Health Insurance (Diagnostic Imaging Accreditation - Approved Accreditors) Determination 2008

Explanatory Statement

Health Insurance Act 1973 (Cth)

Health Insurance (Diagnostic Imaging Accreditation – Approved Accreditors) Determination 2008

Issued by the authority of the Minister for Health and Ageing

The purposes of this instrument are two-fold.  The first is to designate persons with whom certain notices are to be lodged for registration of diagnostic imaging premises and bases for mobile diagnostic imaging equipment (diagnostic imaging practices) for deemed accreditation.  The second purpose is to approve persons to act as approved accreditors for diagnostic imaging practices seeking actual accreditation.

This instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003 (Cth).  It commences on the day after the date of its registration on the Federal Register of Legislative Instruments, and ceases to have effect at the end of the day on 30 June 2010.

Background

The Health Insurance Amendment (Diagnostic Imaging Accreditation) Act 2007 (Cth) (the DIA Act) amended the Health Insurance Act 1973 (Cth) (the Act) to establish a legislative framework for the introduction of an accreditation Scheme for practices providing diagnostic imaging services under Medicare other than:

• Cardiac Ultrasound;
• Cardiac Angiography;
• Obstetric and Gynaecological Ultrasound; and 
• Nuclear Medicine Imaging.

From 1 July 2008, diagnostic imaging premises or bases for mobile diagnostic imaging equipment will need to be accredited for diagnostic imaging procedures in order to retain Medicare eligibility (subject to deemed accreditation arrangements discussed below).  The Diagnostic Imaging Accreditation Scheme (which may comprise one or more Schemes relating to accreditation of diagnostic imaging practices) is to be established by the Minister under paragraph 23DZZIAA(1)(a) of the Act.  Accreditation is to be undertaken by a person or persons approved by the Minister (approved accreditor) under paragraph 23DZZIAA(1)(b).

Deemed accreditation

Proprietors of existing diagnostic imaging practices who lodge a notice of registration for accreditation of their diagnostic imaging practices for diagnostic imaging procedures before 1 July 2008, will be deemed to be accredited (deemed accreditation) under the Scheme for those procedures.  The notice must be lodged with a person designated by the Minister under subitem 12(5) of Schedule 1 of the DIA Act (designated person).  In order to retain Medicare eligibility proprietors with deemed accreditation will need to apply for actual accreditation under the Scheme before 1 July 2009.

Actual accreditation

One or more legislative instruments may establish one or more Schemes for actual accreditation of diagnostic imaging practices by the Minister under paragraph 23DZZIAA(1)(a) of the Act.  An actual accreditation expires on a date and time depending on the terms of any particular accreditation decision.

Consultation

Prior to enactment of the DIA Act there was considerable consultation with stakeholders and general support for an accreditation Scheme administered by the Commonwealth.  The Scheme will be under review during its first two years of operation.  Consultation with stakeholders will continue to be undertaken during that period.  The utilisation of deemed accreditation is one mechanism adopted to ensure that there is minimal impact on business. 

Explanation of sections in the Determination

Section 1 – Name of Determination

Section 1 provides that the Determination is the Health Insurance (Diagnostic Imaging Accreditation- Approved Accreditors) Determination 2008.

Section 2 – Purpose of Determination

Section 2 explains that the purpose of this Determination is to designate persons to receive certain notices that are to be lodged by proprietors of diagnostic imaging practices seeking deemed accreditation and to approve accreditors who are to receive and make decisions on applications by proprietors of diagnostic imaging practices seeking actual accreditation of their practices. 

Section 3 – Commencement and term

Section 3 establishes that the Determination commences on the day after the date when the Determination is registered on the Federal Register of Legislative Instruments and remains in force until the end of the day on 30 June 2010.

Section 4 – Interpretation

Subsection 4(1) provides definitions for words and phrases used in the Determination.  These are as follows.

"Act" refers to the Health Insurance Act 1973.

"actual accreditation" refers to accreditation of a diagnostic imaging practice based on its compliance with criteria provided in a legislative instrument establishing a diagnostic imaging accreditation Scheme under paragraph 23DZZIAA(1)(a) of the Act.  The definition notes that actual accreditation is distinguished from deemed accreditation for which item 12 of Schedule 1 of the DIA Act provides. 

"designated person" refers to a person designated by the Minister to receive applications for registration for deemed accreditation under subitem 12(5) of Schedule 1 of the DIA Act.

"Diagnostic Imaging Accreditation Act" refers to the Health Insurance Amendment (Diagnostic Imaging Accreditation) Act 2007. 

"diagnostic imaging practice" is a convenient term to cover a "diagnostic imaging premises" and a "base for mobile diagnostic imaging equipment".  These two terms are in turn defined in the Act and are explained below.

Subsection 4(2) explains that a reference to "item 12" means item 12 of Schedule 1 of the DIA Act and a reference to "subitem” has a corresponding meaning.

Subsection 4(3) of the Determination provides that a word or phrase used in this Determination that is defined in this section or in the Act or the DIA Act is preceded by an asterisk in the Determination.  It alerts the reader to the need to consult the definitions. 

The notes following subsection 4(3) of this Determination refer to definitions of words and phrases used in the Determination that are defined in the Act or the DIA Act.  These are as follows.

"approved accreditor" is said in section 3(1) of the Act to have the meaning in paragraph 23DZZIAA(1)(b) of the Act.  This is a person or persons approved by the Minister in one or more legislative instruments to accredit premises and bases under the Scheme. 

"base for mobile diagnostic imaging equipment" is said in subsection 3(1) of the Act to have the meaning given by section 23DZL.  Section 23DZL describes a base for mobile diagnostic imaging equipment as premises where diagnostic imaging equipment is ordinarily located when not in use and where the diagnostic imaging procedures carried out using the equipment are not carried out at the premises, or are frequently carried out off the premises.  The diagnostic imaging procedures must be carried out using a single business name.

