Frenetic law making during the COVID-19 pandemic: the impact on doctors, patients and the Medicare system
This is one of a special series of posts exploring the public law implications of the COVID-19 pandemic. For more information on the Gilbert + Tobin Centre's work in the area of public law and public health, see here.
Margaret Faux
24.04.20
On 11 March 2020, Prime Minister Scott Morrison announced a comprehensive $2.4 billion health package to protect Australians from COVID-19, including $100 million to fund new Medicare services. By 20 April 2020, there were twenty COVID-19 related delegated instruments, which were part of this initiative. All have been earmarked on the Senate Standing Committee for the Scrutiny of Delegated Legislation (SSCSDL) website for consideration at a future meeting, meaning these Determinations are already in force, having bypassed the law making norm of being scrutinised by the SSCSDL. With federal Parliament adjourned from 23 March 2020 for almost five months, it is unclear when usual Senate scrutiny of these instruments will be undertaken, if at all. In a media release dated 1 April 2020, the Chair of the SSCSDL announced that the Committee had resolved to meet and report regularly over the coming months, though there is no current indication of meeting dates or schedules.
Each of the Medicare Determinations has been enabled by s 3C(1) of the Health Insurance Act 1973 (Cth) (HIA). In an unprecedented move, the government has made bulk billing mandatory for the new COVID-19 services (with some exceptions) whereas under both the Australian Constitution and the HIA, it is voluntary. This clear inconsistency is throwing the Medicare billing and payment system into chaos. This is not to criticise the undoubted good intentions of a government forced almost overnight to adapt a system built before the Internet to nationalised telehealth. This post also does not seek to criticise doctors nor engage in moral arguments about whether they should be permitted to charge usual fees or should bulk bill everyone at a time when Australians are losing their jobs. Instead this post will explore and consider the short and potential long-term consequences of mandated bulk billing, including the likelihood of future legal challenges against the government, and the reality of causing increased out of pocket medical costs for Australians. Bulk billing is the lynchpin of Medicare and upending the way it operates at a time of crisis may not prove prudent.
Bulk billing and the Constitution
Mandatory bulk billing is constitutionally impermissible pursuant to the civil conscription caveat in s 51(xxiiiA). This provision of the Constitution relevantly grants the Commonwealth Parliament power to legislate with respect to ‘medical and dental services (but not so as to authorize any form of civil conscription)’. Numerous High Court decisions have settled certain points of law in relation to this clause, including that the relationship between a privately practising doctor and a patient is governed by general principles of contract law, and that both legal and practical compulsion, such as for patients to be entitled to see only a particular doctor or for doctors to practice only as public servants, may offend the caveat (see e.g. British Medical Association v Commonwealth (1949); General Practitioners Society in Australia v Commonwealth (1980); Alexandra Private Geriatric Hospital Pty Ltd v Commonwealth (1987); Health Insurance Commission v Peverill (1994); Wong v Commonwealth (2009)). Since the enactment of the Australian Medicare system, Australian doctors have always been free to set their fees as they wish and not bulk bill if they don’t want to. In 1973, to circumvent the Constitutional placitum, the Whitlam Government constructed key machinery provisions of what became Medicare, judiciously, on two simple pillars:
The only person entitled to a Medicare benefit is a patient (not a doctor), and
A patient may elect to assign their Medicare benefit to a doctor through a voluntary process known as bulk billing, which is described in s 20A of the HIA.
By simultaneously making every Australian eligible for Medicare, and making bulk billing optional, the risk of offending s 51(xxiiiA) was all but eliminated, and everyone would bulk bill anyway because, well, who would say no? It really was quite brilliant, though of course success depended on the Medicare rebate being adequate and acceptable remuneration for doctors, and initially it was. Doctors are not permitted to charge any out of pocket amount when they bulk bill and must accept the government rebate as full payment for their service. Over time, as rebates have failed to keep pace with medical practice running costs, bulk billing rates have declined.
