EXPLANATORY STATEMENT
Issued by the authority of the Minister for Human Services
Medicare Australia Act 1973
Direction
Background
Section 4 of the Medicare Australia Act 1973 (the Act) establishes Medicare Australia. Sections 5 and 8AG of the Act create the office of Chief Executive Officer of Medicare Australia (CEO), with statutory functions. The CEO is, under the Minister for Human Services and through the Secretary to the Department of Human Services, responsible for managing Medicare Australia.
Medicare Australia (formerly the Health Insurance Commission) is a specialist service delivery agency and has substantial experience in processing claims and making payments to beneficiaries of the Government’s major health programs.
Section 5 of the Act sets out a number of mechanisms for conferral of functions on the CEO. Paragraph 5(1)(d) of the Act provides that the CEO has any functions that the Minister for Human Services, by writing, directs the CEO to perform.
The original Medicare Australia (Functions of Chief Executive Officer) Direction 2005 (the Direction) signed by the Minister for Human Services on 30 September 2005, made directions under paragraph 5(1)(d) of the Act. The Direction conferred a number of functions on Medicare Australia, which reflected the activities undertaken by the former Health Insurance Commission prior to amendments to the Act implementing new governance arrangements. Generally the functions conferred were to deliver certain health-related services and undertake other health-related regulatory and administrative responsibilities.
Paragraph 5(1)(e) of the Act provides that the CEO has any functions that are prescribed. Pursuant to paragraph 5(1)(e) of the Act, certain aged care payments and related functions under the Aged Care Act 1997 (Aged Care Act) were prescribed as functions of the CEO under the Medicare Australia Regulations 1975 (the Regulations).
The purpose of the Medicare Australia (Functions of Chief Executive Officer) Amendment Direction 2005 (No 1) (the Amending Direction) is for the Minister for Human Services to amend the Direction to ensure the previous conferral of functions on Medicare Australia more closely reflect the activities and work undertaken by Medicare Australia. The Amending Direction also confers on Medicare Australia a number of functions to make aged care payments to supplement those functions conferred by the Regulations.
The Minister for Human Services has also directed the CEO of Medicare Australia to perform the functions in the manner set out in the Medicare Australia (Performance of Chief Executive Officer’s Powers and Functions) Direction 2005 under section 8 of the Act. No amendments have been made to that document resulting from the Amending Direction.
Details of Direction
Section 1 – Name of Direction
This section provides for the Amending Direction to be named the “Medicare Australia (Functions of Chief Executive Officer) Amendment Direction 2005 (No 1)”.
Section 2 – Commencement
This section provides for the Amending Direction to commence on the day it is registered as a legislative instrument.
Section 3 – Amendment of Medicare Australia (Functions of Chief Executive Officer) Direction 2005
This section provides that the Direction is amended as set out in Schedule 1.
Schedule 1 – Amendments
Item [1] – Paragraph 4(2)(e)
This item ensures that Medicare Australia has the function to make directions on behalf of the Minister for Health and Ageing (not just to advise in relation to directions) under section 19D of the Health Insurance Act 1973.
Item [2] – Sub-subparagraph 14(3)(j)(i)(B)
This item ensures that Medicare Australia has the function to nominate (and revoke nominations of) persons for appointment to the Medicare Participation Review Committees under subsection 124EA of the Health Insurance Act 1973.
Item [3] – Section 26
This item removes the functions for the CEO to make contractual payments to Diabetes Australia (for the purposes of funding the National Diabetic Supplies Scheme), which is a function that is not performed by the CEO, and was not previously performed by the former Health Insurance Commission.
Item [4] – After section 33
This item inserts a new section 34 “Functions in relation to payments”. This section contains provisions relating to the conferral of functions on the CEO to make specified aged care payments, which will primarily be administered by the Department of Health and Ageing. The section will include the following functions:
Section 34 – Functions in relation to payments
Section 34 provides that the CEO has the function to make payments as directed by the Department of Health and Ageing in relation to the following:
- the program for Day Therapy Centres;
- grants approved under sections 55 and 58CE of the National Health Act 1953 in relation to 'new or rebuilt nursing homes' and 'upgraded nursing homes’ (also known as “Additional Recurrent Funding” grants); and
- the program for Capital Transition Payments.
Section 34 also provides for additional amounts which are payable in circumstances specified by the Minister for Health and Ageing, pursuant to section 60 of the Aged Care (Consequential Provisions) Act 1997, in relation to certain residential care services (as defined in the Regulations).
Section 34 also provides that the CEO has the function to take action to recover overpayments of amounts paid in relation to the above payments
Consultation
The Direction was settled after consultation with the Department of Health and Ageing. Consultation with the aged care sector and wider community was unnecessary as the amendments are minor or machinery in nature and do not substantially change the law.
The Direction is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Direction is not subject to the sunsetting regime (under which instruments automatically cease after 10 years) under Part 6 of the Legislative Instruments Act 2003.