"deemed accreditation" is defined in subitem 12(2) of Schedule 1 of the DIA Act.  It arises where the proprietor of a diagnostic imaging practice lodges a notice under subitem 12(1) of Schedule 1 of the DIA Act before 1 July 2008 registering the practice for one or more diagnostic imaging procedures.  The diagnostic imaging practice is, for the purposes of section 16EA of the Act, taken to be accredited under a diagnostic imaging accreditation Scheme for the procedures specified in the proprietor's notice.  Subitem 12(3) requires a proprietor with deemed accreditation for any procedure to apply for actual accreditation for that procedure before 1 July 2009 or before another day if such a day is specified in a diagnostic imaging accreditation Scheme for this purpose (the application deadline day).  Subitem 12(4) deals with the cessation of deemed accreditation.  Under that subitem deemed accreditation ceases on the application deadline day if the proprietor has not applied for actual accreditation for the procedure before that day.  Where the proprietor has sought actual accreditation for the procedure before the application deadline day and accreditation has been granted then deemed accreditation ceases on the day that the actual accreditation takes effect.  If the proprietor seeks actual accreditation for the procedure before the application deadline day and the approved accreditor refuses accreditation for that procedure then deemed accreditation ceases on the day after the proprietor's rights to reconsideration are exhausted or expire.

"diagnostic imaging premises" are said in subsection 3(1) of the Act to have the meaning given by section 23DZM.  Section 23DZM states that diagnostic imaging premises are a building, or part of a building, at which diagnostic imaging procedures are carried out under a single business name.  Subsection 23DZM(2) emphasises that a base for mobile diagnostic imaging equipment is not diagnostic imaging premises.

"proprietor" is defined in subsection 3(1) of the Act by reference to section 23DZO of the Act.  In essence the proprietor of a diagnostic imaging practice is the person or government agency that has effective control of the premises or the base, the use of the diagnostic imaging equipment used at or ordinarily located at the premises, and the employment of staff connected with the premises or the base. 

Section 5 – Designation of persons for the purposes of deemed accreditation

Subsection 5(1) of the Determination provides that the designated persons with whom notices under subitem 12(1) are to be lodged are:

  (a) Health and Disability Auditing New Zealand Limited (ARBN 124 747 468), trading as Health and Disability Auditing Australia (Queensland BN 20355610);

  (b) National Association of Testing Authorities, Australia (ACN 004 379 748);

  (c) Quality in Practice Pty Ltd (ACN 094 965 590); and

  (d) The Australian Council on Healthcare Standards Limited (ACN 008 549 773).

The persons named as designated persons under subsection 5(1) of this Determination are designated for the period from the day following the date of registration of the Determination until the end of the day on 30 June 2008.

Section 6 – Approval of persons to accredit diagnostic imaging practices

Subsection 6(1) of this Determination provides that the approved accreditors who are to accredit diagnostic imaging practices in accordance with paragraph 23DZZIAA(1)(a) of the Act are:

  (a) Health and Disability Auditing New Zealand Limited (ARBN 124 747 468), trading as Health and Disability Auditing Australia (Queensland BN 20355610);

  (b) National Association of Testing Authorities, Australia (ACN 004 379 748);

  (c) Quality in Practice Pty Ltd (ACN 094 965 590); and

  (d) The Australian Council on Healthcare Standards Limited (ACN 008 549 773).

The persons named as approved accreditors under subsection 6(1) of this Determination are designated for the period from the day following the date of registration of the Determination until the end of the day on 30 June 2010.

The detailed duties and other arrangements associated with the performance of the functions of the designated persons and approved accreditors are set out in Deeds of Agreement signed by Commonwealth representatives and the designated persons and approved accreditors.

REGULATION IMPACT STATEMENT

1.  Introduction

Diagnostic imaging is the field of medicine that deals with the scanning of radiographic images of the body using medical imaging techniques, advanced computers and complex equipment that allows doctors to see inside a patient’s body and to provide a very accurate display of human anatomy, pathology and physiology.  Forms of imaging include x-ray, magnetic resonance imaging (MRI), ultrasound and computed tomography.  Modern diagnostic imaging methods clearly define disease processes and also allow evaluation of the effects of treatment.  The newer imaging modalities also enable the diagnostic radiologist to undertake sophisticated interventional procedures.  As with many other health treatments there are, however, risks to patients associated with diagnostic imaging.  The main risks are involved with use of radiation, radio-nucleotides, contrast media, and interventional procedures.

Background

In 2007 the Health Insurance Act 1973 was amended to establish from 1 July 2008 an accreditation scheme, linked to the payment of Medicare benefits.

This Regulation Impact Statement (RIS) covers issues relating to the next steps in the establishment of the accreditation scheme for diagnostic imaging services and its operative provisions.  The operational aspects of the accreditation scheme considered in this RIS and which will be specified in the subordinate legislation are the:

• standards that practice sites will need to comply with and that accreditors must assess against;
• process for obtaining and maintaining accreditation;
• process for undertaking assessments and conducting reviews and appeals; and
• organisation(s) determined to be competent to provide accreditation services for the scheme.

Any further changes to these elements of the accreditation scheme will form the second stage of the two stage model described in this paper and will be the subject of a separate RIS. 

1.1  The Problem

Unlike other parts of the health care system, there is currently no broad-based mechanism that helps to ensure that the various elements involved in the delivery of diagnostic imaging services work together and that optimal diagnostic imaging services are being provided to patients.  In what is now a diverse industry with a wide range of imaging practice types there is potential for inconsistency in the delivery of imaging services.  Variations in the qualifications and experience of practitioners, standards of supervision, equipment standards, practice protocols and administrative procedures could lead to inconsistencies, which have been shown to increase the likelihood of adverse events resulting in patient harm. 

The Health Insurance Amendment (Diagnostic Imaging Accreditation) Act was passed by Parliament in 2007 to address these concerns. 

Subject to transitional arrangements, from 1 July 2008 practice sites providing diagnostic imaging services which fall within the scope of the scheme will need to be accredited for those services in order to remain eligible for Medicare benefits.  Non-accredited practice sites providing these services will not be eligible for Medicare benefits for those services.

There is a need to strike a balance between the introduction of an accreditation scheme to ensure the provision of safe, quality diagnostic imaging services and maintaining patient access to Medicare funded services.  Patients will be disadvantaged if imaging becomes unaffordable or access to Medicare funded imaging services is reduced in response to the introduction of the accreditation scheme. 