The expansion of telehealth services in response to COVID-19, and the introduction of mandatory bulk billing
The COVID-19 pandemic has shaken even Medicare’s pillars to their core and placed more than a virus under a microscope. Bulk billing is now the subject of experimentation in a petri dish of its own.
Prior to the Governor-General’s declaration of a Biosecurity Emergency on 18 March 2020 changes to Medicare had begun. The Medicare scheme has included restricted telehealth services for remote Australians and those living in residential aged care facilities for many years, but COVID-19 necessitated a rapid expansion and rethink of telehealth, that balanced the demands of doctors with the need to ensure a viable Medicare system remained standing post pandemic. The government adopted a staged approach to test these uncharted waters.
Stage 1 commenced on 13 March 2020, which was the day bulk billing was made mandatory (for the new COVID-19 services) for the first time in history. The twoDeterminations comprising Stage 1 introduced limited telehealth services for patients who met certain vulnerability criteria and for health professionals who were at risk of COVID-19, and required that these services be bulk billed.
Three days later, on 16 March 2020, amendments were made to various unworkable provisions via a new Stage 2Determination, though bulk billing remained mandatory.
After the Governor-General’s Declaration on 18 March 2020, and simultaneously with the adjournment of federal Parliament on 23 March 2020, Stage 3 made further changes to add vulnerable practitioners to the class of health professionals who were eligible to use the new COVID-19 Medicare services. So, for example, a pregnant dermatologist met the Stage 3 criteria and was permitted to consult patients she would normally have seen face-to-face in her rooms, remotely from home. However, a non-pregnant, otherwise healthy dermatologist under the age of 70 was not permitted to use the new Stage 3 COVID-19 Medicare services and had to continue to consult her patients face-to-face, unless the patients were at risk of COVID-19.
Then on 30 March 2020, the Federal Health Minister announced the Stage 4whole of population telehealth. This stage essentially dropped all prior vulnerability criteria for access to the new Medicare telehealth services and hinted at an end to mandatory bulk billing to come in Stage 5.
However, when Stage 5 was announced on 6 April 2020, doctors were still required to bulk bill for vulnerable patients, and an expansive definition of ‘vulnerable’ ensured many doctors remained forced to bulk bill for most of their patients if their patient populations comprised mostly patients fitting this criteria. A vulnerable patient was defined as a patient at risk of COVID-19 in the following terms (see sch 1 of the Stage 5 Determination):
patient at risk of COVID-19 virus means a person who:
(a) is required to self-isolate or self-quarantine in accordance with guidance issued by the Australian Health Protection Principal Committee in relation to COVID-19; or
(b) is at least 70 years old; or
(c) if the person identifies as being of Aboriginal or Torres Strait Islander descent—is at least 50 years old; or
(d) is pregnant; or
(e) is the parent of a child aged under 12 months; or
(f) is being treated for a chronic health condition; or
(g) is immune compromised; or
(h) meets the current national triage protocol criteria for suspected
COVID-19 infection.
It was evident that subclause (b) brought large numbers of patients within scope and that geriatricians would be forced to bulk bill almost everyone. Subclause (g) had the same effect on oncologists and haematologists treating cancer patients, and subclause (f) was a catch-all that would apply to many patients and potentially all psychiatric patients, depending on the definition of ‘chronic health condition.’ Subclause (e) also raised questions about how every doctor would necessarily know their patient had a child under 12 months if there was no reason for that information to be shared.
A further Determination commenced on 20 April 2020. This Determination finally scrapped mandatory bulk billing for all health workers except GPs, who remain required to bulk bill COVID-19 Medicare services for concession card holders, children under 16 and patients who are more vulnerable to COVID-19 (in accordance with the above unchanged clause), at the time of writing. Further changes will no doubt be made.
The impact on doctors
Doctors are confused. And that is a problem for both doctors and the government. The latter may find itself unable to enforce or prosecute abuses of the Medicare scheme 18 months from now, in the post-COVID period.
