HEALTH INSURANCE AMENDMENT (PROFESSIONAL SERVICES REVIEW) BILL 2012 Explanatory Memorandum

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HEALTH INSURANCE AMENDMENT (PROFESSIONAL SERVICES REVIEW) BILL 2012

2010-2011-2012 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES Health Insurance Amendment (Professional Services Review) Bill 2012 EXPLANATORY MEMORANDUM (Circulated by authority of the Minister for Health, the Hon Tanya Plibersek MP )

Health Insurance Amendment (Professional Services Review) Bill 2012 OUTLINE The majority of the items in this Bill make amendments to the provisions for the Professional Services Review (PSR) Scheme and the Medicare Participation Review Committee process (MPRC) in Parts VAA and VB of the Health Insurance Act 1973 (the HIA). The PSR Scheme is a peer review process for investigating whether a practitioner has engaged in inappropriate practice in the provision of services under the Medicare Benefits Scheme (MBS) or Pharmaceutical Benefits Scheme (PBS). Practitioners who are found to have engaged in inappropriate practice may be reprimanded, counselled and/or disqualified from providing these services for up to three years. An MPRC is an independent statutory committee that makes determinations about whether certain practitioners should maintain the right to participate in Medicare. At present, a practitioner must be referred to an MPRC if they have committed a relevant civil or criminal offence, or been found to have engaged in inappropriate practice on two or more occasions. The proposed amendments do not alter the purpose of the PSR Scheme or the MPRC process. These amendments improve administration, clarify issues raised in recent court decisions and address evidentiary matters. The Bill also includes provisions directed at addressing issues raised in the Full Federal Court's decision in Kutlu v Director of Professional Services Review [2011] FCAFC 94 (Kutlu). In Kutlu the Full Federal Court held that failing to consult the Australian Medical Association (AMA) as required by subsections 84(3) and 85(3) of the HIA invalidated a number of appointments of PSR Panel members and Deputy Directors of PSR and all PSR processes involving the invalidly appointed Panel members and Deputy Directors. The Bill addresses issues raised by Kutlu by ensuring that actions taken under Part VAA, VB or VII of the HIA and any flow on acts that have been brought into question as a result of the Kutlu decision, are treated as valid and effective and are to be taken always to have been valid and effective. The Bill also provides the power for the Director of PSR to re-refer cases to a new Committee if the person under review has successfully challenged a PSR process on the grounds that, or on grounds that include the ground that, a person was not validly appointed as a Panel member or Deputy Director. This is a limited power that will only be able to be used by the Director in relation to PSR processes that commenced under Part VAA of the HIA before the relevant item of the Bill commences (i.e. before Royal Assent). To allow for this re-referral to happen, the Bill enables the 1

Director of PSR to set up a new PSR Committee and make a fresh referral to that Committee, despite the fact that the 12 month time limit that the Director has under section 94 of the HIA to refer a matter to a Committee may have expired. The Bill includes a `just terms' compensation provision that ensures that if a person's property rights are acquired by the Commonwealth due to the operation of these validating provisions, other than on just terms, then a reasonable amount of compensation is payable to that person. The items of the Bill that amend the provisions of the PSR Scheme and the MPRC process are outlined below. The Bill addresses issues raised by the Federal Court in 2003 in the case of Daniel v Health Insurance Commission and Others [2003] FCA 772 (Daniel) by requiring the Chief Executive Medicare (the Chief Executive) to request a review by the Director of PSR, if the Chief Executive becomes aware of a `prescribed pattern of services'. This amendment provides that a `prescribed pattern of services' may be the sole reason for the Chief Executive's request. This request must be made because a `prescribed pattern of services' is deemed to be inappropriate practice, unless a PSR Committee is satisfied that exceptional circumstances exist. The final determination that a `prescribed pattern of services' constitutes inappropriate practice can only be made under the PSR Scheme. It is not a decision that can be taken by the Chief Executive. The Bill contains proposed amendments that arose from recommendations of the Review of the Professional Services Review Scheme - Report of the Steering Committee - May 2007 (the Review). The Review was undertaken by a Steering Committee comprising the Department of Health and Ageing, the former Medicare Australia (which is now part of the Department of Human Services) and the AMA (the Review Committee). Over 70 organisations representing medical and allied health practitioners, medical boards, medical defence organisations, health complaints organisations and consumers were consulted during the Review. At present the PSR Scheme and the MPRC process apply only to medical practitioners, dentists, chiropractors, physiotherapists, podiatrists, optometrists, midwives, nurse practitioners and osteopaths who provide services under Medicare and the PBS. In the 2011 calendar year, practitioners not covered by PSR and MPRC arrangements, provided over 4 million services at a cost to Medicare of $383 million. These practitioners include audiologists; diabetes educators; dieticians; exercise physiologists; mental health nurses; occupational therapists; psychologists; social workers and speech pathologists. The Bill provides for a determination to be made that a health professional is a practitioner for the purposes of the PSR Scheme and the MPRC process. This will 2

enable the PSR Scheme and the MPRC process to be applied to allied health professionals who provide Medicare services. The Bill gives effect to Recommendation 9 of the Review Committee by removing the requirement for the Director of PSR to refer practitioners, who have been found to have engaged in inappropriate practice on two or more occasions, to the Chairperson of MPRCs. The Bill provides for the Director of PSR and the Determining Authority to apply a disqualification period of up to five years to those practitioners. This is equivalent to the sanction available to a MPRC. This change clearly separates the review of inappropriate practice under a PSR process, from the review of a practitioner by an MPRC because they have committed a civil or criminal offence. It also means that these practitioners will not have to undergo a further administrative review, after the completion of the PSR Scheme process. The Bill provides for improvements to streamline the administration of the Scheme related to Recommendation 4 of the Review Committee by: · providing an extension of time for a PSR Committee or the Determining Authority process in some circumstances, such as where a person is unable to participate in the process due to illness; · providing for a PSR Committee or the Determining Authority to take no further action in some circumstances, such as where the person dies; and · providing for a final determination to take effect 7 days after the day on which an appeal is withdrawn or discontinued by the person; The Bill includes amendments to the PSR Scheme's public-protective function. If the conduct of a person under review poses a threat to patient life or health, the Director must contact the relevant body. That is, the body in each State or Territory that is authorised to recall patients for independent medical review, such as the Chief Medical Officer. The Bill also requires the Director to notify the relevant registration body. The relevant bodies will be specified in Regulations after consultation with stakeholders. The Bill makes a number of other minor administrative changes to the Scheme. These are: · clarifying that Medicare services which are requested, may be reviewed by PSR, whether or not they have been rendered; · authorising the Director of PSR to give information about a person to the Determining Authority, on one occasion, up until the Authority makes its draft determination; · protecting patients by requiring persons who are disqualified due to a PSR or MPRC process to display a notice to inform patients that services will not attract Medicare benefits; and 3

· amending certain provisions to clarify that the instrument referred to in those provisions is a legislative instrument under the Legislative Instruments Act 2003. The Bill contains one amendment that will improve the operation of the HIA by enabling the current Regulations applying to referrals to consultant physicians and specialists to be expanded. It amends section 133(2) of the HIA which currently provides for Regulations to be made in relation to referrals to consultant physicians and specialists. Over the last decade a broad range of health practitioners have become able to provide Medicare services. The Bill provides for Regulations to be made to prescribe the manner in which patients are referred for a Medicare service by a referring practitioner to another practitioner. This change will enable the current Regulations applying to referrals to consultant physicians and specialists to be expanded so that they apply to any referral made for a Medicare service. The provisions in this Bill will ensure that the PSR Scheme continues to operate effectively to prevent Commonwealth funds being paid for services provided by practitioners who engage in inappropriate practice. Financial Impact Statement These amendments have no financial implications. 4

Statement of Compatibility with Human Rights Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Health Insurance Amendment (Professional Services Review) Bill 2012 This Bill 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 Bill This Bill makes amendments to the provisions for the Professional Services Review (PSR) Scheme and the Medicare Participation Review Committee (MPRC) in the Health Insurance Act 1973 (the Act). These amendments improve administration, clarify issues raised in court decisions and address evidentiary matters by: · implementing the recommendations of the 2007 review of the PSR Scheme; · addressing issues raised by the Federal Court in 2003 in the case of Daniel v Health Insurance Commission and Others [2003] FCA 772; · making a number of other minor administrative changes to the Scheme; and · introduces retrospective amendments in response to the Full Federal Court's decision in Kutlu v Director of Professional Services Review [2011] FCAFC 94 that will preserve the effect of actions taken under Part VAA, VB and VII of the Act that have been brought into question as a result of this decision. PSR Scheme and PSR Committees The PSR Scheme is established by Part VAA of the Act to review the provision of services for which Medicare benefits have been paid or are payable. It is the only mechanism available to the Commonwealth to ensure that medical services subsidised under the Medical Benefits Scheme ('MBS') and medicines subsidised under the Pharmaceutical Benefits Scheme ('PBS') are clinically relevant and appropriate. The role of PSR Committees under Part VAA of the Act is to investigate the conduct of persons under review ('PUR') who are predominantly medical practitioners and render a finding as to whether the conduct constitutes inappropriate practice. Human rights implications The right to health The right to the highest attainable standard of physical and mental health is protected by Article 12(1) of the International Covenant on Economic Social and Cultural Rights (ICESCR). The object of the PSR Scheme, outlined in section 79A of the Act, is to protect patients and the community in general from the risks associated with inappropriate practice and to protect the Commonwealth from having to meet the cost 5

of services provided as a result of this inappropriate practice. The PSR Scheme investigates the provision of services by a practitioner to determine whether the practitioner has engaged in inappropriate practice in providing Medicare services or in prescribing under the PBS). As the primary mechanism for monitoring the clinical relevance of professional services provided under the Medicare scheme, PSR Committees perform a public health role when undertaking reviews of practitioners. If a PSR Committee identifies public health and safety issues in the course of their deliberations, they may either expressly address those issues in their findings or, if a case arises involving a significant threat to the life or health of any other person, a PSR Committee must refer their concerns, through the Director of PSR, to an appropriate regulatory body (see section 106XA of the Act). This process may lead to the identification of conduct that may not otherwise be brought to the attention of the appropriate regulatory body. The amendments in Schedule 1 of the Act are aimed at ensuring that, other than for matters currently before the High Court, the appointment of and decisions made, by PSR Panel members and Deputy Directors are and always have been valid and effective. By ensuring these actions are valid, the Bill protects the right of individuals to the highest attainable standard of health service by ensuring the provision of Commonwealth-funded health services is appropriate. The amendments further aim to ensure that action taken to protect public health may be relied on. The Schedule 2 amendments in the PSR Bill are aimed at strengthening and clarifying the administration of the PSR Scheme to ensure the community is protected from the risks of inappropriate practice. For example, the amendments to section 106XA of the Act strengthen the provisions that are engaged when there is, or believed to be, a significant threat to a patient's life or health. This amendment will ensure the patient's right to health is protected. The right to life The right to life is enshrined in Article 6 of the International Covenant on Civil and Political Rights (ICCPR). The PSR Bill protects the right to life as it ensures that where there is a significant threat to life or health that becomes evident through the PSR process, the appropriate bodies, such as a State or Territory body responsible for the protection of public health and safety (for example, a State or Territory Health Department, Chief Medical Officer or Health Care Complaints Commission) must be notified. Retrospective validation of decisions Generally, retrospective validation provisions will be compatible with human rights provided that the provisions do not operate to the disadvantage of a person by adversely affecting his/her rights or liabilities. For example, no human rights objections will be raised where the retrospective provisions simply recreate the rights and liabilities in exactly the same way as if the decisions had been validly made. Schedule 1 of the Bill effectively seeks to recreate rights and liabilities that but for the invalid appointments would have been established as a result of the findings made by the invalidly constituted PSR Committees. 6

