Federal Register of Legislation - Australian Government

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Premium Support Scheme Amendment 2013

Authoritative Version
Schemes as made
This scheme simplifies the method for calculating the administration fee payable to contracted medical indemnity insurers, remove redundant provisions relating to UMP support payments and medical practitioner risk management activities and allow for 'responsible officers' to replace 'authorised officers'.
Administered by: Health
Registered 01 Jul 2013
Tabling HistoryDate
Tabled HR12-Nov-2013
Tabled Senate12-Nov-2013

EXPLANATORY STATEMENT

 

Issued by the Authority of the Minister for Health

 

Medical Indemnity Act 2002

 

Premium Support Scheme Amendment 2013

 

The Premium Support Scheme Amendment 2013 (Scheme Amendment) amends the Premium Support Scheme 2004 (Scheme) formulated by the Minister for Health and Ageing under subsection 43(1) of the Medical Indemnity Act 2002.

 

The objective of the Scheme is to help ensure the continued availability of medical services in Australia by providing assistance to eligible medical practitioners, via their insurers or medical defence organisations (MDOs), with the cost of obtaining appropriate medical indemnity cover.

 

The Scheme provides for the making of subsidy payments to contracted medical indemnity insurers or MDOs by the Commonwealth on behalf of medical practitioners, where those insurers and MDOs agree to administer the Scheme on behalf of the Commonwealth.  The Scheme also provides for payment of an administration fee to contracted medical indemnity insurers and MDOs to help them meet the cost of administering the Scheme on behalf of the Commonwealth.

 

The objectives of the Scheme Amendment are:

-   to simplify and streamline the method for calculating the administration fee;

-   to remove the requirement under the Scheme for contractors to submit an application in an approved form for payment of an administration fee that includes, for some contractors, an estimate of their administration fee;

-   to remove redundant references to UMP support payments and requirements for participation in risk management activities;

-   to clarify drafting of references to Medicare items in or taken as being in the general medical services table made under the Health Insurance Act 1973.

 

The Scheme Amendment is a legislative instrument for the purposes of the Legislative Instruments Act 2003

 

The Scheme Amendment will commence on 1 July 2013.  

 

Consultation

 

In developing the Scheme Amendment, the Department of Health and Ageing met with all contracted medical indemnity insurers and the Department of Human Services, and corresponded with the Australian Medical Association.  

 


 

ATTACHMENT

 

Notes on sections and amendments

 

Part 1                  Preliminary

 

Section 1 - Name of Instrument

 

This section provides that the name of the Scheme Amendment is the Premium Support Scheme Amendment 2013.

 

Section 2 - Commencement

 

This section provides that the Scheme Amendment will commence on 1 July 2013.

 

Section 3 – Authority

 

This section provides that the Scheme Amendment is made under the Medical Indemnity Act 2002

 

Section 4 – Schedule(s)

 

This section provides for the amendment of the instruments mentioned in the Schedule in accordance with the items in the Schedule.  The Schedule mentions the Premium Support Scheme 2004 (the Scheme).

 

Schedule 1 Amendments

 

Part 1 – Amendments

 

Item 1, 3, 4, 7, 8, 9, 10, 13 and 14

 

Items 1, 3, 4, 7, 8, 9, 10, 13 and 14 repeal provisions of the Scheme which refer to the UMP support scheme and cross-references to those provisions.  The UMP support scheme ceased a number of years ago and references to it are no longer relevant for the Scheme. 

 

Item 2

 

Item 2 replaces the reference to “an authorised officer under the MISS” with a reference to “a responsible officer” (see item 20) in paragraph 12(2)(b) of the Scheme. 

 

Items 5 and 6

 

Item 6 repeals paragraph 13(1)(g) of the Scheme which relates to contractors’ members participating in risk management activities.  Given the requirement in the National Law under the National Registration and Accreditation Scheme for all registered medical practitioners to participate in continuing professional development, participation in risk management activities is no longer relevant as a compulsory requirement for members’ eligibility for the Scheme. 

 

Item 5 makes a minor amendment to paragraph 13(1)(f) of the Scheme, which is necessary as a result of the deletion of paragraph 13(1)(g). 

 

Item 11

 

This item substitutes a new Part 8 of the Scheme.

 

New section 41 provides that a contractor is eligible to be paid an administration fee calculated in accordance with section 43 if the contractor complies with conditions for payment in the Scheme and its contract with the Commonwealth. 

 

The requirement for contractors to submit an application in an approved form to be eligible for payment has been removed from section 41 (leading consequentially to the removal of section 42 of the Scheme).  Contractors remain required under their agreement with the Commonwealth to submit an invoice in respect of the administration fee.