Having set as the objective the establishment of a comprehensive accreditation scheme to support high-quality delivery of services under Medicare, the regulatory problem is to determine the conditions under which eligible diagnostic imaging service providers would participate in the scheme.  This means taking account of:

• the legislative requirement for the scheme to commence operation from 1 July 2008;
• the current quality system in the sector based on minimum standards, with some practices participating in accreditation schemes on a voluntary basis and exceeding minimum standards; and
• the diverse characteristics of the practices which provide diagnostic imaging services.

The design of the scheme as articulated in the legislative instruments, therefore needs to avoid a rigid approach that would impose unnecessary cost and impede access to essential health services. 

A major challenge in deciding on implementation arrangements is the need to cater for the large number of practices and the diverse range of practice types rendering diagnostic imaging services. 

Diagnostic imaging services are provided, and are increasingly being provided, by a diverse range of provider groups, as well as by specialist radiologists. Among those directly involved in the provision of imaging services are general practitioners, surgeons, vascular surgeons, cardiologists, orthopaedic surgeons, obstetricians and gynaecologists, phlebologists, anaesthetists, sports physicians, chiropractors, sonographers, radiographers, and dentists. 

Diagnostic imaging services can also be provided in a range of practice settings and circumstances, including hospitals, single practitioner practices and multi-site corporate practices, or in conjunction with surgical procedures. 

An additional challenge is that many of the sites providing diagnostic imaging services are accredited under other health care schemes such as the GP and hospital accreditation schemes. 

1.2  Quality in Health Care

Australian governments through the Australian Health Ministers' Conference have given expression to the desire to improve safety and quality across the health care system in Australia.  The Australian Commission for Safety and Quality in Health Care (ACSQHC) was established jointly by the Commonwealth and state and territory governments in 2006 to lead and coordinate improvements in safety and quality in health care in Australia. 

The Commission's establishment followed the Paterson Review[1] that found that while Australia has a good record for improvements in health safety and quality, important work needs to be done at all levels of the health system to ensure that care is safe, effective and responsive to the needs of consumers.  The Review also noted that accreditation is an important driver for safety and quality improvement, and urged development of a plan to enhance the role of accreditation in both quality improvement and in the implementation of agreed national standards. 

The Commission is currently in the process of developing an umbrella framework for accreditation across the health services sector.  This framework will incorporate a set of principles and other core elements, such as national health standards, quality improvement, and mutual recognition, which will underpin the design and development of individual accreditation arrangements.  The framework will ensure that in the future the current piecemeal approach to the development and review of accreditation schemes is removed and replaced by a more coordinated and systematic approach.

The ACSQHC and the Australian Institute of Health and Welfare collect data and analyse the performance of Australia's health system.  There is, however, very little longitudinal data on the performance of specific health services, such as diagnostic imaging.  It is acknowledged that any adverse safety or quality incident for any medical procedure, including those involving diagnostic imaging, can have serious consequences for the patient concerned.  Australian health authorities regard it as unacceptable for potentially preventable incidents to occur.  Systems of standards and accreditation are an important mechanism to minimise such incidents. 

1.3 Accreditation

It is reasonable for Australian consumers to expect to receive quality services in all fields of health care.  Accreditation is one means of gaining assurance that the large amount of money spent through Medicare is spent on services of an appropriate standard.

Accreditation is a process of externally assessing an organisation's performance against a defined set of standards.  Accreditation is generally recognised as a means of assisting the health care industry to review and improve systems that support the delivery of safe and high-quality health care.  The accreditation process provides:

• a means of ensuring that minimum standards of practice operation are met;
• a benchmark for maintaining that competence; and
• feedback to enhance overall quality in a professional discipline over time.

Accreditation is based on standards and processes devised and developed by, or in association with, health care professionals themselves.

The quality of a diagnostic imaging service provided by a practice is affected by a range of factors other than the professional qualifications of the staff.  Effective management, equipment performance, information systems, and multidisciplinary teamwork - all contribute to a quality diagnostic imaging service.  An appropriate accreditation system would look at these and other factors and the way they are combined to deliver a high quality patient service. 

Participation in an accreditation scheme as a pre-requisite for access to Medicare payments would bring diagnostic imaging into line with some other health services.  It would assure the public of certain standards of safety and patient care and build in processes which will lead to continuous improvement. 

In a separate development the Government has also incorporated a quality requirement into the eligibility of health services for private health insurance support.  From 1 July 2008 under a separate legislative requirement eligible health sector service providers, including diagnostic imaging, will only qualify for support from private health insurers, if the practice concerned is subject to a recognised accreditation arrangement. 

1.4  Diagnostic Imaging Sector

In 2006-07 over 75 per cent of the Medicare benefits paid for diagnostic imaging services covered services included within the scope of the accreditation scheme. 

There are in the order of 3500 sites providing these diagnostic imaging services.  Of these: 

• around 1,100 are private specialist radiology practices;
• over 600 are in radiology departments in public and private hospitals;
• 200 are general practices, primarily in rural Australia; and
• 800 are other specialised practice types such as vascular surgery practices, obstetric and gynaecological practices, cardiology practices.

In the 2006-07 financial year there were $1.3 billion in Medicare benefits claimed for services included in the scope of the scheme.  Analysis of the Location Specific Practice Number (LSPN) data indicates that:

• 75 per cent of practices are either private specialist radiology practices (28 per cent) or another type of private practice (47 per cent) such as cardiology; obstetric and gynaecology; chiropractic or general practice;
• 16 per cent of sites are located in a public facility;
• practice sites with ultrasound equipment only account for 45 per cent of sites, with a further 27 per cent of practices sites having x-ray equipment only; and
• 18 per cent of practice sites represent a comprehensive practice (i.e. have at least x‑ray, ultrasound and computed tomography (ie CT)).

The following charts are based on data from December 2007 and provide an overview of the sector by practice type and imaging equipment operated.

Chart 1:  Diagnostic imaging practices by category

Chart 2: Diagnostic imaging practices by modality

* Comprehensive practices are those with at least X-ray, ultrasound and CT equipment.  Practices must have X-ray, ultrasound and CT equipment in order to be eligible to provide Magnetic Resonance Imaging under Medicare.  111 of these comprehensive practices also provide Medicare eligible MRI services.

Around 11 per cent of total Medicare expenditure is attributable to services which fall within the scope of the scheme. The total Medicare outlays for these are capped at $5.7 billion. 