The right to a fair trial The right to a fair trial is protected in Article 14 of the ICCPR and is aimed at ensuring the proper administration of justice by upholding, among other things, the right to a fair hearing. The amendments made in Schedule 1 of this Bill will operate to retrospectively validate PSR Committee processes. The Bill has a legitimate objective in ensuring that a technical error in the appointment process of the PSR Panel and Deputy Director does not expose the public to the risks of inappropriate practice. The right to a fair trial will not be prejudiced as all existing rights and liabilities will be able to be relied upon, in exactly the same way as if the appointments had been validly made. The retrospective validation of PSR Committee appointments will extend to parties with proceedings that are currently before a court that have not been finally determined or disposed of. The application of these amendments to parties with proceedings that have not been finally determined is reasonable, necessary and proportionate to ensure the protection of the public through the PSR Scheme. The right to a fair trial is not prejudiced as practitioners who have had a finding of inappropriate practice against them and are now challenging that finding on the basis of irregularities in the appointment process, have already been through the PSR Scheme, which has a number of natural justice and procedural fairness provisions built in. The practitioner who goes through a PSR Committee process will have had eight opportunities to make submissions to explain their practice and at any time during the process they have the right to seek judicial intervention in the Federal Court, or Federal Magistrates Court, in accordance with the Administrative Decisions (Judicial Review) Act 1977, on the grounds that there has been a breach of procedural fairness or natural justice. This ensures that the practitioner's right to a fair trial is upheld while also ensuring the right of the public to the highest standard of health services. The right to equal protection of the law and non-discrimination The right of equal protection of the law is protected by Article 26 of the ICCPR. Item 1 in Schedule 1 of the Bill will not apply to parties with proceedings currently before the High Court of Australia and as such distinguishes these matters from other matters that may be pending in before other courts or tribunals. Whilst this may engage the right to equal protection of the law, the measure is necessary so as not to impermissibly interfere with the Chapter III power of the courts enshrined in the Constitution. In any event the effect of Item 2 in Schedule 1 of the Bill provides the Director, Professional Services Review with the power to refer the matters before the High Court, once disposed of, to a properly constituted PSR Committee. The practical effect to these measures is that there will be no substantive discrimination between those who will be exempted from the validating provisions and those who will be subject to them. 7

Prohibition against retrospective application of criminal laws The prohibition on retrospective criminal laws is contained in Article 15 of the ICCPR. This right is an absolute right. It provides that a person may not normally be prosecuted for acts that were not criminal offences at the time they were committed. This flows from the principle that the criminal law should be sufficiently precise to enable persons to know in advance whether their conduct would be criminal. The prohibition does not extend to retrospective changes to other measures, such as procedure, provided that they do not affect the punishment to which an offender is liable. The key issue will be whether the measure that is changed is in fact a penalty. Terms of imprisonment and fines are clearly penalties, to which the prohibition potentially applies. Retrospective changes to trial practice or rules of evidence would not normally infringe the prohibition. The prohibition only applies to laws imposing criminal liability or punishments for criminal offences. It does not apply to non- criminal sanctions, such as financial penalties imposed by a court in a civil case that does not result in a criminal conviction, provided that these penalties do not in substance meet the threshold of a criminal charge. To our knowledge the amendments to the Act set out in the Bill are not material to any criminal prosecutions flowing from an invalid decision. As such Article 15 of the ICCPR is not engaged. If there has been criminal prosecutions that have had findings of invalid PSR Committees tendered in evidence, the force of the substance of those findings is not subject to controversy. The right to privacy The protection of an individual's privacy engages Article 17 of the ICCPR. This right can be subject to permissible limitations. The limitations in the Bill set out in Pt 8 of Schedule 2 that deal with referral to appropriate regulatory bodies, are authorised by law, are not arbitrary and are reasonable, necessary and proportionate. Any limitation on privacy serves the legitimate objective of protecting the right to health and the right to life by acting to protect persons at risk. Further there are statutory safeguards in place that limit the extent to which information that may be subject to the right to privacy, may be used. In dealing with statutory powers, bodies established by Pt VAA of the Act must comply with the secrecy provisions contained in the Act as well as the provisions of the Privacy Act 1988. Further to the extent that matters are referred to bodies in other jurisdictions for possible investigation, those jurisdictions have privacy legislation that will be engaged. Conclusion The Bill is compatible with human rights because it advances the protection of human rights and to the extent that it may also limit human rights, those limitations are reasonable, necessary and proportionate. The Hon Tanya Plibersek MP, the Minister for Health 8

Health Insurance Amendment (Professional Services Review) Bill 2012 NOTES ON CLAUSES Clause 1 - Short Title This clause provides that the Bill, once enacted, may be cited as the Health Insurance Amendment (Professional Services Review) Act 2012. Clause 2 - Commencement This clause provides that sections 1 to 3 (which cover the Short Title, Commencement and Schedule(s)) and Schedule 1 of the Bill, once enacted, will commence on the day the Act receives Royal Assent. Schedule 2 of the Bill will commence on a day to be fixed by Proclamation. However, if any of the provision(s) in Schedule 2 do not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, those provisions commence on the first day after the end of that 6-month period. Schedule 3 of the Bill will commence on the day after the Act receives Royal Assent. Clause 3 - Schedule(s) This clause provides that each Act that is specified in a Schedule to the Bill is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the Bill has effect according to its terms. SCHEDULE 1 -- VALIDATION OF CERTAIN ACTIONS Schedule 1 includes provisions that: · ensure that a thing purportedly done under Part VAA, VB or VII of the HIA at any time before the commencement of the relevant provision (i.e. before Royal Assent), that may be invalid because a person was not appointed, or validly appointed, as a Panel member or Deputy Director, is as valid and effective, and is taken always to have been as valid and effective, as it would have been had the person been validly appointed as a Panel member or Deputy Director. The validating provisions do not affect the rights and liabilities of parties to proceedings for which leave to appeal to the High Court has been granted on or before Royal Assent, if the validity of a PSR Panel member or Deputy Director appointment is in issue in the proceedings; · allow the Director of PSR to re-refer a matter to a new PSR Committee if the person under review has successfully challenged the previous PSR process, either before or after the commencement of the relevant provision (i.e. before or after Royal Assent), on the grounds that, or on grounds that include the ground that, a person was not validly appointed as a Panel member or Deputy Director under Part VAA of the HIA; · allow for a reasonable amount of compensation to be paid to a person if these provisions result in an acquisition of that person's property otherwise than on `just terms'. 9

SCHEDULE 2 - AMENDMENTS RELATING TO THE PROFESSIONAL SERVICES REVIEW SCHEME Health Insurance Act 1973 Schedule 2 amends the HIA to: · require the Chief Executive Medicare to request that the Director of PSR ("the Director") review the provision of services by a person if he or she becomes aware that the person has provided the services in circumstances that constitute a prescribed pattern of services. This may be the sole reason for the referral; · authorise the Minister to determine by legislative instrument that certain health professionals are practitioners, and certain vocations are professions, for the purposes of the PSR Scheme and the MPRC arrangements; · clarify the authority of a PSR Committee to investigate Medicare services that have been initiated but not rendered; · provide that the Director may give case-relevant information about a person under review to the Determining Authority on one occasion up until the Authority makes its draft determination; · extend the time for a PSR Committee to make its final report when progress is halted in specified circumstances; · extend the time for the Determining Authority to make a determination when progress is halted in specified circumstances; · provide for a PSR Committee or the Determining Authority (as the case requires) to take no further action if they are satisfied that a proper investigation is impossible, that the making of a proper determination is impossible, or that it is impossible for action specified in a section 92 negotiated agreement to take effect. Circumstances that could trigger this action include the death of a person under review or where the person is permanently incapacitated; · provide for a final determination to take effect 7 days after the day on which an application instituting a proceeding is withdrawn, a proceeding is dismissed or determined, an appeal is withdrawn or discontinued, or an appeal is dismissed or determined; · remove the requirement for the Director to refer a person who has received a final determination of inappropriate practice and/or negotiated a section 92 agreement on two or more occasions to the Chairperson of a MPRC; · provide for the Director (in relation to a section 92 negotiated agreement) and the Determining Authority (in relation to a final determination of inappropriate practice under section 106TA) to disqualify a person under review for up to five years in certain circumstances (where the person is a person against whom a previous final determination or agreement under section 92 has taken effect); · require the Director to refer material about the conduct of a person under review to a State or Territory body, and an appropriate person or body, at any stage of the PSR process, if the conduct of the person poses a significant threat to the life or health of patients or demonstrates a failure to comply with professional standards; · provide that persons who are partly or fully disqualified must display notice of that disqualification in their practices to notify patients that services will not attract Medicare benefits; 10

· enable regulations to be made which prescribe the kind of information that must be included in any patient referral for a Medicare service by a referring practitioner to another practitioner. Schedule 3 - Technical amendments relating to legislative instruments Health Insurance Act 1973 Schedule 3 amends the HIA to: · clarify the operation of section 124FAA in relation to practitioners who have been referred to an MPRC because of one or more section 92 agreements; · make minor technical amendments to certain provisions to clarify that the instrument referred to is a legislative instrument under the Legislative Instruments Act 2003. 11

