HIC ANNUAL REPORT 2002-03
Chairman’s Report
15 October 2003
The Hon Tony Abbott MP
Minister for Health and Ageing
Parliament House
CANBERRA ACT 2600
Dear Minister
The Board of the Health Insurance Commission (HIC) is pleased to submit HIC's Annual Report for
the period 1 July 2002 to 30 June 2003 for presentation to each House of Parliament. The report is
submitted in accordance with Section 9 of the Commonwealth Authorities and Companies Act 1997.
I am pleased to report that HIC has enjoyed a successful year of growth and development in a
number of significant and ground-breaking areas. The Business Improvement Program has achieved
substantial success with product development resulting in the delivery of key initiatives. It is a
consolidated program of activity being undertaken over four years to 2004 – 05 and will transform a
range of HIC products and services using new and improved service delivery channels that are
emerging from advances in eBusiness technologies.
The activities of HIC’s business improvement initiatives are aligned with HIC’s strategic purpose of
‘Improving Australia’s health through payments and information’, and support the Government’s
Online agenda. HIC has received strong support from the Government for its agenda to modernise its
claims and payment systems and to better connect the health sector.
Achievements over the year in this area are detailed in the report, but include the successful
deployment of a number of new applications. A new high availability eBusiness IT Infrastructure for
Medicare and PBS claims submission was used for the MediConnect Field Test – a new
development in health care which, by drawing together comprehensive information about the
medicines people use, will help to enable doctors, pharmacists and hospitals to prevent health
problems caused by adverse drug reactions and interaction. The year also saw the implementation of
a new eBusiness IT architecture enabling Medicare bulk bill and patient claims to be transmitted
through the internet from doctors’ practices, using Public Key Infrastructure (PKI) technology.
The Board of Commissioners is pleased with HIC’s direction in regard to its eBusiness activities.
The impact of the Canberra Bushfires in January needs special mention. This was a time of
considerable disruption and impact on the operations of HIC’s National Office, with several staff being
either directly or indirectly affected by the fires. What is notable of mention about this event however,
is the magnificent response of HIC’s State Offices in rallying support for the victims of the fires in
Canberra. This was a tremendous example of the corporate perspective and concern which staff of
HIC embody throughout the land. I, together with the Board of Commissioners, heartily congratulate
the staff of HIC nationally for their loyalty, their generosity and their commitment during those
harrowing times.
In a similar vein, I would also like to congratulate the Medicare Claims Section for their continued
good work on Balimed during the year. Balimed was established to help the victims of the Bali
bombings by covering all their out-of-pocket expenses for the treatment of injuries resulting from the
bombings. The section has worked hard over the year to ensure that the Bali victims’ interests, and
those of the Government and HIC, have been dealt with efficiently and effectively.
The Board of Commissioners itself has seen a number of changes this year. Consequent upon
amendments to the Health Insurance Commission Act 1973 that came into effect on 1 November
2002, the number of Commissioners was reduced from eleven overall to nine, and with one vacancy
at the time this resulted in the need for one Commissioner to leave the Commission. Mr Ian Fletcher
graciously agreed to stand aside and his appointment terminated on 10 November 2002. Over the
short term of Ian’s appointment he proved himself a worthy and valuable member of the Board. On 3
March 2003, Mr Ron Harris resigned his position on the Board, owing to a change in his business
interests which he perceived presented a potential conflict of interest to his role as a Commissioner.
Ron also was a valuable member of the Board and his absence will be missed. I take this opportunity
to thank both Ian and Ron for their sterling contribution during their respective terms of office.
In February 2003, the Board learnt of the appointment of the Managing Director of HIC, Dr Jeff
Harmer, to the position of Secretary to the Australian Government Department of Education, Science
and Training. Accordingly, on 10 March 2003, Dr Harmer resigned his position as Managing Director.
Jeff was a man of exceptional talent and enthusiasm, with a real commitment to HIC, and during his
almost five-year term as Managing Director, he was the instigator of several business initiatives that
placed HIC at the forefront of modern business practice. His departure was sadly felt by all who knew
him or who had associated with him, and the reaction of the staff of HIC in offices around the country
to his leaving was testimony to the high level of esteem in which Jeff was held. I join with my fellow
Commissioners, and the staff of HIC, in offering our heartfelt thanks to Jeff for his outstanding
contribution to, and leadership of, HIC over the past five years.
Mr Jeff Whalan commenced his duties as the new Managing Director of HIC on 8 September 2003.
Jeff joined HIC from the Department of the Prime Minister and Cabinet, where he was a Deputy
Secretary. Jeff has been appointed for a term of five years. The Board of Commissioners considers
that Jeff will provide excellent leadership to HIC in the coming years.
I take this opportunity to thank Mr James Kelaher, who enthusiastically stepped into the role of Acting
Managing Director virtually overnight upon Dr Harmer’s departure, for the professional and diligent
manner in which he has led the organisation in this period.
The Board of Commissioners and the Executive are justly proud of HIC’s achievements over this
reporting year. We are confident and enthusiastic about its future.
We take much pleasure in commending our Annual Report to you.
Yours sincerely
Peter Bunting
Chairman
HIC IS TRUSTED BY OUR CUSTOMERS AND THE COMMUNITY… THAT’LL PUT
A SMILE ON EVERYONE’S FACE.
MANAGING DIRECTOR’S REPORT
This financial year was a year of change, challenges and successes for HIC. Our Business
Improvement Program continued to gather momentum and build a framework for our future business
processes, and we also started to explore new functions and prepare for the introduction of new
programs such as Medical Indemnity.
Our Business Improvement Program has been designed to take advantage of emerging technology
to improve the service we offer our customers, especially the channels our customers use to do
business with us. This year saw a number of our business improvement initiatives successfully
implemented. For example, the information technology architecture has been developed which allows
online applications such as HIC Online, PBS online services, eAuthorities and MediConnect to
provide more efficient, value added interaction between HIC and its customers. Work on other
systems has also enabled the easy extraction and analysis of Medicare data to assist health
decision-makers.
Earlier this year the Australian Government announced a new framework for Medical Indemnity
insurance for the medical profession. HIC will administer two of the schemes associated with this new
Medical Indemnity framework – the Incurred but Not Reported Indemnity Scheme and the High Cost
Claim Indemnity Scheme.
It is rewarding to see the inroads we are making with new business opportunities as a result of our
Business Improvement Program and our subsequent eBusiness capability. We are looking forward to
using our eBusiness platform to deliver new and innovative programs on behalf of Government.
HIC Online is one of the key business improvement initiatives. The system allows doctors and
patients to claim their Medicare entitlements online. At 30 June 2003 there were 69 sites transmitting
claims to HIC with a total of 326,902 bulk billed claims and 20,954 patient claims processed since the
system was introduced in March 2002.
HIC has also played an important role in implementing changes to the Pharmaceutical Benefits
Scheme (PBS). The 2002 Federal Budget measures aimed at sustaining the PBS have resulted in a
number of projects which HIC is leading. These include the Prescription Shopping project, Overseas
Drug Diversion project, PBS Risk, PBS Restrictions, and Enhancing PBS Authorities.
The Australian Organ Donor Register, also administered by HIC, had a very successful year – 4.7
million Australians are now listed as potential organ and tissue donors. This year the Australian
Childhood Immunisation Register recorded more than 400,000 meningococcal C vaccinations
following the introduction of the National Meningococcal C Vaccination Program in January 2003.
In 2002–03, HIC placed a priority on reaching Aboriginal and Torres Strait Islander communities to
increase understanding of the health system and improve access to health services. This work will
continue in 2003–04.
It is pleasing to note that the Australian community continues to hold HIC’s services in administering
programs such as Medicare and the PBS in high regard with a satisfaction rating of 93 per cent.
We continue to work with doctors and pharmacists to improve our service to them. Our Stakeholder
Advisory Committee has provided an opportunity for timely and meaningful consultation on many
aspects of our business and we are working closely with the Red Tape Taskforce to identify and reengineer business practices which could be streamlined further. Over the past year we have also
worked to implement a range of new and dynamic initiatives to ensure our front line staff particularly
have the best possible information to pass on to our customers and the tools to do their work more
efficiently.
The developments over 2002–03 have resulted in significant change for HIC. The changes are aimed
at providing a better service to the Australian public and to other key customers including doctors and
pharmacists. These changes are only possible as the result of a very high level of dedication and
professionalism of staff across HIC. Maintaining HIC’s reputation for being a people focused
organisation is valued highly by the Executive team and will continue to be supported at every
opportunity.
I also want to thank Mr James Kelaher and the Executive for their excellent contribution over the
period before my appointment. On behalf of my HIC colleagues I am proud to commend our 2002-03
Annual Report to you.
Jeff Whalan
Managing Director
HISTORICAL HIGHLIGHTS
1974 Wealth Insurance Commission Act 1973 is passed in August at an historic joint sitting of
both Houses of Parliament
1975 Medibank offices are opened across Australia on 1 July to administer Medibank
1976 Medibank Private is established on 1 October to compete with other private health
insurance funds
1978 Operation of Medibank Private becomes HIC's sole function
1982 Medibank Private becomes Australia's largest national private health insurer
1984 Medicare is introduced in February
1985 Fraud and over servicing function {new Professional Review) is transferred to HIC
1989 Administration of the Pharmaceutical Benefits Scheme is transferred to HIC Medclaims
{electronic direct billing) is introduced
1993 HIC begins processing and paying claims on behalf of Australian Hearing Services HIC is
chosen to administer the Commonwealth Childcare Rebate Scheme
1994 Commonwealth Childcare Cash Rebate Scheme begins in July
1995 HIC is chosen to administer the Australian Childhood Immunisation Register from 1 January
Wealth and Other Services (Compensation) Act 1995 becomes effective from 1 February for
HIC administration
1996 HIC begins processing of Veterans' treatment accounts on behalf of the Department of
Veterans' Affairs
1997 Commonwealth Government announces separation of Medibank Private from HIC Private
Health Insurance Incentives Scheme begins in July General Practice Immunisation
Incentives Program begins in August
1998 Medibank Private is separated from HIC
Government announces the introduction of two-way agency arrangements between
Medicare and private health insurance funds
Medicare offices cease to assess Medibank Private claims from 30 June Practice Incentives
Program replaces the Better Practice Program from 1 July
1999 Federal Government 30% Health Insurance Rebate supersedes the Private Health
Insurance Incentives Scheme from 1 January
2000 HIC begins providing services under the Family Assistance Office HIC begins administering
the Australian Organ Donor Register
2001 Health eSignature Authority Pty Ltd is established to facilitate PKI infrastructure
2002 HIC Online is launched, allowing direct bill claims to Medicare to be made over the internet
PBS Online is launched and HIC receives more than 90.000 scripts in its first six months
2003 The first MediConoecf consumer has their medication and prescription details registered
with HIC
2003 The Australian Organ Donor Register has more than 4.5 million people registered
REPORT OF OPERATIONS
The information required in the report of operations is included throughout this annual report. The
table below shows where this information can be found.
Clause of FMO
Requirement
8(a)
Enabling legislation, objectives and functions
8(b)
Name of all responsible Ministers
9
Outline of organisational structure
10
Review of operations and future prospects
11
Judicial decisions and reviews by outside
bodies
12
Effects of Ministerial directions
14
Directors (Commissioners)
15(1)
Governance practices
15(2)
Committees
16
Indemnities and insurance premiums for officers
18
Commonwealth disability strategy
Certification
In accordance with the Finance Ministers Orders, the Board of Commissioners has
responsibility for the preparation and content of the report of operations under section 9 of
the Commonwealth Authorities and Companies Act 1997.
Signed in accordance with a resolution of the Board of Commissioners
Peter Bunting
Chairman
12 September 2008
Jeff Whalan
Managing Director
12 September 2008
CHAPTER-1
YEAR IN SUMMARY
Medicare
Active Medicare cards at 30 June 2003
11.7 million
Persons enrolled in Medicare at 30 June 2003
20.6 million
Cards issued and re-issued
3.03 million
Medicare services processed
221.4 million
Medicare services bulk billed
150.1 million
Percentage of Medicare services bulk billed (of all services)
67.8%
Bulk bill services lodged electronically (Medclaims/HIC Online)
75.4%
Total Medicare benefits paid
$8.1 billion
Community satisfaction with HIC
93%
Medical practitioner satisfaction with HIC
75%
Providers audited to ensure legislative compliance
188
Services audited to ensure legislative compliance
9,277
Recovery amount identified for non-compliance with legislation
$0.25 million
Medicare offices at 30 June 2003
226
Medicare easyclaim
Medicare easyclaim self-service fax devices operating in pharmacies across Australia
501
Patient claims lodged by fax
246,168
Medicare easyclaim phone booth facilities operating in Rural Transaction Centres and
State Government shopfronts
562
Telephone claims lodged using Medicare easyclaim telephone claiming
70,084
Pharmaceutical Benefits Scheme (PBS) and Repatriation
Pharmaceutical Benefits Scheme* (RPBS)
Total benefits paid
$5.2 billion
Total number of PBS/RPBS services
174 million
Authority prescriptions authorised
4.76 million
Authority prescriptions authorised by telephone
4.49 million
Pharmacist satisfaction with HIC
91%
*Payments to veterans processed by HIC on behalf of the Department of Veterans’ Affairs.
Veterans’ treatment accounts
Cards produced
193,113
Lines processed
18.11 million
Benefits paid
$1,610 million
Australian Organ Donor Register
Number of potential donors registered
4.7 million
Australian Childhood Immunisation Register
Immunisation episodes recorded
4.03 million
Children (under 7 years) registered
1.8 million
Payments to immunisation providers
$8.1 million
Percentage of children registered with full (age-appropriate) immunisation
coverage:
Aged 12-15 months at 30 June 2003
91.2%
Aged 24-27 months at 30 June 2003
89.3%
Aged 72-75 months at 30 June 2003
82.3%
General Practice Immunisation Incentives Scheme
Total practices registered at 30 June 2003
5,487
Service incentive payments
$19.9 million
Total outcomes payments
$17.0 million
Practice Incentives Program
Practices participating at 30 June 2003
4,624
Total payments
$244 million
Rural Retention Program
Eligible medical practitioners participating at 30 June 2003
2,309
Total number of payments
1,907
Total payments
$18.0 million
General Practice Registrars’ Rural Incentive Payments Scheme
Eligible medical practitioners participating
374
Total number of payments
695
Total payments
$5.5 million
Compensation Recovery Program
Cases finalised
65,960
Refundable benefits recovered
$38.1 million
HECS Reimbursement Scheme
Eligible medical graduates participating
67
Total number of payments
91
Total payments
$459,951
Federal Government 30% Health Insurance Rebate
Memberships registered
4,816,238
Total paid in cash claims
$2.8 million
Total paid to health funds
$2,163 million
Two-way agency arrangements with health funds
In-hospital gap claims lodged under two-way agency arrangements
730,329
Participating health funds
37
Simplified billing
Medicare in-hospital services claimed through simplified billing
69.5%
Health funds transmitting simplified billing claims electronically to HIC
40
Billing agents registered for simplified billing
25
Office of Hearing Services
Services processed
769,538
Benefits paid
$154 million
Family Assistance Office
Services provided to customers
194,737
OUR PRIORITY IS TO SERVICE OUR CUSTOMERS’ INDIVIDUAL NEEDS…NOW
THAT’S SERVICE WITH A SMILE.
CHAPTER-2
HIC’S STRATEGIC PLAN
Our Strategic Plan affirms HIC’s purpose of improving Australia’s health through payments and
information. It was developed in consultation with customers, stakeholders and staff. HIC aims to
build on its strong base of payments, processing and customer service to provide information for
better health decision-making and we will develop and customise new services to supply secure and
reliable information to our customers.
The 7 levels of our Strategic Plan are:
Level 1 - Our purpose:

improving Australia’s health through payments and information.
Level 2 - What we want to be known for:

being trusted by our customers and the community;

helping to connect Australia’s health sector; and

being a valued strategic partner in delivering the health portfolio’s agenda.
Level 3 - The driving force of our business shows:
 we are continuing our efforts to be a customer-driven organisation in conjunction with strategic
partners in the health portfolio.
Level 4 - Our business approach describes how we will:

ensure customer access;

create value for our customers;

grow and develop; and

organise ourselves through our business approach.
Level 5 - Our national strategic themes are:

building confidence in HIC;

stimulating strategic thinking and the creation of knowledge within HIC;

producing complete, accurate and timely payments and information;

building strategic alliances to connect the health sector;

customising our services; and
 efficient and effective program delivery through emphasis on regulatory frameworks and risk
management.
Level 6 - Our key result areas are:
 commitment to strengthening HIC’s financial position and ensuring accountability for the financial
aspects of all programs;
 our customers and stakeholders have confidence in HIC’s provision of services and its
commitment to relationship-building and open communication;
 commitment to internal processes that support the efficient delivery of HIC products and services
that reflect responsible business practices;
 commitment to supporting innovation, learning and continuous improvement for individuals and
the organisation as a whole while also respecting the objectives of external parties;

commitment to our staff and to making a positive contribution to the community; and

commitment to contributing to and improvement in the physical environment.
Level 7 - Strategies to achieve our Strategic Plan include:

engaging with customers in accordance with our Charter of Care;

realigning our processes to seamlessly provide payments and information to our customers;
 working with the Astralian Government Department of Health and Ageing to improve connectivity
within the health sector;

investing in human resources so that staff skills are aligned with organisational strategies;

aligning our investment strategies to support the needs of our customers; and

proactively approaching new business opportunities that are consistent with our Strategic Plan.
Our values

Our top priority is meeting customer needs.

People can trust us to protect the privacy of all information we handle.

We trust and respect each other and work as a team to achieve the best results.

We improve our business efficiency with new products, ideas and ways of working.