 

New section 43 sets out a revised method for calculating the administration fee.  New subsection 43(1) provides that the administration fee payable to a contractor for the 2013 / 2014 financial year is the sum of:

 

-   the base fee; and

-   an additional amount, determined to be reasonable by a responsible officer, which takes into account the proportion of all privately insured medical practitioners insured by the contractor.

 

The “base fee” is a fee of $250,000 in respect of the contractor meeting its obligations under the Scheme (see item 19).

 

By including a base fee component in the administration fee calculation, new subsection 43(1) allows for smaller insurers, whose relative administration costs per practitioner are higher due to the unavailability of economies of scale, to be treated more equitably. 

 

By also including a component in the administration fee calculation that takes into account the number of the contractor’s members, new subsection 43(1) allows for larger insurers to receive a higher additional amount than smaller insurers to account for the increased amount of work associated with administering the Scheme for a larger number of members. 

 

New subsection 43(2) provides that the administration fee will be indexed annually by an amount determined by a responsible officer, having regard to indices in respect of the relevant financial year that are provided by to the Department by the Department of Finance and Deregulation for the purposes of funding increases.  Contractors’ relative share of the total number of privately insured practitioners has stabilised in recent years and any annual movement is likely to be relatively insignificant.  Accordingly, this subsection aims to simplify the method by which administration fees are calculated each year and to enable insurers to predict with some certainty the fee that they will be entitled to receive in future years. 

 

New subsection 43(6) clarifies that where a medical indemnity insurer and an associated MDO are both party to the same contract with the Commonwealth, for the purpose of calculating the administration fee the insurer is taken to be the only contractor.  However, where an MDO provides administration services for the purposes of the Scheme insurers are, in accordance with the contract, able to direct a portion of the administration fee be paid to the MDO. 

 

Section 44 provides that where a responsible officer determines the amount of the additional fee payable in respect of a contractor under paragraph 43(1)(b), the officer must notify this amount to the Chief Executive Medicare as soon as practicable. 

 

Section 45 provides that the Chief Executive Medicare must pay the administration fee calculated in accordance with Part 8 of the Scheme to contractors in accordance with the timeframe set out in the contract between the Commonwealth and the contractor. 

 

Section 46, which deals with the recovery of administration fee paid where it is later determined that the contractor has not complied with conditions for payment, is unchanged other than reference to an “authorised officer” being replaced with reference to a “responsible officer” (see item 20). 

 

Items 12, 15 and 16

 

Items 12, 15 and 16 amend section 47 of the Scheme which provides for internal review of certain decisions taken under the Scheme and for review by the Administrative Appeals Tribunal of internal review decisions. 

 

The Scheme previously allowed for review of decisions by “authorised officers” made under Part 8 of the Scheme.  Item 12 substitutes reference to review of decisions under Part 8 made by “responsible officers”. 

 

Item 15 repeals paragraph 47(3)(b) of the Scheme, which provided for internal review of certain decisions by “authorised officers” or by the Chief Executive Medicare, and substitutes new paragraphs 47(3)(b) and (c).  These paragraphs provide that relevant decisions made by the Chief Executive Medicare or a responsible officer at the level of an Assistant Secretary in the Department may be initially reviewed by a responsible officer at the level of a First Assistant Secretary, and relevant decisions made by a responsible officer at the level of a First Assistant Secretary may be reviewed by a Deputy Secretary of the Department.

 

Item 16 substitutes existing subsection 47(4) with a new subsection 47(4) which no longer contains a reference to “an officer of the Department”.  This reference is no longer relevant as a result of the amendments to subsection 47(3).

 

Item 17

 

Item 17 substitutes the reference to an “authorised officer” in section 48 with a reference to a “responsible officer”.  Section 48 specifies the types of information to which the Chief Executive Medicare or a responsible officer may have regard when assessing whether a contractor is eligible for an administration fee or whether a member of an insurer is an eligible member for the purposes of the Scheme, or the amount of any administration fee or subsidy payable.

 

Item 18

 

This item repeals the definition of “authorised officer” as this term is no longer used  in the Scheme, being replaced by the concept of a “responsible officer” (see item 20).. 

 

Item 19

 

This item inserts a definition of the term “base fee” which is used in new paragraph 43(1)(a).  The base fee is a fee of $250,000 paid to a contractor in respect of the contractor meeting its obligations under the Scheme.

 

Item 20

 

This item inserts a new definition of “responsible officer” into section 52 of the Scheme.  A responsible officer is a person who holds or occupies the position of:

 

-     the Assistant Secretary of the Branch of the Department of Health and Ageing for the time being responsible for administering the Scheme; or

-     the First Assistant Secretary of the Division of the Department of Health and Ageing responsible for the time being for administering the Scheme.