Schedule 1 - Validation of certain actions This Schedule responds to the judgment of the Full Federal Court in Kutlu v Director of Professional Services Review [2011] FCAFC 94 (Kutlu). In Kutlu the Full Federal Court held that failing to consult the AMA as required by subsections 84(3) and 85(3) of the HIA invalidated a number of appointments of PSR Panel members and Deputy Directors of PSR and all PSR processes involving the invalidly appointed Panel members and Deputy Directors. The purpose of the provisions in item 1 of Schedule 1 is to ensure that a thing purportedly done under Part VAA, VB or VII of the HIA at any time before the commencement of item 1 (i.e. before Royal Assent), that may be invalid because a person was not appointed, or validly appointed, as a Panel member or Deputy Director, is as valid and effective, and is taken always to have been as valid and effective, as it would have been had the person been validly appointed as a Panel member and/or Deputy Director under the HIA. The validating provisions are not intended to apply to parties to proceedings for which leave to appeal to the High Court of Australia has been given on or before the commencement of this Schedule, if the validity of the appointment of a Panel member or Deputy Director under the HIA is in issue in those proceedings. The provisions in item 2 of Schedule 1 will enable the Director of PSR to re-refer matters to a new PSR Committee if, either before or after the commencement of item 2, proceedings relating to Part VAA of the HIA have been finally determined by a court in favour of the person under review on the grounds that, or on grounds that include the ground that, a person was not appointed or validly appointed as a Panel member or Deputy Director under the HIA. Item 1 - Validation of acts done under Part VAA, VB or VII of the Health Insurance Act 1973 Subitem 1(1) describes the `things purportedly done' in respect of which the validating provisions in item 1 will apply. Subitem (1) provides that item 1 applies to a thing purportedly done under Part VAA, VB or VII of the HIA, at any time before the day the item commences, to the extent that the thing purportedly done would, apart from item 1, be invalid because a person was not appointed, or validly appointed, as a Panel member or Deputy Director under Part VAA of the HIA. Subitem (2) provides that the thing done (by a person referred to in subitem (1)) is as valid and effective, and is taken to have always been as valid and effective, as it would have been had the person been validly appointed as a Panel member or Deputy Director under Part VAA of the HIA. Subitem (3) is intended to ensure that third parties who have acted on the basis of a thing purportedly done (referred to in subitem (1)) are entitled, and always were entitled, to act on the basis that the thing purportedly done is valid and effective. This will ensure that any actions taken that ultimately relied upon the findings of a PSR Committee are valid and effective, such as debt recovery proceedings. 12

Subitem (4) provides an exclusion from the validating provisions contained in item 1. Subitem (4) provides that item 1 does not affect the rights or liabilities of parties to proceedings for which leave to appeal to the High Court of Australia has been granted on or before the day item 1 commences, if the fact that a person was not appointed, or validly appointed, as a Panel member or Deputy Director under Part VAA of the HIA is in issue in the proceedings. Subitem (5) is intended to ensure that the validating provisions in subitems (1), (2) and (3) will have effect in relation to particular proceedings. Subitem (5) provides that, subject to the exclusion in subitem (4), subitems (1), (2) and (3) have effect in relation to proceedings (whether original or appellate) that begin on or after the day item 1 commences, or that began before the day item 1 commences, but have not been finally determined as at that day. Item 2: Re-referral to a Committee allowed in certain cases Subitem 1(1) outlines when the `re-referral power' described in subitem (2) applies. Subitem (1) provides that item 2 applies if proceedings relating to Part VAA of the HIA were brought before the day item 2 commences and those proceedings have been finally determined, or otherwise disposed of, in favour of the person under review on the grounds that, or on grounds that include the ground that, a person was not appointed or validly appointed as a Panel member or Deputy Director under Part VAA. Subitem (2) provides that within the period of 12 months after the proceedings referred to in subitem (1) have been finally determined or otherwise disposed of, the Director of PSR may, by writing, set up a PSR Committee (in accordance with Division 4 of Part VAA of the HIA) and make a referral to that Committee pursuant to section 93 of the HIA, in relation to the provision of services by the person under review that were the subject of the proceedings referred to in subitem (1). Subitem (2) applies despite the 12 month time limitation placed on the Director of PSR under section 94 of the HIA to refer a matter to a Committee. By allowing a new PSR Committee to examine the range of services for matters that have been successfully challenged by a practitioner on the grounds of irregularities in the appointment process of Panel members and Deputy Directors, item 2 will allow a Committee of the practitioner's peers to ensure that the practitioner's provision of those services was appropriate. This will ensure the integrity of the MBS and PBS is maintained and not undermined by an irregularity in the appointment process. Paragraph (3)(a) allows the new Committee process to take into account evidence given in relation to the review as investigated before proceedings were brought. This will allow the Committee to examine the evidence that was brought before the previous PSR Committee set up for the matter and should save the new Committee and the person under review from having to resubmit evidence that has been previously provided. Paragraph 3(b) will also allow the new Committee to take into account evidence given in proceedings as mentioned in subitem (1), as this evidence may be relevant to the new Committee investigation. Subitem (4) makes it clear that subitem (3) does not limit the evidence that the Committee may take into account. 13

Item 3: Compensation for acquisition of property Subitem 3(1) provides that if the operation of Schedule 1 would result in an acquisition of property from a person otherwise than on just terms, the Commonwealth is liable to pay a reasonable amount of compensation to the person. Subitem (2) provides that if the Commonwealth and the person do not agree on the amount for the compensation payment, the person may institute proceedings in a court of competent jurisdiction for the recovery from the Commonwealth of an amount determined by the court to be reasonable. Subitem (3) provides that in item 3, the terms acquisition of property and just terms have the same meaning as provided in paragraph 51(xxxi) of the Constitution. 14

Schedule 2 - Amendments relating to the Professional Services Review Scheme PART 1 - Prescribed pattern of services This part inserts provisions relating to prescribed patterns of services into Division 1, Part VAA of the HIA. These amendments are in response to the judgments in Daniel v Health Insurance Commission and Others [2003] FCA 772 and Kelly v. Daniel [2004] FCAFC 14. The purpose of the amendments is to make it clear that the Chief Executive Medicare must request the Director of Professional Services Review to review the provision of services by a person during the period specified in the request (refer to existing subsection 86(1)) if the Chief Executive Medicare becomes aware that the circumstances in which the services were rendered or initiated by a person constitute a prescribed pattern of services. If the Chief Executive Medicare makes a request based on prescribed pattern of services, the request may also include reasons dealing with inappropriate practice other than prescribed pattern of services. The amendments also make it clear that, when the Director, who may make a referral to a Professional Services Review Committee with respect to a prescribed pattern of services, makes a referral the referral may include reasons other than the prescribed pattern of services. Alternatively, the reasons may relate solely to the services being rendered or initiated in circumstances that constitute a prescribed pattern of services. Item 1: Subsection 81(1) Item 1 inserts a definition of the term prescribed pattern of services into existing subsection 81(1) and provides that the term will have the meaning given by new section 82A. Item 2: Before subsection 82(1) Item 2 inserts the subheading Unacceptable conduct before subsection 82(1). Item 3: After subsection 82(1) Item 3 amends section 82 by inserting new subsections relating to prescribed pattern of services after existing subsection 82(1). The amendments in item 3 are intended to replace existing section 106KA which is repealed at item 13. New subsection 82(1A) provides that, subject to subsections 82(1B) and (1C), a practitioner engages in inappropriate practice in rendering or initiating services during a particular period (the relevant period) if the circumstances in which some, or all, of the services were rendered or initiated constitute a prescribed pattern of services. New subsection 82(1B) provides an exception to new subsection 82(1A) so that a practitioner does not engage in inappropriate practice in rendering or initiating services on a particular day in the relevant period if a Committee could reasonably conclude that exceptional circumstances existed on that particular day which affected the rendering or initiating of the services. 15

New subsection 82(1C) provides that new subsection 82(1B) does not affect the operation of new subsection 82(1A) in respect of the remaining day or days during the relevant period on which the practitioner rendered or initiated services even if the circumstances in which the services were rendered or initiated on that day or those days would not, if considered alone, have constituted a prescribed pattern of services. This means that where a Professional Services Review Committee concludes that exceptional circumstances exist for one or more days during a particular period, services provided on other days included in that period may still constitute a prescribed pattern of services. New subsection 82(1D) provides that the regulations may prescribe circumstances which constitute exceptional circumstances for the purposes of new subsection 81(1B) but that the prescribed circumstances are not exhaustive. This item also inserts the heading "Causing or permitting inappropriate practice" to existing subsection 82(2). Item 4: Paragraphs 82(2)(a) and (b) Item 4 amends paragraphs 82(2)(a) and (b) by omitting the words "within the meaning of subsection (1)" and substituting the words "under subsection (1) or (1A)". This amendment is a technical consequential amendment, required as a result of the addition of new subsection 82(1A) (item 3 refers). Item 5: Before subsection 82(3) Item 5 inserts the heading "Matters to which Committee must have regard" to existing subsection 82(3). Item 6: At the end of Division 1 of Part VAA Item 6 inserts new section 82A at the end of existing Division 1 of Part VAA. As was the case with new subsections 82(1A) to (1D), this new section is intended to replace aspects of existing section 106KA. New section 82A concerns the meaning of the term prescribed pattern of services. New subsection 82A(1) provides that the circumstances in which services are rendered or initiated by a practitioner constitute a prescribed pattern of services if they are circumstances prescribed by the regulations for the purposes of section 82A. New subsection 82A(2) provides that the circumstances prescribed may relate to services of a particular kind or description that are rendered or initiated either by practitioners in a particular profession, or by an identified group or groups of practitioners in a particular profession. New subsection 82A(3) provides that the regulations may prescribe circumstances which include the rendering or initiation of more than a specified number of either services or services of a particular kind, on each of more than a specified number of days during a specified period. 16

