4 After subsection 129AC(1)
Insert:
Failure to produce document
(1A) Subject to subsection (1B), if:
(a) a person referred to in paragraph 129AAD(2)(a) is required, by a notice given under section 129AAD, to produce a document, extract or copy in respect of a professional service; and
(b) the person does not comply with the requirement within the period set out in the notice;
the amount paid, purportedly by way of benefit or payment under this Act, in respect of the service, is recoverable as a debt due to the Commonwealth from the person, or the estate of the person, whether or not the amount was paid to the person.
(1B) Subsection (1A) does not apply if the person concerned satisfies the Medicare Australia CEO that the person’s non‑compliance is due to circumstances beyond the person’s control.
Note: See section 129AAJ for review of decisions.
Amount not properly substantiated—notice to person referred to in paragraph 129AAD(2)(a)
(1C) Subject to subsection (1D), if:
(a) a person referred to in paragraph 129AAD(2)(a) is required, by a notice given under section 129AAD, to produce a document, extract or copy in respect of a professional service; and
(b) the person complies with the requirement within the period set out in the notice; and
(c) the information contained in the document, extract or copy does not properly substantiate (wholly or partly) that the amount paid, purportedly by way of benefit or payment under this Act, in respect of the service, should have been paid;
then, to the extent that the amount is not properly substantiated, the amount is recoverable as a debt due to the Commonwealth from the person, or the estate of the person, whether or not the amount was paid to the person.
(1D) Subsection (1C) does not apply if the person concerned satisfies the Medicare Australia CEO that the reason that the information contained in the document, extract or copy does not properly substantiate the amount is due to circumstances beyond the person’s control.
Note: See section 129AAJ for review of decisions.
Amount not properly substantiated—notice to person referred to in paragraph 129AAD(2)(b)
(1E) Subject to subsection (1F), if:
(a) a person (the notice recipient) referred to in paragraph 129AAD(2)(b) is required, by a notice given under section 129AAD, to produce a document, extract or copy in respect of a professional service; and
(b) the notice recipient complies with the requirement within the period set out in the notice; and
(c) the information contained in the document, extract or copy does not properly substantiate (wholly or partly) that the amount paid, purportedly by way of benefit or payment under this Act, in respect of the service, should have been paid;
then, to the extent that the amount is not properly substantiated, the amount is recoverable as a debt due to the Commonwealth from:
(d) the person who rendered the service, or on whose behalf the service was rendered; or
(e) the estate of that person;
whether or not the amount was paid to that person.
(1F) Subsection (1E) does not apply if the person from whom the amount concerned is recoverable satisfies the Medicare Australia CEO that the reason that the information contained in the document, extract or copy does not properly substantiate the amount is due to circumstances beyond the control of the person and the notice recipient.
Note: See section 129AAJ for review of decisions.
Administrative penalty
(1G) If:
(a) a person is given a notice under section 129AEC of the person’s liability to pay an administrative penalty; and
(b) the person does not pay the penalty by the day set out in the notice as the day by which the penalty becomes due for payment;
the amount set out in the notice is recoverable as a debt due to the Commonwealth from the person or the estate of the person.
Recovery once only
(1H) To avoid doubt, an amount paid purportedly by way of benefit or payment under this Act is recoverable under this section once only.
Note 1: The heading to section 129AC is replaced by the heading “Recovery of amounts overpaid etc. and administrative penalties”.
Note 2: The following heading to subsection 129AC(1) is inserted “False or misleading statements”.
5 At the end of paragraph 129AC(2)(a)
Add “, (1A), (1C), (1E) or (1G)”.
Note: The following heading to subsection 129AC(2) is inserted “Interest on amounts”.
6 At the end of paragraph 129AC(2)(a)
Add “and”.
7 Subsection 129AC(4)
Repeal the subsection, substitute:
Set‑off
(4) Despite any other provision of this Act, if:
(a) an amount (the recoverable amount) is recoverable from a person under subsection (1), (1A), (1C), (1E) or (1G); and
(b) an amount (the later amount) of benefit or payment later becomes payable to the person under this Act; and
(c) the person so agrees;
the Medicare Australia CEO may, on behalf of the Commonwealth, set off all or a part of the recoverable amount against all or a part of the later amount.