Currently the principal scheme for accrediting diagnostic imaging practices is the Medical Imaging Accreditation Program which is a voluntary scheme of accreditation operated jointly by the Royal Australian and New Zealand College of Radiologists (RANZCR) and the National Association of Testing Authorities, Australia (NATA).   There are 37 practices accredited under this program.

1.5  Other Health Care Accreditation Schemes

A number of health care accreditation schemes are already in operation.  Some of these schemes are voluntary.  Others, such as the national pathology laboratory accreditation program delivered by the National Association of Testing Authorities, are prescribed in legislation and may be linked to the payment of Medicare benefits. 

Practice sites seeking accreditation of services covered by the new diagnostic imaging accreditation arrangements might also participate in other health care accreditation schemes.  These schemes might include those set out in Table 1.

Table 1: Health care accreditation programs

Each of these accreditation schemes is characterised by a regular on-site assessment of the practice against an agreed set of standards.  The standards for each scheme are confined to the scope of medical practice covered by that scheme, although there are requirements, for example requirements for infection control or the keeping of patient records, which are common in the different sets of standards. 

Accreditation assessors are usually peers.  Accreditation is usually time limited.  At the expiration of the period of accreditation (usually three or four years) the practice must reapply for accreditation and re-demonstrate through an on-site assessment that they comply with the accreditation standards for that scheme.

Some of the accreditation schemes are delivered by a sole supplier, while others have multiple providers. 

As well as the Medical Imaging Accreditation Scheme which is a voluntary scheme offered to the diagnostic imaging sector, there are specific requirements applying to magnetic resonance imaging (MRI) practices.  To be eligible for Medicare benefits sites that offer MRI services are required by law to participate in the RANZCR's MRI Accreditation Registration Program. 

2.  OBJECTIVES OF GOVERNMENT ACTION

The objectives of Government action are to provide for safe and quality diagnostic imaging services to health care consumers that are affordable.  The means to achieve this is through establishing an accreditation scheme that is comprehensive in its application to practices supported under Medicare.  The actions therefore need to set out the conditions to enable commencement of the quality accreditation scheme for diagnostic imaging services in accordance with the requirements in the Act. 

In practical terms this means approving persons (accreditors) who will be able to accredit practices for the purposes of the scheme, specifying the conditions with which accreditors would need to comply in order to become approved or maintain their approval, setting out the scheme rules, and the establishment of a diagnostic imaging register. 

Scheme rules would need to include such matters as the method for obtaining accreditation, standards and conditions to be met for accreditation, the parameters for fee setting for accreditation services, expiry and renewal of accreditation, circumstances in which accreditation may be varied, and record keeping and reporting obligations.

In setting out such requirements the Government needs to be mindful of the provisions of the Act and the overarching objective to establish comprehensive arrangements for diagnostic imaging that assure quality and safety at affordable cost.  Ultimately, accreditation should ensure that safe and high quality diagnostic imaging services are provided to patients.  To do this an accreditation scheme should aim to:

• assure the provision of safe, quality diagnostic imaging services for healthcare consumers;
• foster a culture of continuous quality improvement;
• provide practices with regular and objective advice regarding their performance against agreed accreditation standards; and
• provide benchmarks for the monitoring and maintenance of industry performance.

Just as importantly, accreditation needs to be practical and enforceable, fit into overarching arrangements for health care accreditation, and not be costly or cumbersome for providers of health care services.  Quality diagnostic imaging services will be defined by the standards that are adopted for the accreditation scheme and should reflect the balance of community interests, informed by expert scientific research and international practices. 

3.  OPTIONS

The decision to introduce an accreditation scheme was taken in 2007 with the enactment of the Health Insurance Amendment (Diagnostic Imaging Accreditation) Act.   Amendments to the Act require the Minister for Health and Ageing to establish an accreditation scheme by legislative instrument(s).

In considering options for the implementation of an accreditation scheme due regard must be given to the following matters:

• the diversity of diagnostic imaging practice types and the practitioner groups impacted upon by the introduction of the scheme;
• the potential for one practice site to be subject to the requirements of more than one health care accreditation scheme;
• the direct and indirect costs of accreditation and the goal of affordability for all practice types;
• the need to maintain patient access to safe, quality diagnostic imaging services; and
• the extent of change imposed and the time available for practices to adjust to new requirements. 

Within the constraint of introducing a scheme which satisfies legislative requirements and commences from 1 July 2008, the main options can be distinguished by the strength of the standards and accreditation requirements imposed on practices, the number of approved accreditors delivering the scheme, and timing aspects. 

All options need to set out an approach with respect to the three central components of the accreditation scheme: 

• standards that practice sites need to comply with and that accreditors must assess against;
• assessment process for obtaining and maintaining accreditation; and
• accreditor(s) offering accreditation services to practice sites.

The possible options are:

Option A – Full implementation model commencing with comprehensive requirements (involving new standards above current levels) delivered by approved accreditor(s). 

Option B – Two stage implementation model with Stage 1 comprising an interim or transition stage using entry level practice requirements (at current levels) delivered by approved accreditation organisation(s), with further improvements to be introduced through Stage 2.

Both options could be delivered by a single accreditor or multiple accreditors. 

Under both options the approved accreditor(s) would deliver accreditation and assessment services to diagnostic imaging practices.  Each appointed organisation would be required to enter into a Deed of Agreement with the Commonwealth as represented by the Department of Health and Ageing.

Each approved accreditor would:

• provide accreditation services to practices and determine the accreditation status of practices (that choose to use its services);
• maintain a register of practices that have chosen to use its services, identifying the accreditation status of each practice (i.e. registered or accredited);
• manage and coordinate assessments and audits for the practices that are registered with it; and
• confer accreditation for the practices it assesses.

Accreditors would also train individual assessors, provide education and information to promote consistency and quality improvement among assessors and registered practices, manage and handle appeals against accreditation decisions, and manage complaints made in relation to conduct in providing accreditation and assessment services.

The appointment of approved accreditors under either option would follow an open application process run by the Department of Health and Ageing.  This process would assess the organisation's ability to provide accreditation and assessment services to practices in accordance with the rules for the scheme.  Once approved, accreditors would be listed in a Ministerial determination for the scheme.  Under the respective Deeds of Agreement the appointed accreditors would deliver accreditation services with fees to be established on a cost recovery basis for the registration and application elements, and on the basis of competitive commercial rates for the auditing and membership service elements.  In their bids to be appointed as accreditors, organisations would submit their proposed fee schedules.