New section 82A permits flexibility in the regulation-making power. Different combinations of numbers of days and services can be used to determine what constitutes a prescribed pattern of service for different health professions, or for individual specialties within professions. This recognises that significant variation exists in the way in which different health professions and individual specialties within professions practice and that the point at which the quality of the clinical service provided to patients may be undermined varies between professions and specialties. Item 7: Division 3 of Part VAA (heading) Item 7 amends the heading of Division 3 of Part VAA by repealing the existing heading, "Division 3 - Medicare Australia CEO may request review" and substituting the new heading "Division 3 - Role of Chief Executive Medicare". This amendment is a technical amendment which will refer to the appropriate position title of the relevant officer, previously Medicare Australia CEO, and will better reflect Division 3 of Part VAA of the HIA after the commencement of Schedule 2 of this Bill, once enacted. Item 8: Section 86 (heading) Item 8 repeals the existing heading "Medicare Australia CEO may request Director to review provision of services" and inserts the new heading "Requests by Chief Executive Medicare to Director to review provision of services". This amendment is a technical amendment which will refer to the appropriate position title of the relevant officer, previously Medicare Australia CEO, will better reflect the section after the commencement of this item. Item 9: Subsection 86(1) Item 9 amends existing subsection 86(1) by omitting "The" and substituting "Subject to subsection (1A), the". This is a technical consequential amendment, required as a result of the insertion of new subsection 86(1A) (item 10 refers). Item 10: After subsection 86(1) Item 10 inserts new subsection 86(1A) after existing subsection 86(1). It provides that if the Chief Executive Medicare becomes aware that the circumstances in which services were rendered or initiated by a person constitute a prescribed pattern of services, the Chief Executive Medicare is required to make a request to the Director of Professional Services Review under existing subsection 86(1) in relation to the services. New subsection 86(1A) places this obligation upon the Chief Executive Medicare even if there is a possibility that a Professional Services Review Committee could reasonably conclude that exceptional circumstances existed on a particular day which affected the rendering or initiating of particular services on that day (refer to item 3 and new subsection 82(1B)). Item 11: At the end of subsection 86(3) Item 11 inserts, at the end of existing subsection 86(3), a note which explains that if, under subsection 86(1), the Medicare Australia CEO requests the Director of Professional Services Review to review the provision of services by a person during a specified period because of subsection 86(1A), the request may include reasons other than the prescribed pattern of services. Item 12: At the end of subsection 93(6) 17

Item 12 inserts, at the end of existing subsection 93(6), a note which explains that, where the Director of Professional Services Review decides to make a referral to a Professional Services Review Committee, the reasons given by the Director (as to why the Director thinks the person under review may have engaged in inappropriate practice in providing the services to which the referral relates - refer to existing paragraph 93(6)(a)) may relate solely to the services being rendered or initiated in circumstances that constitute a prescribed pattern of services. Item 13: Section 106KA Item 13 repeals existing section 106KA. Existing section 106KA is replaced by new subsections 82(1A) to 82(1D) (item 3 refers) and new section 82A (item 6 refers). Item 14: Paragraph 106KB (1)(b) Item 14 omits from existing paragraph 106KB(1)(b) the reference to "106KA" and substitutes the words "for the purposes of subsection 82(1A) or (1B)". This is a technical consequential amendment and is required as a result of the deletion of existing section 106KA (item 13 refers) and the insertion of new subsections 82(1A) and 82(1B) (item 3 refers). Item 15: Application The application provision provides that the repeals and amendments of the HIA described in Part 1 of Schedule 2 of the Bill do not apply in relation to requests made under section 86 of the HIA before the commencement of item 15 of Schedule 2 of the Bill, once enacted. The "old law" (existing section 106KA, existing section 106KB and any regulations which are in force immediately before the commencement of item 15 of Schedule 2 of the Bill, once enacted) will continue to apply in relation to such requests. These amendments will only apply to new requests made under section 86 of the HIA. PART 2 - Allied Health Practitioners This part inserts provisions relating to allied health practitioners into Part VAA, Divisions 1 and 2 of the HIA. Division 1 - Amendments Item 16: Subsection 81(1) (at the end of the definition of practitioner) Item 16 broadens the definition of practitioner in subsection 81(1) by including a new paragraph (i) which allows the Minister to determine new categories of health professionals (providing health services within the meaning of subsection 3C(8) of the HIA) for the purposes of Part VAA of the Professional Services Review Scheme. This amendment is made as a result of the Commonwealth broadening the categories of health professionals permitted to provide Medicare-eligible services to include categories not specified under subsection 81(1) of the HIA. The new categories of health professionals who provide health services within the meaning of subsection 3C(8) of the HIA and who cannot currently be reviewed under the Professional Services Review Scheme include aboriginal health workers; audiologists; clinical psychologists; diabetes educators; dieticians; exercise physiologists; mental health workers; mental health nurses; occupational therapists; psychologists; social workers; and speech pathologists. 18

This gives effect to Recommendation 12 of the Review of the Professional Services Review Scheme - Report of the Steering Committee - May 2007 which recommended section 81 be amended to include all allied health groups who are eligible to provide services that attract a Medicare benefit. Item 17: Subsection 81(1) (at the end of the definition of profession) Item 17 broadens the definition of profession in subsection 81(1) by including a new paragraph (h) which allows the Minister to determine categories of professions for the purposes of Part VAA of the HIA. Item 18: After subsection 81(1) Item 18 allows the Minister to determine by legislative instrument: (a) new categories of health professionals as practitioners for the purposes of Part VAA of the HIA, if the health professional is providing a health service referred to in subsection 3C(8) of the HIA; and (b) that a particular vocation engaged in by the health professional is a profession for the purposes of Part VAA of the HIA. Item 19: Before subsection 81(2) This item inserts the heading `Meaning of provides services.' to subsection 81(2) of the HIA. Item 20: Paragraph 106ZPA(1)(c) Item 20 removes paragraph 106ZPA(1)(c) and adds a new paragraph 106ZPA(1)(c) to ensure that, a member of the profession of each new category of health professional added for the purposes of the Professional Services Review Scheme, may sit on the Determining Authority. Item 21: Paragraph 106ZPB(2)(c) Item 21 removes paragraph 106ZPB(2)(c) and adds a new paragraph 106ZPB(2)(c) to ensure that practitioners under Part VAA of the Professional Services Review Scheme are represented on the Determining Authority. Item 22: Subsection 106ZPB(3) Item 22 amends subsection 106ZPB(3) by inserting `other than a medical practitioner' after the phrase `a practitioner' to make it clear that when the Minister is making appointments to the Determining Authority, the Minister must consult the Australian Medical Association about the appointment of medical practitioners, or other appropriate organisations about the appointment of other health practitioners. Item 23: Subsection 106ZPB(3) Item 23 omits subparagraphs 106ZPA(1)(c)(ii) to (vii) and adds paragraph 106ZPA(1)(c). The new paragraph provides that the Minister cannot appoint a practitioner to the Determining Authority unless the practitioner is a member of a group listed in paragraph 106ZPA(1)(c ) of the HIA. This amendment is a technical consequential amendment, required as a result of the insertion of new paragraph 106ZPA(1)(c) (item 20 refers). Item 24: Subsection 106ZPH(3) 19

Item 24 repeals subsection 106ZPH(3) and substitutes a new subsection in respect of acting appointments to the Determining Authority. The new subsection provides that where the Minister appoints a person to act for a member of the Determining Authority, that person must be the same kind of practitioner as the member of the Determining Authority. Item 25: Subsection 124B(1) (at the end of the definition of practitioner) Item 25 broadens the definition of practitioner in subsection 124B(1) which is used for the purpose of Part VB - Medicare Participation Review Committee by including a new paragraph (i) which will allow the Minister for Health and Ageing to determine categories of health professionals (providing health services within the meaning of subsection 3C(8) of the HIA) for the purposes of Part VB of the HIA. This amendment is made as a result of the Commonwealth broadening the categories of practitioners permitted to provide health services within the meaning of subsection 3C(8) of the HIA to include a broad range of other health professionals. These new categories of health professionals include: aboriginal health workers; audiologists; diabetes educators; clinical psychologists; dieticians; exercise physiologists; mental health workers; mental health nurses; occupational therapists; psychologists; social workers; and speech pathologists. Item 26: At the end of section 124B Item 26 amends subsection 124B by adding new paragraph (7) which will enable the Minister to determine by legislative instrument that new categories of health professionals are practitioners for the purposes of Part VB if they provide a health service referred to in subsection 3C(8) of the HIA. Item 27: At the end of section 124EB(2) Item 27 amends subsection 124EB(2) by adding new paragraphs (d), (e), (f), (g) and (h) to ensure that the Chairperson appoints a member of the MPRC, from a list provided to the Minister by a professional organisation, who is a health professional of the same kind as the practitioner being reviewed by the MPRC. Division 2 - Transitional and application provisions Item 28: Transitional - review of services rendered or initiated by certain allied health practitioners Item 28 is a transitional provision which applies to services rendered or initiated by the newly added health practitioners after the Minister makes a determination in relation to them under subsection 81(1A) of the HIA. Item 28 provides that the Chief Executive Medicare must not make a request under section 86 in relation to services provided by a person, if those services were provided before the person was determined to be a practitioner for the purposes of the PSR Scheme. The reference to a request under section 86 of the HIA covers requests under subsection 86(1) and requests required to be made under subsection 86(1A) of the HIA. 20

Item 29: Application - acts and omissions of certain allied health practitioners Item 29 limits the application of Part VB of the HIA to relevant acts and omissions committed by health professionals after they become practitioners for the purposes of subsection 124B of the HIA. This means that relevant offences and civil contraventions committed in relation to services provided before the Minister determines that a health professional is a practitioner for the purposes of Part VB, cannot be referred to a MPRC. Subitem (3) provides that if an act or omission occurs around the time the determination is made, and some services relating to the act or omission occur prior to the determination being made and some occur after the determination is made, then the act or omission is taken to have occurred prior to the making of the determination. This means that where a relevant offence or civil contravention relates to services provided over a period of time, including some provided before a person becomes a practitioner for the purposes of Part VB, that relevant offence or civil contravention is outside the scope of the MPRC. Item 30: Application of item 27 Item 30 provides that the amendments made by item 27 in relation to subsection 124EB(2) only apply to a MPRC established after the commencement of the item. Part 3 - Meaning of service This Part relates to existing paragraph (a) of the definition of service for the purposes of Part VAA of the HIA, in existing subsection 81(1). The purpose of the amendment is to clarify that the Professional Services Review Scheme applies in respect of a service that has been initiated, if at the time it was initiated, a medicare benefit would have been payable in respect of the service had it been rendered at that time. This is the case: · whether or not the initiated service has been or will be rendered; and · even where no medicare benefit is payable for the initiating service. Item 31: Subsection 81(1) (paragraph (a) of the definition of service) Item 31 repeals existing paragraph (a) of the definition of service in subsection 81(1) and substitutes new paragraphs (a) and (ab). New paragraph (a) provides that service means a service that has been rendered if, at the time it was rendered, a medicare benefit was payable in respect of the service. This new paragraph effectively replicates existing paragraph (a) of the definition of service in so far as it relates to a service that has been rendered. New paragraph (ab) provides that service means a service that has been initiated (whether or not it has been or will be rendered) if, at the time it was initiated, a medicare benefit would have been payable in respect of the service had it been rendered at that time. This is the case even where no medicare benefit is payable for the initiating service. 21

