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News Bulletin : ADA News Bulletin May 2011
8 MAY 2011 The Health Insurance Amendment (Compliance) Bill 2010 (the Bill) was introduced into the Federal House of Representatives on 17 November 2010 and passed through the Senate on 21 March 2011. It will shortly receive Royal Assent. The Bill amends the Health Insurance Act 1973. It will impose some very strict time limitations for responses to demands that may be made by Medicare Australia. Medicare says the new legislation will provide it with the necessary powers to protect the integrity of the annual expenditure under the Medicare program. It creates a statutory frame work for the auditing of health professionals who provide services that attract a Medicare benefit. It will therefore apply to dentists who provide services under the Chronic Disease Dental Scheme (CDDS) and other Federal government schemes. The Bill will enable the Chief Executive Officer (CEO) of Medicare Australia to give a notice requiring the production of documents to a practitioner, or another person who has custody, control or possession of the documents, to substantiate a Medicare benefit paid for a service. The following is a summary of the key points in the Bill. It will: • Allow the CEO of Medicare to serve a Notice to Produce if the CEO has a 'reasonable concern' that a benefit has been paid that exceeds the amount that should have been paid. A 'reasonable concern' may relate to a particular practitioner or group of practitioners, or a particular service or group of services. This notice will require health professionals to produce documents to substantiate claims made under the Medicare program when provided with a notice by Medicare Australia. If you fail to comply with the Notice to Produce the benefits paid will become recoverable as a debt to the Commonwealth irrespective of whether a person received the benefit. A complete defence to the non-compliance is available if it can be established that the non- compliance was brought about by factors out of the control of the person. • Allow Medicare Australia to require the production of clinical records where it is necessary to substantiate a claim. The health professional may elect to provide the clinical record to a Medicare Australia medical adviser. • Require that notices to produce documents only relate to services that were rendered in the two year period immediately before the notice is provided and after the legislation takes effect. • Set timeframes for certain parts of the audit activity. For example Medicare Australia is required to give a health professional at least 21 days to respond to a notice to produce documents. • Give greater clarity and certainty to the audit process. • Require the CEO to take reasonable steps to consult with a relevant professional body about the types of documents required to substantiate a Medicare benefit before commencing a compliance audit. The Minister will, by legislative instrument, declare bodies to be relevant professional bodies for this purpose. • Require that Medicare Australia contact health professionals in writing at the beginning of an audit as well as advising health professionals in writing of the outcome when the audit has been finalised. • Prevent Medicare Australia from issuing a debt notice until 28 days after the health professional has been advised of the audit outcome. • Give health professionals 28 days in which to request an internal review of the audit outcome and allow the health professional to provide further information to substantiate the claims in that time. • Prevent Medicare Australia from using or providing information that is provided by a health professional in response to a notice to produce to the Director of the Professional Services Review or for any other criminal and civil proceedings. • Introduce a penalty system to encourage voluntary compliance and deter recidivism. The financial penalty will only apply to debts that exceed $2,500. This threshold reflects the point at which Medicare Australia data indicates that mistaken claims may become routine, or be reflective of poor administration or decision making. (If this threshold had been applied to audits conducted in 2009-10, 60% of practitioners who made incorrect claims would not have received a financial penalty.) • Provide: • A base penalty amount of 20% to be applied to all debts over $2,500. The base penalty amount can be reduced or increased according to circumstances described in the legislation. The reductions are intended to encourage greater voluntary compliance. • If a practitioner tells Medicare Australia that an incorrect amount has been paid for a service: -- prior to being contacted by the CEO, the penalty is reduced by 100%; -- before a notice to produce documents is issued, the penalty is reduced by 50%; -- after a notice to produce documents has been issued but before completion of the audit, the penalty is reduced by 25%. • On the other hand, if a practitioner: -- does not respond to a notice, the full amount of the services identified in the notice become repayable and the penalty is increased by 25%; or -- has been unable to substantiate an amount paid for other services in the previous 24 months, and the total they repaid was more than $30,000, the penalty for the current amount is increased by 50%. Medicare Australia has advised it will provide more detailed information to health professionals about the requirements and obligations of the new law in the near future. It will also provide a dedicated email address for health professionals to ask us about the new law. Contact details will be provided with the information pack to health professionals. Robert Boyd-Boland Chief Executive Officer April 2011 HEALTH INSURANCE AMENDMENT (Compliance) Bill 2010
ADA News Bulletin April 2011
ADA News Bulletin June 2011