8 Application and saving
(1) Subsection 129AC(4) of the Health Insurance Act 1973 as amended by this Act applies in relation to amounts recoverable under subsection 129AC(1) of that Act before, on or after the commencement of this item.
(2) If a person’s agreement referred to in subsection 129AC(4) of the Health Insurance Act 1973 is in force, in relation to an amount, immediately before the commencement of this item, that agreement is taken to be in force for the purposes of:
(a) that amount; and
(b) that subsection as in force immediately after that commencement.
(3) Subitem (2) does not prevent the person withdrawing the agreement.
9 After section 129AE
Insert:
129AEA Liability for administrative penalty
Subsection 129AC(1) applies
(1) A person is liable for an administrative penalty in respect of a professional service rendered by, or on behalf of, the person if:
(a) the Medicare Australia CEO has served a notice on the person claiming an amount (the total amount) as a debt due to the Commonwealth under subsection 129AC(1); and
(b) the total amount consists of, or includes, an amount (the recoverable amount) in respect of the service; and
(c) no part of the total amount became due more than 2 years before the notice was served; and
(d) the total amount is more than:
(i) $2,500; or
(ii) if a higher amount is prescribed by the regulations—that higher amount.
Subsection 129AC(1A) or (1C) applies
(2) A person is liable for an administrative penalty in respect of a particular professional service if:
(a) a notice was given to the person under section 129AAD requiring the person to produce a document, extract or copy relevant to the particular professional service; and
(b) subsection 129AC(1A) or (1C) applies in respect of the person and the particular professional service; and
(c) if the notice specifies one or more other professional services—either or both of subsections 129AC(1A) and (1C) apply in respect of the person and any other professional service specified in the notice; and
(d) the sum of the amounts that may be recovered from the person under those subsections in respect of the particular professional service, and any other professional service specified in the notice, is more than:
(i) $2,500; or
(ii) if a higher amount is prescribed by the regulations—that higher amount; and
(e) the Medicare Australia CEO has served a notice on the person claiming as a debt due to the Commonwealth the amount (the recoverable amount) that may be recovered from the person under whichever of subsection 129AC(1A) or (1C) applies in respect of the person and the particular professional service.
Subsection 129AC(1E) applies
(3) A person (the practitioner) who rendered a particular professional service, or on whose behalf a particular professional service was rendered, is liable for an administrative penalty in respect of the service if:
(a) a notice was given to another person under section 129AAD requiring the person to produce a document, extract or copy relevant to the particular professional service; and
(b) subsection 129AC(1E) applies in respect of the practitioner and the particular professional service; and
(c) if the notice specifies one or more other professional services—subsection 129AC(1E) applies in respect of the practitioner and any other professional service specified in the notice; and
(d) the sum of the amounts that may be recovered from the practitioner under that subsection in respect of the particular professional service, and any other professional service specified in the notice, is more than:
(i) $2,500; or
(ii) if a higher amount is prescribed by the regulations—that higher amount; and
(e) the Medicare Australia CEO has served a notice on the practitioner claiming as a debt due to the Commonwealth the amount (the recoverable amount) that may be recovered from the practitioner under subsection 129AC(1E) in respect of the particular professional service.
129AEB Amount of administrative penalty
(1) The amount of the administrative penalty in respect of a professional service is worked out in accordance with this section.
Base penalty amount
(2) Subject to subsections (3), (4), (5) and (6), the amount (the base penalty amount) of the administrative penalty is 20% of whichever of the following applies in respect of the professional service:
(a) the recoverable amount referred to in paragraph 129AEA(1)(b);
(b) the recoverable amount referred to in paragraph 129AEA(2)(e);
(c) the recoverable amount referred to in paragraph 129AEA(3)(e).