For example, a practitioner refers a patient for a diagnostic imaging service such as an x-ray and a medicare benefit is payable for the x-ray (the initiated service) but is not payable for the consultation with the referring practitioner. New paragraph (ab) clarifies that the initiated service will come within the definition of service if a medicare benefit would have been payable for the service if it had been rendered at the time it was initiated. A review of initiated services which have not yet been rendered is relevant to the consideration of whether or not a practitioner has engaged in inappropriate practice. For example, a chiropractor may advertise that every new patient for the month of March will receive `a free set of spinal x-rays' at the first consultation. The chiropractor may then refer each new patient for a service for which a medicare benefit would be payable if rendered e.g. an x-ray. If the chiropractor is subsequently a person under review, his or her conduct in initiating such services may be taken into account in forming a view about inappropriate practice even though the initiated services may not have been rendered (or may never be rendered). This is because the chiropractor has initiated services which, if rendered, would result in the expenditure of public revenue for services that may not be clinically relevant. Item 32: Application Item 32 provides that an amendment made by Part 3 applies to a service that is rendered or initiated on or after the day that item 32 commences. Part 4 - Extension of time for certain processes This Part relates to an extension of time in certain circumstances for a Professional Services Review Committee to provide its final report and for the Determining Authority to issue a draft or final determination. Item 33: Subsection 106G(3) Item 33 repeals existing subsection 106G(3) and replaces it with a new subsection 106G(3). New subsection 106G(3) provides that where the circumstances in column 1 of the table occur, the Professional Services Review Committee may determine in writing that the period of six months referred to in existing paragraph 106G(2)(a) (which sets out the timeframe by which the Committee must give its final report to the Determining Authority or, where relevant, the person under review) is extended for a period that does not exceed the specified period in column 2 of the table for that item. New subsection 106G(3) differs from existing subsection 106G(3) by the insertion of a new circumstance (set out at item 2 of the table). The new circumstance is where the person under review is fully disqualified under existing section 105 for failing to appear, give evidence or answer a question when required by the Professional Services Review Committee. The maximum period of extension is the period in which the person under review is fully disqualified under section 105. New subsection 106G(3) also differs by making it clear in item 4 of the table that a circumstance is that the Professional Services Review Committee's consideration of the referral is suspended because of an injunction or other court order. 22

The other circumstances in new subsection 106G(3) are as follows: · the person under review is unable because of illness to attend a hearing being conducted by the Professional Services Review Committee; · a notice is given to a person under existing subsection 105A(2) (to produce documents or give information) and the person fails to comply with a requirement of the notice; and · the Professional Services Review Committee's consideration of the referral is suspended under existing paragraph 106N(2)(b) (because the Committee refers material to the Medicare Australia CEO if it suspects that the person under review may have committed a relevant offence or relevant civil contravention). New subsection 106G(3) also sets out the maximum periods of extension for each item in the table. Item 34: After subsection 106G(4) Item 34 inserts new subsection 106G(4A) which clarifies that the period of six months referred to in existing paragraph 106G(2)(a) (which sets out the timeframe by which the Professional Services Review Committee must give its final report to the Determining Authority or, where relevant, the person under review) may be extended under new subsection 106G(3) more than once. Item 35: Subsection 106S(2) Item 35 repeals existing subsection 106S(2) and substitutes new subsections 106S(2) and 106S(2A). Existing subsection 106S(1) provides that the Director may give the Determining Authority any information that the Director considers is relevant to the Authority making its draft determination or final determination in accordance with existing section 106U. The current subsection 106S(2) provides that any information which the Director gives the Determining Authority under subsection 106S(1) must be given no later than the day on which the Professional Services Review Committee's final report is given to the Determining Authority under existing subsection 106L(3). New subsection 106S(2) provides that the Director may give information to the Determining Authority under existing subsection 106S(1) on one occasion only. New subsection 106S(2A) provides that the Director must not give information to the Determining Authority under existing subsection 106S(1) after the Authority has made its draft determination in accordance with existing section 106U. The purpose of new subsections 106S(2) and 106S(2A) is to extend the time that the Director currently has for giving information to the Determining Authority from the day on which the Professional Services Review Committee's final report is given to when the Determining Authority makes its draft determination. This amendment is necessary because there is no other provision under which the Director may pass information to the Determining Authority even though instances have arisen when the Director has acquired case-relevant information after the date upon which the Determining Authority had received the Professional Services Review Committee's final report. In such instances, the Director was unable to pass the information to the Determining Authority. 23

The information the Director may provide to the Determining Authority may be to the advantage of the person under review, for example, if the practitioner has taken demonstrable steps to address the conduct under review in relation to the provision of services. However, the information provided may not be to the person's advantage, for example, if it demonstrates that the person has persisted with conduct relevant to the review. New subsections 106S(2) and 106S(2A) prevent the Director from giving information more than once and from giving information after the Authority has made its draft determination. These limitations ensure that the person under review has adequate opportunities to make submissions in relation to the information given, which affords natural justice to the person under review (refer to new section 106SA at item 36). Item 36: Subsection 106SA Item 36 repeals existing section 106SA and substitutes a new section 106SA. New subsection 106SA(1) is headed "Invitation to make submissions" and provides that the Determining Authority must give the person under review a written invitation to make written submissions to the Authority, having regard to the Professional Services Review Committee's final report and any information given by the Director under new section 106S (item 35 refers), about the directions the Authority should make in the draft determination relating to the person. The note at the end of subsection 106SA(1) provides that existing section 106U sets out the directions the Determining Authority can make. New subsection 106SA(2) provides that an invitation under new subsection 106SA(1) must state that the person under review may make submissions within one month after the day on which the invitation is given to the person. The note at the end of subsection 106SA(2) provides that the period for making submissions may be extended under new subsection 106SA(5) (because the person applied for an extension and the other requirements of new subsection 106SA(5) were fulfilled). The note also provides that the period for making submissions may be affected by new section 106TB (which applies when the time for doing an act is affected by a court order - item 41 refers). New subsection 106SA(3) is headed "Invitation to be given after Committee's final report is given to Authority" and provides that the Determining Authority must give an invitation to the person under review to make a submission under new subsection 106SA(1) within one month after being given the Professional Services Review Committee's final report. The note at the end of subsection 106SA(3) provides that the period for giving the invitation may be affected by new section 106TB (which applies when the time for doing an act is affected by a court order - item 41 refers). New subsection 106SA(4) is headed "Further invitation to be given in certain circumstances" and provides that if, the Director gives the Determining Authority 24

information under section 106S (item 35 refers), after the Determining Authority has given the person under review an invitation under new subsection 106SA(1), the Determining Authority must, within 14 days after being given the information from the Director, give the person a further invitation under new subsection 106SA(1). Subsection (3) does not apply to the further invitation. That is, where a person under review has been invited to make a submission in relation to the Professional Services Review Committee's final report under subsection 106SA(1), and the Director then gives further information under subsection 106S(1) to the Determining Authority (before the Determining Authority makes a draft determination), the Determining Authority must within 14 days of being given the information from the Director, invite the person under review to make submission in relation to the information and give the person one month in which to make a submission. The submission periods relating to the Professional Services Review Committee's final report and any new information run concurrently. The submission period relating to the Committee's final report is not extended by an invitation regarding new information given under new subsection 106SA(4). The note at the end of subsection 106SA(4) provides that the period for giving the invitation may be affected by new section 106TB (which applies when the time for doing an act is affected by a court order - item 41 refers). New subsection 106SA(5) provides that the Determining Authority may extend a period within which the person under review may make submissions if the person applies, in writing, for the period to be extended, and the application is made before the end of the period, and the Authority considers that it is reasonable to extend the period. An example of when subsection 106SA(5) might apply is where a person has sought additional data from Medicare Australia in order to support the person's submission to the Determining Authority. Item 37: Subsection 106T(1) Item 37 repeals existing subsection 106T(1) and substitutes new subsections 106T(1) and 106T(1A). New subsection 106T(1) provides that the Determining Authority must, after taking into account any submissions made by the person under review in accordance with new section 106SA (which is about submission periods - item 36 refers), make a draft determination in accordance with existing section 106U (which sets out the directions that the Determining Authority can make) relating to the person, and give copies of the draft determination to the person and to the Director. New subsection 106T(1A) provides that the Determining Authority must comply with new subsection 106T(1) within 1 month after the last day on which the person under review may make submissions in accordance with section 106SA (which is about submission periods - item 36 refers). The note at the end of subsection 106T(1A) provides that the period for giving the invitation may be affected by new section 106TB (which applies when the time for doing an act is affected by a court order - item 41 refers). 25

Item 38: At the end of subsection 106T(2) Item 38 adds a note to the end of existing subsection 106T(2) to provide that the period for making submissions may be affected by new section 106TB (which applies when the time for doing an act is affected by a court order - item 41 refers). Item 39: Subsection 106T(4) Item 39 amends existing subsection 106T(4) by omitting the words "that paragraph" and substituting the words "subsection (1A)". This amendment is a technical consequential amendment required as a result of new subsection 106T(1A) (item 37 refers). Item 40: At the end of subsection 106TA(1) Item 40 adds a note to the end of existing subsection 106TA(1) to provide that the period for making submissions may be affected by new section 106TB (which applies when the time for doing an act is affected by a court order - item 41 refers). Item 41: After section 106TA Item 41 inserts new section 106TB, which is about how time periods for doing an act in new Subdivision C are affected if an injunction or other court order operates. A person under review may seek review by the Federal Court at any stage of the process set out in Part VAA of the Act. The purpose of new section 106TB is to automatically extend the time for the Determining Authority to make a draft or final determination where a court order affects the time for doing an act. New subsection 106TB(1) provides that section 106TB applies in relation to an act that is required or permitted by Subdivision C to be done within a particular period (referred to as the original action period) if an injunction or other court order prevents the act, or a further act of that kind, from being done within that period. New subsection 106TB(2) provides that, despite any other provision of Subdivision C, and subject to any order of a court, the original action period stops running at the beginning of the period (referred to as the suspension period) during which the injunction or other court order prevents the act from being done; and a new period (referred to as the new action period) for doing the act, being a period of the same length as the original action period, starts running on the day after the end of the suspension period. For example, where the Determining Authority has been provided with the Professional Services Review Committee's final report, the Determining Authority is required to invite the person under review to make a submission within one month after being given the Committee's final report (new subsection 106SA(3) - item 36 refers). This is the original action period. If an injunction prevents the Determining Authority from inviting the person, that is, there is a suspension period preventing the act from being done, then, once the suspension period ends, due to the injunction no longer being in force, the Determining Authority has one month from the day after the end of the suspension period to invite the person to make a submission. That is, the new action period for making the invitation for a submission is one month (which is equivalent to the original action period) and it runs from the day after the end of the suspension period. 26