3.1 Full Implementation Model (Option A)

Under Option A, a set of comprehensive practice standards would need to be developed and promulgated at the outset, and approved accreditors would be need to be appointed to register and accredit eligible diagnostic imaging practices. 

Accreditors under the Option A would be appointed by the Department following an open application process.  An appointed accreditation provider would be able to register practices for the purpose of Medicare payments and deliver accreditation to qualifying practices. 

Subject to the number of bodies demonstrating their credentials and capacity to provide timely and affordable accreditation the Department could appoint multiple accreditors.

Other key features of Option A would be:

• a transparent schedule of charges to practices set out in Deeds of Agreement between the Department and approved accreditor bodies; and
• establishment of an advisory committee to advise on the performance of the scheme, accreditation policies, and any proposed amendments to the scheme rules and standards. 

The Department of Health and Ageing would support the committee by collating and analysing data collected from accreditation bodies. 

3.2  Two-Stage Implementation Model (Option B)

Option B would involve a two step approach with the first step involving a low entry point, based on current minimum standards and approved accreditors being appointed to register and accredit practices. 

Under Option B the first step would be followed by a second stage which involves development of comprehensive practice standards in conjunction with key stakeholders.  The key features of this option are set out in Table 2.

A set of entry level accreditation standards, comprising existing state and territory regulatory requirements covering radiation safety licensing and registration of staff and equipment, would need to be prepared by the Department and incorporated in the subordinate legislation covering the arrangements for Stage 1.

Essential processes in assessment under Option B would involve minimal burden.  Transitional arrangements already included in the Act provide for "deemed accreditation" for 12 months for existing practices.  Stage 1 accreditation would primarily consist of each imaging practice determining it has all relevant documentation set out in the regulation followed by a desk-top audit of that documentation.  

Accreditors under the first stage would be appointed by the Department following an open application process.  These appointments would have a two year life and expire at the end of June 2010.  An appointed accreditation provider would register practices for the purpose of Medicare payments and deliver accreditation to qualifying practices. 

Table 2:  Features of the Two Stage Model (Option B)

Subject to the number of bodies demonstrating their credentials and capacity to provide timely and affordable accreditation the Department could appoint multiple accreditors.

A further open application process would be conducted to approve accreditors to deliver accreditation services under the second stage of the scheme from July 2010. 

Other key features of Option B would be:

• a transparent schedule of charges to practices set out in Deeds of Agreement with accreditor bodies;
• establishment of an advisory committee to advise on the performance of the scheme and its development under Stage 2; and
• an industry census to get a better understanding of the key characteristics of diagnostic imaging practices involved in the scheme.

Overall governance of the scheme will be provided by the Government.  A committee of stakeholder representatives would advise on the performance of the scheme, accreditation policies and on proposed amendments to the scheme rules and standards.  The Department of Health and Ageing would support the committee by collating and analysing data collected from accreditation bodies.  

4. IMPACT ANALYSIS OF THE OPTIONS

The key impacts from the establishment of an accreditation scheme for diagnostic imaging are expected to be measured in the form of:

• costs to provide services;
• prices paid by consumers and taxpayers;
• access by consumers to diagnostic imaging services, and
• both the individual and wider community benefits from improved health care and safety for patients. 

4.1 Stakeholders

The following are considered to be the key stakeholder groups affected by the options outlined above:

4.1.1 Australian Government (representing taxpayers)

The Government's interest is in assuring quality care for patients nationally, at affordable cost and with minimal disruption.  There will be costs to Medicare Australia under all options to modify its systems to enable payments to accredited sites and prevent payments to sites that are not accredited.  Both options would satisfy the quality assurance requirements of the new provisions of the Private Health Insurance Act 2007. 

4.1.2 Practices providing diagnostic imaging services

The diverse nature of the providers of diagnostic imaging services needs to be taken into account in the design of an accreditation scheme.

In some practices diagnostic imaging may be only a minor part of a range of health services provided and care needs to be taken that complying with an accreditation scheme does not impose a disproportionate burden.  This could either raise business costs unnecessarily or drive the practice to close down its imaging services, thereby denying patients access to a valuable service.  Patient access may also be reduced if the cost of accreditation were to force imaging practices to withdraw from bulk billing arrangements under Medicare. 

Some mixed practices may already be participating in other medical accreditation schemes (such as for hospitals, GPs or pathologists) and it is important that an accreditation scheme for diagnostic imaging does not duplicate such programs. 

Other practices may already be participating in the diagnostic imaging industry's voluntary program of accreditation, the Medical Imaging Accreditation Program.  It is important to recognise this and not impose an unwarranted burden on these participants. 

4.1.3 Accreditor(s)

Accreditation bodies have an interest in being able to participate in efficient and effective quality accreditation services that can be tailored to client groups needs.  They will have an interest in harmonising product development and delivery across various specialist schemes so that overlap and duplication are avoided. 

4.1.4 Health care consumers

Consumers have an interest in having access to affordable diagnostic imaging services that will be performed consistently and safely across Australia.  Consumers would not want any sudden disruption to service as a result of the introduction of mandatory accreditation, either through closure of practices or withdrawal from bulk billing arrangements.  

4.2 Comparison of Impacts

Option A - Full implementation model commencing with comprehensive requirements (involving new higher standards) delivered by approved accreditor organisation(s). 

Option B - Two stage implementation model with Stage 1 comprising an interim or transition stage using entry level practice requirements (existing standards) delivered by approved accreditation organisation(s), with further improvements to be introduced through Stage 2.

4.3 Benefits of accreditation

The benefits of accreditation in health care and safety terms are unlikely to be immediately observable or in fact quantifiable.  The benefits of lower radiation doses are only likely to become evident with long term studies.  Similarly, quantifying the benefits of more accurate diagnosis and treatment through better imaging services will be possible with long term studies, such as those undertaken by ACSQHC and AIHW, and would be assisted by data generated by an accreditation scheme.  An accreditation system should help reduce the incidence of events such as mis-diagnosis, excess accumulation of radiation, adverse patient reactions to treatments involving the use of imaging contrast, and complications from not screening patients for implanted devices (such as pacemakers) or for medical conditions (such as diabetes) prior to imaging procedures. 