We deliver results with honesty, integrity, accountability and enthusiasm.
Our commitment to continuous improvement
HIC is committed to continuous improvement and:

uses customer feedback to help identify and resolve any problems;

provides training programs to ensure staff are skilled and customer-focused; and

monitors and evaluates services against our Charter of Care standards.
For more information about our strategic direction see HIC’s website www.hic.gov.au
Turning the Strategic Plan into action
Corporate scorecard
An organisational performance management system was developed in 2001 to replace the key
performance objective reporting system. The new system provides a comprehensive coverage of
performance measures organised along balanced scorecard perspectives (customer, financial,
internal business and growth, and development).
Development of the corporate scorecard continued in 2002-03 with a major review completed
towards the end of the financial year. A revised and more detailed scorecard will be operating from
early in 2003-04 and will be available to appropriate staff within HIC via the HIC intranet.
Balanced scorecard perspectives from 2000-01 to 2003-04
2000-01
Actual %
2001-02
Actual %
2002-03
Actual %
2003-04
Target
Community satisfaction
92
90
93
90% or better
Medical practitioner satisfaction
71
72
75
80% or better
Pharmacist satisfaction
90
92
91
90% or better
Customer perspective
Prompt processing
2000-01
Actual %
2001-02
Actual %
2002-03
Actual %
2003-04
Target
93
93
93
90% or better
Internal business processes perspective
Claim processing accuracy
93
98
98
99%
Medicare transactions online*
49
50
50
N/A†
General practices online
86
86
90
N/A††
73
72
Improvement reflected
in 2004 survey
Growth and development perspective
Staff satisfaction
66
*Includes Medclaims and internet electronic transactions.
†To be calculated differently from 2002.
††Currently no target set although practices are being encouraged to move online.
Customer satisfaction
HIC annually measures satisfaction with its services within three main customer groups: medical
practitioners, pharmacists and health consumers. The results remained steady, with no significant
statistical difference from last year’s scores. Of consumers surveyed,
93 per cent were satisfied with HIC services, and 91 per cent of pharmacists were satisfied. Among
doctors, satisfaction also remained steady at 75 per cent. Practice manager satisfaction also
remained steady at 85 per cent.
Market research
HIC undertook a range of research projects to improve customer service, business understanding of
initiatives, and as part of effective marketing communications and promotion work.
These included:
 research into customer service issues and needs for all key customer segments, including those
from Indigenous communities and culturally and linguistically diverse backgrounds, within the context
of business plan targets for customer satisfaction;
 specialised study of communication effectiveness and Medicare claims satisfaction within
Indigenous communities from the point of view of consumers, health practitioners and pharmacists
(the latter in relation to medicine access and Pharmaceutical Benefits Scheme claims);
 study of attitudinal issues and business impact around an initiative to improve the use of the
internet as a key channel for Medicare claims for bulk billed and patient claims in medical practices
and Pharmaceutical Benefits Scheme (PBS) claims from pharmacies;
 evaluation of Medicare easyclaim fax and booth facilities for Medicare claims from pharmacies
and Rural Transaction Centres in regional Australia side by side with a market study on customer
demand for a shift from Electronic Funds Transfer (EFT) to the credit card market for Medicare
claims;
 various studies related to PBS including a tracking study on trends in relation to community
attitudes, overseas drug diversion, PBS risk (stockpiling of prescription medications) and restrictions;
and
 in-depth study into the Australian Organ Donor Register (AODR), exploring the motivators and
barriers to people deciding whether or not to register and donate organs or tissue for transplantation
and other related issues.
Corporate Business Plan
HIC’s Corporate Business Plan outlines major initiatives over three years in support of HIC’s
Strategic Plan. The organisation’s performance is measured through the Corporate Business Plan
and reported using a balanced scorecard approach.
The first cycle of the Corporate Business Plan is now complete. HIC enhanced its processes to better
integrate the annual budget construction with the business planning process. This resulted in a more
streamlined process to obtain funding for both business-as-usual and specific projects. In particular, it
will allow more accurate reporting of the progress of key business initiatives.
The structure of the Strategic Plan and Corporate Business Plan were amended to ensure better
alignment between HIC’s key result areas and the reporting balanced scorecard perspectives. This
has ensured that progress against key business plans within HIC is clearly demonstrated as
contributing to progress against the Strategic Plan.
Further refinements included development of corporate objectives to be used at all levels of planning
and refined accountabilities for planned initiatives. These have assisted in maintaining consistency
across all levels of business planning and have enhanced personal accountabilities for managers.
Reporting progress against the Corporate Business Plan continues to occur mid year and at the end
of the financial year.
Business Improvement Program
The Business Improvement Program has been in existence for two years and has achieved
substantial success with product development and key initiatives such as the delivery of services
using an eBusiness capability in addition to existing service delivery channels. It is a consolidated
program of activity that is addressing both Government and health online agendas, as well as
meeting the expectations of HIC customers. The program is expected to be completed in 2004-05,
and is using new and improved service delivery channels that are emerging from advances in
eBusiness technologies to transform the range of HIC products and services.
HIC has received strong support from the Government for its agenda to modernise its claims and
payment systems and to better connect the health sector. In the 2001 Budget the Government
agreed to fund an investment in eBusiness capability for HIC. Total funding for the proposal is $125.7
million and comprises capital funding of $98.1 million and operating funding of $27.6 million. Funding
commenced in 2002-03 with the receipt of $34.0 million, with $32.0 million as capital for software
developement projects and a further $2.0 million for staff training.
The investment strategy includes:

provision of new technical infrastructure;

facilitation of electronic business with medical providers and pharmacies;

substantial reduction in paper-based processing; and
 continued strong emphasis on fraud prevention and maintenance of high standards of privacy and
security.
Achievements to date include:

successful deployment of new applications development tools;
 new high availability eBusiness IT infrastructure which is being used in Medicare and PBS claims
submission and for the MediConnect Field Test;
 implementation of a new eBusiness IT architecture including a new mid-range infrastructure,
integrated applications development methodologies and tools, common software components and
applications development best practices;
 Medicare bulk bill and patient claims being transmitted through the internet from doctors’ practices
with 319,440 vouchers claimed in this way from 69 practices since July 2002; and
 PBS online transactions submitted by email have resulted in 150,805 prescriptions being received
since September 2002, with 16,535 prescriptions received in June 2003 from 4 pharmacies.
MediConnect
MediConnect (formerly the Better Medication Management System) is a voluntary scheme that
creates comprehensive medication records for participating consumers that can be accessed by
participating doctors and pharmacists with the consent of the consumer. It is a new development in
health care which, by drawing together comprehensive information about the medicines people use,
will enable doctors, pharmacists and hospitals to prevent health problems caused by adverse drug
reactions and interactions. It is currently being field tested in two locations: at Launceston in
Tasmania and Ballarat in Victoria.
The MediConnect Field Test (or trial) commenced in March 2003 and is designed to trial both the
technical and policy aspects of MediConnect. Participating pharmacists in Launceston are providing
information to consumers about the benefits of joining MediConnect and registering interested
participants. Consumers can also register to participate at a Medicare office. Doctors and
pharmacists in Ballarat joined the Field Test in June 2003.
The Field Test is expected to run until December 2003 and the results will be used to inform future
design of MediConnect to ensure it meets the needs of professionals and consumers and improves
health outcomes.
Web Channel Development project
The project is designed to bring relevant information products and services to HIC customers. It will
deliver an integrated approach to operating HIC’s corporate web channel and coordinating,
maintaining, improving and delivering internet and intranet web-based products.
New policies and standards for web look and feel have been developed and introduced to achieve a
consistent interface for new applications. Tenders were also received and evaluated for a new
Content Management Solution that will improve the efficiency and accuracy of web content
preparation and maintenance.
Automated Risk Management System (ARMS)
This risk mitigation measure has two systems components: the Program Review (PR) Desktop and a
new payment risk assessment tool. The PR Desktop is a national system that supports all aspects of
program review work in the State Offices and National Office.
It is used to record, manage and report on all activities arising from program integrity work. The new
payment risk assessment tool, which is still under development, identifies payments to providers that
exceed their normal pattern of claiming, thus providing an early opportunity for integrity checks to be
made.
Directories
Development of the new Directories infrastructure will support the provision of better customer
services, increased productivity and the use of new technology that can support eHealth and
emerging customer service requirements.
The Directories project will allow HIC to enhance its ability to provide complete, accurate and timely
payments and information and deliver on other Business Improvement strategies including: protecting
individual privacy and confidentiality, connecting the health sector and customising its services.
At 30 June 2003, the project was nearing the completion of the Consumer Directory, a single central
repository of data relating to health service consumers registered with HIC. The Provider Directory
project also commenced during the year and its aim is to improve the quality and quantity of HIC
provider information for program administration as well as making that information available to
providers, consumers and health sector organisations. The Consumer and Provider Directories are
key enablers in HIC’s four-year Business Improvement Program.
HIC Online
HIC Online is the new electronic way of doing business with HIC. It has evolved from HIC’s
Medclaims channel to take full advantage of the latest developments in internet technology. As part
of HIC’s Business Improvement Program, the HIC Online project allows internet claiming for both
bulk bill and patient claims at the point of service, that is, at the doctor’s surgery. The successful
implementation of HIC Online has:
 enabled claiming at the time and place of care (the doctor’s surgery), reducing or eliminating the
need to visit a Medicare office;
 delivered an easier bulk billing system integrated into existing practice management software,
making it administratively easier for doctors to bulk bill Medicare for patient services;
 reduced paperwork for the practice because supporting documentation no longer needs to be
sent to HIC;
 improved practice cash flow for providers who bulk bill as the claims can be made daily, in
contrast to batch claiming;
 decreased claim rejection rates as claims are assessed immediately and any data errors can be
corrected at the time of claiming; and
 significantly reduced administrative costs due to secure and economical web technology which
enables accurate claims transaction processing.
HIC Online was developed in response to the 1999 General Practitioner Memorandum of
Understanding in which general practice groups asked for electronic patient claiming from doctors’
surgeries.
Another driver was customer research, ‘Development of ways to improve access to Medicare (March
1999)’, which looked at current consumer claiming behaviour and potential use of new technology.
The study found that 82 per cent of consumers of Medicare services would find electronic claiming
convenient.
Further, the Business Improvement Program, and HIC Online in particular, was established in
response to the Government’s online agenda, which aims to improve equity of access to Government
services by making appropriate services available online. The project also fulfils Government online
objectives by developing its capacity for electronic communication, facilitating information exchange
through partnerships and communication systems, and resolving issues such as the privacy, security
and authentication of electronic transactions. HIC has developed an Application Program Interface
(API) for use by software vendors to allow for the integration of this claiming technology with practice
management software. Transmissions are secured using Public Key Infrastructure (PKI), which
provides security for electronic communications by using digital certificates and digital keys. PKI is
internationally renowned for its innovative approach to online security.
There have been two releases of the HIC Online API, with each new release offering more functions.
Release 3 is expected to be implemented in early 2004. It will deliver additional functionality which
will allow specialists, hospitals and private health funds to access the new system to electronically
exchange eligibility, entitlement and claiming information, and will assist in the provision of Informed
Financial Consent for patients and streamlined claiming for in-hospital episodes of care.
At 30 June 2003, 69 sites were transmitting HIC Online claims. A total of 326,902 bulk bill and 19,110
patient claims have been processed since the system was introduced in March 2002.
PBS online services
The PBS online project continues to be an integral part of HIC’s Business Improvement Program with
a focus on:

delivering efficiencies to pharmacies;

encouraging the uptake of electronic services resulting in savings to pharmacists and HIC; and

developing an enhanced authority approval system with electronic access for prescribers.
A key feature of PBS online services is the use of Public Key Infrastructure (PKI) to ensure security of
transmissions.
In September 2002 several pharmacists participated in an interactive trial of the Claims Transmission
System/Electronic Reconciliation Statement which was the subject of the first stage of PBS online
services. The successful submission of claims via internet email and the receipt of electronic
reconciliation statements gave rise to a demand for an additional but related service. In mid-2003
PBS online services will enhance HIC’s electronic services for pharmacists by providing the ability for
online requests of duplicate reconciliation statements. Strategies for taking these products beyond
the trial stage will be developed in late 2003.
Stage 2 of PBS online services allows pharmacists to submit email files containing prescription
details for partial-batch pre-assessment. Results are then returned to the pharmacist in a format
similar to the emailed electronic reconciliation information, thus providing an opportunity for errors to
be corrected before submitting an actual Claims Transmission System (CTS) claim file for processing
and payment.
Enhancements to the Stage 2 pre-assessment functions, including making use of online access as
an alternative to the email option, will become available during early 2004.
PBS online services is also developing an enhanced authority approval system which will allow
prescribers to electronically submit PBS authority requests and receive authority approvals over the
internet.
PBS online transactions submitted by email have resulted in 150,805 prescriptions being received
since September 2002, with 16,535 prescriptions received in June 2003 from four pharmacies.
HIC’S PURPOSE
HIC’s purpose is to improve Australia’s health through payments and information.
HIC is a Commonwealth statutory authority and was established by an Act of Parliament in 1974, the
Health Insurance Commission Act 1973, to administer what has become Australia’s universal health
insurance scheme, Medicare.
Programs administered by HIC
HIC administers many health-related programs on behalf of the Australian Government:

Medicare;

Pharmaceutical Benefits Scheme/Repatriation Pharmaceutical Benefits Scheme;

Compensation Recovery Program for Medicare and nursing home benefits;

Australian Organ Donor Register;

Australian Childhood Immunisation Register;

Medical Indemnity;

General Practice Immunisation Incentives scheme;

Practice Incentives Program;

Rural Retention Program;

HECS Reimbursement Scheme;

General Practice Registrars’ Rural Incentive Payments Scheme;

Federal Government 30% Rebate on Health Insurance;
 Family Assistance Office — in partnership with Centrelink, the Australian Taxation Office and the
Department of Family and Community Services;
 claims processing and payments for the Department of Veterans’ Affairs (the veterans’ treatment
accounts), the Office of Hearing Services, the Health Department of Western Australia, Vietnam
Veterans’ Children’s Program; and

Balimed.
Statutory information is detailed in Appendix A on page 165.
HIC’s relationships
All HIC’s activities are conducted within the Australian Government policy framework set by the
Department of Health and Ageing, the Department of Veterans’ Affairs, the Department of Family and
Community Services and relevant legislation. HIC seeks to be an active contributor to policy
development by providing regular information and feedback from its day-to-day operations.
HIC’s relationship with the Department of Health and Ageing is underpinned by a service level
agreement, the Strategic Partnership Agreement, and a funding agreement, the Output Pricing
Agreement.
HIC processes medical, hospital and allied health services claims for veterans’ treatment accounts on
behalf of the Department of Veterans’ Affairs in accordance with a services agreement covering
services, service standards and financial arrangements between HIC and the Department of
Veterans’ Affairs.
HIC’s role in delivering Family Assistance Office services is covered by a business service
agreement with the Department of Family and Community Services.
Funding arrangements
Department of Health and Ageing
HIC’s current funding arrangement for the provision of services under the Strategic Partnership
Agreement with the Department of Health and Ageing is based on the 2000-2002 Output Pricing
Agreement adjusted for volume variations and indexation. Estimated revenue under this arrangement
in 2003-04 is $396.3 million. The Government is providing funding of $34.3 million in 2003-04 to HIC
to ensure it is appropriately resourced to continue to deliver a range of family health and family
services programs. This is the first phase of a process to update HIC’s resourcing arrangements, with
further funding to be decided after an activity-based costing and benchmarking exercise has been
undertaken in 2003-04.
Department of Veterans’ Affairs
Following the expiry of a Memorandum of Understanding that lasted from December 1996 to 30
November 2001, HIC has entered into a five-year services agreement with the Department of
Veterans’ Affairs and the Repatriation Commission to continue to provide processing services for
veterans’ treatment accounts. The services agreement is based on a two-tiered payment
arrangement comprising a fixed charge and a variable charge per transaction processed. Under the
agreement, estimated revenue to HIC in 2003-04 is $16.9 million.
Department of Family and Community Services
HIC receives a single annual payment from the Department of Family and Community Services to
cover the costs of providing services under the Family Assistance Office program. Under this
agreement, the estimated revenue to HIC in 2003-04 is $8.4 million.
Health Department of Western Australia
On 17 June 1999, an agreement was reached between HIC and the Health Department of Western
Australia for the development and implementation of a visiting medical practitioner fee-for-service
payment and information system. This system was implemented in April 2000 and currently provides
public non-teaching hospitals in Western Australian with an intranet processing system (in real time)
to assess and pay invoices submitted by visiting medical practitioners for services rendered to public
patients. Negotiations are currently underway to renew the agreement.
Office of Hearing Services
HIC processes and pays claims to accredited hearing service contractors on behalf of the Office of
Hearing Services at the Department of Health and Ageing according to the Output Pricing Agreement
between HIC and the Department. Payments comprise a fixed component and variable payments
(depending on the number of claims paid). Under the agreement, the estimated revenue to HIC in
2003-04 is $0.539 million.
Data security and access to information
HIC maintains strict confidentiality of all data it holds. Personal information held by HIC is restricted to
that which is necessary to administer HIC programs and for audit and postpayment review
requirements. Policies and standards set out in the Commonwealth protective security manual are
observed and strict security controls are in place to ensure a high level of protection for the stored
data.
Information held by HIC is strictly protected by legislation and there are severe penalties for HIC
employees who improperly use, release or communicate personal information. Requests for the
release of information are processed in accordance with the relevant legislation and legislative
release provisions, for example, the Freedom of Information Act 1982, the Privacy Act 1988, the
Health Insurance Act 1973, and the National Health Act 1953. See Appendix B on page 171 for a
detailed report on the release of information under the Freedom of Information Act.
HIC computer systems can provide an audit trail of operator access that enables detection of
possible improper use of data. HIC staff are regularly reminded of their obligations regarding the use
of personal information and automatic warning notices are a further reminder whenever they access
electronic data.
HIC complies with the Privacy Commissioner’s Guidelines on data matching and the storage and
destruction of data. It can, however, provide de-identified statistical information in accordance with
the relevant legislation to assist research projects with the potential to improve Australia’s health.
HIC privacy training — internal and external stakeholders
HIC’s Privacy Branch plays a fundamental role in raising awareness of privacy issues through
training and promotions, participating in various privacy forums and providing expert advice to
internal and external stakeholders.
HIC is meeting its legislative training responsibilities by ensuring all new (and existing) staff complete
the National privacy and security training module, which includes temporary and permanent staff,
consultants and contractors. Staff experience the benefits of a robust privacy training program via
new and improved methods and tools to assist staff to assimilate legislative responsibilities in their
daily roles.
External customers have also benefited from quality tailored products developed by the Privacy
Branch. These include a series of tailored manuals and forms to assist in streamlining the processes
for requesting information from HIC.
Customers and staff can access a wide range of privacy-related information on HIC’s web channels,
which include HIC’s internet (available to customers) and intranet (available to staff).
Public Key Infrastructure
Public Key Infrastructure (PKI) is a combination of policies, procedures and technology designed to
provide secure and confidential conduct of electronic business (eBusiness).
It has been successfully used for payment authentication (claims reimbursement), secure messaging,
secure document storage, retrieval and exchange. It is a key element for supporting secure and
reliable electronic communications in the framework of eHealth.
Health eSignature Authority Pty Ltd
The Health eSignature Authority Pty Ltd (HeSA), a company wholly owned by HIC, was established
in February 2001 to provide digital certificates to the Australian health sector. HeSAs digital
certificates, or Public Key Infrastructure (PKI) certificates, enable the secure electronic exchange of
data between health professionals and organisations within the health sector.
Strategic priorities for HeSA in 2002-03 had a strong customer and business enhancement focus.
They included:
 support for HIC’s Business Improvement Program, and HIC Online and PBS online services in
particular;
 provision of efficient and reliable digital certificate registration services to health providers and
organisations throughout the health sector in Australia;