New subsection 106TB(3) provides that if a court order operates during a submission period (sections 106SA and 106T refer), the person's submission period starts afresh irrespective of whether or not the person made a submission. If a person made a submission prior to the court order taking effect, the person is taken to have already made that submission for the purposes of any new action periods. The purpose of this subsection is to clarify that a person is not required to make another submission where they have already provided a submission prior to the court order taking effect. Item 42: Application of items 35, 36, 37 and 39 Item 42 is an application provision which provides that the amendments made by items 35, 36, 37 and 39 of Schedule 2 do not apply in relation to the making of a draft determination or a final determination in relation to a person under review under Part VAA, if the Professional Services Review Committee's final report in relation to the person was given to the Determining Authority under subsection 106L(3) of the HIA before the commencement of this item. Part 5 - No further action to be taken in certain circumstances This Part provides that a Professional Services Review Committee or the Determining Authority may take no further action in certain circumstances. Item 43: Subsection 106G(6) Subsection 106G(6) allows the Director, in certain circumstances, to give the Professional Services Review Committee written notice that the Director is satisfied that circumstances exist that make a proper investigation by the Committee impossible. The Director must also give this notice to the CEO of Medicare Australia and the person under review within seven days of giving the notice to the Professional Services Review Committee. Subsection 106G(6) is removed and replaced with a new section 106GA which deals with not only the notification by the Director but also the notification by the Professional Services Review Committee in circumstances where a proper investigation is impossible by the Committee (refer to item 44). Item 44: After section 106G Circumstances may arise when it becomes impossible for the Professional Services Review Committee to conduct a proper investigation or for the Determining Authority to make a Determination in relation to the person under review, for example when the person under review dies or is permanently incapacitated. Item 44 inserts section 106GA. The purpose of subsection 106GA(1) is that it allows the Director, in certain circumstances, to notify the Professional Services Review Committee that the Director is satisfied that circumstances exist that would make a proper investigation by the Committee impossible. The notice by the Director must set out the reasons for the decision. Subsection 106GA(2) provides for the Professional Services Review Committee to notify the Director, in certain circumstances, that the Committee is satisfied that 27

circumstances exist that would make a proper investigation by the Committee impossible. The notice by the Professional Services Review Committee must set out the reasons for the decision. Subsection 106GA(3) provides that if the Director or the Professional Services Review Committee gives a notice, the Director must give a copy of that notice to the CEO of Medicare Australia and the person under review within 7 days of the Director receiving the notice from the Committee or the Director giving the notice to the Committee. Item 45: Division 5 of Part VAA (heading) Item 45 replaces the heading `Division 5- Determinations by the Determining Authority' with `Division 5 - Determining Authority Subdivision A - Establishment etc. of the Determining Authority' clarifying that subdivision A of Division 5 of Part VAA of the HIA deals with both the establishment and functions of the Determining Authority. Item 46: Before section 106R Item 46 adds the heading `Subdivision B - Ratification of agreements by the Determining Authority' which identifies the provisions in Part VAA dealing with the ratification of section 92 agreements between the Director and the person under review by the Determining Authority. Item 46 also inserts subsection 106QA into the HIA which is an application provision that applies in circumstances where a section 92 agreement between the Director and the person under review is given to the Determining Authority for ratification. Section 106QB is also inserted into the HIA which broadly deals with circumstances that may arise when it becomes impossible for the Determining Authority to ratify a section 92 agreement between the Director and the person under review, such as when the person dies or is permanently incapacitated. Subsection 106QB(1) allows the Director to give a written notice to the Determining Authority that he or she is satisfied that it is not possible for an action in a section 92 agreement to take effect. The written notice must explain the reasons for this decision. Subsection 106QB(2) allows the Determining Authority to give a written notice to the Director that the Authority is satisfied that it is not possible for an action in a section 92 agreement to take effect. The written notice must explain the reasons for this decision. If a written notice is given by the Director to the Determining Authority in relation to a person under review pursuant to subsection 106QB(1) or a notice is given by the Determining Authority to the Director in relation to a person under review pursuant to subsection 106QB(2), then any decision under section 106R ceases to have effect in relation to the section 92 agreement, and the Director must, within 7 days, after giving or receiving the notice (as the case may be) give a copy of the notice to the Chief Executive Medicare and the person under review (subsection 106QB(3)). Item 47: Section 106 R (heading) Item 47 replaces the heading to section 106R with `Authority must ratify or refuse to ratify agreement'. 28

Item 48: Subsection 106R(1) Item 48 removes subsection 106R(1) and adds a new subsection 106R(1) that provides that the Determining Authority must decide whether or not to ratify a section 92 agreement within one month after the day on which it receives the agreement from the Director. This amendment is a technical consequential amendment, required as a result of the insertion of a new subdivision B (item 46 refers). Item 49: After section 106R Item 49 adds the heading `Subdivision C - Determinations by the Determining Authority' to identify the sections dealing with the making of the determinations by the Determining Authority. Item 49 also inserts new subsection 106RA into the HIA which is an application provision that applies in circumstances where a final report from the Professional Services Review Committee in relation to a person under review is given to the Determining Authority under subsection 106L(3). Item 49 also inserts new subsection 106RB which broadly deals with circumstances that may arise when it becomes impossible for the Determining Authority to make a proper draft or final determination in relation to a person under review, such as when the person dies or is permanently incapacitated. Subsection 106RB(1) allows the Director to give a written notice to the Determining Authority that he or she is satisfied that it is not possible for a proper draft or final determination to be made by the Determining Authority in relation to a person under review. The notice must explain the reasons for this decision. Subsection 106RB(2) allows the Determining Authority to give a written notice to the Director that the Determining Authority is satisfied that it is not possible for a proper draft or final determination to be made by the Determining Authority in relation to a person under review. The notice must explain the reasons for this decision. If a written notice is given by the Director to the Determining Authority in relation to a person under review pursuant to subsection 106RB(1), or a written notice is given by the Determining Authority to the Director in relation to a person under review pursuant to subsection 106RB(2), then Subdivision C (dealing with the provision of draft and final determination by the Determining Authority) ceases to have effect in relation to the person under review and the Director must within 7 days after giving or receiving the notice (as the case may be) give a copy of the notice to the Chief Executive Medicare and the person under review (subsection 106RB(3)). Part 6 - Date of effect for final determinations Item 50: Subsection 106V(2) Section 106V specifies when a final determination of the Determining Authority takes effect. 29

Existing subsection 106V(1) provides that subject to subsection 106V(2), the final determination takes effect on the 35th day after the day on which the Determining Authority gives a copy of it to the person under review. Existing subsection 106V(2) defines the dates from which the final determination takes effect when the person under review institutes court proceedings in respect of the final determination. Item 50 repeals existing subsection 106V(2) and substitutes new subsection 106V(2). New subsection 106V(2) differs from existing subsection 106V(2): · by addressing the issue of when the final determination takes effect if either an application instituting a proceeding is withdrawn or a proceeding is discontinued; and · by changing the timeframe within which the final determination takes effect when a person under review withdraws or discontinues an appeal. New subsection 106V(2) provides that, if before that 35th day (i.e. before the 35th day after the day on which the Determining Authority gives a copy of the final determination to the person under review - refer to subsection 106V(1)), a proceeding is instituted in a court in respect of the final determination, the determination takes effect (subject to any court order) at the end of the period specified in paragraph (a), (b), (c) or (d) as the case requires. Under paragraph (a) of new subsection 106V(2), if an application instituting a proceeding is withdrawn or the proceeding is discontinued, the determination takes effect (subject to any court order) at the end of 7 days after the day on which the application is withdrawn or the proceeding is discontinued. Under paragraph (c) of new subsection 106V(2), if an appeal is instituted but the appeal is then withdrawn or discontinued, the determination takes effect (subject to any court order) at the end of 7 days after the day on which the appeal is withdrawn or discontinued. New paragraph 106V(2)(c) corresponds to existing paragraph 106V(2)(b) but reduces the timeframe within which the determination takes effect from 35 days (after the day the appeal is withdrawn or discontinued) to 7 days (after the day the appeal is withdrawn or discontinued) where the appeal is instituted in a court other than the High Court. Under paragraphs (b) and (d) of new subsection 106V(2), if a proceeding or an appeal is dismissed or determined, the determination takes effect (subject to any court order) at the end of the prescribed number of days after the day on which the proceeding or the appeal is dismissed or determined. The prescribed number of days is set out in existing subsection 106V(3) and differs depending upon the court in which the proceeding or appeal is instituted. New paragraphs 106V(2)(b) and (d) in effect replicate existing paragraphs 106V(2)(a) and (c). Item 51: Application Item 51 provides that new subsection 106V(2) does not apply in relation to a final determination that was made by the Determining Authority under existing section 106TA before the commencement of item 51. 30

Part 7 - Referrals to Medicare Participation Review Committee Part 7 relates to the interaction between the PSR Scheme which is set out in Part VAA of the HIA and MPRCs which are established under Part VB of the HIA. MPRCs are statutory committees established on a case by case basis to make determinations on a range of matters relating to practitioners such as in relation to: · practitioners who have commissioned relevant offences or relevant civil contraventions ; or · approved pathology practitioners or authorities who are reasonably believed to have breached pathology undertakings; or · practitioners or persons who are reasonably believed to have engaged in prohibited diagnostic imaging practices; or · practitioners who have been found to have engaged in inappropriate practice on two separate occasions under the Professional Services Review Scheme. Currently, under subsection 106X(2), where a practitioner has been found to have engaged in inappropriate practice by a PSR Committee resulting in final determinations of a Determining Authority taking effect on two occasions, the Director must give to the Chairperson of a MPRC a written notice setting out the details of all final determinations that have taken effect against the person. An agreement between a practitioner and the Director under section 92 is taken to be a final determination of the Determining Authority for the purposes of section 106X (see paragraph 92(4)(f)). Under subsection 124E(2A), a MPRC must be established where the Chairperson receives a notice under section 106X. The MPRC then determines whether any further action should be taken against the practitioner to that determined by the Determining Authority. Under section 124FAA, the MPRC may determine that no further action be taken against the practitioner in addition to that action being taken under the final determination made by the Determining Authority under section 106TA. Alternatively, the MPRC may determine that the practitioner is disqualified (partly or fully) from providing professional services for a specified period not exceeding 5 years. A determination by the MPRC that a practitioner is disqualified replaces any period of disqualification under a final determination made under section 106TA that is still in force when the MPRC's determination is made. This Part removes the obligation imposed upon the Director under section 106X to refer practitioners who have been found to have engaged in inappropriate practice on two separate occasions (through either final determinations under section 106TA or negotiated agreements under section 92) to a MPRC. Instead, the Director (for agreements made under section 92) and the Determining Authority (for final determinations made under section 106TA) will be able to impose sanctions which are equivalent to those which are currently available to a MPRC under section 124FAA. This gives effect to Recommendation 9 of the Review of the Professional Services Review Scheme - Report of the Steering Committee - May 2007 which recommended the Determining Authority be given the power to enforce sanctions equivalent to those available to an MPRC. 31