Healthcare accreditation is an important driver for improvements in safety and quality.  It is widely used internationally in the health sector and in other industries.  Australia was an early adopter of accreditation processes and they have been used for more than thirty years as a mechanism for achieving safety and quality in various health fields.  Ultimately the objective of accreditation for diagnostic imaging is to ensure the delivery of high quality services to patients. 

Both Option A and Option B deliver benefits from accreditation.  Under both options, accreditors play a key role in educating and supporting practices to develop robust and systematic service delivery arrangements that are safe and sustainable.  Both options offer practices the opportunity to review and test the effectiveness of their technical diagnostic imaging equipment and procedures, standardisation of clinical protocols, supervision arrangements, patient identification and information systems, and administrative procedures.  Feedback from accreditation assessments can inform positive changes in diagnostic imaging practice.

In the long term Options A and B should yield similar levels of benefits.  The difference is that the tangible benefits of accreditation are realised later under Option B because of the staged implementation.  However it could be argued that staging the implementation of accreditation as proposed in Option B maximises participation across the diagnostic imaging sector and results in greater benefits in the longer term because the incremental improvements foster continuous commitment to safety and quality and greater ownership of the program by the industry and profession.

4.4 Costs of accreditation

The costs of an accreditation scheme are more tangible and apparent in the short term than the benefits.  Indicative costs are available from several sources, although care needs to be taken in making comparisons because the cost is directly dependent on:

• the benchmarks or standards against which practices are being assessed;
• the rigour, frequency and method of undertaking assessments and audits;
• the extent of competition; and
• the range of imaging services offered by the practice. 

At one end of the spectrum the voluntary Medical Imaging Accreditation Program operated jointly by RANZCR and NATA is estimated to have an initial cost for a practice of between $60,000 and $100,000 and an annual cost of around $25,000[2].  Other industry estimates suggest that a more modest scheme of mandatory accreditation for the whole sector with on-site inspections would cost in the order of between $2,500 and $3,200 per year per practice.  It is expected, however, that these costs could be significantly reduced with self-assessment and off-site desktop audits replacing on-site visits. 

For Stage 1 of the proposed scheme the Department has made provision for accreditors to collect fees from practices based on various activities - registration, application for accreditation, off-site desk top audit, investigation, and membership/service. 

It is apparent from the applications to deliver accreditation services that charges for the various component services under Stage 1 will fall into the ranges indicated in Table 3.

Table 3:  Range of fees for chargeable accreditation services

* Varies according to size and complexity of practice type

The impact of these charges is seen in the estimated annual costs to typical practice categories set out in Table 4.  In most cases for practices in the respective size groups the costs would be lower if they have fewer imaging modalities. 

Table 4: Estimated Annual Cost Ranges for Accreditation during Stage 1*

* Assumes the accreditation is straight forward and no investigation work is involved.

4.5 Other compliance costs

As well as the fees paid to an accreditation body, other potential costs to practices from regulation stem from the sorts of compliance tasks which are set out in the Business Costs Calculator.  For diagnostic imaging practices this might include record keeping, education, enforcement, and revised administrative procedures, and education. 

There are no reliable cost estimates for Option A as these would ultimately depend on the level of new standards and the process of accreditation and factors such as on-site versus off-site audit. 

For the first stage of Option B the main internal compliance costs would relate to the cost of lodging a registration and presenting documentation for accreditation.  However, since the accreditation requirements for a practice in Stage 1 would derive from existing regulatory requirements this cost largely relates to the transaction costs from dealing with another party (ie the accreditation body).  These and other compliance costs could be readily absorbed in functions normally associated with running a diagnostic imaging practice – continuous improvement, staff development, induction of new staff, installation and operation of new equipment, professional development, and compliance activities associated with current state and territory requirements. 

Typical costs already borne by imaging practices from complying with existing state and territory standards cover such things as:

• Radiation equipment testing;
• Radiation equipment registration;
• Licensing and monitoring of personnel involved in using radiation equipment; and
• Sonographer accreditation.

It has been estimated that such compliance costs for a practice site in New South Wales offering x-ray, fluoroscopy, mammography, computed tomography and orthopantomography with a staffing of four radiographers, two sonographers and a radiologist are in the order of $2,500 per year.[3] 

4.6 Single Accreditation Body or Multiple Accreditation Bodies

Both options could be delivered by a single appointed accreditation organisation or multiple bodies. 

Some industry stakeholders favour a single accreditor based on the proposition that efficiencies will flow from being able to achieve economies of scale and avoid waste from duplicated overheads such as information technology and communication systems.  For Government there would be potential benefit in dealing with a single body when it comes to data collection and communication. Another potential advantage from a single provider approach is consistency in the application of accreditation processes. 

Other stakeholders favour the appointment of multiple accreditors on the grounds that competition will encourage development of a diverse range of accreditation services and provide for choice particularly where an appointed accreditor may be capable of meeting a practice’s needs for accreditation in fields other than diagnostic imaging. 

Option B offers the chance to test whether having multiple accreditation bodies for Stage 1 stimulates innovation in the delivery of accreditation services.  It would enable practices to exercise choice and place a market value on the different elements of the accreditation service.  Depending on the providers appointed, there may also be an opportunity to test the tractability of adapting diagnostic imaging accreditation to other practice accreditation schemes. 

The experience of multiple accreditors under Stage 1 of Option B has the potential to create a richer base of experience to inform the design and development of the second stage.  Government as well as other stakeholders would be able to observe the benefits and costs of the multiple provider model and compare these against other health care accreditation models where delivery is by a single provider.  Further, on the question of consistency, if multiple accreditors are appointed the Deeds of Agreement with the Department should provide considerable control over the level of consistency. 

4.7 Risks

There is limited information available to definitively quantify many of the costs and benefits.  Both options involve questions of judgment and assessment of risks.  There is a balance to be struck between achieving safety and quality benefits on the one hand and affordability on the other. 

Under Option A, with higher standards it is reasonable to expect that the risks to patient care and community health would be reduced.  The benefits from higher standards are, however, uncertain and it is apparent that costs are potentially significant but also uncertain.  There is a risk therefore that a high standard / high cost accreditation scheme may not yield commensurate health care benefits. 