transition of Certification Authority services to a new service provider; and

positioning HeSA to meet future certificate demand.
Significant achievements for HeSA in 2002-03 included:
 successful re-accreditation under the Australian Government’s gatekeeper framework, with
appreciably less complex and more user-friendly policy documents and administrative processes;

increased automation of processes;

positive engagement with stakeholders across the health sector;
 the development of information products, resources and tools to support the take-up and use of
PKI in the health sector; and
 continuing upward trends in the take-up of digital certificates, which increased from 2,200 in June
2002 to 5,250 in June 2003.
HeSA continues to play an active role in helping HIC to achieve its strategic objectives and in
promoting the Government’s broader eBusiness agenda. Further information about HeSA, including
access to a range of information services and resources, can be found at www.hesa.com.au
Health sector connectivity
HIC continues to facilitate connectivity in Australia’s health sector by implementing information
management strategies that leverage HIC’s technical, intellectual and strategic assets to improve
health outcomes.
In the past year, an Office of the Chief Information Officer (OCIO) was established to promote HIC’s
reputation as a responsible information manager by leading corporate initiatives to connect the health
sector, as well as providing advice to the Managing Director, Commissioners and Senior Executives
on ways of developing HIC’s role within the health sector.
HIC actively supports initiatives aimed at connecting the Australian health sector. For example, at the
national level HIC is working with the Department of Health and Ageing to inform the Department’s
HealthConnect initiative, while also continuing to work with State and Territory Governments on their
projects. HIC’s role in this process is reinforced through its representation on a wide range of
stakeholder forums including those incorporated within the Australian Health Ministers Advisory
Council framework.
Health information services
Statistical information collected from HIC administered programs is used, within strict privacy
guidelines to develop and provide health information and services for the Australian community and
health sector. HIC information services assist health decision-making to improve community health
by:

supporting clinicians to evaluate and improve clinical practice;

promoting evidence-based approaches to health care;
 coordinating care between medical practitioners and integrating information from different
sources; and
 providing health care consumers with information to make more informed decisions and improve
access to services.
HIC information strategy
A key initiative has been the development and implementation of HIC’s information strategy which
builds on HIC’s information management achievements to date, improves information services for
HIC staff and provides a clear direction for improving HIC’s capacity to turn data into useful health
information that will lead to improved decision making and health outcomes.
Corporate metadata management
In September 2002, HIC began implementing the recommendations of an independent review of HIC
metadata management practices. HIC’s corporate metadata management strategy sets out a
comprehensive range of initiatives for HIC to work towards the establishment of an enterprise wide
metadata management framework for its information and data assets. Work undertaken this year
included improvements to business processes, establishment of standards, practices and
governance arrangements, and increasing staff awareness of the importance of metadata.
Knowledge management
Continued implementation of HIC’s knowledge management strategy has enhanced HIC’s capability
to make the best use of its intellectual assets. Its successful implementation is dependent on a
consistent whole-of-organisation approach which collectively pieces together HIC’s knowledge
management building blocks. A primary focus is on improving the way information flows around the
organisation and working collaboratively with other HIC business units to support knowledge
management incorporation into work practices.
Key organisational knowledge management initiatives included:
 redevelopment of HIC’s reference suite, using innovative systems and metadata, to provide HIC
Customer Service Officers with electronic decision support tools enabling delivery of quality
information to customers;

development of a national induction program;

development of a functional web-based corporate directory to proof of concept stage;
 establishment of State and Divisional Coordinators’ Communities of Practice to encourage greater
understanding and coordination between Divisions, National Office and the States; and
 creation of a monthly knowledge management team newsletter, In the Know, an internal
communication and education tool.
Integrated Business Information System (IBIS)
The Information Services Branch (ISB) sponsored the IBIS (Data Warehouse) project, which is built
and being loaded. The IBIS facility is recognised as an essential underpinning to HIC’s information
strategy and eBusiness initiatives. It aims to be a single source of reliable and complete health
related (and other) information that supports HIC’s goal of making health information accessible to
managers, policy makers, service providers and consumers. In 2002-03, IBIS included the
development of a range of information products based on Medicare data to meet internal business
needs in the Program Management Division, Professional Review Division and Information Strategy
and Business Development Division. At the end of 2002-03, IBIS was transitioned from project status
to core HIC business.
This transition provided for the establishment of a team within the Information Technology Services
Division to manage infrastructure and maintenance of the facility. A steady program of information
product development will now continue within a number of areas across HIC.
Provider feedback
ISB continues to provide a service delivery point for a range of mailout and provider feedback
activities. During 2002-03, the Branch successfully completed 34 mailouts involving over 367,000
mail pieces on a range of health related issues, with the majority undertaken for clients external to
HIC. Five (involving 49,000 mail pieces) were provided for internal (HIC) stakeholder groups.
The Branch is also committed to developing systems that provide secure access to feedback
information over the internet. Continued development of HIC’s feedback reporting facility during
2002-03 enabled optometrists to join vocationally and non-vocationally registered practitioners in
being able to access their Medicare service utilisation via the internet. The facility will continue to be
provided to practitioner groups who currently receive HIC feedback through the post.
HIC’s web statistics pages
In line with HIC’s strategic objectives, ISB continues to maintain and provide both Medicare and PBS
item statistic reports on the internet.
During 2002-03, trend analysis indicates the number of ‘users’ compiling Medicare and PBS
statistical reports using HIC’s website facility averaged about 8,000 hits per month.
Data quality
A number of significant data quality initiatives were conducted during the year under the auspices of
the National Continuous Data Quality Improvement (CDQI) Committee.

preliminary review of the Medicare quality control system;
 establishment of the National quality control procedures manual (encompassing a range of
programs);

establishment of the data quality intranet site;

launch of the National CDQI initiative award;

National data quality awareness week in September 2002;

establishment of HIC’s data quality framework; and

establishment of the Eligibility CDQI working party.
HIC’s data quality framework incorporates a CDQI strategy for addressing data quality issues in a
holistic and coordinated manner, guided by CDQI working parties with appropriate stakeholder
representation. Its primary focus is to promote and develop a CDQI culture within HIC, which will
facilitate continuous improvement of business practices and information quality.
Health information delivery
In line with HIC’s strategic direction of improving Australia’s health through information delivery to
internal/external stakeholders and customers, ISB processed about 14,000 formal requests for
information in 2002-03.
Information channels with key stakeholders
HIC maintains regular communication with key stakeholder groups through various publications and
HIC’s website.
Mediguide is a guide to the Medicare claiming system and other health programs administered by
HIC and is updated annually and distributed to medical practices and new practitioners. Medical
practitioners also receive the Forum newsletter on a quarterly basis. Pathologists are sent a bi-annual
newsletter, Pathology Notes.
HIC representatives also communicate with medical practitioners and practice staff through
conferences, seminars and presentations.
Health Industry News, a new quarterly electronic newsletter, was developed specifically for private
health fund operators, billing agents, software vendors and other interested parties. Bulletin Board, a
quarterly newsletter, provides pharmacists with regular updates on PBS, program initiatives and
online developments and is also available on HIC’s website.
HIC’s website provides medical practitioners and pharmacists with information about HIC programs,
online initiatives, incentives and allowances, as well as access to health statistics and forms.
Your Health Matters, a quarterly lifestyle magazine for consumers, is available free of charge from
Medicare offices, doctors’ surgeries, pharmacies, and some child-care centres, fitness centres and
health food outlets. The magazine is popular with a range of groups interested in health and health
issues and demand for the Autumn 2003 issue lead to an increase in the number printed, with
280,000 copies now distributed each quarter throughout Australia.
The Good Health TV network, which is shown in doctors’ surgeries throughout Australia also provides
regular consumer information.
Program integrity and assurance role
HIC is responsible for ensuring payments of benefits are correctly made for services properly
rendered while preventing, detecting and investigating fraud and abuse. To ensure program integrity
in accordance with the requirements of the Health Insurance Act 1973, the National Health Act 1953
and the Health Insurance Commission Act 1973, HIC applies a balance of education, audit and data
analytical methods
HIC provides information, education and conducts interviews regarding the appropriate use of the
Medicare Benefits Schedule, the Schedule of Pharmaceutical Benefits and other programs
administered by HIC.
To achieve compliance, HIC:

employs a range of sophisticated data analytics;

conducts comprehensive post-payment audits;

investigates cases of suspected fraud and inappropriate practice;
 coordinates and manages investigation of suspected cases of fraud and inappropriate practice
using a case-management approach; and

provides feedback and educational material to providers in relation to the various programs.
Fraud investigation
HIC investigators in each State investigate fraud against Medicare, the PBS and other Government
programs administered by HIC. In some cases, investigations are conducted in liaison with State
and/or Federal Police.
HIC’s investigative powers
The Health Insurance Commission Act provides HIC with a comprehensive range of powers with
which to perform its functions in relation to fraud investigation. The Act allows HIC to:

issue a notice requiring a person to give information or produce documents;
 enter premises with the consent of the occupier and conduct a search for the purpose of
monitoring compliance with regulatory requirements; and
 enter premises, conduct searches and seize evidential material under warrant, where there are
reasonable grounds for suspecting that a ‘relevant offence’ is being or has been committed, and the
Managing Director has approved the use of the powers for that specific investigation.
The use of these powers is required to be reported in HIC’s Annual Report pursuant to section 42 of
the Health Insurance Commission Act. See Appendix A on page 165.
Review of HIC’s national investigation function
In 2001, HIC’s Board of Commissioners approved a review of the national investigation function
within HIC. The review was considered timely given the increasing challenges of eBusiness and other
initiatives that are part of business improvement throughout the organisation.
As a consequence of the review, recommendations were made to enhance HIC’s activities in
program integrity. In particular, the review team identified the need to enhance the existing role of
HIC’s National Office in:

setting national program review priorities;

monitoring the performance and productivity of program review activity nationally;

ensuring the delivery of education and training programs;

promoting a nationally consistent approach; and

performing ongoing quality assurance.
These recommendations were successfully implemented during the year.
Information technology role
HIC seeks to use technology to continually improve customer service. The Information Technology
Services Division’s (ITSD) purpose is to lead HIC’s Information Technology agenda as a key
contributor in delivering HIC’s business.
Initiatives included:

extending system development expertise to deliver new services;

consulting customers during development to better meet their requirements;

consolidating and unifying system capabilities;

integrating our help desk services;
 formulating an IT charge back process to accurately reflect the true usage of assets throughout
HIC; and

introduction of the design authority to ensure streamlined architectural systems.
Outcomes have been:

handling customer enquiries through an expert system;

reduction of time required by HIC staff and customers to conduct business;

increased accuracy and consistency of information;

improved useability and simplified navigation through improvement of interfaces;
 development of a standards management process that will allow HIC to identify, evaluate, select,
maintain and retire IT standards in a timely manner;

establishment of technical and documentation standards;

seamless transfer of data;

easy access to information;

improved access for people with disabilities to information and services;

improved coordination of services to customers; and

increased efficiencies and productivity within ITSD by restructuring the Division.
IT applications
HIC is the only agency which services all Australians through its large claims processing and
payment systems.
HIC is extending its services by using real time web-based systems which customers can access via
the internet or within HIC’s branch network, for example, the Organ Donor registration system and
various systems that support the HIC Online Medical Desktop Project (which enables doctors to claim
online, on behalf of patients from their practice, for all medical services rendered).
Architecture
Its purpose is to improve HIC’s ability to deliver flexible, integrated business focused systems in a
cost-effective manner. HIC’s enterprise architecture is comprised of functional, application,
information and technology architectures. These provide frameworks, standards and guidelines for
delivery of their components in a consistent manner.
The Architecture Branch is responsible for working with stakeholders and developing these
architecture frameworks, standards and guidelines and managing their evolution to meet new and
emerging business requirements.
The initial focus of architecture is to:
 transition the Business Improvement Division’s architectural roles into ITSD’s core business, thus
extending and promoting HIC enterprise architecture;

monitor and advise on the architecture of projects;
 establish architectural standards and ensure compliance with standards, strategies and guiding
principles; and

establish architectural infrastructure and research and development projects as required.
Infrastructure and business continuity
Infrastructure is physical architecture used to support IT solutions. The Infrastructure Delivery and
Business Continuity Branch ensures:
 HIC’s information technology infrastructure meets its business objectives and the appropriate
engagement models are used;
 relationships with vendors are actively managed to support business as usual and growth and
change;

vendor contracts are optimised for service improvement at reduced costs;
 uninterrupted availability of all key business resources required to support essential activities
through disaster recover management; and

privacy security framework creates and endorses a security culture within HIC.
Performance of IBM Global Services Australia (IBMGSA)
IBMGSA has managed HIC’s IT infrastructure delivery since 2000. During this time, IBMGSA has
consistently met or exceeded service level achievements of greater than 95 per cent. IBMGSA
services include managing HIC’s IT helpdesk and desktop support groups, and provides the desktop,
LAN, mainframe and mid-range (including ebusiness) platforms which deliver and support the
corporate applications (such as email) and business related applications including PBS, DVA,
Medicare and ACIR.
Planning and business management
The Planning and Business Management Branch was created to streamline the administrative and
business side of the Division to allow those who service the business areas to continue to do so with
minimal interruption to their core business.
The objective of the Planning and Business Management Branch is:

to monitor, report and advise on the Division’s finances;

initiate and implement the IT charge back program;
 currently undergoing an activity based costing project for further transparency of expenditure and
value;

administer the business, financial and IT plans for the Division; and

administer and coordinate software contracts and licences for HIC.
Enterprise services and projects
The Enterprise Services and Projects Branch was created to administer the newly transitioned
programs from the business improvement areas back into HIC’s core business.
Its role is to:

ensure project management principles are applied to all growth and change projects;
 administer the continuing PKI authentication program and continue with the development of PKI
software; and

manage the data warehouse IBIS.
IT quality assurance and testing
All new and changed IT solutions must be independently tested in a production-like environment to
verify that the solution is fit for purpose and meets business continuity requirements.
The IT Quality Assurance and Testing Branch:
 is responsible for engaging quality assurance and testing services as early as possible to ensure
IT solutions are fully testable;

tests for the integrity and robustness of systems developed by HIC;

ensures accuracy of data from HIC systems before implementation; and

ensures IT solutions are signed off for production implementation.
Web channel services management
The web channel incorporates both the corporate intranet as well as HIC’s internet presence. Its role
is to:
 ensure all content web pages and web enabled applications delivering information via the web
channel are approved in accordance with the web channel policies and guidelines; and
 develop a more streamlined and interactive web channel through implementing a content
management system.
Initiatives and challenges
Challenges for Information Technology Services Division include:

taking new applications from development through to operational stage;

conversion/retiring of legacy applications and processes;

creation of new architectural standards;

managing a multisourcing strategy for the provision of essential business services;

removing old systems to realise benefits;

working with external parties (eg IBMGSA/Telstra/Optus) for the shared delivery of services;
 ensuring the IT charge back process is efficient and continually work together with all
stakeholders; and
 communicating its evolving roles and skills to the business areas to ensure smooth transitioning of
business improvement projects back to HIC’s core business.
HIC consultancy services role
HIC has provided high quality consultancy services to international and domestic clients since 1989
and has been awarded projects against stringent international competition. Projects have been
undertaken for international government agencies in Slovenia, Bulgaria, Croatia, Romania, Hungary,
Mongolia, Turkey, Indonesia, Saudi Arabia, Malaysia, the Philippines, Vietnam and Kenya. The
majority of projects were funded through the World Bank, while development agencies such as
AusAID, the International Labour Organisation and the World Health Organisation funded others. On
occasion, a commissioning government has directly funded a project.
HIC’s consulting projects in Eastern Europe, Asia and Africa have been in health financing, health
insurance administration, health information systems, information technology, training and
institutional development. These include the design and implementation of an improved health
insurance program for the Bulgarian National Health Insurance Fund and a current project which
involves providing assistance to the Slovenian Ministry of Health to improve the health sector
reimbursement system.
Health financing model
With the aid of funding from the World Bank, HIC has developed a generic health financing model
comprising a generic framework and software. It will assist policy makers in the health sector to
evaluate different policy options at both physical and financial resource levels in terms of
sustainability, affordability and equity.
Development of the model led to significant consulting opportunities in Romania, Bulgaria, Slovenia
and China. The generic health financing model framework is currently being used to develop an
Australian health financing model to assist with health policy decision making in Australia.
International projects
During 2002-03, HIC was involved in international projects in:

Slovenia — adapting and improving the health sector reimbursement system
This World Bank funded project is being undertaken in collaboration with Callund Consulting, United
Kingdom for the Slovenian Ministry of Health. Its objective is to improve performance of the health
sector through setting more coherent policies, establishing effective purchasing and surveillance
facilities, and case management for the unified national health information system. To achieve this,
there is a need for appropriate management education and training at the level of governance by
national and regional authorities in the health care sector. A comprehensive accounting system will
be developed that has the ability to link medical and financial data for enhancing the rationality of
utilisation of available resources.