Item 52: Subparagraph 19B(2)(a)(i) Item 52 amends existing subparagraph 19B(2)(a)(i) by omitting the reference to ",124FAA(2)(e)". This is a technical consequential amendment, resulting because existing section 124FAA is repealed by Schedule 2 of this Bill (item 70 refers). Item 53: Subparagraph 19B(2)(b)(i) Item 53 amends existing subparagraph 19B(2)(b)(i) by omitting the reference to ",124FAA(2)(d)". This is a technical consequential amendment, resulting because existing section 124FAA is repealed by Schedule 2 of this Bill (item 70 refers). Item 54: Subparagraph 19B(2)(c)(iii) Item 54 amends existing subparagraph 19B(2)(c)(iii) by omitting the reference to ",124FAA(2)(e)". This is a technical consequential amendment, resulting because existing section 124FAA is repealed by Schedule 2 of this Bill (item 70 refers). Item 55: Subparagraph 19B(2)(d)(iii) Item 55 amends existing subparagraph 19B(2)(d)(iii) by omitting the reference to ",124FAA(2)(d)". This is a technical consequential amendment, resulting because existing section 124FAA is repealed by Schedule 2 of this Bill (item 70 refers). Item 56: Subsection 19D(11)(paragraph (a) of the definition of disqualified practitioner) Item 56 amends existing subsection 19D(11) at paragraph (a) of the definition of the term disqualified practitioner by omitting the words ",124FAA(2)(d) or (e)". This is a technical consequential amendment, resulting because existing section 124FAA is repealed by Schedule 2 of this Bill (item 70 refers). Item 57: Paragraphs 92(2)(f) and (g) Item 57 amends existing paragraphs 92(2)(f) and 92(2)(g) by omitting the words "of not more than 3 years". This is a technical consequential amendment, resulting because of the insertion of new subsection 92(2A) (item 58 refers). Item 58: After subsection 92(2) Existing paragraph 92(2)(f) provides that the action that may be specified under a section 92 agreement includes that the person is to be disqualified, for a specified period of 3 years or less starting when the agreement takes effect, in respect of one or more of the following: · provision of specified services, or provision of services other than specified services; · provision of services to a specified class of persons, or provision of services to persons other than persons included in a specified class of persons; · provision of services within a specified location, or provision of services otherwise than in a specified location. Existing paragraph 92(2)(g) provides that the action that may be specified under a section 92 agreement includes that a person is to be fully disqualified for a specified period of 3 years or less starting when the agreement takes effect. Item 58 inserts new subsection 92(2A) which provides that, for the purposes of existing paragraphs 92(2)(f) and 92(2)(g), the period specified must not be more than 32

5 years (if the person is a practitioner in relation to whom an agreement under section 92, or a final determination under section 106TA, has previously taken effect) or 3 years (in any other case). Item 59: Paragraph 92(4)(e) Item 59 amends existing paragraph 92(4)(e) by omitting "jurisdiction; and", and substituting "jurisdiction.". This amendment is consequential upon the repeal of existing paragraph 92(4)(f) (item 60 refers). Item 60: Paragraph 92(4)(f) Item 60 repeals existing paragraph 92(4)(f) which is no longer required (item 64 refers). Item 61: Paragraph 106U(1)(g) Item 61 amends existing paragraph 106U(1)(g) by inserting after "disqualified" the words ", for a specified period starting when the determination takes effect,". This item clarifies paragraph 106U(1)(g) so that it is clear that the period during which a practitioner is partially disqualified starts when the determination takes effect. Item 62: At the end of paragraph 106U(1)(h) Item 62 amends existing paragraph 106U(1)(h) by inserting ", for a specified period starting when the determination takes effect". This item clarifies paragraph 106U(1)(h) so that it is clear that the period during which a practitioner is fully disqualified starts when the determination takes effect. Item 63: At the end of paragraph 106U(3) and (4) Item 63 repeals existing subsections 106U(3) and (4), substituting new subsection 106U(3) (there is no new subsection 106U(4)). New subsection 106U(3) provides that, for the purposes of paragraphs 106U(1)(g) and (h) (which concern directions included in a draft or final determination that a practitioner be partly or fully disqualified for a specified period - items 61 and 62 refer), the period specified must not be more than 5 years (if the person under review is a practitioner in relation to whom an agreement under section 92, or a final determination under section 106TA, has previously taken effect) or 3 years (in any other case). Item 64: Section 106X Section 106X requires the Director of Professional Services Review to notify the Chairperson of a MPRC when a practitioner has received two or more findings of inappropriate practice through either a negotiated agreement under section 92 and/or a 106TA final determination. Item 64 repeals section 106X because new subsections 92(2A) and 106U(3) will apply to practitioners who have received two or more findings of inappropriate practice through either a negotiated agreement under section 92 and/or a 106TA final determination. Item 65: Subsection 106ZPR(2) Item 65 repeals subsection 106ZPR(2) as it is no longer required (item 60 refers). 33

Item 66: Subsection 124E(2A) Under existing subsection 124E(2A), a MPRC must be established where the Chairperson receives a notice under existing section 106X. Item 66 repeals subsection 124E(2A) as it is no longer required (item 64 refers). Item 67: Subsection 124E(5) Item 61 amends existing subsection 124E(5) by omitting "106X or". This is a technical consequential amendment, resulting from the repeal of existing section 106X (item 64 refers). Item 68: Subsection 124E(5) Item 68 amends existing subsection 124E(5) by omitting ", (2A)". This is a technical consequential amendment, resulting from the repeal of existing subsection 124E(2A) (item 66 refers). Item 69: Subsection 124EA(1) Item 69 amends existing subsection 124EA(1) by omitting ", (2A)". This is a technical consequential amendment, resulting from the repeal of existing subsection 124E(2A) (item 66 refers). Item 70: Section 124FAA Existing section 124FAA sets out the permissible determinations that a MPRC established under subsection 124E(2A) must make in relation to a practitioner. Item 70 repeals section 124FAA as it is no longer required (item 64 refers). Item 70 commences on proclamation (see clause 2 of the Bill). Note that item 9 of Schedule 3 of this Bill amends existing section 124FAA. This amendment commences on the day after Royal Assent (i.e. before proclamation). Item 71: Subsection 124H(7) Item 71 amends existing subsection 124H(7), by omitting the reference to existing subsection 124FAA(2). This is a technical consequential amendment, resulting from the repeal of existing section 124FAA (item 70 refers). Item 72: Subsection 124J(8) Item 72 amends subsection 124J(8) by omitting ", (2A)". This is a technical consequential amendment resulting from the repeal of existing subsection 124E(2A) (item 66 refers). Item 73: Subsection 124S(9) Item 73 amends existing subsection 124S(9) by omitting "or paragraph 124FAA(2)(d) or (e)". This is a consequential amendment, resulting from the repeal of section 124FAA (item 70 refers). Item 74: Application Item 74 provides that the repeals and amendments of the HIA made by Part 7 do not apply in relation to a request to review the provision of services by a person that was made under section 86 of that Act before the commencement of this item. 34

Part 8 - Referrals to appropriate regulatory bodies This Part is about the Director's referral obligations and powers under the HIA in relation to significant threats to life or health. Item 75: Paragraph 93(8)(a) Item 75 amends existing paragraph 93(8)(a) by omitting the words "an appropriate body" and substituting the words "a person or body". This amendment is a technical consequential amendment, required as a result of new subsections 106XA(2) to (4) (item 79 refers). Item 76: Subsection 93(8) Item 76 amends existing subsection 93(8) by omitting the words "the appropriate body" and substituting the words "the person or body". This amendment is a technical consequential amendment, required as a result of new subsections 106XA(2) to (4) (item 79 refers). Item 77: Section 106XA (heading) This item replaces the heading for 106XA with `Significant threat to life or health'. This is a technical, consequential amendment. Item 78: Before subsection 106XA(1) Item 78 inserts the subheading `Opinion formed by Committee or Determining Authority'. This is a technical, consequential amendment. Item 79: Subsections 106XA(2) to (4) Item 79 repeals existing subsections 106XA(2) to (4) and substitutes new subsections 106XA(2) to (4). New subsections 106XA(2) to (4) broaden the circumstances in which the Director is required to notify bodies of conduct by a person under review that poses a significant threat to the life or health of another person. New subsections 106XA(2) to (4) also require the Director, where he or she has formed an opinion under new subsection 106XA(3), to prepare and send a written statement attaching relevant material to certain persons and bodies. Item 79 also defines `appropriate person or body' for the purposes of section 106XA. Existing subsection 106XA(1) provides that where a Professional Services Review Committee or the Determining Authority forms the opinion that conduct by a person under review may cause a significant threat to the life or health of another person, the Committee or the Determining Authority must provide a written statement of their concerns, with material on which their opinion is based, to the Director. New subsection 106XA(2) provides that if the Director receives from a Professional Services Review Committee or the Determining Authority a statement and material under existing subsection 106XA(1) in relation to conduct by a person under review, the Director must send the statement and material to: · a State or Territory body that is responsible for the administration of health services or the protection of public health and safety in the State or Territory in 35

which the conduct occurred (for example, a State or Territory Health Department, Chief Medical Officer or Health Care Complaints Commission); and · each appropriate person or body for the person under review (see new subsection 106XA(4)) (for example, a Medical Board or other registration body). New subsection 106XA(3) is headed "Opinion formed by Director". New subsection 106XA(3) provides that if, under Part VAA in relation to a person under review, the Director forms the opinion that the conduct of a person under review has caused, is causing, or is likely to cause a significant threat to the life or health of any other person, the Director must prepare a written statement of his or her concerns; attach to the statement the material (or copies of material) on which his or her opinion is based; and send the statement and material to: · the State or Territory body that is responsible for the administration of health service or the protection of public health and safety in the State or Territory in which the conduct occurred (for example, a State or Territory Health Department, Chief Medical Officer or Health Care Complaints Commission); and · each appropriate person or body for the person under review (see new subsection 106XA(4)) (for example, a Medical Board or other registration body). New subsection 106XA(4) is headed "Meaning of appropriate person or body" and provides that, for the purposes of new paragraph 106XA(2)(b) and new subparagraph 106XA(3)(c)(ii), an appropriate person or body for a person under review is a person or body that is specified in the regulations and has the power to take action against the person under review. For example, where a person under review is a medical practitioner, an appropriate body would be the body responsible for registering medical practitioners, such as a Medical Board. Item 80: Paragraph 106XB (heading) Item 80 replaces the heading to 106XB with `Non-compliance by a practitioner with professional standards'. This is a consequential, technical amendment. Item 81: Paragraph 106XB(2)(a) Item 81 repeals existing paragraph 106XB(2)(a) and substitutes with a new paragraph. New paragraph 106XB(2)(a) provides that if, under Part VAA in relation to a person under review who is a practitioner, the Director forms the opinion that the practitioner has failed to comply with professional standards, then under existing paragraph 106XB(2)(c) the Director must prepare and send a statement with relevant material to the appropriate body referred to in subsection 106XB(3). New paragraph 106XB(2)(a) differs from existing paragraph 106XB(2)(a) by broadening the circumstances in which the Director may form an opinion about whether the conduct of a person under review amounts to a failure to comply with professional standards. Existing paragraph 106XB(2)(a) is limited to the Director forming an opinion in the course of the Director's review rather than at any stage of the process under Part VAA, for example, in connection with functions and powers exercised by the PSR Committee or the Determining Authority. The effect of new paragraph 106XB(2)(c) is that the Director must prepare and send a statement under paragraph 106XB(2)(c) to the appropriate body where they have formed an opinion at any stage of the process, under Part VAA of the HIA that a practitioner has failed to comply with professional standards. 36