Reductions in base penalty amount
(3) A person’s base penalty amount for a professional service is reduced in accordance with the table.
| Reductions in base penalty amount |
| Item | If ... | the base penalty amount is reduced by ... |
| 1 | before the Medicare Australia CEO contacts the person (whether by notice under section 129AAD or otherwise) about the professional service, the person voluntarily tells the CEO, or an employee of Medicare Australia, in the form approved in writing by the CEO, that an amount paid, purportedly by way of benefit or payment under this Act, in respect of the service exceeds the amount (if any) that should have been paid | 100% |
| 2 | (a) after the Medicare Australia CEO contacts the person about the service; and (b) before the CEO gives a notice to the person under section 129AAD that specifies the service; the person voluntarily tells the CEO, or an employee of Medicare Australia, in the form approved in writing by the CEO, that an amount paid, purportedly by way of benefit or payment under this Act, in respect of the service exceeds the amount (if any) that should have been paid | 50% |
| 3 | (a) after the Medicare Australia CEO gives a notice to the person under section 129AAD that specifies the service; and (b) before the end of the period specified in the notice; the person tells the CEO, or an employee of Medicare Australia, in the form approved in writing by the CEO, that an amount paid, purportedly by way of benefit or payment under this Act, in respect of the service exceeds the amount (if any) that should have been paid | 25% |
Increases in base penalty amount
(4) A person’s base penalty amount for a professional service is increased by 25% if:
(a) the Medicare Australia CEO gives a notice to the person under section 129AAD that specifies the service; and
(b) the person does not comply with the notice in respect of the service, or any other professional service specified in the notice, within the period specified in the notice.
(5) A person’s (the practitioner’s) base penalty amount for a professional service (the latest professional service) rendered by, or on behalf of, the practitioner is increased by 50% if:
(a) any of the following apply:
(i) the Medicare Australia CEO gives a notice to the practitioner under section 129AAD that specifies the latest professional service;
(ii) the CEO serves a notice on the practitioner claiming an amount as a debt due to the Commonwealth under subsection 129AC(1) and that amount consists of, or includes, an amount in respect of the latest professional service;
(iii) the CEO gives a notice to another person under section 129AAD that specifies the latest professional service; and
(b) any of the following apply:
(i) in the 24 months immediately before the notice is given or served, the CEO has given to the practitioner one or more other notices under section 129AAD specifying other professional services rendered by, or on behalf of, the practitioner;
(ii) in the 24 months immediately before the notice is given or served, the CEO has served on the practitioner one or more other notices claiming an amount as a debt due to the Commonwealth under subsection 129AC(1) consisting of, or including, other professional services rendered by, or on behalf of, the practitioner;
(iii) in the 24 months immediately before the notice is given or served, the CEO has given to another person one or more other notices under section 129AAD specifying other professional services that were rendered by, or on behalf of, the practitioner; and
(c) the total of:
(i) the sum of the recoverable amounts (see subsection (2)) in respect of each other professional service; and
(ii) the sum of the base penalty amounts for each other professional service as reduced or increased in accordance with this section (if relevant);
is more than:
(iii) $30,000; or
(iv) if a higher amount is prescribed by the regulations—that higher amount.
(6) If both subsections (4) and (5) apply in relation to a professional service, apply subsection (4) and then subsection (5). In applying subsection (5) in that case, the base penalty amount is that amount as increased under subsection (4).
Interaction between reduction and increase
(7) If a base penalty amount is subject to both a reduction and an increase, apply the reduction first.
129AEC Notice of administrative penalty
The Medicare Australia CEO must give to a person who is liable for an administrative penalty written notice of the following:
(a) the person’s liability to pay an administrative penalty in respect of one or more professional services;
(b) the professional service to which each administrative penalty relates;
(c) if there is more than one professional service—the total of the administrative penalties;
(d) the day by which the penalty becomes due for payment (which must be at least 14 days after the day on which the notice is given);
(e) the fact that the notice is given under this section.
The notice may also deal with a debt due to the Commonwealth under section 129AC arising in relation to the professional service.
10 Application
Sections 129AEA, 129AEB and 129AEC of the Health Insurance Act 1973 apply in respect of a professional service that is rendered on or after the commencement of those sections.