Bulgaria — health information standards
This World Bank funded project is being undertaken in collaboration with the Health Information
Management Association of Australia for the Bulgarian National Health Insurance Fund (NHIF). It will
formulate standards for the provision of health related information. A major expected outcome is the
ability of NHIF to obtain information, at a national level, on all activities associated with the provision
of health care. There is also a need to reduce or eliminate the numerous methods of reporting so
there is less of a burden on health care providers, enabling them to deliver a high standard of health
care. The standards will reflect national needs and practices and reflect international best practice,
including European Union standards.

Croatia — pharmaceutical sector reform
This World Bank funded project is being undertaken in collaboration with the World Health
Organisation Collaborating Centre for Training, Pharmacology and Rational Drug Use, University of
Newcastle. The objective is to reform the Croatian pharmaceutical sector. It is proposed to reduce the
overall cost to the community of essential drugs supply and improve the quality and effectiveness of
drug prescribing by physicians and other health care workers.
The reform also seeks to create a more informed environment within which both prescription and
consumption of essential drugs occurs. Health economies and pharmacoeconomics concepts and
tools will be used in national drug policy development. Guidance will be provided on ways to mobilise
and allocate sufficient funds to finance pharmaceuticals within the framework of the national health
policy and health sector reform. In addition, guidelines will be created on drug financing alternatives
and alternative methods for paying pharmaceuticals within a new payer-system. An education
program will be developed for physicians and clinical pharmacologists aimed at improving rational
disease management and pharmaceutical prescribing.

Malaysia — a universal government health fund
HIC provided consulting advice on the proposed establishment of the National Health Financing
Authority in Malaysia. Its role was to prepare a submission to the Government of Malaysia for the
purpose of documenting the key issues that prompted the Government to consider reforming the
national health financing system and to advise on an appropriate approach to manage the national
health financing function. The submission covered the identification of the underlying principles,
issues, institutional and organisational requirements necessary to support a national health financing
authority for Malaysia.

Saudi Arabia — a health insurance scheme for expatriates
HIC provided consulting advice on the proposed establishment of the National Health Insurance
Scheme in Saudi Arabia. It prepared a submission to assist the Nukhba Medical Group to document
key issues that had prompted the Saudi Arabian Government to consider reforming the national
health system and to provide advice on the requirements and challenges posed by the introduction of
a social health insurance scheme. The submission identified the objectives of delivering the best
health outcomes and efficient use of available health resources to properly design a new health
system for expatriates in Saudi Arabia.
International delegations
HIC has hosted international delegations from countries such as Slovenia and Vietnam and
conducted formal presentations to officials from other countries including Canada, Japan, the
Philippines, China, Malaysia and Korea.
National project activity
Department of Veterans’ Affairs provider feedback project for diversified health
systems
HIC is contracted to Diversified Health Systems, a subsidiary of GlaxoSmithKline Pty Ltd, to
undertake activities within the prescriber feedback program for the Department of Veterans’ Affairs.
Project objectives include:

improving health outcomes;

improving prescriber awareness of potential medication problems for individual veterans;

encouraging best practice for specific conditions;

encouraging proper medicine use; and

reducing expenditure on pharmaceuticals.
WE HAVE A STRONG, FORWARD THINKING NETWORK OF PEOPLE
DEDICATED TO DELIVERING THE BEST RESULTS FOR THE FUTURE OF
AUSTRALIAN HEALTH …NOW THAT’S SOMETHING TO BE PROUD OF.
CHAPTER-3
CORPORATE GOVERNANCE, SERVICES AND
ARRANGEMENTS
HIC recognises that effective corporate governance is essential to manage its strategic direction and
day-to-day operations. HIC’s Board of Commissioners and senior management have implemented a
strong corporate governance framework.
HIC’s Board of Commissioners
HIC’s Board of Commissioners operates within the framework of a corporate governance charter
which guides Commissioners in adopting the highest ethical and professional standards in carrying
out their governance roles. Its code of conduct emphasises the need for Commissioners to act
honestly, in good faith and in HIC’s best interests. It outlines HIC’s Board of Commissioners functions
in terms of goal setting and strategy formulation and delineates these from senior management
responsibilities. The charter also sets out the obligations of Commissioners in relation to possible
conflicts of interest, expanding upon their obligations according to Subdivision B, Division 4, Part 3 of
the Commonwealth Authorities and Companies Act which relates to the conduct of officers.
Structure
The Health Insurance Commission Act stipulates that HIC’s Board of Commissioners has a
chairperson, a managing director and nine other members. These are appointed by the GovernorGeneral for periods of up to five years and may be reappointed. The Commissioners, including the
chairperson, are part-time appointments. The Managing Director is a full-time appointment and is
HIC’s Board of Commissioners only executive director. The Managing Director manages HIC’s
operations as directed by HIC’s Board of Commissioners.
Commissioners must disclose any pecuniary interests that may conflict with matters being considered
by HIC’s Board of Commissioners in session. Meetings are presided over by the chairperson. HIC’s
Board of Commissioners’ decisions are by majority vote with the chairperson having a casting vote.
In the absence of the chairperson, the Commissioners present may conduct a vote for the election of
a person to preside at an HIC Board of Commissioners’ meeting. The Managing Director is not
eligible for election.
Remuneration
The chairman’s remuneration is $57,410 a year. Commissioners receive $24,240 a year. The
Managing Director receives a total remuneration package of $270,000 a year including
superannuation and fringe benefits, plus access to performance pay. Committee fees of $5,200 a
year apply to membership of HIC’s Board of Commissioners Audit Committee and the Fraud and
Service Audit Committee. The chairs of both committees receive $10,000 a year. HIC’s chairman
does not receive additional fees for attending these committee meetings.
Directors’ and officers’ liability insurance
HIC has in place directors’ and officers’ liability insurance covering both HIC and its subsidiary, HeSA
Pty Ltd, against liability for an act or omission in the capacity of director, officer or employee of the
company.
Membership and attendance at HIC’s Board of Commissioners meetings
Commissioners during 2002-03
Appointment
expiry date
Number of
meetings
eligible to
attend
Number of
meetings
attended
Mr Peter Bunting, LLB, FCA —
Chairman
22 December
2005
11
10
Mr Robert Collins, BSc, FAICD, FAIM
4 July 2005
11
10
Sr Maria Cunningham, FCNA, MAICD
4 July 2005
11
7
Dr Jeff Harmer, ba (Hons), Dip Ed, PhD,
FAIM — Managing Director
13 April 2004
7
7
4
4
Mr James Kelaher*, BA, MBA, FCPA,
MAICD
Commissioners during 2002-03
Appointment
expiry date
Number of
meetings
eligible to
attend
Number of
meetings
attended
Mr Colin Johns, OAM, AUA, FAIPM
24 November
2003
11
11
Dr Bryce Phillips, AO, MBBS, FAMA
Reappointed 1 September 2001
30 August 2006
11
9
Mr ian Fletcher,
10 November
2002
4
4
Ms Jane Halton, BA (Hons), FAIM, PSM
10 November
2006
11
5
Mr Ron Harris
10 November
2006
6
5
Dr Sally Warneford, BSc (Hons), PhD
30 August 2006
11
9
BA, FAIM, MAICD, CMAHRI, JP
Retirements during the year
Mr ian Fletcher,
BA, FAIM, MAICD, CMAHRI, JP
10 November
2002
Mr Ron Harris
3 March 2003
Dr Jeff Harmer, ba (Hons), Dip Ed, PhD,
FAIM — Managing Director
10 March 2003
*Appointed Acting Managing Director from 10 March 2003 - 7 September 2003
HIC’S BOARD OF COMMISSIONERS
The Commissioners
Peter D. Bunting, LLB, FCA, was appointed Commissioner on 23 December 1997. His term
expires on 22 December 2005. Mr Bunting was appointed Chairman on 25 May 2000.
He is the Managing Director of PDB Associates Pty Ltd, which provides corporate advisory services.
He is also a director of several public and private companies and is a Fellow of the Australian
Institute of Company Directors, the Taxation Institute of Australia and the Institute of Chartered
Accountants in Australia.
Robert J. Collins, BSc, FAICD, FAIM, was appointed Commissioner on 5 July 2000. His term
expires on 4 July 2005. Mr Collins is Managing Director of Candle Australia Ltd, a publicly listed
company involved in personnel services. His previous roles include Chief Executive Officer of
FreeOnline Holdings Ltd, a company involved in online consumer marketing, and Chief Executive
Officer of Icon Recruitment and Ajilon Australia, companies owned by the world-wide Adeco group.
Mr Collins was founding past president of the Information Technology Contracting and Recruiting
Association.
Maria Cunningham, FCNA, FAICD, was appointed Commissioner on 5 July 2000. Her current term
expires on 4 July 2005. Sister Cunningham is a Sister of Charity and holds qualifications in nursing,
community health and health administration. She has recently been appointed to the Sister of Charity
Community Care Services and is a Director of the Sisters of Charity Health Service (SCHS) and
Trustee of Catholic Health Care Services. Sr Cunningham has previously held the position of
Regional Chief Executive Officer of SCHS Darlinghurst.
Jeff A. Harmer, BA (Hons), Dip Ed, PhD, FAIM, was appointed Managing Director from 14 April
1998 until he retired on 10 March 2003. His term was due to expire on 13 April 2004. Dr Harmer was
formerly Deputy Secretary of the Department of Social Security, Deputy Secretary of the Department
of Housing and Regional Development and a First Assistant Secretary in the Department of Human
Services and Health.
James S. Kelaher, BA, MBA, was appointed Acting Managing Director from 10 March 2003. Mr
Kelaher has largely worked in finance and manufacturing, mostly in Sydney and Melbourne, with brief
stays in the UK and Europe. Before his appointment to HIC Mr Kelaher assisted the Federal
Government with restructuring and reforming the Australian Federal Police. Mr Kelaher is a Fellow of
the Australian Society of CPA’s and an Associate of the Australian Institute of Company Directors.
Ian R. Fletcher, BA, FAIM, MAICD, CMAHRI, JP, was appointed Commissioner on 1 September
2001. His term expired on 10 November 2002. Mr Fletcher is the Chief Executive Officer of the City of
Kalgoorlie-Boulder, has 20 years’ experience in senior positions in Commonwealth, State and
Territory Governments and has also run his own business consultancy firm. He has had considerable
experience in the health sector and with eBusiness. Mr Fletcher is a Fellow of the Australian Institute
of Management, associate Fellow of the Australian College of Health Service Executives, member of
the Australian Institute of Company Directors, Local Government Managers Australia and the Institute
of Public Administration Australia, and a chartered member of the Australian Human Resources
Institute.
Jane Halton, BA (Hons), FAIM, PSM, was appointed Commissioner on 18 January 2002. Her term
expires on 10 November 2006. Before her appointment in January 2002 as Secretary of the
Department of Health and Ageing, Ms Halton was Executive Coordinator for the Department of the
Prime Minister and Cabinet and was responsible for advising in all aspects of Commonwealth
Government Social Policy. In addition, she was responsible for the Office of the Status of Women
and for advising the Minister Assisting the Prime Minister for the Status of Women. Previously, Ms
Halton was National Program Manager (First Assistant Secretary) of the Australian Government’s
Aged and Community Care Program in the Department of Health and Aged Care with responsibilities
for long term care. Ms Halton is a Fellow of the Australian Institute of Management.
Ron Harris, was appointed Commissioner on 1 September 2001. His term expired on 10 November
2002. Mr Harris has worked with his own information technology companies since 1980. He is
Managing Director of Harris Technology which he founded in 1986, Managing Director of Liquorland
Direct/Vintage Cellars Direct and a director of Quids Technology, a software company partly owned
by Coles Myer. Mr Harris is also a director of Tanake Pty Ltd and Tanabo Pty Ltd, private investment
companies specialising in property investment.
Colin R. Johns, OAM, AUA, FAIPM, was appointed Commissioner on 24 November 1998. His term
expires on 24 November 2003. Mr Johns is a pharmacist and was Chairman of the Australian
Community Pharmacy Authority until 30 June 2000. He was National President of the Pharmacy
Guild of Australia from 1990 to 1994 and Director of Guild Commercial Ltd in 1999. Mr Johns is a
Fellow of the Australian Institute of Pharmacy Management and a member of the Pharmaceutical
Society of Australia.
F. Bryce M. Phillips, AO, MBBS, FAMA, was initially appointed Commissioner on 28 August 1996
and reappointed on 1 September 2001. His term expires on 30 August 2006. Dr Phillips is a general
practitioner. He was President of the Australian Medical Association from 1988 to 1990 and is Deputy
President of the Medical Practitioners’ Board of Victoria. He is also a member of the Royal Australian
College of General Practitioners.
Sally G. Warneford, BSc (Hons), PhD, was appointed Commissioner on 1 September 2001. Her
current term expires 30 August 2006. Dr Warneford is currently an investment manager with Credit
Suisse Asset Management. From 1998 to 2000, she was an industrial equities analyst with Merrill
Lynch, covering the health care and biotechnology and chemicals sectors.
Jeff Whalan, BA, FAIM, FAICD, was appointed Commissioner on 15 August 2003. His term expires
on 14 August 2008. Before his appointment as Managing Director of HIC,
Mr Whalan was a Deputy Secretary in the Department of Prime Minister and Cabinet. He was
responsible for advising the Prime Minister on social policy issues including health, ageing,
immigration, Indigenous Australians, employment, education, income support and veteran’s. Mr
Whalan has a background in health and social policy issues. He has led areas responsible for
disability services, housing, income security, family services, mental health, rural health and health
workforce issues. Mr Whalan is a member of the ACT advisory committee and a Fellow of the
Australian Institute of Management. He is also a Fellow of the Australian Institute of Company
Directors.
Committees
HIC’s Board of Commissioners operates five standing governance committees:

Audit Committee;

Fraud and Service Audit Committee;

Business Outcomes Committee;