 

These positions are currently held by the Assistant Secretary of the Medicare Financing and Listing Branch and the First Assistant Secretary of the Medical Benefits Division.

 

Item 21

 

This item repeals the definition of “UMP support payment” as this term is no longer used in the Scheme. 

 

Items 22 and 23

 

These items amends the definition of “non-therapeutic cosmetic procedure” (item 22) and “procedural general practitioner” (item 23) to refer to health services specified in a determination made under subsection 3C(1) of the Health Insurance Act 1973 as well as professional services mentioned in the general medical services table under the Health Insurance Act 1973.  

 

Subsection 3C(1) of the Health Insurance Act 1973 allows the Minister to determine that particular items of health services not in the general medical services table are to be treated as if they were professional services and in the table for the purposes of the Health Insurance Act 1973 and National Health Act 1953

 

Part 2 – Transitional provisions

 

Item 24 is a transitional provision to ensure that the change of reference from “authorised officer” to “responsible officer” and removal of reference to the UMP scheme will not affect any existing review rights under section 47 of the Scheme.

 


Statement of compatibility with human rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Premium Support Scheme Amendment 2013

 

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Premium Support Scheme Amendment 2013 (Scheme Amendment) amends the Premium Support Scheme 2004 (Scheme) formulated by the Minister for Health and Ageing under subsection 43(1) of the Medical Indemnity Act 2002.

 

The objective of the Scheme is to help ensure the continued availability of medical services in Australia by providing assistance to eligible medical practitioners, via their insurers or medical defence organisations (MDOs), with the cost of obtaining appropriate medical indemnity cover.

 

The Scheme provides for the making of subsidy payments to contracted medical indemnity insurers or MDOs by the Commonwealth on behalf of medical practitioners, where those insurers and MDOs agree to administer the Scheme on behalf of the Commonwealth.  The Scheme also provides for payment of an administration fee to contracted medical indemnity insurers and MDOs to help them meet the cost of administering the Scheme on behalf of the Commonwealth.

 

The objectives of the Scheme Amendment are:

-   to simplify and streamline the method for calculating the administration fee payable to contractors under the Scheme: the fee for the 2013-2014 financial year is based on a base fee payable to all contractors and an additional amount determined by a responsible officer within the Department having regard to the proportion of all privately insured medical practitioners insured by the contractor, with fees for subsequent financial years indexed from the 2013-2014 amount;

-   to remove the requirement that contractors submit an application for payment of an administration fee in a form approved by the Secretary including, for some contractors, an estimate of their administration fee;

-   to remove redundant references to payments under the UMP scheme, which ceased several years ago;

-   to remove redundant requirements for practitioners to participate in risk management activities in order to be eligible for subsidies to be paid in their respect under the Scheme;  

-   to update references from an ‘authorised officer’ within the Department to a ‘responsible officer’, being either the Assistant Secretary or First Assistant Secretary of the area of the Department responsible for administering the Scheme;

-   to clarify drafting of references to Medicare items in or taken as being in the general medical services table made under the Health Insurance Act 1973 in two definitions applicable to the Scheme;

-   to include transitional provisions ensuring that medical practitioners and contractors affected by decisions taken by ‘authorised officers’ prior to the amendment to ‘responsible officers’ can still access review rights given under the Scheme following the amendment.

Human rights implications

The major changes made by the Scheme Amendment are to adjust the administration fee payable to contracted insurers and medical defence organisations in respect of their administrative costs incurred in administering the Premium Support Scheme and to remove redundant references to the ceased UMP scheme.  These changes do not affect the ability of medical practitioners to access Commonwealth subsidies for their medical indemnity insurance the Premium Support Scheme and hence will not affect the level of medical care available to patients across Australia.

The Scheme Amendment also alters references from ‘authorised officers’ to ‘responsible officers’ for the purpose of administrative ease.  However, transitional provisions have been included to ensure that medical practitioners or contractors affected by decisions made by authorised officers will not be prevented by the change from accessing any review rights available to them under the Scheme (including review by the Administrative Appeals Tribunal, following internal review). 

The removal of the requirement for medical practitioners to participate in risk management activities in order to be eligible for the Scheme removes an unnecessary administrative burden on practitioners, as the introduction of the National Law made under the National Registration and Accreditation Scheme in 2010 now requires all registered practitioners to participate in continuing professional development activities to be eligible for registration renewal.

The Scheme Amendment does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

The Hon Tanya Pilbersek MP, Minister for Health