Commonwealth of Australia Explanatory Memoranda

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HEALTH AND OTHER SERVICES (COMPENSATION) AMENDMENT BILL 2006

                            2004-2005-2006




  THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                  HOUSE OF REPRESENTATIVES




HEALTH AND OTHER SERVICES (COMPENSATION) AMENDMENT
                      BILL 2006




                 EXPLANATORY MEMORANDUM




     (Circulated by authority of the Minister for Health and Ageing,
                   the Honourable Tony Abbott MP)
    HEALTH AND OTHER SERVICES (COMPENSATION) AMENDMENT
                          BILL 2006

OUTLINE

This Bill proposes amendments to the Health and Other Services (Compensation) Act
1995.

The Health and Other Services (Compensation) Act 1995 (HOSC Act) provides for
the recovery of monies by the Commonwealth that have been paid to claimants as
Medicare, nursing home or residential care benefits, once those claimants have
received a judgment or settlement in respect of their compensation claim. The
Commonwealth payments are usually made to cover medical, nursing home or
residential care expenses directly related to an injury for which a claimant has been
granted compensation. Once the claim is settled, the claimant has a responsibility
under the HOSC Act to repay the Commonwealth any money paid on his or her
behalf prior to the judgement or settlement for any Medicare, nursing home or
residential care expenses.

The purpose of the Bill is to:

·   Repeal paragraph 4(2)(d) of the HOSC Act to clarify that all claims under the
    definition of compensation are covered, including those involving a fatal
    injury/disease. This will clarify that all compensation claims which include past
    Medicare costs and any nursing home or residential care costs which involved
    fatal injury/disease are covered under the definition of compensation. Recently
    claimants with past Medicare costs have argued that where they have a long term
    but medically fatal illness that this provision excludes them from refunding under
    the HOSC Act. This is not legally correct and such claimants are currently
    required to comply with the HOSC Act. The HOSC Act is legislated to cover
    deceased estates to enable recovery under the Act where the estate receives a
    compensation settlement or judgment which includes compensation received for
    Medicare, nursing home and residential care expenses. This amendment will
    remove any perceived inconsistency in the Act.

·   Remove superseded wording in paragraph 17(6)(a) so that the provision refers to
    the date of "injury" for compensation and not the date of "claim" for
    compensation. This aligns paragraph 17(6)(a) with paragraph 23(3)(b) which uses
    the date of injury as a trigger for recovery action. This allows Medicare Australia
    a 60 day period to provide a history statement if the date of injury was greater
    than five years old. Access to records by Medicare Australia which are over five
    years old, involve a greater retrieval period as these type of archival records are
    held by the Department of Health and Ageing as required under guidelines issued
    by the Privacy Commissioner.

·   Provide a formal pathway under section 18 for internal review of Medicare
    Australia's refusal to give a notice under sub-section (7). An informal review
    within Medicare Australia currently operates but requires legislative support. As
    there is no formal internal review a person can at first instance go directly to the


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    Administrative Appeals Tribunal (AAT). In a large number of cases the informal
    review does resolve the matter without the costs or administrative delays involved
    in AAT review. Once the internal review mechanism is part of the legislation a
    claimant will be required to await the internal review outcome before formally
    being able to initiate AAT review. This will avoid the initiation of what have been
    unnecessary AAT applications for review in the past.

·   Repeal section 33AA which activates a sunset provision on 1 July 2006.
    Presently compensation payers and insurers have the ability to utilize the
    Advanced Payment Option (APO). The APO allows compensation payers and
    insurers to pay 10 per cent of the judgment or settlement to Medicare Australia to
    cover the Commonwealth debt, allowing claimants immediate access to the
    remaining 90 per cent of their money. This facility will cease on 1 July 2006 if
    the sunset clause is not repealed. Currently, over eighty per cent of the 50,000
    judgment or settlements recorded per annum under the HOSC Act are finalized
    using the APO pathway. The purpose of the proposed repeal made under section
    33AA of the HOSC Act is to allow for a continuation of the Advanced Payment
    Option in respect of judgments or settlements made on or after 1 July 2006.

·   Provide consistency in the Act in paragraph 33(1)(d), regarding a "small amount"
    as being equal to or less than $5,000. There has been confusion relating to
    whether $5,000 was caught or whether the value had to be $5,000.01 before being
    caught under the HOSC Act. It was always the intention that a value over $5,000
    was the trigger for compliance, in line with the definition of a "small amount" in
    the HOSC Act.


FINANCIAL IMPACT STATEMENT

There are no financial implications for these proposed amendments.




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   HEALTH AND OTHER SERVICES (COMPENSATION) AMENDMENT
                         BILL 2006

NOTES ON CLAUSES

Clause 1 ­ Short title

Clause 1 provides for the Act to be cited as the Health and Other Services
(Compensation) Amendment Act 2006.

Clause 2 ­ Commencement

Provides that the Act commences on the day on which it receives the Royal Assent.

Clause 3 ­ Schedule(s)

Clause 3 ensures that the amendments, repeals and items in the Schedule can take
effect.

SCHEDULE 1 ­ AMENDMENTS


Item 1

Repeals paragraph 4(2)(d). The removal of the clause leaves no doubt as to the
obligation of compensation payers and insurers to repay the Commonwealth if
Medicare, nursing home or residential care expenses have been incurred.

Item 2

Omits the wording in Paragraph 17(6)(a) "claim for compensation was made more
than 5 years before the request" and substitutes "date on which the claimant suffered
the injury is more than 5 years before the request was made." This aligns the wording
in paragraph 17(6)(a) with the obligations set out in section 23(3)(b).

Item 3

Provides for commencement of the amendment to Subsection 17(6)(a) to apply to
requests made on or after the commencement of Item 2.




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Item 4

Inserts an additional subparagraph (9A) after subsection 18(9) titled "Review of
decision to refuse to give notice". The new subparagraph allows for the Chief
Executive Officer (CEO) of Medicare Australia to reconsider an earlier decision to
refuse to give a notice under subsection (7) regarding the amount payable for
professional services. Subparagraph (9B) requires the application for review to be
lodged within 28 days from the date of notification. Subparagraph (9C) provides that
the reconsideration must be undertaken by the Medicare Australia CEO or a delegate
of the Medicare Australia CEO. Subparagraph (9D) provides that the reconsideration
must not be reconsidered by the same person. Subparagraph (9E) provides for the
reconsideration to be within 28 days of the application for reconsideration.

Item 5

Repeals subsection 18(10) and substitutes new 18(10) with the wording "If a decision
has been internally reconsidered, application may be made to the Administrative
Appeals Tribunal for review of the decision." This subsection allows for access to the
Administrative Appeals Tribunal after the reconsideration by the CEO or delegate
where previously access was available directly to the Administrative Appeals
Tribunal without any reconsideration of the earlier decision.

Item 6

Repeals section 33AA. The repeal of section 33AA allows for compensation payers
and insurers to continue to utilise the Advanced Payment Option enabling
compensation claimants to have access to the majority proportion of compensation
money at the time of their judgment or settlement.

Item 7

Omits the words "less than $5,000 or such other amount as the Minister determines,"
and substitutes "a small amount." This clarifies the reference to a "small amount" as
that which is currently specified under the existing subsection 38, definition of a
"small amount".

Item 8

Provides a Note for "small amount" to be referenced at section 38.




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