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News Bulletin : ADA News Bulletin December 2011
26 DECEMBER 2011 • a person who exercises control or direction over a person specified above in the second person's capacity as specified; and • a person is a provider if the person is a provider of any kind of diagnostic imaging service. PERSONS CONNECTED The obligations extend not only to the provider and requester but also to persons who are "connected" to a provider or requester. Section 23DZZIJ states that a person is connected to another person if (amongst other matters): • the first person is a relative of the other person; or • both of the following apply: (a) The first person is a body corporate; (b) The other person is a director, secretary, chief executive officer or any other executive officer of that body corporate; or • Both of the following apply: (a) The other person is a body corporate; (b) The first person is a director, secretary, chief executive office or any other executive officer of that body corporate; or • Both of the following apply: (a) The first person is a body corporate; (b) The other person is a body corporate that is related to that body corporate. There are similar arrangements in relation to trusts/beneficiaries and partnerships or employment/engagement. Whether or not a body corporate is related to another body corporate is to be determined in the same manner as under the Corporations Act 2001 (Commonwealth). If a person who is connected to a provider/requester (e.g. a spouse) and provides a threat/asks for a benefit in relation to a prohibited benefit, then the penalty does not occur if the provider/ requester reports the threat/benefit to Medicare Australia within 30 days of becoming first aware of the threat. PERMITTED BENEFITS The legislation allows for permitted benefits in certain circumstances. Section 23DZZIF defines "permitted benefits". These include: • Sharing profits of a pathology or diagnostic imaging business if the dividend is proportionate to the beneficiary's interest in the business; • Remuneration (whether salary, wages, commission, allowance or bonuses) provided that the amount of remuneration is not substantially different from the usual remuneration paid to persons engaged in similar employment or under similar contract; • A payment for property, goods or services that are shared, where the amount of the benefit is proportionate to the person's share of the cost of the properly, goods or services; • Making or accepting payment for property, goods or services that are not shared between the requester and the provider at market value; • The provision of pathology or diagnostic imaging consumables approved by Ministerial Determination. Even if a benefit is included in the list of permitted benefits, it will not be permitted if the benefit is related to the number, kind or value of the requests for pathology services or diagnostic imaging services made by the requester. The Amendment Act also prohibits the provision of staff and equipment at the requester's premises for the purposes of providing pathology or diagnostic imaging services. EXAMPLES OF PERMITTED BENEFITS The Permitted Benefits Determinations specify some useful permitted benefits. • Educational material about diagnostic imaging, including material that may be given to patients; • Education sessions on diagnostic imaging that meets specified requirements. LEASE ARRANGEMENTS Dental practices who have leases with diagnostic imaging providers will need to review the terms of the leases to ensure that the rental is market rental (the meaning of market rental is discussed below). CIVIL PENALTIES The Civil penalties for: • an individual -- is 600 penalty units (currently $66,000); and • a corporation -- is 6,000 penalty units (currently $660,000). Further, a breach of this legislation can result to referral to a Medicare Participation Review Committee and possibly loss of access to Medicare. CRIMINAL PROSECUTION It will be a criminal offence to ask for, accept, offer, or to provide a benefit, or make a threat that is intended to induce requests to a particular provider. The penalty for a criminal offence can be imprisonment for five years. PERSONAL LIABILITY AND RESPONSIBILITIES OF EXECUTIVE OFFICERS An executive officer of a body corporate might contravene a civil penalty provision under the legislation if the body corporate contravenes a civil penalty provision. An executive officer of a corporation contravenes the legislation if: • The body corporate contravenes the legislation; • The executive officer knew that the contravention would occur; • The executive officer was in a position to influence the conduct of the body in relation to the contravention; and • The executive officer failed to take all reasonable steps to prevent the contravention. Executive officers of a body corporate should take reasonable steps to prevent the commission of an offence under the Act (this will be taken into consideration in connection with any prosecution of an offence). Therefore, for corporate governance reasons, we recommend that you issue an instruction to your managers in relation to the legislation. This can include providing to your executive managers a copy of this article. AIDING AND ABETTING The Act also prohibits persons from aiding, abetting, counselling or procuring the contravention of the Act. DOES THE ACT APPLY TO PUBLIC SECTOR HEALTHCARE PROVIDERS? The Act does not apply to the provision of pathology and diagnostic imaging services which are not funded through Medicare. However, the Act is stated to bind the Crown. Whilst no penalties will be imposed against the Crown, injunctive relief may be available.
ADA News Bulletin November 2011
ADA News Bulletin February 2012