Human Resource Committee; and

Remuneration Committee.
Audit Committee
Its broad objectives are to: ensure HIC meets its strategic objectives; promote accountability to the
Minister, Parliament and the community; support measures to improve management performance
and internal controls; oversee the Audit and Risk Assurance Services Branch function; and ensure
effective liaison between senior management, internal audit and external audit functions. At 30 June
2003 the Committee had six members and met five times during 2002-03.
Audit Committee membership 2002-03
Number of meetings eligible to
attend
Number of meetings
attended
Mr Colin Johns —
Chair
5
5
Mr Peter Bunting
5
4
Mr Ron Harris
4
3
Dr Bryce Phillips
1
1
Fraud and Service Audit Committee
The Fraud and Service Audit Committee (FASAC) monitors and reviews the effectiveness of the
Program Review Division’s practices in preventing, detecting and investigating fraud and
inappropriate practice by service providers and the public. At 30 June 2003 the Committee comprised
six members. Committee meetings are held bimonthly and the Committee met five times during
2002-03.
FASAC membership 2002-03
Number of meetings eligible to
attend
Number of meetings
attended
Dr Bryce Phillips —
Chair
5
5
Mr Colin Johns
5
5
Mr Robert Collins
5
3
Dr Sally Warneford
5
3
Sr Maria Cunningham
1
1
Mr James Kelaher
2
2
Dr Jeff Harmer
3
3
Business Outcomes Committee
The Business Outcomes Committee considers strategic issues relating to HIC’s business activities
and monitors its performance under the obligations of the Strategic Partnership Agreement with the
Department of Health and Ageing. It also reviews business proposals and examines performance
indicators to ensure overall continuous improvement in HIC’s business outcomes. At 30 June 2003
the Committee comprised three members and it met once during 2002-03.
Business Outcomes Committee membership 2002-03
Number of meetings eligible to
attend
Number of meetings
attended
Mr Peter Bunting —
Chair
1
1
Mr Robert Collins
1
1
Mr Ron Harris
1
1
Human Resource Committee
The Human Resource Committee is responsible for ensuring HIC has in place human resource
management approaches and practices that support the business objectives of the organisation. In
addition, it reviews remuneration issues for senior executives, not including the Commissioners and
Managing Director. At 30 June 2003 the Committee comprised three members and it met three times
during 2002-03.
Human Resource Committee membership 2002-03
Sr Maria Cunningham —
Chair
Number of meetings eligible to
attend
Number of meetings
attended
3
3
Number of meetings eligible to
attend
Number of meetings
attended
Mr Ian Fletcher
1
1
Dr Jeff Harmer
3
3
Remuneration Committee
The Remuneration Committee is responsible for reviewing remuneration issues for the Managing
Director. At 30 June 2003 the Committee comprised three members and met once during the year.
Remuneration Committee membership 2002-03
Number of meetings eligible to
attend
Number of meetings
attended
Sr Maria Cunningham —
Chair
4
4
Mr Peter Bunting — Chair
1
1
Dr Bryce Phillips
1
1
Reporting
HIC’s Board of Commissioners receives regular reports covering all aspects of HIC’s operations,
including key issues and trends from management. At any time HIC’s Board of Commissioners may
request reports concerning any aspect of HIC operations.
Internal control framework
The Audit and Risk Assurance Services Branch provides assurance on HIC’s corporate governance
framework and internal control framework to HIC’s Board of Commissioners through its Audit
Committee. It examines and evaluates the adequacy, effectiveness, efficiency and economy of
activities of HIC and its subsidiaries.
The Branch also evaluates and reports on the performance of management in maintaining HIC’s
strategic direction, achieving its operational objectives, and ensuring appropriate standards of probity
and accountability. It promotes management’s ownership of the control process and contributes to an
institutional culture of accountability and integrity through ongoing risk management training and
support.
The Audit Committee, as part of its oversight function, defines the Branch’s responsibilities and
approves its business plan. The work schedule is based on an assessment of possible audit topics
ranked against relevant business risks to determine a scope and level of coverage sufficient to
provide an appropriate level of assurance to HIC.
Business risks
HIC’s Board of Commissioners, its committees and the executive management committees discuss
business and financial risks applying to all HIC functions. Strategies to minimise economic risk and
audit plans are integrated into all major HIC activities.
Ethical standards and Code of Conduct
The Code of Conduct contained in the Corporate Governance Charter sets out the principles that
guide HIC’s Commissioners in adopting the highest ethical and professional standards in carrying out
their governance roles. All HIC employees sign the Code of Conduct, which includes specific
reference to the secrecy provisions in the Health Insurance Commission Act.
Corporate governance information for HIC staff
Information, including the Managing Director’s instructions, finance policies, human resource
management policies and audit policies/charters, are available on HIC’s intranet to guide the day-today work of staff.
Management Committees
While HIC’s Board of Commissioners set HIC’s goals and considers strategies to achieve them,
internal management structures manage the competing priorities of timely decision making and
consideration of HIC’s future vision and operating environment. During 2002-03, HIC operated three
senior management committees, with two committees merging in September and the formation of a
new committee in April.
Executive Planning Committee, which shared information, developed and reviewed the
Strategic Plan. Meetings allow senior managers to discuss strategic issues including developments in
the external environment. The Committee met three times and was chaired by the Managing Director.
Members were: the Deputy Managing Director; the National Manager Operations; the Commission
Secretary; the Chief Information Officer; the Chief Finance Officer; the Manager — Audit; all General
Managers and all State Managers.
Output Review Committee, which monitored HIC’s business performance during 2002-03
against a number of indicators including HIC’s Charter of Care. The Committee also initiated
enhancements to improve performance, discussed stakeholder issues relative to business
performance and reported on revenue and expenditure issues. It met monthly and was chaired by the
Deputy Managing Director. Members were: all General Managers and State Managers; the Manager,
— Associate Government Programs, the Manager — Medicare Program and the Manager —
Pharmaceutical Benefits.
Business Change Board, which reviewed the performance of strategic projects, maintained a
corporate timetable for all projects, and examined project delivery, risk, schedule and budget
performance. The Committee met monthly and was chaired by the Executive General Manager —
Business Improvement. All General Managers, the Director — Project Office and a State Manager
attended each meeting.
Business Management Committee, established in September and combined the functions of
both the Output Review Committee and the Business Change Board. The Committee met monthly
and was chaired by the Managing Director. Members were: the Deputy Managing Director; the
National Manager Operations; the Commission Secretary; all General Managers; all State Managers;
the Manager — Audit; and the Chief Finance Officer.
Organisational structure
HIC has a decentralised organisation and structure, which includes a National Office in Canberra, a
headquarters in each State capital, a number of processing centres and a Medicare office network
throughout Australia.
HIC’s organisational structure at 30 June 2003 is detailed on page 41. The functions of each HIC
division, which are based at the National Office, are outlined below.
HIC’s divisions
Executive Support aims to provide high quality legal, parliamentary, secretariat and other services
to HIC’s, Board of Commissioners, HIC Senior Executive, Minister and Parliament.
Business Improvement Program Division is responsible for the planning, design and
implementation of new capabilities that will enable HIC to deliver its services and products through
the internet. In particular, the Division has been established to progress HIC’s Strategic Plan and
eBusiness strategy through the implementation of major components of its IT and business
architectures. The business architecture describes how HIC will be organised to deliver services in
the future and achieve the objectives of the Strategic Plan. The IT architecture provides the
infrastructure and technical capabilities required to deliver these business requirements.
Program Management Division manages Medicare, the Pharmaceutical Benefits Scheme and
other health and allied programs administered by HIC. It monitors performance of each program,
develops administrative policy and undertakes business development for existing programs and
proposed Australian Government initiatives.
Finance and Planning Division supports the achievement of HIC’s strategic direction by providing
high quality financial management, business planning, project management and procurement
services to the whole organisation.
Corporate Development Division supports HIC’s line areas achieve their business goals by
delivering human resource strategies and corporate services. In line with HIC’s Strategic Plan, the
Division has a strong focus on achieving and maintaining a high performing culture and developing a
workforce planning framework to ensure HIC’s people have the right skills in the right locations at the
right time.
The Office of the Chief Information Officer implements information management strategies that
leverage HIC’s technical, intellectual and strategic assets to improve health outcomes. The Chief
Information Officer is responsible for promoting HIC’s reputation as a responsible information
manager, and providing advice to the Managing Director, Commissioners and Senior Executives on
developing HIC’s role within the health sector.
Information Technology Services Division provides and manages information technology services
including system applications, and works closely with all areas to get the best out of HIC internal and
contracted IT resources.
Program Review Division is responsible for ensuring the integrity of programs administered by HIC
through the prevention, detection and investigation of fraud and abuse.
State Offices
These cater for Australia’s highly dispersed population. State Managers administer the operations of
Medicare offices, processing centres, telephone enquiry lines and customer service areas, and each
State Office is responsible for day-to-day operational activities.
HIC’s staff
HIC staff are employed under the Health Insurance Commission Act.
As at 30 June 2003, HIC employed 4706 staff, an increase of 235 staff or 5.25 per cent since 30 June
2002. Of these, 1014 were employed as part-time staff and 268 as temporary staff. The significant
proportion of part-time staff, 21.5 per cent, ensures HIC can maintain high standards of customer
service during peak hours.
Of all staff employed at 30 June 2003, 3761 or 80 per cent were female. Staff are located across
Australia, at National Office in Canberra, each of the State Offices, several processing centres and
226 Medicare offices.
Performance Support Program
HIC’s Performance Support Program (PSP) is part of HIC’s business planning framework. For the
first time, in 2002-03, team leaders and managers were required to apply a four point rating scale as
part of the assessment process.
At 30 June 2003, 4004 (86%) of staff had signed Performance Support Agreements (PSAs). In
December 2002, HIC engaged Results Consulting to conduct a qualitative PSA audit. One hundred
PSAs were included in the audit, the purpose which was to gauge the quality of PSAs developed and
the extent to which they were linked to business plans. Overall, the Audit indicated a good quality of
PSAs. Their strengths were that performance goals and performance measures were closely linked
to the employee’s work, and learning and development needs were also strongly tied to work
performance needs.
As agreed in HIC’s (Business Improvement) Certified Agreement 2001-2003, the PSP was evaluated
jointly with the Community and Public Sector Union to assess its application. MOZ Consulting
undertook the evaluation which commenced in February 2003 and concluded in April 2003. Overall,
the evaluation report observed that HIC has been successful in its introduction of the PSP
Recommendations focused on continuous improvement.
In 2003-04, HIC will begin implementing recommendations arising out of both the PSA audit and the
joint evaluation of the PSP
To ensure all staff continues to be trained in applying the PSP, ongoing training is being provided to
new managers and staff, including refresher training for all managers.
Property management
United KFPW Pty Limited provided HIC with property and lease management services under contract
to 30 June 2003. During 2002-03, HIC reviewed the management of its property function and, as a
result, has decided to manage a range of property functions internally while retaining professional
assistance for lease administration, lease management and maintenance help desk services. These
changes will be introduced from July 2003.
All services provided by external organisations have been subject to an open tender process. During
the year HIC continued its leasehold improvement program for Medicare offices, with 13 offices being
refurbished and 16 offices relocated.
Learning and development
To ensure HIC’s learning and development environment fully meets current and future HIC strategic
requirements, a learning and development review took place in February 2002.
Its outcomes have guided the direction of national learning and development activity within HIC in
2002-03.
In response to the review there has been the:

appointment of a National Learning and Development Manager;
 alignment of the structure of Learning and Development nationally to reflect the model
recommended; and

development of the Learning and development strategy 2003-2006.
The focus of the Learning and Development Strategy, which was developed after significant internal
consultation, is to set future directions and strategic priorities for HIC learning and skill development
until 2006. The consultative process was supported by a national analysis of aggregated learning and
development needs arising from individuals’ Performance Support Agreements.
Key priority areas identified in the Learning and development strategy 2003-2006, are:

transition from management to leadership;

supporting performance through the development of identified key capabilities (core skills);

customer service skills to exceed customer expectations; and

supporting business improvement and change related activities.
Leadership for change strategy — under the key priority area of ‘Transition from
management to leadership’, the Leadership for change strategy was launched in 2003. It is
underpinned by five initiatives for specific target groups that will be progressively rolled out. Each
initiative provides a range of learning and development opportunities for individuals in the target
groups — Top Team, Senior Executive, Senior Manager, Middle Manager and Front Line Managers.
HIC’s values, the leadership capability framework, the PSP process and implementation of the
cascading coaching model form the basis of each initiative.
360 degree feedback — during 2002-03 HIC extended the 360 degree feedback process to
include Senior Management in National and State Offices. This builds on the success of the
implementation of 360 degree feedback with HIC’s Senior Executive group in 2001-02.
Leadership for Frontline Managers — following a successful pilot program in 2001-02, HIC
introduced the Frontline Manager support service coaching initiative to improve the skills and
knowledge of Frontline Managers.
Based on the National Frontline Management competencies, this initiative provides one-on- one
coaching for Frontline Managers. The initiative also involves participation in accredited frontline
management at either the Certificate IV or Diploma level. During 2002-03, 155 managers participated
in this formal training.
eLearning — to support HIC learning and development activities, HIC has included implementation of
eLearning and a Learning management system into its Learning and development strategy. This
forms part of the Learning and Development Infrastructure component of the strategy.
Implementation and consolidation of this initiative will be a major focus in 2003-04.
During 2002-03 eLearning trials were conducted with a range of commercial ‘off-the-shelf’ eLearning
packages. Selection and implementation of the Learning management system will take place in 200304.
Core skills — as part of HIC’s commitment to the development of staff, the national Performance
Support Agreement analysis, conducted as part of the development of the Learning and
Development Strategy 2003-2006, resulted in targeted core skill programs being run nationally. At 30
June a high proportion of identified learning needs have either already been addressed or planned for
the near future. Areas addressed as a priority included project management, PC skills, time
management and interpersonal skills. Nationally, key operational skills have also been addressed,
with significant training in areas such as pathology understanding and interpretation.
Customer Service Officer (CSO) program — the CSO program is a graduated,
competency-based program allowing for the development and assessment of skills within customer
service roles. It has undergone a review, and a project is underway to initiate both short and longerterm changes that will give it a more contemporary focus. The National operations manual for CSOs
is currently being rewritten.
Employment framework
Certified Agreement In January 2003 HIC commenced negotiations with staff and the Community
and Public Sector Union to establish a new Certified Agreement for when the current one expires.
These have focused on:
 maintaining and enhancing a strong performance-based culture — this includes enhancing the
PSP, gaining a further reduction in absenteeism and introducing a staff innovation scheme;
 supporting the business improvement process — through a revised classification structure, job
rotation flexibility and ability to utilise agency staff; and
 further streamlining and simplifying conditions of employment — rationalisation of overtime, single
leave entitlement for fixed term employees, streamlining part-time work clauses, standardising
personal leave for part-time staff in line with full-time staff and reducing the minimum amount of long
service leave that can be taken to seven days.
A revised Human resource delegations’ instrument will take into account changes reflected in the
new Certified agreement and revised HIC terms and conditions, and will also incorporate changes
suggested through the evaluation of the devolution of delegations process. It will take effect from the
date the new Certified Agreement is certified.
The Certified Agreement negotiations are expected to be finalised early in 2003-04.
Australian Workplace Agreements All HIC Senior Executives and Medical Advisers are covered
by Australian Workplace Agreements (AWAs). Negotiations are underway with HIC to revise these.
HIC also continues to use AWAs for Senior Managers below the executive level to promote flexibility
and performance and, where necessary, to address attraction and retention issues.
Classification structure HIC is introducing a rationalised classification structure and associated
work level standards as part of the current Certified Agreement negotiations. The proposed structure
will reflect the needs of the organisation throughout the business improvement process. The adoption
of organisation-specific work level standards will describe the type and level of work performed in
HIC, and establish the basis for classifying jobs and distinguishing between work levels.
Attendance management HIC’s 2001-2003 Certified Agreement provided for a bonus of 0.5% of
salary contingent upon HIC achieving a reduction in unscheduled absenteeism from an average of
12.7 to 12 days per annum to the end of May 2003. HIC was able to meet this target with the actual
level of absenteeism being reduced to 10.96 days. The achievement bonus was paid to all staff
covered by the Certified Agreement on 3 July 2003.
HIC is continuing to give the reduction of unscheduled absenteeism a high priority and as part of the
2003-2005 Certified Agreement, is intending to link other pay increases and bonuses to further
reductions in absenteeism.
During 2002-03, HIC initiatives to further reduce absenteeism levels included strategies aimed at
raising awareness of attendance issues with staff and managers such as:

conducting absence management workshops and briefings for Managers and Team Leaders;

producing a range of educational material for staff and Managers; and

encouraging Managers and Team leaders to use available statistical information on absenteeism.
In addition, improved recruitment and induction processes have been introduced and high users of
unscheduled leave have been identified.
Equity and diversity
HIC’s annual report on equity and diversity to the Minister for Health and Ageing for the 2001-02
reporting period was submitted to the Minister in September 2002. It noted significant achievements
including:
 continued implementation and monitoring of the Indigenous recruitment and retention strategy,
aimed at increasing the number of Indigenous staff employed in HIC and retaining these staff for a
period of at least five years;
 high level of attendance at training aimed at raising awareness about equity and diversity
principles; and
 identification and analysis of customer profiles and using Australian Bureau of Statistics census
data to better inform communication and other strategies aimed at engaging HIC customers.
In November 2002, a meeting of HIC’s Indigenous staff network was held in Canberra to give
Indigenous staff the opportunity to review progress under the Indigenous recruitment and retention
strategy and develop an action plan for future activities.
Safety management
HIC has continued to maintain a strong emphasis on the effective management of work- related
injuries and illness, with a particular focus on high cost claims. HIC continues to pursue a reduction in
claim numbers and costs.
In 2002-03, the focus on occupational health and safety (OHS) and claims management has been
assisted through the engagement of external consultants (SRC Solutions), who have provided
professional and skilled resources in injury prevention and management. In addition, the National
OHS Sub-Committee met on a regular basis to discuss issues of national significance in relation to
OHS matters. State OHS Committees also met regularly to discuss OHS issues of relevance to their
area.
Measures implemented to ensure the health and safety of HIC employees, contractors and third
parties accessing HIC workplaces included:

review of HIC’s OHS policy and agreement, in consultation with the CPSU;

development of an online accident/incident report form;

development of the following OHS policies and guidance notes:
First aid policy;
Home based work policy;
Safe use of laptop computers;
Duty of care relating to contractors and consultants;
Visitor information;
development of the OHS Strategic Plan; and
implementation of a nationally consistent hazard identification, risk assessment and risk
control process.
The statutory report required under section 74 of the Occupational Health and Safety
(Commonwealth Employment) Act 1991 is included in the statutory reports at Appendix A on page
170.
Staff survey
The HIC Staff survey is an effective, transparent and powerful way of obtaining the views of staff
across the organisation. Staff surveys have been conducted in HIC since 1990 to identify areas of
high performance and areas for improvement. The survey measures staff perceptions, attitudes,
concerns and areas of satisfaction across a range of key organisational topics.
The 2003 survey was held on 13 March, with 3,884 staff participating, representing a response rate
of 94%. The staff satisfaction key performance indicator (KPI) derived from the Staff survey indicates
that 72% of staff are satisfied with HIC overall. This compares well when benchmarked with
approximately 150 organisations across the public and private sector that form part of a
benchmarking network. In all categories benchmarked, HIC continues to maintain its position within
the top quartile of the benchmarking group.
People Plan
The People Plan is an ongoing initiative addressing the impact on people and the workforce of
planning requirements resulting from HIC’s business changes. The first People Plan was released in
March 2002. It, and subsequent updates, aim to provide clear information to staff on the changes
they will experience as a result of the Business Improvement program and other new business
initiatives. HIC will release new versions of the plan as change unfolds.
An update of the People Plan was released in August 2002, and a further update was released in
May 2003. The August 2002 update covered the main business improvement changes across HIC,
whereas the May 2003 update focused on HIC’s contact centres (previously known as processing
and call centres). It identified the intended number and location of these centres in the medium to
longer-term and described the future structure and working arrangements of each one. The update
also outlined future working arrangements for Medicare offices and the PBS transition timeline.
It is anticipated that future releases of the People Plan will address, among other things, updates
about the emerging contact centres, arrangements for Medicare offices and the National Office,
learning and development requirements associated with changes, and staff support initiatives.
Consultancy services engaged by HIC
HIC engaged a diverse range of consultants during 2002-03 to undertake consultancy work for which
a total of $11,663,091 was paid.
Consultants are engaged where HIC does not have sufficient specialist expertise available or where
an independent assessment is considered desirable. The types of consultancies cover quantitative
and qualitative research, strategic policy related advice, information gathering and analysis, attitude
surveys, public relations advice (including the development and testing of promotional campaigns),
business improvement initiatives and the development of staff training materials to improve customer
service.
Consultants paid $10,000 or more during 2002-03 are listed in Appendix E on page 179.
Stakeholder Advisory Committee
The Stakeholder Advisory Committee is the peak stakeholder consultation forum, where matters of a
strategic nature impacting HIC are discussed. The forum provides an opportunity for key stakeholder
groups to influence HIC’s activities and agenda at a strategic level.
The Stakeholder Advisory Committee influences the agenda of the subordinate committees: the
Pharmacists’ Communication Group, the Doctors’ Communication Group and the Consumer
Communication Group. The Stakeholder Advisory Committee meets approximately quarterly with the
communication groups meeting as issues arise, usually biannually. The purpose of the subordinate
committees is to engage with a specialist stakeholder set on issues germane to that group.
Membership of the Stakeholder Committees includes peak body and individual representatives from:

consumers;

providers;

