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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-04-04 Daily Xml
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MEDICARE BILLING

Mr HAMILTON-SMITH (Waite) (15:01): My question is again to the Minister for Health. Is the practice of using the Medicare provider numbers of state government salaried doctors for treatment of patients at public hospitals as private patients, with confluent charges to Medicare, including arrangements for the donation of any portion of private income earned by those doctors, voluntary or is it mandated?

The Hon. J.D. HILL (Kaurna—Minister for Health and Ageing, Minister for Mental Health and Substance Abuse, Minister for the Arts) (15:02): I thank the member for his question. It raises the issues that he raised yesterday, and in fact I had prepared a ministerial statement which I was going to give at the end of question time which goes through this. I can either do it now or you can wait until the end of question time.

Mr Hamilton-Smith: Do it at the end. Well, no, I want an answer to that question.

The Hon. J.D. HILL: I think it covers all of the issues, so I will take it on notice.

Mr Hamilton-Smith: Is it voluntary or mandated?

The Hon. J.D. HILL: I heard the question. If I do not cover what you want to be covered, I will come back with even more information. I think it covers it.

The SPEAKER: Member for Waite, did you have another question or was it related to that?

Mr HAMILTON-SMITH: Madam Speaker, I would actually like an answer to the question now, if I may.

The Hon. J.D. HILL: I am happy to provide the information. As I said yesterday, I would try and get back information. This is a complex set of issues and they cover a range of issues so I will do my best to go through it. Rights of private practice is a longstanding arrangement enabling salaried medical officers to see patients privately within the public hospital system. It has been in place since the 1980s in South Australia and is also conducted extensively throughout Australia. The practice is officially recognised by the commonwealth in the National Health Reform Agreement which explicitly provides for a patient at a public hospital to have the choice to be seen or admitted as a private patient. It requires patients making a private choice to have made an informed financial consent.

The South Australian health policy directive around outpatient billing practices—which gets to the point—released in November last year is drawn from and reflects the business rules and the current National Health Reform Agreement and the relevant parts of the Medicare Benefits Schedule. As I said yesterday, the directive provides clarity of the requirements to medical officers and administrators.

Under the Salaried Medical Officers Enterprise Agreement 2008, doctors are entitled to retain the income from their private billings up to a defined ceiling (minus a 9 per cent administrative and indemnity fee) according to their specialty. Anaesthetists, for example, can retain up to 45 per cent of their base salary; intensive care unit consultants, up to 35 per cent; rehab consultants, up to 20 per cent; and other consultants, up to 65 per cent. Emergency medicine consultants and paediatric emergency consultants are not eligible for private practice.

A salaried medical officer has the option to choose a higher ceiling scheme (known as Scheme Two Option B) but forgoes their salary based attraction and retention allowance. Under this option, the doctor receives a further third of billing receipts above 65 per cent, up to 100 per cent of base salary, plus a further 15 per cent of receipts above 100 per cent of base salary.

Each participating doctor enters into a memorandum of agreement stipulating the terms and conditions of their private practice. The form and content of agreements was written by the Crown Solicitor's Office with full consultation and agreement with the Salaried Medical Officers Association. It is only after a doctor has reached their income ceiling that they are required to pay excess earnings into hospital funds. Some doctors reach their ceiling, some don't. The amounts paid to the funds are consideration for the use of hospital facilities to perform their private practice.

In the 2010-11 financial year, total doctors' billing receipts from private practice were $75 million of which they retained $43.5 million, with $24.4 million paid by doctors to hospital specific funds and $7.1 million paid for indemnity insurance and administrative services. These figures represent the total private practice including hospital inpatients and outpatients and compensable patients.

The funds are held at each hospital site and established under local arrangements. There are numerous funds. They are usually overseen by a committee whose membership includes the participating doctors and hospital administration. The amounts paid by doctors into the funds and which funds are utilised in each case are according to the doctor's individual private practice agreements. Amounts are only paid to the funds where the doctor has performed sufficient billing to exceed their own income entitlement.

There are usually terms of reference that specify what the funds are to be used for. As a broad generalisation, they may be used to fund medical research, professional development, education and training, improvement to equipment and other expenditure that helps the hospital provide better service to patients. These arrangements have been ruled upon by the commonwealth Commissioner of Taxation in public rulings CR2006/24 and CR2008/65. As I mentioned yesterday, transparent financial records are provided to doctors so they can properly declare their income and deductions in their tax returns.

SASMOA has supported the continued conduct of private practice through the enterprise and private practice agreements they have entered into on behalf of their members. I am advised that advice is sought from time to time with the association and is satisfactorily resolved by the department in most cases. There have been very few issues raised in recent times.

To an extent, that is very complicated, but I wanted to get it in a thorough form. I will have a look at what the member asked me again and, if I have left anything out, I will get back to him. My understanding is that doctors have choices about what they do and it is not mandated.

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