Part 9 - Disqualified practitioners Item 82: Subparagraphs 19B(2)(a)(ii) and (c)(iv) Item 82 amends existing subparagraphs 19B(2)(a)(ii) and (c)(iv) by omitting the word "partly" and substituting the word "fully". This amendment corrects minor errors in existing subparagraphs 19B(2)(a)(ii) and (c)(iv) which require correction to reflect the policy intent. The amendment to subparagraph 19B(2)(a)(ii) means that a medicare benefit is not payable in respect of a professional service if, at the time that the service was rendered, the person who rendered the service (or on whose behalf the service was rendered) was a practitioner who was taken to be fully disqualified because a determination by a MPRC was in effect under paragraphs 124F(2)(f) or 124FF(2)(e) or 124FF(2)(f) in relation to another person. The amendment to subparagraph 19B(2)(c)(ii) means that a medicare benefit is not payable in respect of a professional service if the service was initiated by a person (other than the person who rendered the service) and the person who initiated the service (or on whose behalf the service was initiated) was a practitioner who was taken to be fully disqualified because a determination by a MPRC was in effect under paragraph 124F(2)(f) or 124FF(2)(e) or 124FF(f) in relation to another person. Item 83: Subsection 19D(1) Item 83 amends existing subsection 19D(1) to include the words "or 106ZPM" after the words "section 19B". Existing section 106ZPM sets out the circumstances in which a person under review may be taken to be fully disqualified for the purposes of section 19D for intentionally failing to comply with a notice to produce documents or give information within the period specified in the notice. Under existing subsection 19D(1), the Minister may serve on a disqualified practitioner a written instrument directing that with effect from a particular day, the practitioner shall not render or initiate a specified professional service or services for which a medicare benefit is payable (under existing section 19B) unless, before rendering or initiating such a service (or services) to a patient, the practitioner provides a notice to, or otherwise informs, the patient about the particulars of the practitioner's disqualification and its effect. This amendment to existing subsection 19D(1) is intended to ensure that practitioners disqualified under section 106ZPM also have the notification obligations imposed upon them under subsection 19D(1). Item 84: Subsection 19D(11)(paragraph (c) of the definition of disqualified practitioner) Item 84 amends existing subsection 19D(11) at paragraph (c) of the definition of the term disqualified practitioner by omitting the word "fully". This is a technical amendment to clarify that, for the purposes of section 19D, paragraph (c) of the definition of disqualified practitioner also covers a practitioner who is partly 37

disqualified under an agreement between the practitioner and the Director under existing section 92 that is in effect. Item 85: Subsection 19D(11)(paragraph (e) of the definition of disqualified practitioner) Item 85 amends existing subsection 19D(11) at paragraph (e) of the definition of the term disqualified practitioner by omitting "paragraph 106U(1)(h) that the practitioner be fully disqualified" and substituting "paragraph 106U(1)(g) or (h)". This is a technical amendment to clarify that, for the purposes of section 19D, paragraph (e) of the definition of disqualified practitioner also covers a practitioner who is partly disqualified in accordance with existing paragraph 106U(1)(g). Item 86: Subsection 19D(11)(note to the definition of disqualified practitioner) Item 86 repeals the note to existing subsection 19D(11). Part 10- Patient referrals Item 87: After section 132 Existing subsection 133(2) provides that in circumstances where an item specifies a medical service that is to be rendered by a consultant physician or a specialist, to a patient who has been referred to him or her, regulations may require that, for the purposes of the item, the patient be referred in a manner prescribed by the regulations. However as a result of changes in health policy over the last decade a much broader range of practitioners (including a range of allied health practitioners) are now able to provide, on receipt of a referral, services for which a medicare benefit is payable. The purpose of the amendment at item 87 is to enable regulations to be made which prescribe the manner in which patients are referred for a service for which a medicare benefit is payable by a referring practitioner to another practitioner (who may not necessarily be a consultant physician or specialist). Item 87 inserts new section 132A. New subsection 132A(1) provides that, if an item specifies a service that is to be rendered by a practitioner to a patient who has been referred to the practitioner, the regulations may require that, for the purposes of the item, the patient is to be referred in a manner prescribed by the regulations. New subsection 132A(2) defines the terms item and practitioner for the purposes of new section 132A. New subsection 132A(2) provides that the term item includes an item relating to a service specified in a determination in force under subsection 3C(1). This provision is necessary because a service that is specified in a determination made under subsection 3C(1) is, pursuant to that determination, only treated (for the purposes of specified provisions of the HIA, the National Health Act 1953 and regulations made under those Acts), as if there were an item in a table that related to the service. There is no actual item in a table that relates to the service. 38

The term practitioner is defined as having the same meaning as in section 124B. Existing subsection 124B(1) defines the term practitioner and is amended by this Bill to include a health professional of a kind determined by the Minister to be a practitioner for the purposes of Part VB (item 25 refers)). This ensures that the term practitioner, as it is used in section 132A, will cover the broad range of practitioners specified in the definition of practitioner in section 124B. Item 88: Subsection 133(2) This item repeals subsection 133(2). Subsection 133(2) is no longer required as it has been replaced by new subsection 132A (item 87 refers). 39

Schedule 3 - Technical amendments relating to legislative instruments Items 1 to 8 of Schedule 3 of the Bill make a number of technical amendments to the HIA as a consequence of the commencement of the Legislative Instruments Act 2003. These amendments do not in any way affect the operation of the provisions of the HIA. Item 9 of Schedule 3 of the Bill amends existing section 124FAA to clarify its operation with respect to practitioners who are subject to section 92 agreements. Although Schedule 2 of the Bill will repeal section 124FAA, with effect from a day to be fixed by Proclamation, the repeal only applies in relation to section 86 requests made after the repeal takes effect. The "old law" (section 124FAA amended as proposed in item 9) will continue to operate in relation to requests made before that repeal. Item 1: Subsection 86(5) Item 1 amends existing subsection 86(5) by inserting ", by legislative instrument," after "Minister may". This is a minor technical amendment as a consequence of the Legislative Instruments Act 2003. The amendment makes it clear that the instrument referred to in the subsection is a legislative instrument under the Legislative Instruments Act 2003. Item 2: Subsection 86(6) Item 2 repeals existing subsection 86(6) as the subsection refers to section 46A of the Acts Interpretation Act 1901 which was repealed by the Legislative Instruments Act 2003. The subsection is repealed because it is redundant. Item 3: Subsection 93(4) Item 3 amends existing subsection 93(4) by omitting the reference to "in writing" and substituting a reference to "by legislative instrument". This is a minor technical amendment as a consequence of the Legislative Instruments Act 2003. The amendment makes it clear that the instrument referred to in the subsection is a legislative instrument under the Legislative Instruments Act 2003. Item 4: Subsection 93(5) Item 4 repeals subsection 93(5) as the subsection refers to section 46A of the Acts Interpretation Act 1901 which was repealed by the Legislative Instruments Act 2003. The subsection is repealed because it is redundant. Item 5: Subsection 106K(3) Item 5 amends subsection 106K(3) by omitting the reference to "make written" and substituting a reference to ", by legislative instrument, make". This is a minor technical amendment as a consequence of the Legislative Instruments Act 2003. The amendment makes it clear that the instrument referred to in the subsection is a legislative instrument under the Legislative Instruments Act 2003. Item 6: Subsection 106K(5) Item 6 repeals subsection 106K(5) as the subsection refers to section 46A of the Acts Interpretation Act 1901 which was repealed by the Legislative Instruments Act 2003. The subsection is repealed because it is redundant. 40

Item 7: Subsection 106Q(3) Item 7 amends subsection 106Q(3) by inserting ", by legislative instrument," after "Minister may". This is a minor technical amendment as a consequence of the Legislative Instruments Act 2003. The amendment makes it clear that the instrument referred to is a legislative instrument under the Legislative Instruments Act 2003. Item 8: Subsection 106Q(4) Item 8 repeals subsection 106Q(4) as the subsection refers to section 46A of the Acts Interpretation Act 1901 which was repealed by the Legislative Instruments Act 2003. The subsection is repealed because it is redundant. Item 9: At the end of section 124FAA Item 9 inserts new subsection 124FAA(7). New subsection 124FAA(7) clarifies that in section 124FAA, a reference to a final determination under section 106TA includes a reference to a section 92 agreement entered into between a person under review and the Director of Professional Services Review that, under paragraph 92(4)(f), is taken to be a final determination for the purposes of section 106X. This amendment makes it clear that where a person under review has been referred to a MPRC under section 106X (because two section 92 agreements or a section 92 agreement and a final determination under section 106TA have taken effect in relation to the person), paragraph 124FAA(2)(a) allows the MPRC to take no action in addition to the action taken under the section 92 agreements or the section 92 agreement and final determination (as the case requires) that gave rise to the MPRC being established under subsection 124E(2A). This amendment also makes it clear that if the MPRC determines under section 124FAA that a practitioner is disqualified, that determination has the effect of replacing any period of disqualification set out in a section 92 agreement or final determination (as the case requires) that is still in force at the time that the MPRC's determination under section 124FAA is made. 41

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