Having been inundated with requests from doctors seeking clarity about mandatory bulk billing, I commenced a daily bulletin on 16 March 2020 answering questions about the new COVID-19 Medicare services. It serves to illustrate the high levels of confusion about Medicare billing compliance right now. Even the most basic elements of a bulk billing transaction, such as whether the patient still has to sign the assignment of benefit voucher and how that can be done over a phone call, have caused Medicare audit anxiety.
Medicare audit anxiety is an increasingly well-documented phenomenon that some commentators have identified as contributing to doctor burnout and suicide. It stems from a long-standing problem of doctors not really understanding how Medicare works and worse, being randomly subjected to sometimes far reaching investigations by officials who also do not know how it works. There is not now, and has never been, a national curriculum on the law and practice of Medicare, so levels of knowledge are variable, including within the Federal Services Australia Department, which administers the scheme.
If you can imagine running a case in the Supreme Court having never been made aware of the Supreme Court Rules, that will give you a glimpse into the world doctors inhabit when it comes to Medicare. Astonishing though it may seem, Australian doctors are never taught how Medicare works or how to bill correctly at any point in their careers. It is a central area of inquiry in my PhD on Medicare claiming and compliance.
Confusion about correct use of Medicare prevails even in non-COVID times, so to add to that burden by enacting laws so fast that the same billing decision might be illegal on 13 March, legal on the 31st, illegal again on 6 April, and legal again from 20 April, has increased anxiety levels among doctors exponentially, but it is the longer-term fear of an investigation and audit that troubles them the most, and there is unfortunately no reliable resource that can assuage that fear completely.
In a recent post on AUSPUBLAW, Andrew Edgar described one of the problems of rapid, unscrutinised law-making being legal uncertainty in circumstances where serious penalties may be imposed for breaches of laws unable to be found, because they are not on the register. Certainly, this phenomenon has occurred in relation to the Medicare Determinations. Not only has the MBS Online website (detailing items of the Medicare Benefits Schedule) not kept pace with the frenetic changes, but neither that website, nor verbal or even written advice from the Department, can be relied upon by doctors in any event.
In Stirling v Minister for Finance [2017] FCA 874, Dr Stirling was a GP who recorded a telephone conversation he had with Medicare seeking advice about whether he was eligible to claim two Medicare services. The recorded telephone advice he received, which was later admitted into evidence, led him to believe he was so eligible, and he commenced regularly claiming the two services. He also confirmed the verbal advice in a letter to Medicare which informed the Department of his understanding and intentions. He successfully claimed the two uncontroversial services for the next five years before being audited by Medicare, which decided he was not eligible to claim them, had never been, and would be required to repay a debt of $332,541.30 to the Commonwealth. On the basis that relevant considerations had not been taken into account and the earlier decision was legally unreasonable, Dr Stirling successfully appealed a decision disallowing his application for waiver of the Commonwealth debt and the matter was remitted to the Minister for further consideration.
In addition to departmental desk audits, which can have catastrophic consequences for doctors such as Dr Stirling, billing concerns can also be investigated by the Professional Services Review Scheme (PSR), a scheme under Part VAA of the HIA. The PSR is a peer review scheme administered by lay people with a remit to protect the integrity of Medicare and the Pharmaceutical Benefits Scheme.
The PSR has been plagued by Federal Court challenges since its inception in 1994, many of which have included an element of denial of procedural fairness. In addition, in the recent PSR matter of Nithianantha v Commonwealth of Australia [2018] FCA 2063, a quite breathtaking decision was made which effectively closed off the only remaining source of reliable information for doctors about Medicare billing. In that case, Dr Nithianantha attempted to rely on written advice from Medicare (see Nithianantha at [38(6)] and [55]) to justify a medical billing decision but was unsuccessful because the PSR effectively said the written advice was wrong. Notably, the Stirling decision was not cited in Nithianantha and there appears to have been no consideration of any relevant precedent that may arguably have been set.