Option B involves the risk that the prospect of improvements to safety and quality health care are deferred for two years while the current level of standards is relied upon.  However, by relying on current standards, affordability and patient access to services is not threatened.  Nevertheless, the foundations would be laid for future safety and quality improvements through higher standards of accreditation. 

5. CONSULTATIONS

There has been an extensive period of formal consultation on an accreditation scheme for diagnostic imaging.  The principal parties during the initial phase of consultation were the Royal Australian and New Zealand College of Radiologists representing the specialist radiology profession and the Australian Diagnostic Imaging Association representing practice owners. 

This consultation process was broadened to include other stakeholders in 2006 in the lead up to the development of legislation.  In 2006 the Department of Health and Ageing issued a discussion paper to peak diagnostic imaging professional and industry organisations, state and territory governments and major accreditation bodies inviting comments on the proposed accreditation scheme.  It also wrote to a wide range of parties inviting them to express interest in further information on the accreditation scheme.  This was followed up by workshops conducted in Adelaide, Sydney and Melbourne during August 2006.  Ninety two submissions were received in response to the consultation paper.

5.1 National Stakeholder Forum – September 2007

Consultation has continued since the passage of the legislation with the focus on specific arrangements to implement an accreditation scheme.  On 4‑5 September 2007 representatives from state and territory governments and peak industry and professional groups came together to discuss proposals relating to the commencement of a scheme along the lines of the full implementation model described by Option A.  An attendance list is at Attachment A. 

Over the two days feedback was sought on proposals regarding:

• the governance framework for the scheme including stakeholder committees to provide advice to government about accreditation;
• draft accreditation standards prepared by the Royal Australian and New Zealand College of Radiologists (RANZCR);
• a procedure for assessing practices; and
• the appointment of an organisation (or organisations) to accredit practices against accreditation standards.

Consumer representatives in particular noted the requirement to establish an accreditation system that would give consumers practical information about patient care, staff qualifications, handling of patient data, and lead to progressive improvements in quality over time.  They also drew attention to the need for continued involvement of consumer representatives in the governance arrangements to monitor the operation of the accreditation scheme and its further development.

The level of feedback from the Forum is evidence of a high level and constructive engagement on the part of a broad range of stakeholders.  Key messages to emerge from the consultations are that "one size does not fit all" in a health sector with such a diverse group of practices, the cost impact needs to be moderated in line with expected patient benefits, and more time will be needed to design best practice features that should form part of an accreditation scheme to serve the longer term interests of all stakeholders. 

The preferred option to introduce accreditation via a two stage model with minimum entry level standards is in line with the prevailing stakeholder sentiment.  Option B was developed in direct response to stakeholder feedback from the Forum.  An information paper on the two stage model was released for stakeholder comment by the Department of Health and Ageing in February 2008.

Table 5:  Summary of Feedback from Stakeholders (4-5 September 2007)

Source: Introducing the Diagnostic Imaging Accreditation Scheme for Practices Providing Services under Medicare, Department of Health and Ageing (February 2008)

6. CONCLUSION AND RECOMMENDED OPTION

It is clear from consultations with stakeholders that Option B the two stage model is preferable to full implementation from 1 July 2008.  There are no new standards readily available and there is too much uncertainty about the appropriate level of new standards, and the associated cost impacts, to adopt full implementation.  Adopting Option A would fly in the face of feedback from the stakeholder consultations.  Moreover, it is not clear that the almost certainly higher costs would be justified by the expected pay-off in improved patient care.

This suggests that a measured approach is preferable while experience is gained and data can be collected on the industry and the operation of accreditation arrangements.  The two stage approach with Stage 1 essentially representing the codification of existing arrangements under the Medicare system to allow time to consider design and development aspects of Stage 2 is appropriate.  Using a multiple accreditor approach for Stage 1 enables testing of the propositions about administrative costs and the impact of competitive behaviour on quality and consistency of application of standards.  It does mean that some potential improvements in safety and quality in patient care will be deferred for two years pending the introduction of Stage 2. 

The two stage approach based on minimum requirements fits in well with broader initiatives for improvements in quality of health care.  The Australian Commission on Safety and Quality in Health Care is in the process of developing a national strategic framework to improve quality and safety across the health care system.  The result of this work will be a national model for the accreditation of health care services across Australia which will provide an umbrella for the formulation of a consistent approach to the accreditation of various health care services, like diagnostic imaging.

The preferred two stage approach is also in line with the views expressed by the Productivity Commission (PC) in its 2006 report on standard setting and laboratory accreditation[4].  Although that review focused on activities of bodies such as Standards Australia and the National Association of Testing Authorities, the PC's concern about excessive requirements for accreditation have general application.  It advocated consultation with stakeholders, the use of cost – benefit analysis, and allowing competition in accreditation as part of the checks and balances before requirements become mandatory. 

6.1  The Preferred Option - Option B

Option B – Two stage interim/transition model with Stage 1 comprising entry level practice requirements (existing standards) delivered by multiple approved accreditors – represents a measured approach to achieving the Government's ultimate objective of a comprehensive accreditation scheme for diagnostic imaging that delivers high levels of safety and quality at affordable cost. 

Option B will mean that access to Medicare funds is tied to current minimum standards in the provision of safe and quality diagnostic imaging services.  It will enable practices to prepare incrementally for accreditation, allowing them to become familiar with accreditation requirements and the assessment process.  Starting at existing entry level standards involves minimal additional compliance burden for practices.  It will assure consumers that certain minimum standards are achieved.  Moreover, compliance costs at this stage are expected to be negligible relative to the costs and turnover of practices supplying diagnostic imaging services. 

The two stage approach will allow the second stage of the scheme to be designed to take in the lessons from Stage 1 as well as from developments in accreditation schemes in the health care field more broadly.  Data generated during the first stage will help inform the design of Stage 2.  Stage 1 will also enable approved accreditors to communicate with their client practices.  It will encourage a process of cultural change across the diagnostic imaging sector, helping to shift the focus from practitioner qualifications to the performance of the practice against the accreditation requirements in contributing to quality health outcomes.  It will also enable Stage 2 to be designed to take account of other health care accreditation schemes for those practices which provide a mix of health service types.  During Stage 1 accreditation bodies can undertake preparation for international accreditation[5], one of the requirements for participation in Stage 2 delivery. 

