GA 2020/0717
Answer
No.
Context
An administrator in a public hospital had been incorrectly advised that he could start billing to Medicare for inpatient services including case conferences.
This answer deals with the law around billing public patients admitted to public hospitals.
Relevant legislative provisions
National Health Reform Agreement
Other Relevant Materials
1. Academic journal article published in the Journal of Law and Medicine, covering basic principles of Medicare billing including billing in public hospitals: Medicare Billing Law and Practice: Complex, Incomprehensible and Beginning to Unravel. https://www.ncbi.nlm.nih.gov/pubmed/31682343
Case law
Health Insurance Commission v Peverill [1994] HCA 8; (1994) 179 CLR 226; (1994) 119 ALR 675; (1994) 68 ALJR 251 (9 March 1994)
Departmental interpretation
mbsonline.gov.au (accessed 19 July 2020)
“GN.1.2 Medicare – an outline
The Medicare Program (‘Medicare’) provides access to medical and hospital services for all Australian residents and certain categories of visitors to Australia. The Department of Human Services administers Medicare and the payment of Medicare benefits. The major elements of Medicare are contained in the Health Insurance Act 1973, as amended, and include the following:
a. Free treatment for public patients in public hospitals…”
Detailed Reasoning
Section 19(2) of the Health Insurance Act is the most frequently cited section, which prohibits Medicare billing if a service has been rendered ‘by, or on behalf of, or under an arrangement with‘ various entities including state governments who are funded to run public hospitals. However, the section cannot be read in isolation. Both the 1994 High Court decision in the Peverill case, and the provisions of the National Health Reform Agreement create exceptions such as when employed specialists exercise rights of private practice.
Section 128C of the Health Insurance Act is more proscriptive, as follows:
“128C Charging of fees for provision of public hospital services to public patients
(1) A person mentioned in subsection (2) must not, in circumstances set out in the regulations:
(a) charge a fee for the provision of a public hospital service; or
(b) receive any payment or other consideration from anyone in respect of the provision of a public hospital service;
if the person knows that the person to whom the service is, or is to be, provided is, or intends to be, a public patient in the hospital.“
In addition, the National Health Reform Agreement (NHRA) between the state and federal governments upholds Medicare principles (set out in the Health Insurance Act) specifically that public patients who wish to remain public shall be treated free of charge. Below are relevant section of the NHRA:
“States will provide health and emergency services through the public hospital system, based on the following Medicare Principles:
a. eligible persons must be given the choice to receive public hospital services free of charge as public patients;”
AND
“Public patient charges… Where an eligible person receives public hospital services as a public patient no charges will be raised, except for the following services provided to non-admitted patients and, in relation to (f) only, to admitted patients upon separation:” What follows is prostheses, aids etc.
AND
“Where care is directly related to an episode of admitted patient care, it should be provided free of charge as a public hospital service where the patient chooses to be treated as a public patient, regardless of whether it is provided at the hospital or in private rooms.”
AND
“Where a patient chooses to be treated as a public patient, components of the public hospital service (such as pathology and diagnostic imaging) will be regarded as a part of the patient’s treatment and will be provided free of charge.”
The combined effects of Sections 19(2) and 128(c) and the NHRA are pretty clear but for the avoidance of doubt – free of charge means free to the patient and free to the federal government, so no bulk billing of public inpatients is permitted.
Further, multiple provisions of the NHRA reinforce the concept of patient choice – if a patient chooses to be public, that is their right, even if they have private health insurance.
Examples and other relevant information
Private and ineligible patients are essentially the only patients who can be billed when admitted to a public hospital.
The process of private election is based on patient consent. For clarity, a patient who has private health insurance (PHI) is completely within their rights to decide not to use their PHI and remain a public patient.
Section 18 of the Health Insurance Act provides that services provided to patients eligible to claim under a workers compensation or other third party insurance scheme for treatment of an accident of injury, shall not be billed to Medicare.
This answer applies to inpatients only, the billing of outpatient services in public hospitals comes under other provisions of the NHRA and will be the subject of a separate answer.
Who this applies to
Everyone
When this applies
Always