As a result of the Nithianantha decision, doctors have been left in a situation where it is no longer an exaggeration to say there is apparently nowhere they can go to obtain legally accurate, reliable information on Medicare billing. So, in the context of rapidly changing, complex, COVID-19 Medicare billing arrangements, heightened fear of Medicare audits would seem well placed.
In addition to general confusion about what happens, for example, if a doctor decides not to bulk bill a COVID-19 Medicare service (does the patient simply not receive their Medicare rebate or is a penalty imposed on the doctor?), the highly interpretive nature of the new service descriptions may very likely lead to costly appeals for the government. In Suman Sood v R [2006] NSWCCA 114, Adams J stated that requiring Dr Sood to have known in advance the legal meaning of ‘in respect of’ amounted to requiring her to provide an opinion concerning the interpretation of the law and its application to the facts which, as a medical practitioner, she had neither the skills nor the qualifications to do. Similarly, the system is now requiring doctors to predict what the legal interpretation of words such as ‘chronic health condition’ might be, which, in turn, determines whether a service must be bulk billed or not. Doctors are therefore in a similar position to Dr Sood, where a not unreasonable interpretation of a COVID-19 Medicare service may end up being wrong, but the only way to find out is when it’s too late and the doctor has found herself before the PSR or a court.
The impact on patients
Ultimately, the greatest impact of the mandatory bulk billing decision will be felt by consumers, because the Medicare entitlement is theirs. However, it may not play out in the manner anticipated by the government and protect consumers from out of pocket costs. It may instead do the opposite.
In 1972, a few years before the introduction of the original scheme Medibank (later Medicare), then Health Minister, Bill Hayden, referring to the Constitutional caveat, correctly stated:
Doctors don’t have to enter the scheme; we couldn’t compel them to. They could just refuse to take part…Doctors aren’t going to be conscripted…
In the 2009 High Court case of Wong v Commonwealth, Kirby J described the circumstances when doctors can bill outside of the Medicare scheme in the following terms:
Whilst fully disqualified, a medical practitioner would not be prevented from rendering medical services for which no Medicare benefit was payable – such as … for those patients who are "prepared to pay the practitioner's fee without claiming on Medicare”.
While Kirby J’s comments related to a disqualified doctor, they apply to all doctors and the practical effect is that there is no legal barrier to doctors charging patients private fees during COVID-19, as long as the patient does not claim on Medicare. This is easy for doctors to implement by not putting a Medicare item number on the relevant invoice. Anecdotal evidence suggests that the combined effects of the fear of making billing errors despite best intentions and rapidly collapsing practices under mandatory bulk billing, has caused some doctors to start doing precisely this, meaning Medicare-eligible taxpayers are being denied Medicare rebates.
Conclusion
The current COVID-19 item numbers in the Medicare schedule will sunset on 30 September 2020, though the government will no doubt be under pressure before then for their continuance. Medicare, as an honour system, relies heavily on the integrity of doctors to bill correctly. While evidence suggests most doctors do try to achieve compliance, it cannot be denied that telehealth will expose Medicare to new vulnerabilities and risks – how will the Department know if a phone call between a doctor and patient ever took place when the costs of auditing each single service outweigh the value of the claim?
Before telehealth becomes a permanent feature of Australia’s health system, important structural weaknesses and educational deficits will need to be addressed to ensure the scheme’s sustainability. However, mandatory bulk billing does not now and will never fit within the current legal structure of Medicare, not least because it is constitutionally impermissible, and the attempt to force it during COVID-19 may end up being of rhetorical effect only, unable to be policed or prosecuted in any meaningful way.
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Margaret Faux is a solicitor and PhD candidate. The focus of her doctorate is Medicare claiming and compliance. She has previously also worked as a Registered Nurse.
Suggested citation: Margaret Faux, 'Frenetic law making during the COVID-19 pandemic: the impact on doctors, patients and the Medicare system' on AUSPUBLAW (24 April 2020) <https://auspublaw.org/blog/2020/04/frenetic-law-making-during-the-covid-19-pandemic-the-impact-on-doctors-patients-and-the-medicare-system/>