From an administrative perspective Stage 1 should help the Department identify where there are inconsistencies or unacceptable divergence between accreditors and how these might be overcome in Stage 2.  Again, Option B offers the chance to test the extent to which the Deeds of Agreement between accreditation organisations and the Department are able to control this. 

Appointing multiple accreditation bodies for Stage 1 would also enable stakeholders to test how important it is for imaging practices to have a choice of accreditors.  To appoint a single accreditation body would imply that cost would be the primary driver for participants and that the vast majority of practices have similar needs when it comes to accreditation services.  It would deny practices the opportunity to place a higher value on the services they receive from accreditation or the benefits of aligning delivery of accreditation with another scheme in which they are already participating. 

7. IMPLEMENTATION AND REVIEW

The accreditation scheme will be implemented in two stages with the first stage being set out in this package of subordinate legislation.  Further regulatory instruments will be introduced when the details of Stage 2 of the accreditation scheme are resolved.  These arrangements which will cover new accreditation standards, assessment processes, and the appointment of accreditors for the second stage will be subject to a separate Regulatory Impact Statement. 

In line with the legislative provisions the arrangements for Stage 1 will be given additional substance through Deeds of Agreement between approved accreditors and the Department of Health and Ageing.  These will set out requirements such as statutory obligations, level of charges, functions to be performed and methodology to be utilised (including reference to the standards which are embodied in current regulatory requirements), performance criteria, communication schedule, record keeping and reporting details. 

In addition there will be an advisory committee with broad representation of stakeholders to monitor the operations of Stage 1.  This committee will be established around the time Stage 1 commences and will provide advice to government about accreditation standards and the introduction and management of Stage 2 of the scheme.  It is expected to comprise people who represent a range of stakeholder views – health care consumers; industry and professional; medical and non-medical; private and public sector; and urban and rural service providers.  The committee's role will be to lead and support changes in the provision of diagnostic imaging services through accreditation. 

The Department will collect and analyse data from the approved accreditors on participation in and the performance of Stage 1.

The Department will also undertake a census of participating practices and their facilities.  Data presently generated through Medicare are not completely reliable for this purpose but give a profile of the type, number and location of practice sites, and the equipment used.  However, to inform the design of Stage 2 additional data is needed on practice characteristics such as:

• the number of sites already accredited under another health care accreditation process or will need after 1 July 2008 to become accredited under the private health insurance quality assurance requirements;
• the number of sites co-located with another practice which participates in another health care accreditation scheme and share staff and other resources; and
• to what extent are practices using off-site reporting, and how much off-site reporting is conducted at other accredited sites or elsewhere.

The census data will be used to address the following matters:

• quantify the number of sites which may need to be visited for the purposes of Stage 2 of the scheme;
• inform proposals from potential Stage 2 accreditor(s) regarding fees to be charged to practices for accreditation; and
• identify opportunities to tailor accreditation for different types of practices and different business arrangements.

The development of the scheme through to Stage 2 will also be informed by experience with Stage 1 and further research, particularly where this can aid in the quantification of costs and benefits.  The design of Stage 2 will also be able to be adapted to fit in with the overarching model for health care accreditation services being developed by ACSQHC. 

ATTACHMENT A (RIS)

Attendance List for 4-5 September 2007

NATIONAL STAKEHOLDER FORUM

Australasian College of Physical Scientists and Engineers in Medicine (ACPSEM)

Australasian College of Phlebology (ACP)

Australasian Society of Orthopaedic Surgeons (ASOS)

Australasian Society for Ultrasound in Medicine (ASUM)

Australian and New Zealand Association of Physicians in Nuclear Medicine (ANZAPNM)

Australian and New Zealand Society of Phlebology (ANZ Soc. Phleb)

Australian and New Zealand Society of Vascular Surgery (ANZSVS)

Australian Commission on Safety and Quality in Health Care (ACSQHC)

Australian College of Rural and Remote Medicine (ACRRM)  

Australian Diagnostic Imaging Association (ADIA)

Australian Institute of Radiography (AIR)

Australian Medical Association Limited (AMA)

Australian Private Hospitals Association (APHA)

Australian Society of Anaesthetists (ASoA)

Australian Sonographers Association (ASA)

Cardiac Society of Australia and New Zealand (CSANZ)

Catholic Health Australia (CHA)

Chiropractors Association of Australia (CAA)

Consumers Health Forum (CHF)

Royal Australasian College of Physicians (RACP)

Royal Australasian College of Surgeons (RACS)

Royal Australian and New Zealand College of Obstetricians and Gynaecologists (RANZCOG)

Royal Australian and New Zealand College of Radiologists (RANZCR)

Royal Australian College of General Practitioners (RACGP) 

JURISDICTIONAL FORUM 

ACT Department of Health

NSW Department of Health

Queensland Health

Department Human Services, Victoria

Department of Health and Human Services, Tasmania

Australian Commission on Safety and Quality in Health Care (ACSQHC)

Australian Diagnostic Imaging Association (ADIA)

Royal Australian and New Zealand College of Radiologists (RANZCR)

ATTACHMENT B (RIS)

DIAGNOSTIC IMAGING PRACTICES BY TYPE*

* approximate number of LSPN sites per practice type.   LSPN data is an indicative only.  Some public facilities have registered for more than one LSPN. Thirty three (33) possible duplications have been identified accounting for 88 LSPNs.

ATTACHMENT  C (RIS)

LOCATION ANALYSIS OF DIAGNOSTIC IMAGING SITES (BY LSPN)

[1] National Arrangements for Safety and Quality of Health Care in Australia, The Report of the Review of Future Governance Arrangements for Safety and Quality in Health Care (2005)

[2] QUDI Project – Post Implementation Review of Accreditation of Radiology Practices – September 2005.

[3] Health Insurance Act (Diagnostic Imaging Accreditation) Amendment Bill, Explanatory Memorandum (June 2007)

[4] Standard Setting and Laboratory Accreditation, Productivity Commission (2006)

[5] International accreditation certifies that the organisation assessing practices is competent to provide accreditation and is compliant with well-established international standards governing accreditation.  It gives accreditors access to international best practice, supported by leading scientific research, and prevents the scheme from becoming insular and tainted by complacency.