IT industry;

government;

private health insurer groups; and

HIC.
Tenure of membership is two years.
HIC service charter
HIC’s service charter, the Charter of Care, was launched in June 1999 following extensive
consultation with customers, health care providers, stakeholders, government agencies and staff.
The Charter of Care describes:

HIC’s current obligations and standards of service;

benchmarks against which HIC’s service performance can be measured;

how customers can access HIC’s services;

customer rights and responsibilities; and

complaints handling procedures.
Service Charter brochures are available at any Medicare office or by contacting the Medicare
customer enquiry number 132 011*. Brochures can also be viewed at HIC’s website,
www.hic.gov.au or by sending a request via email to hic.info@hic.gov.au
*Local call rates. Normal mobile and public phone charges apply.
As a customer-focused organisation committed to continuous improvement, HIC monitors and
evaluates its services against its Charter of Care standards on a regular basis. Regular monitoring of
service levels and receipt of customer feedback helps HIC to identify problems, implement
improvement strategies, develop skilled and customer-focused staff and reinforce HIC’s commitment
to high external and internal customer service standards.
Key Charter of Care activities undertaken in 2002-03 include:
 ensuring national complaints handling procedures are in line with Australian Standard AS42691995;
 holding regular management meetings where performance against Charter of Care standards are
discussed and reviewed;
 reporting Charter of Care standards within the monthly Executive business report to HIC’s Board
of Commissioners;
 reviewing the public and provider service charter brochures to ensure they remain relevant to
customer needs and in line with HIC’s strategic direction;

updating and reprinting the public and provider service charter brochures;
 commencing customisation of a new customer feedback system that will incorporate work flow
management and improve reporting capabilities; and
 ensuring national induction procedures continue to emphasise the importance of the Charter of
Care.
See Appendix F on page 183 for a report on performance against the Charter of Care standards.
Responding to Australia’s culturally diverse society and people with
disabilities
Under its Charter of Care, HIC makes a commitment to be responsive to all customer needs. In
particular, this means being sensitive to and ensuring flexible and easy access to our services for a
diverse range of consumers including people with disabilities, Indigenous people and people from
culturally diverse backgrounds.
Actions include strengthening employees’ knowledge and awareness of equity and diversity
principles through the compulsory National equity and diversity training program which is also a
mandatory goal in Senior Executive Performance Support Agreements. This reflects corporate
commitment to equity and diversity principles and ensures senior managers are accountable and can
ensure staff and projects reflect these principles.
Improving access for Indigenous people
HIC developed and implemented a national communications strategy for Indigenous Australians and
their health service providers. It aims to improve access to Medicare, the PBS and other relevant
programs for Aboriginal and Torres Strait Islander people and their health service providers and was
developed in consultation with the National Aboriginal Community Controlled Health Organisations
(NACCHO) and the Department of Health and Ageing, with the support of an Indigenous
communications consultant.
Channels of communication include HIC publications, direct mail, press inserts, radio, a program of
visitations by HIC liaison officers for Indigenous access, a dedicated 1800 hotline number, a word-ofmouth campaign within Indigenous communities, promotional activities and strategic sponsorship of
community events. Strategy materials were developed in direct consultation with the community and
market tested across Australia.
Key components of the communication strategy included:
 Well & Good, an Indigenous focused magazine, featuring stories about HIC’s programs, major
health problems, personalities and communities;

a promotional poster;
 a toolkit for Indigenous health workers to support the educational activities of HIC’s Liaison
Officers for Indigenous access in their visits to Indigenous health service providers;
 health worker information sheets and consumer fliers containing key messages about Medicare,
the PBS and the Australian Childhood Immunisation Register;

a series of English and traditional language radio announcements;

Indigenous specific information on HIC’s website; and
 development of a CD music compilation disc for distribution to Aboriginal Health Services and a
youth focused multimedia/IT strategy.
The communication strategy was the winner of the highly regarded international Dalton Pen Award
for communication innovation and excellence. It is ongoing with planned further growth and
development.
Cross cultural awareness training is provided to Customer Service and Liaison Officers for
Indigenous access, and it is HIC’s aim that all staff will undertake this training. It provides participants
with an appreciation and understanding of Indigenous culture, history, and communication
differences and protocols. In turn, it enables staff to effectively deliver services to Indigenous
customers in a culturally appropriate manner.
The Indigenous recruitment and retention program to increase Indigenous Australians’ representation
in HIC continues to grow and develop. The annual Indigenous network workshop identified areas of
need and support with positive outcomes including increased communication between the network
members using email contact.
Liaison Officers for Indigenous access and Medicare office staff have continued the provision of
outreach services to Indigenous Australians and their health service providers. Detailed policy and
access information is contained in the relevant program area sections below.
Improving access for new arrivals and residents from culturally and
linguistically diverse backgrounds
HIC works in partnership with the Department of Immigration and Multicultural and Indigenous Affairs
to make Medicare enrolment for new arrivals easier by using information supplied electronically by
the Department as part of the process. Staff also work closely with migrant resource centres and
volunteer groups to provide new arrivals with information regarding Medicare requirements.
HIC’s Welcome Kit for newly arrived immigrants includes information about Medicare,
Pharmaceutical Benefits Scheme, Immunisation, the Australian Organ Donation Register, the Family
Assistance Office and HIC’s Charter of Care. It also contains information relevant to longer term
residents and is available in English and 16 other languages from the Department of Immigration and
Multicultural and Indigenous Affairs overseas posts, migrant resource centres, Medicare offices and
HIC’s website. Plans to make the Welcome Kit available in audio format will enable people with vision
difficulties or low literacy skills to also access the information. A promotional leaflet has been widely
distributed to promote the Welcome Kit.
As a positive reflection on HIC’s dedication to customer service, a language selector has been
included on the front page of HIC’s website providing easy access to the range of translated
information. Recently developed translated language gateway pages have been added to the website
to guide access to the general translated information. The introduction of these pages also allows for
effective international search engine registration.
At 30 June 2003, 60 HIC employees throughout the State network were formally recognised (through
the payment of an allowance) for using their cultural or linguistic skills to provide interpreter services
to customers.
HIC is a member of the interdepartmental committee on multicultural affairs and reports annually to
the Department of Immigration and Multicultural and Indigenous Affairs regarding HIC activities under
the Charter of Public Service in a Culturally Diverse Society.
Contact details for the Translating Interpreting Service (TIS) are included on all communication
material to ensure all people have access to information on HIC’s programs and services.
HIC also promotes its services to people from different cultural and language backgrounds in key
publications such as Australian Mosaic and a range of ethnic print and radio media.
Improving access for people with disabilities
HIC continues to respond to the Commonwealth Disability Strategy with a range of activities that are
guided by the principles of equity, inclusion, participation, access and accountability.
For example, the consumer health magazine, Your Health Matters, has the following features to
make it more accessible for people with a vision impairment:
 Contrast — uses mainly black type on white or yellow paper. When text is printed over tints the
background colour is very pale;
 Type size — 14 pt is used throughout the magazine, reflecting research that indicates a
significant number of blind and partially sighted people can read large print;

Type weight — medium to bold type weights are used to provide good contrast.

Font type — standard sans serif font is used, which is easy to read;

Paper stock — stock chosen is matt and has minimum show-through; and
 Other considerations — adequate space is left between paragraphs, layouts are simple and
clear, e.g. text is not placed around illustrations.
Some HIC information is available in alternative formats in audio and braille and HIC has begun a
program to expand availability into large print and easy English.
HIC continues to provide high quality disability access to HIC’s website and is committed to ongoing
review and implementation of accessibility for people who are blind or vision impaired.
HIC promotes its services to people with disabilities through publications such as Link magazine, the
Telephone Typewriter (TTY) directory and the Australian captions journal.
Contact details for HIC’s Telephone Typewriter (TTY) number are included on all communication
material to ensure all people have access to information on HIC’s programs and services.
Physical access issues are incorporated as a component of any agreed ‘scope of works’ concerning
fit-out and refurbishment of HIC premises. Sit down counters and low writing slopes are available in
all Medicare offices for customers and additional seating has been provided in waiting areas for
disabled or elderly customers. Automatic doors have also been installed.
In addition to specific research projects, key components are included in the annual customer service
and satisfaction research in relation to people from culturally and linguistically diverse backgrounds,
Indigenous Australians and people with disabilities and their health service providers.
HIC telephone enquiry service
HIC manages 68 incoming telephone enquiry lines, which cover most of the programs it administers.
There were approximately 10.5 million calls made to these lines during the financial year. Eleven
enquiry lines are available 24 hours a day, seven days a week, while the remainders are available
during normal business hours.
Calls are answered by customer service staff with the exception of an interactive voice response
system for optometrists to check dates of services.
Over 4.4 million telephone calls were handled by the PBS authority approval line.
See Appendix G on page 188 for a report on the telephone enquiry service.
Contact details for accessing HIC are listed in Appendix H on page 189 and at www.hic.gov.au
EASY AND AFFORDABLE ACCESS TO HEALTHCARE FOR THE WHOLE
FAMILY…IT’S JUST A WALK IN THE PARK.
CHAPTER-4
MEDICARE
Key business results
In 2002-03, HIC processed 221.4 million services, representing $8,115.5 million in Medicare benefits.
At a glance
Medicare expenditure 2001-02 and 2002-03
At 30 June
2001-02
2002-03
% change
Total benefits (includes adjustments to provisions for
outstanding claims)
$7,832.0
million
$8,174.5
million
4.4%
increase
Radiation oncology health program grants
$23.0 million
$36.0 million
56.5%
increase
Medicare enrolments, claims and benefits 1998-99 to 2002-03
As at 30 June
Units
1998-99
1999-00
2000-01
2001-02
2002-03
Persons enrolled*
Million
19.4
19.7
20.1
20.4
20.6
Active cards
Million
10.8
11.0
11.3
11.5
11.7
Enrolment
Claims
As at 30 June
Units
1998-99
1999-00
2000-01
2001-02
2002-03
Services processed
Million
206.3
209.6
213.9
220.7
221.4
Benefits processed
$million
6,669
6,945
7,327
7,830
8,116
Average benefit per service
$
32.32
33.14
34.25
35.48
36.65
Average period service to
lodgement
Days†
15.1
15.3
15.7
16.5
16.3
Average period lodgement to
processing
Days††
5.1
5.7
6.1
5.1
4.4
Benefits
*Medicare enrollees include some people who are not Australian residents (e.g. long-term visitors
greater than six months and eligible short-term visitors).
†Time between date of a medical service and lodgement of a Medicare claim.
††Time between date of lodgement and processing of a Medicare claim.
Overview
Medicare is Australia’s universal health insurance scheme. Introduced in 1984, its objectives are to:

make health care affordable for all Australians;
 provide all Australians with access to health care services, with priority according to clinical need;
and

provide a high quality of care.
Medicare provides access to:

free treatment as a public (Medicare) patient in a public hospital; and
 free or subsidised treatment by medical practitioners including general practitioners, specialists,
participating optometrists or dentists (specified services only).
The Australian Government funds health care through:
 grants to State and Territory governments for the operation of public hospitals through Australian
Health Care Agreements;
 access to medical benefits offering eligible patient rebates on fees paid to eligible medical
practitioners; and
 grants to government and non-government medical practitioners for a range of other services,
such as screening programs to meet special needs.
HIC’s responsibilities
HIC’s responsibilities primarily relate to:
 ensuring Medicare benefits are paid for services to eligible health care consumers by eligible
medical practitioners;
 assessing and paying Medicare benefits for a range of medical services, whether provided in or
out of hospital, based on the Medicare Benefits Schedule (MBS) fees set by the Australian
Government on advice from expert committees; and
 protecting the integrity of the programs it administers through the prevention, detection and
investigation of fraud and abuse.
Medicare Benefits Schedule
The Department of Health and Ageing has primary responsibility for the MBS and advises HIC on any
changes. HIC is responsible for the day-to-day operation of the MBS, and also monitors and analyses
the operation and performance of service item usage under Medicare to identify trends in specific
item usage, broad types of service, costs and future audit topics.
Medicare levy
The Medicare levy was established on the principle that all Australians should contribute to the cost
of health care, according to their ability to pay through taxation revenue and a levy on taxable
income.
Medicare Safety Net
The Medicare Safety Net is designed to protect people who have high medical expenses. When an
individual or registered family that pays ‘gap’ amounts reaches the Medicare Safety Net threshold in
a calendar year ($319.70 from 1 January 2003, for individuals or families — indexed annually from 1
January), Medicare benefits increase to 100 per cent of the MBS fee for any further services that are
not bulk billed in that year. ‘Gap’ amounts are the difference between the Medicare rebate and MBS
fee.
To be eligible for the Medicare Safety Net using combined gap amounts, families and couples need
to complete a Medicare Safety Net registration form (even where its members are listed on a single
Medicare card). Individuals do not need to register.
Medicare eligibility
People who reside in Australia are eligible for Medicare if they:

hold Australian citizenship; or

have been issued with a permanent visa; or

hold New Zealand citizenship; or
 have applied for a permanent visa (restrictions apply to persons who have applied for a parent
visa — other requirements apply).
Australian citizens who have resided overseas for more than five years will be required to
demonstrate their intention to permanently reside in Australia before a Medicare card is granted. A
blue interim Medicare card was introduced in September 2000 for people eligible for Medicare
benefits based on their application for permanent residency. An interim Medicare card helps medical
practitioners and their staff to identify people with limited Medicare eligibility.
Medicare cards and Medicare levy exemptions 2001-02 and 2002-03
Medicare
Cards
2001-02
2002-03
% change
Medicare
2001-02
2002-03
% change
Total cards issued*
3.43 million
3.03 million
11.6% decrease
Reciprocal health care cards
51,373
46,932
8.6% decrease
Total applications
24,458
19,994
18.25% decrease
Accepted applications
24,317
18,500
23.92% decrease
Rejected applications
141
488
246.10% increase
Medicare levy exemption
*Includes reciprocal health care cards issued under agreements
Customising services for Indigenous Australians
As an ongoing response to recommendations in the 1997 Keys Young report, HIC continued to make
significant progress in ensuring Indigenous Australians have access to Medicare, the PBS and other
HIC programs.
Key initiatives during 2002-03 included:
 support to program changes and policy initiatives with the Department of Health and Ageing such
as payments for pathology services;

introduction of a voluntary Indigenous identifier on the Medicare enrolment file;
 provision and enhancement of outreach services to Indigenous communities and providing advice
and support to Aboriginal Health Services;
 continued sponsorship of Indigenous events, such as Croc Festivals and the National 3-on-3
Basketball Challenge, and providing information about HIC programs at these events; and

launch and implementation of the Indigenous Communication Strategy (see page 50).
HIC continues to work in partnership with the Department of Health and Ageing, including the Office
of Aboriginal and Torres Strait Islander Health, the Department of Immigration and Multicultural and
Indigenous Affairs, and to develop working relationships with other key organisations such as the
National Aboriginal Community Controlled Health Organisations (NACCHO) and the Aboriginal and
Torres Strait Islander Commission (ATSIC).
Liaison Officers for Indigenous access in each State and Territory work closely with Aboriginal Health
Services and Aboriginal Health Workers in community health services, providing outreach services.
These include conducting on-the-ground promotion and education about HIC’s programs for
Indigenous Australians and their health service providers. For example, through Medicare enrolment
drives, visitations, training, and building relationships at local community events.
Relationships between Aboriginal Health Services and their local Medicare offices continue to be
fostered, based on the success of reducing rejected claims and improving enrolment data in areas
where these relationships exist. The introduction in 2002 of a national free call 1800 number
specifically for Aboriginal and Torres Strait Islander customers and their health service providers has
proved to be extremely effective in providing additional support for enrolment, claiming and general
advice. Approximately 20,500 calls were answered during 2002-03.
The voluntary Indigenous identifier is an initiative that aims to enable HIC to improve service delivery
to Indigenous customers, research Indigenous health data and measure performance. It was a
commitment of the Minister for Health and Ageing and a recommendation of the Keys Young report.
HIC continues to provide cross-cultural awareness training for staff, and is committed to improving
HIC staff understanding and appreciation of Indigenous culture.
With the support of NACCHO, the Office of Aboriginal and Torres Strait Islander Health and an
Indigenous communications consultant, HIC developed a communication strategy in 2002-03 for
Indigenous customers and their service providers. Its aim is to effectively provide information to
Indigenous people and their service providers about HIC programs and how to access them. As part
of the communication strategy, a toolkit for Aboriginal Health Services was developed to assist
Aboriginal Health Service staff with Medicare billing and enrolment. For further information see page
50.
HIC will continue to work with authorities, medical practitioners and communities to improve the
accuracy of immunisation data for Indigenous Australian children.
The Northern Territory District Medical Officers Project is a partnership between HIC, the Department
of Health and Ageing and Northern Territory Health which has provided a further 60 Indigenous
communities and health services with approval to claim Medicare benefits for medical services
provided to community members.
Aboriginal health service practice data
To improve access to Medicare benefits for customers of nominated Aboriginal and Torres Strait
Islander Health Services, the Minister for Health and Ageing directed (in accordance with existing
section 19(2) orders under the Health Insurance Act) that Medicare benefits be paid to these health
services. Medicare benefits are not payable where a health service is funded from another source
unless the Minister otherwise directs.
HIC collects information on medical practitioners providing services at 168 Aboriginal and Torres
Strait Islander Health Services. This information enables the identification of Medicare payments
provided to these Aboriginal and Torres Strait Islander health services.
Memorandums of understanding signed
HIC supports a number of Indigenous health projects involving the Tiwi Health Board, Katherine West
Health Board and Maari Ma Health Aboriginal Corporation (Wilcannia, NSW). HIC’s responsibilities
include verification of Medicare eligibility of project participants, enrolment of new Medicare
applicants, and the addition to/withdrawal of participants from the projects. HIC also provides
fortnightly aggregated financial Medicare and PBS usage information to help in identifying funds to be
reimbursed to the Australian Government.
To ensure its obligations under the Privacy Act are met, HIC entered into memorandums of
understanding with each of the project fundholders where they agreed to:
 provide relevant Medicare information for each new participant to enable HIC to establish their
Medicare and PBS entitlement and to enable linking back to the fund holder for billing purposes; and

advise HIC of any participant who is to be withdrawn from the project.
Improved services for immigrants
HIC and the Department of Immigration and Multicultural and Indigenous Affairs continue to work
together through the electronic transmission of information with an aim to:
 improve service delivery for people who have applied for, or been granted, permanent residency
status in Australia;

reduce administrative burdens associated with establishing Medicare eligibility; and

simplify Medicare enrolment.
HIC staff also work closely with Migrant Resource Centres and volunteer groups working with
migrants to provide information regarding Medicare requirements.
Visitors to Australia
The Australian Government has signed Reciprocal Health Care Agreements with some countries,
which entitles residents of these countries to restricted access to health cover while visiting Australia.
Currently, these are Finland, Ireland, Italy, Malta, New Zealand, Sweden, The Netherlands and the
United Kingdom.
Provider eligibility and registration
Medical practitioners must satisfy the eligibility requirements of the Health Insurance Act before
Medicare benefits are payable for professional services. They may apply to HIC for a provider
number at each location at which they practice by completing an application form and attaching
relevant documentation.
Services provided by a medical practitioner who does not satisfy the eligibility requirements will not
attract a Medicare benefit. However, this may not affect the practitioner’s ability to prescribe
pharmaceutical benefits, or refer or order pathology and diagnostic imaging services.
Committees
HIC is represented on a number of MBS related, inter-departmental and inter-professional
committees including:

Medicare Benefits Consultative Committee;

Diagnostic Imaging Management Committee;

Pathology Services Table Committee;

Pathology Consultative Committee;

Optometrical Benefits Consultative Committee; and

Medicare Claims Review Panel.
HIC also provides administrative support for expert committees under the Medicare program. The
Minister for Health and Ageing appoints committee members from panels of nominees put forward by
the relevant professional bodies and colleges.
The committees are:

General Practice Recognition Eligibility Committee;

General Practice Recognition Appeal Committee;

Medical Benefits (Dental Practitioner) Advisory Committee;

Medical Benefits (Dental Practitioner) Appeal Committee;

Overseas Specialist Advisory Committees;

Overseas Specialist Appeal Committee;

Specialist Recognition Advisory Committees; and

Specialist Recognition Appeal Committee.
Location specific practice registration
The Health Insurance Amendment (Diagnostic Imaging, Radiation Oncology and Other Measures)
Act 2003 requires all practice sites and bases for mobile equipment where diagnostic imaging and
radiation oncology services are undertaken, to be registered with HIC in order to claim Medicare
benefits.
The main purpose of this amendment is to provide a mechanism to collect information about the
rendering of diagnostic imaging and radiation oncology services. This assists the Government and
the diagnostic imaging industry to monitor the nature of services provided and assess compliance for
benefits by ensuring equipment used in relation to a Medicare claim meets the eligibility
requirements. The information will also allow the development of future programs to maintain and
improve patient access to high quality services.
As at 30 June 2003, 2,544 diagnostic imaging or radiation oncology premises or mobile bases have
registered with HIC and been allocated a unique location specific practice number (LSPN). Under the
new legislation, from 1 July 2003 Medicare benefits will not be payable to practice sites for diagnostic
imaging or radiation oncology items unless a LSPN is quoted on patient accounts, receipts, or bulk
billing assignment forms.
To assist doctors in identifying registered practices eligible for Medicare benefits, a list of LSPN
registered practice sites and mobile facilities have been published on HIC’s website www.hic.gov.au
Pathology
The Pathology quality and outlays agreement 1999-2004 between the Minister for Health and Ageing,
the Royal College of Pathologists Australasia and the Australian Association of Pathology Practices,
provides the basis for developing an improved regulatory environment in the health sector with
potential benefits to all parties.
Approved collection centre listings are now available on HIC’s website www.hic.gov.au
Medicare Claiming
Bulk bill claims
Bulk billing occurs when the patient’s right to a Medicare benefit is assigned by the patient to the
medical practitioner who rendered the service. The medical practitioner accepts 85 per cent of the
MBS fee as full payment for the medical service and bills HIC directly.
In 2002-03, there were 150.1 million services bulk billed, accounting for 67.8 per cent of all services
by all categories of medical practitioners. Additional statistical information is available in the electronic
version of HIC’s annual report www.hic.gov.au
HIC Online
As at 30 June 2003, 69 sites were transmitting claims to HIC via HIC Online. A total of 326,902 bulk
bill claims have been processed since the system was introduced.
Medclaims
The proportion of bulk bill services made electronically using Medclaims increased to 75.4 per cent
with the number of sites transmitting claims decreasing from 6,957 at 30 June 2002 to 6,231 at 30
June 2003.
Scanning and document imaging system
HIC continues to use a generic imaging system for scanning. In 2002-03, some 15 per cent of bulk
bill services were processed using this system.
Patient claims
Recognising that consumers of health services have different preferences when it comes to
accessing Medicare benefits, HIC has developed a range of benefit claiming options. The challenge
for HIC is to maintain an efficient service that is responsive to unique customer groups and provides
ongoing innovation in claiming and related services, while further broadening information service
provision.
Paid accounts
Where the medical practitioner does not bulk bill, and the patient pays the account in full at the time
of service, a Medicare benefit may be claimed from HIC by the patient.
Unpaid accounts
Where the medical practitioner gives the patient an account, the patient may choose to lodge an
unpaid account with HIC. A cheque for the Medicare benefit made payable to the medical practitioner
will be sent to the patient who gives the cheque to the medical practitioner plus any additional amount
owing.
Medicare office claiming
HIC’s network of 226 Medicare offices throughout Australia is supported by its national computing
and communications infrastructure. All Medicare offices provide a full range of Medicare services
including processing of enrolments and registrations, and cash, cheque and electronic funds transfer
(EFT) payments. They also accept lodgement of participating health fund claims under Medicare twoway arrangements, and process claims for the Federal Government 30% Health Insurance Rebate
and benefits for the PBS. Medicare offices also provide Family Assistance Office services. Medicare
office address details are available at www.hic.gov.au/yourhealth/where_to_find_us/index.htm
Medicare claims can be made in person by submitting a claim over the counter or via a drop box at a
Medicare office. Innovations, such as formless cash claiming and EFT payment of Medicare benefits
directly into the patient’s bank or credit union account, are an important part of customer-focused
service in Medicare offices. EFT payment is offered to people lodging claims by post and through
Medicare easyclaim facilities as an alternative to payment by cheque.
Medicare easyclaim
There have been 990,281 Medicare claims since the Medicare easyclaim project commenced,
providing an alternative Medicare claiming option for people living in rural and remote areas around
Australia who do not have direct access to Medicare offices.
At 30 June 2003, 501 facsimile devices and 562 telephone booths were operating in Rural
Transaction Centres, State Government agencies, post offices, pharmacies and many other locally
based shops and services. The locations of Medicare easyclaim devices are available at HIC’s
website www.hic.gov.au
Medicare mail claiming
Medicare claims can still be made by posting the claim form and account or receipt to HIC.
Two-way lodgement of Medicare claims
Medicare Two-Way Agency allows people to lodge Medicare claims at their health fund or health fund
claims at Medicare offices. A total of 730,329 in-hospital gap claims were lodged under the two-way
agency arrangements and there was a total of 37 participating health funds in 2002-03.
Simplified billing
The simplified billing initiative is designed to simplify medical billing and payment arrangements for
private patients for in-hospital care. It reduces:

the number of separate accounts sent to the patient;

delays in patient billing;

administration costs for accounts; and

the level of bad debts as providers have evidence that the claim has been lodged.
There are four major simplified billing models currently in use.
Medical Purchaser Provider Agreement (MPPA) — where a health fund can make an
agreement to pay provider benefits above the Medicare Benefits Schedule fee. Legislation was
introduced prohibiting any health fund from interfering with the clinical freedom of medical
practitioners. This addresses any concerns a medical practitioner may have with entering into such
an agreement with a health fund. The patient need not be involved unless there is an agreed out-ofpocket expense.
Hospital purchaser provider agreement/Practitioner agreement (HPPA/PA) — where a
medical practitioner need not deal directly with health funds if submitting claims for simplified billing.
The agreement is a combination of agreements between medical practitioners and hospitals and
between hospitals and health funds.
Approved billing agency model — where a billing agent acts on behalf of the patient to claim
Medicare benefits and health insurance medical benefits. The maximum amount of benefits a billing
agent can collect on the patient’s behalf is equal to 100 per cent of the schedule fee.
Registration of simplified billing agents — on 8 October 2002 the Health Legislation
Amendment (Private Health Industry Measures) Act 2002 (the Amending Act) transferred
responsibility for the registration of billing agents from the Private Health Insurance Administration
Council (PHIAC) to HIC effective from 8 April 2003.
Between 8 April and 30 June 2003, HIC received and approved one new application for registration
as a Public body simplified billing agent. Two previously registered simplified billing agents renewed
their registrations, one as a public body and one a body corporate.
Gap cover schemes — where the purpose is to enable a health fund to offer insurance coverage
for the cost of hospital treatment and associated professional attention for the person insured. This
can apply where;

the cost of the treatment is greater than the schedule fee;

there is no other form of agreement between the health fund and the provider; and
 the person insured pays a specified amount or percentage under a known gap policy or the full
cost of treatment is covered under a no-gap policy.
Simplified billing claims have increased from 65.9% to 69.5% of all Medicare in-hospital services in
12 months. Twenty-five billing agents were registered to coordinate claims for medical accounts
under simplified billing arrangements at 30 June 2003. Eight were transmitting claims electronically
and 17 were lodging claims manually. Forty health funds also transmitted simplified billing claims
electronically to HIC.
Of the claims transmitted from health funds and billing agents, 97% were transmitted electronically
and 3% manually.
Balimed
In recognition of the extreme difficulties faced by those injured in the Bali bombings, the Australian
Government agreed to cover all out-of-pocket expenses, incurred in Australia, for the treatment of
injuries received. The scheme covers Australian residents and eligible overseas nationals.
A Balimed Steering Committee was established in order to generate and oversee guidelines and
procedures. The committee includes representatives from the Department of Health and Ageing, the
Department of Family and Community Services, the Department of Finance and Administration and
HIC.
A Bali special health care benefits hotline has been established 1800 660 026.
The scheme covers eligible persons until 12 October 2005 and HIC has the discretion to terminate
coverage of a person on reasonable grounds, on a case-by-case basis. It will cover costs faced by
eligible patients for the following kinds of goods and services:
 Medical — gap payments between normal Medicare benefits and the fee charged by the doctor,
to the extent that the amount is not covered by private health insurance;

Hospital — costs not otherwise covered by public patient arrangements or private insurance;
 Pharmaceutical — the full cost of pharmaceuticals covered by the Pharmaceutical Benefits
Scheme; and
 Allied Health — costs of services such as physiotherapy, speech therapy and occupational
therapy, less any amounts covered by private health insurance.
As at 30 June 2003, 141 victims were registered with HIC to receive assistance and $111,811 has
been paid to 84 victims.
Professional Services Review Scheme
Established under the Health Insurance Act, the Professional Services Review Scheme came into
effect on 1 July 1994 and applies to health professionals who provide or initiate services under
Medicare or the Pharmaceutical Benefits Scheme. These include medical practitioners, optometrists,
dentists, podiatrists, chiropractors, physiotherapists and practice proprietors.
The Professional Services Review Scheme provides a system of peer review to determine whether a
practitioner is inappropriately rendering or initiating services under Medicare, or inappropriately
prescribing under the Pharmaceutical Benefits Scheme.
The Director of Professional Services Review, the Professional Services Review Committees and the
determining authority are independent of HIC. Their role is to report on the question of inappropriate
practice. If a Committee makes a finding of inappropriate practice against a medical practitioner, the
determining authority will decide the sanction to be imposed. During the year ending 30 June 2003,
52 practitioners were referred to the Director of Professional Services Review. Of those referred, 47
were general practitioners and five were specialists.
Prescribed pattern of service (80/20 rule)
In 2002-03, nine practitioners who had a prescribed pattern of service were referred to the Director of
Professional Services Review. A ‘prescribed pattern of service’ occurs when a medical practitioner
renders 80 or more professional services on each of 20 or more days in a 12-month period.
Recoveries under the Professional Services Review Scheme
In 2002-03, $150,155.40 was recovered from 10 practitioners pursuant to agreements and final
determinations under the Professional Services Review Scheme.
Inappropriate practice
‘Inappropriate practice’, as defined by section 82 of the Health Insurance Act, occurs where a
Professional Services Review Committee could reasonably conclude that a medical practitioner’s
conduct in relation to rendering or initiating a service would be unacceptable to their general body of
peers. For this purpose, a service is either one for which a Medicare benefit was payable or a
prescription was written for supply of medication under the Pharmaceutical Benefits Scheme (or
supplied by a health care provider).
HIC identifies medical practitioners whose statistics with respect to rendering or initiating services
appears abnormal when compared with their peers. HIC’s State Case Management Committees
review patterns of practice and decide when medical practitioners should be interviewed.
HIC medical, pharmaceutical or optometrical advisers may meet with the medical practitioners for
further information and discussion. The interview, also referred to as an intervention, provides the
opportunity for the medical practitioner to discuss particular issues with the adviser and explain
possible reasons for the pattern of practice.
Following the meeting, any concerns are reconsidered by the State Case Management Committee. In
the majority of cases no further action is required.
If after this review, the medical practitioner’s servicing remains a concern, a request will be made by
HIC to the Director of Professional Services Review to review the provision of services by the
practitioner. The Director may decide to:

dismiss the request;
 enter into an agreement with the medical practitioner to repay Medicare benefits; undertake a
period of disqualification from Medicare, or revoke or suspend the authority to prescribe items under
the PBS; or
 set up a Professional Services Review Committee comprising the medical practitioner’s peers to
determine if the medical practitioner has engaged in inappropriate practice.
Summary of counselling undertaken 2002-03
Specialty
NSW
VIC
QLD
WA
SA
TAS
ACT
NT
Total
General practice
212
140
56
67
31
16
0
5
527
Specialists
20
17
8
5
3
2
0
0
55
Optometrists
22
11
7
9
1
1
0
0
51
Total
254
168
71
81
35
19
0
5
633
Compliance audits
HIC monitors payments on claims paid for Medicare through a program of audits.
Post payment audits
HIC conducts an annual program of post payment audits to monitor and evaluate legislative
compliance with claiming and payment of claims by HIC. To support the post payment audit process
for Medicare, purpose based and source based audits are conducted throughout the year.
Purpose based audits
Purpose based audits are specific, in-depth reviews designed to confirm compliance with the
applicable legislation and the MBS. They complement other HIC activities used to address risks to, or
abuse of, Medicare. HIC conducts purpose based audits throughout the year; however, the audit
results are reported only in the year in which they are completed.
Medicare purpose based audits undertaken during the year involved 188 medical practitioners and
9,277 services. Various levels of non-compliance were found and the total amount of identified
recoveries was approximately $0.25 million.
State and National Office audit officers’ conduct the audits, supported by Medical Advisers within
HIC. National consistency is achieved through regular conferences with State audit staff and a
common methodology.
Source based audits
Source based audits are a post payment review process used by HIC. Their principal objective is to
determine high-risk areas within the Medicare program by verifying all aspects of the claimed service
with documents and parties relevant to the transaction, including patients, medical practitioners and
HIC processing areas.
A secondary objective is to identify administrative errors; these errors generally do not affect the
amount of benefit paid.
Source based audits are used to identify the errors in services examined and to quantify the amount
of improper payments made in relation to those services. In the audits conducted in 2002-03, there
were no improper payments identified, however, errors without payment implications were identified
in the claims examined. This resulted in providers being advised of the errors and counselled where
appropriate. Examples included dates of services provided not being advised and tick boxes not
checked.
Fraud investigations
HIC uses a participative approach to ensure uniform and consistent guidelines to fraud investigations
are implemented nationally and conform with Government best practices.
This is done through the National Central Coordinating Committee which consists of representatives
from the Australian Federal Police, Department of Health and Ageing, Department of Veterans’
Affairs, the Office of the Director of Public Prosecutions and HIC.
Summary of investigations into fraud 2002-03
Investigations
Total
Public fraud* investigations started (all programs)
112
Public fraud investigations finished (all programs)
122
Practitioner fraud investigations started (all programs)
104
Practitioner fraud investigations finished (all programs)
164
Receptionist fraud investigations started (all programs)
4
Receptionist fraud investigations finished (all programs)
2
Public/provider/receptionist/pharmacist fraud referred to Australian Federal Police (all
programs)
1
Public/provider/receptionist fraud referred to State Police
46
Public/provider investigation briefs-of-evidence referred to Director of Public Prosecutions
28
*‘Public fraud’ refers to patients and members of the public who unlawfully seek to obtain health
benefits.
Of Medicare related investigations in 2002-03 the following stand out:
Provider fraud
 In March 2003 in Victoria, Dr Jack Freeman pleaded guilty in the County Court to one charge of
defrauding the Commonwealth in relation to approximately $680,000 of fraudulent Medicare claims.
 In April 2003 in Victoria, Dr Michelle Wielicki pleaded guilty to three charges under section 128B
of the Health Insurance Act 1973 relating to the submission of fraudulent Medicare claims.
Public fraud
 In July 2002 in South Australia, Miss D Kennedy was forging accounts/receipts and using them to
obtain cash benefits from Medicare. The charges were proved and Miss Kennedy received a threemonth suspended sentence and ordered to repay the money.
 In November 2002 in Victoria, Susan Green, a person working for a medical stationery supplier,
manufactured false invoices and receipts on which fraudulent payments were obtained from HIC. As
a result the offender was sentenced to 12 months imprisonment and ordered to repay the money.
Internal
In October 2002, Sandra Di Filippo, a former HIC customer service operator from Queensland, was
sentenced to three years imprisonment with a minimum sentence to serve of four months for
defrauding HIC. The money defrauded by the employee was repaid before the the trial.
Provider investigations (PBS)
In September 2002 in Victoria, a major pharmacy investigation was concluded with the sentencing of
Thi Xuan Phoung Le to three years imprisonment and an order to repay $350,000.
Training
All HIC investigators will hold Certificate IV Fraud Control (Investigation) qualifications and relevant
investigation managers will meet the Commonwealth Fraud Control Guidelines issued by the
Attorney-General’s Department.
Program Review (PR) desktop
The PR desktop is a national system that supports all aspects of Program Review work in the States
and National Office. It is used to record, manage and report on all activities arising from program
integrity work.
Medicare Participation Review Committee
Practitioners convicted of offences against Medicare must be referred to the Medicare Participation
Review Committee (MPRC) for review of their future involvement in the Medicare scheme. The
MPRC can determine if a person, including where relevant, a body corporate, has breached an
Approved Pathology Practitioner (APP) or Approved Pathology Authority (APA) undertaking, or has
engaged in a prohibited diagnostic imaging practice. Medical practitioners with two final
determinations of inappropriate practice under the Professional Services Review Scheme also come
before the MPRC.
The Health Insurance Act requires that the MPRC include a legally qualified chairperson and,
depending on the matter being considered, two to four members drawn from a pool of medical,
optometrical or dental practitioners. The MPRC is administratively supported by HIC but is an
independent statutory body.
An MPRC determination can result in five years total disqualification from professional participation in
the Medicare Scheme and further action by State and Territory registration bodies. During 2002-03,
six cases were referred to an MPRC and three determinations were made. There is a time lag
between referral and determination and, as a consequence, matters may span more than one
financial year.
Cases referred to the Medicare Participation Review Committee 2002-03
Type of practitioner
No.
Reason
General practitioner
2
Convicted or found guilty of Medicare offences
Type of practitioner
No.
Reason
Pathology company
1
Potential breach of APA undertaking
Determinations by the Medicare Participation Review Committee 2002-03
Determination
No.
Total disqualification for one year and six months
1
Revocation of APA undertaking for three months
1
Reprimanded
1
Dismissed due to out of time appeal by practitioner referred
1
Risk management developments
HIC has developed new Artificial Intelligence (AI) tools to detect anomalies in a number of areas. All
systems for diagnostic imaging and general practice were field tested in August 2002 and November
2002 respectively. Initial in-house testing was very promising.
Education and promotion
Community
Medicare information revamped in 2002-03 included: Medicare — your questions answered, Health
care for visitors to Australia, The Safety Net helps protect you from high medical costs, the Medicare
Two-way Agency information sheet and poster, One easy step to enrol your new baby in Medicare,
and Welcome to Australia — How to use your Medicare card. Your Health Matters continues to
provide consumers with information relating to Medicare, including how to claim benefits and the
importance of keeping card details up-to-date.
Medical practitioners
Education and information activities for medical practitioners and practice staff included quarterly
production of HIC’s newsletters Forum, Pathology Notes and Health Industry News — an electronic
newsletter developed specifically for private health fund operators, billing agents, software vendors
and other interested parties. An upgrade of Mediguide — a guide to the Medicare claiming system
and other health programs administered by HIC was completed. HIC representatives attended
conferences, seminars and presentations for medical practitioners and practice managers.
Communication to medical practitioners on HIC Online occurred through Forum, the reference
publication Mediguide, articles and media releases, national and local conference participation and
workshops with Divisions of General Practice. Information kits including sheets and booklets were
also produced for medical practitioners and practice managers on the HIC Online claiming channel.
An HIC Online helpdesk enquiry line is also in place to answer HIC Online enquiries.
Software vendors
Communication to medical software vendors on HIC Online occurred through the Software Vendor
helpdesk, information booklets and guides, consultation with the Medical Software Industry
Association and electronic updates.
Customer research
Ninety-three per cent of health consumers indicated they were satisfied with HIC service for
Medicare. Ninety-three per cent of consumers who recently visited a Medicare office were satisfied
with the experience.
Seventy-three per cent of general practitioners were satisfied with claiming and receiving Medicare
payments. Practitioners were also satisfied with HIC’s phone services and believe that HIC customer
service staff do a good job administering Medicare, PBS and other programs given the growing
complexity of the health system.
AFFORDABLE AND RELIABLE ACCESS TO PRESCRIPTION MEDICINES
ALLOWS US TO ENJOY LIFE TO THE FULL…ALL I HAVE TO WORRY ABOUT
NOW IS REDUCING MY HANDICAP.
CHAPTER-5
PHARMACEUTICAL BENEFITS SCHEME
Key business results
In 2002-03, HIC processed 174 million services, representing $5.1 billion in benefits paid under the
Pharmaceutical Benefits Scheme (PBS) and Repatriation Pharmaceutical Benefits Scheme (RPBS)
collectively called the PBS.
At a glance
PBS expenditure 2001-02 and 2002-03
At 30 June
2001-02
2002-03
% change
Total benefit expenditure (after allowing for
movement in outstanding claims)
$4,706.4 million
$5,211.6 million
10.7% increase
PBS benefits
$4,333.1 million
$4,783.9 million 10.4% increase
RPBS benefits
$373.3 million
$427.7 million
14.5% increase
Stoma appliances
$37.6 million
$40.5 million
7.7% increase
Comprises:
Overview
The PBS ensures all Australian residents and eligible overseas visitors are provided with affordable,
reliable and timely access to prescription medicines. Most medicines available on prescription are
subsidised by the Australian Government under the PBS.
The Department of Health and Ageing is responsible for program policy development and overall
management of the PBS, including the Schedule of Pharmaceutical Benefits, and the Department of
Veterans’ Affairs is responsible for the overall policy for the RPBS.
PBS beneficiaries
There are two types of PBS beneficiaries — general patients, who pay up to $23.10* for prescription
medication, and concession patients, who pay up to $3.70* for prescription medication. All patients,
general and concession, must provide their Medicare number (or Department of Veterans’ Affairs file
number) to the pharmacist at the time the PBS (or RPBS) medicine is supplied. This ensures
subsidised medicines are provided only to those who are eligible to receive them.
Concession beneficiaries must also provide their concession card number to the pharmacist at the
time of supply. Concession beneficiaries hold either a Health care card, Pensioner concession card
or Commonwealth senior’s health card issued by Centrelink. The Department of Veterans’ Affairs
also issues Pensioner concession cards and Commonwealth seniors health cards.
*These figures are adjusted annually in line with CPI and do not cover surcharges for more expensive alternative
brands/medicines.
PBS Safety Net
The PBS Safety Net helps protect people and their families who spend large amounts of money on
prescription medicines. It sets a threshold amount that a person or family would pay for PBS
prescription medicines in a calendar year. The 2003 Safety Net threshold* for concession card
holders was $192.40 and $708.40 for general patients. Once the relevant threshold is reached, and a
Safety Net card obtained, PBS medicines are cheaper or free for the rest of the calendar year.
To qualify for the PBS Safety Net a person needs to keep a record of all PBS medicines supplied to
them and their family. They can ask their pharmacist for a prescription record form and hand this form
in whenever they have a prescription filled or, if they have a regular pharmacist, they can ask them to
keep a record on their computer. Pharmacists are able to provide more information about how the
Safety Net works.
Further information on the PBS Safety Net can also be found at www.hic.gov.au
*Safety Net amounts change each calendar year.
HIC’s responsibilities
HIC is responsible for the operation of the PBS and the RPBS. This involves:
 processing pharmacists’ claims using the claims transmission system (CTS), which uses
electronic data provided by pharmacists from their pharmacy computers;
 administrating Safety Net arrangements to help with the cost of PBS medicines for families and
individuals;

approving authority prescriptions for medicines limited to specific circumstances;

approving pharmacists to supply PBS medicines;

approving doctors to supply PBS medicines where there are limited pharmacy services;

approving private hospitals to supply PBS medicines to their patients; and
 approving participating public hospitals to supply PBS to eligible patients under the
pharmaceutical reform measures.
Processing claims and payment to approved pharmacists
HIC makes payments to approved pharmacists for:

cost of medicine (Commonwealth price to pharmacists);

mark-up (depending on cost of medicine — see Explanation of Current Pricing booklet);

dispensing fee;

PBS Safety Net recording fee; and

other fees as required (e.g. Dangerous drug fee — Schedule 8 medicines).
HIC also makes payments under section 100 of the National Health Act to:

Colostomy and Ileostomy Associations for ostomy supplies;
 drug companies for the supply of in-vitro fertilisation hormones, fertility drugs and botulinum toxin;
and

remote Aboriginal and Torres Strait Islander communities.
PBS claims lodged on computer disk must be paid on or before the seventeenth day after receipt by
HIC. Claims submitted for manual keying by HIC must be paid on or by the thirtieth day after the data
is keyed.
Approving authority prescriptions
Under the authority prescription approval arrangements, medical practitioners are required to obtain
prior approval from HIC for all PBS authority prescriptions before an approved pharmacist can make
a supply. As at 30 June 2003, of the 1,451 PBS items listed, 778 are restricted to use for a particular
condition or purpose. Of these 778 items, 288 are subject to criteria set by the Pharmaceutical
Benefits Advisory Committee that limits supply to a PBS authority prescription.
Authority prescriptions are also required where an increased supply is needed in the treatment of an
individual patient. During 2002-03, 4.76 million authority prescriptions were approved, with 4.49
million of these being handled by telephone through HIC’s 1800 service which operates 24 hours a
day, seven days a week.
Internet ordering of repeat authorisation stationery
Pharmacists can now order repeat authorisation forms via the internet at www.norcross.com.au.
The process is secure and orders are confirmed online and promptly delivered, enabling pharmacies
to store less stock.
Approving pharmacists to supply PBS medicines
The authority to supply PBS medicines is defined under section 90 of the National Health Act.
Provisions under section 92 of the Act also give approval for doctors to dispense in rural areas where
a pharmacist is not available.
During 2002-03, HIC received 368 applications for new or relocated pharmacies. These were referred
to the Australian Community Pharmacy Authority, which recommended 281 pharmacies for approval
with a further nine being deferred. Of the remainder, 55 were not recommended and the rest were
withdrawn. HIC also processed 584 pharmacy applications for approval relating to changes in
ownership in 2002-03.
Approval was granted to 14 medical practitioners to supply pharmaceutical benefits under section 92
of the National Health Act.
Third Community Pharmacy Agreement
The Third Community Pharmacy Agreement between the Australian Government and the Pharmacy
Guild of Australia was implemented on 1 July 2000. Under the Agreement,
HIC is responsible for making payments for:
 Highly Specialised Drug Program — remuneration for pharmacies supplying highly specialised
drugs to private hospitals;
 Rural Pharmacy Maintenance Allowance — a financial incentive for pharmacy proprietors to
remain in rural and (designated) remote locations in Australia;
 Start-up Allowance — a staggered payment, over two years, to encourage the establishment of
new pharmacies in rural/remote locations where there is a need for a community pharmacy. Eligibility
for the allowance is stipulated in the Third Community Pharmacy Agreement;
 Succession Allowance — a staggered payment, over two years, to pharmacists wishing to
purchase an existing pharmacy in an identified area of need. Eligibility depends on the degree of
remoteness according to agreed categories as defined under the Pharmacy
Accessibility/Remoteness Index of Australia (PHARIA);
 Quality Care Pharmacy Program — embodies the professional practice standards of the
Pharmaceutical Society and encourages community pharmacies to achieve and maintain
accreditation. Financial incentives are paid as appropriate once Quality care pharmacy program
milestones are achieved; and
 Improved Monitoring of Entitlement Medicare Number Allowance Payments — a continuing
payment to all approved pharmacies for residual administration costs associated with recording
Medicare numbers on PBS prescriptions. During 2002-03, two payments were made totalling $10
million to all approved pharmacies. The first payment was made in January and the second in March.
Applications for the Rural Pharmacy Maintenance Allowance, Start-up Allowance and Succession
Allowance are available at www.hic.gov.au
Payments under the Third Community Pharmacy Agreement
HIC payments under the Third Community Pharmacy Agreement initiatives totaled $30 million (and
an additional $10 million for Improved Monitoring of Entitlement payments) in 2002-03.
Payments made under the Third Community Pharmacy Agreement 2002-03
Type of payment
Number of
payments
Total amount
paid
Medicines Information to Consumers Incentive
Allowance
4,301
$4.3 million
Medicines Information to Consumers Participation
Allowance
6,420
$4.1 million
Quality Care Pharmacy Program
1,145
$7.2 million
Rural Pharmacy Maintenance Allowance
9,181
$10.5 million
Start-up and Succession Allowance
18
$610,125
Home Medicine Review Services
3,735
$2.9 million
The Medicines Information to Consumers Incentive Allowance was paid to pharmacies that had
undertaken to provide consumer medication information to customers. The incentive was to
encourage pharmacists to register for the Medicines Information to Consumers program before 31
December 2002. It involved payment of $1,000 to 4,301 participating pharmacies; with payments
being made in December 2002, January 2003, and February 2003. The total payment was $4.3
million.
The Medicines Information to Consumers Participation Allowance is an ongoing payment, made
every two months to pharmacies providing consumer medication information. It is paid at the rate of
ten cents for every claimable PBS or RPBS prescription dispensed. To date a total of 6,420
payments have been made, totalling $4.1 million.
The Medicines Information to Consumers program provides a framework for pharmacists to use
Consumer Medicine Information when informing patients about their medicines. The provision of
Consumer Medicine Information does not replace counselling by pharmacists nor does it in anyway
reduce the pharmacists’ duty to counsel patients about medicines.
Payments made to 1,145 approved community pharmacies under the Quality Care Pharmacy
Program totalled $7.2 million.
The Rural Pharmacy Maintenance Allowance was implemented in January 2001. In 2002-03, the
total amount paid was $10.5 million, to about 705 community pharmacies.
Start-up and Succession Allowance payments totalling $610,125 were made to 18 community
pharmacies.
The Home Medicine Review Services program is designed to allow patients’ medication regimes to
be reviewed upon request of the patient, medical practitioner or carer. The review is conducted in the
patient’s home and is undertaken by an accredited pharmacist upon referral of a medical practitioner.
The outcome is discussed by the medical practitioner and pharmacist, followed by the development
of a medication management plan. Payments for 3,735 Home Medicine Review Services totalled
$2.9 million.
Indigenous and Torres Strait Islander Access to the PBS
HIC continued to administer the Australian Government PBS arrangements that make PBS
medicines accessible in remote Indigenous and Torres Strait Islander communities.
Herceptin
In December 2001, the Australian Government agreed to fund Herceptin (trastuzumab), a new drug
used in the treatment of metastatic breast cancer. This program is administered by HIC as a separate
program to the PBS, with Herceptin supplied to the prescriber on a monthly basis after patient
eligibility has been determined.
Since its inception, over 700 eligible patients have been approved for Herceptin use with total
benefits paid exceeding $23 million.
Australian Health Care Agreements — pharmaceutical reform
measures for public hospitals
Under the Australian Health Care Agreements, the Government, States and Territories are reforming
the supply of pharmaceuticals to patients in public hospitals. Key features of the reform proposal are
to extend the PBS to admitted patients on discharge and outpatients and to provide access to
chemotherapy drugs for day patients of public hospitals. Participating hospitals will be required to
adopt the Australian Pharmaceutical Advisory Council guidelines on continuum of pharmaceutical
care between the hospital and the community.
The Australian Government has made offers to all States and Territories and discussions are now
proceeding on a bilateral basis. The pharmaceutical reforms are operating across Victorian public
hospitals and are being implemented in a staged process with Queensland. The Western Australian
Government has agreed to the reforms, with the first Western Australian hospitals expected to
participate from October 2003. It is expected other States will also participate.
HIC has worked closely with the Australian and State Governments to implement these reforms. At
30 June 2003, HIC approved 31 Victorian and four Queensland public hospitals under these
arrangements and paid benefits in excess of $18 million.
A second phase will enable hospital pharmacists, on behalf of oncologists, to obtain electronic
approval for chemotherapy authority prescriptions for day admitted patients. This facility builds on the
Authority Notification System and will use Public Key Infrastucture (PKI) technology to safeguard the
privacy of hospital patients. Paperless claiming is a feature of these arrangements, which
commenced in three hospitals in December/January 2002-03.
Management of risks to the PBS
In its 2002 Budget, the Australian Government announced a series of budget measures aimed at
ensuring sustainability of the PBS. HIC was assigned responsibility for a number of these measures
and is implementing them over a four-year program.
Restricted PBS medicines
The prescribing of drugs outside pharmaceutical benefits listing restrictions has been identified as a
major risk to sustainability of the PBS. HIC has developed and implemented strategies aimed at
promoting understanding and observance of the restrictions required when prescribing on the PBS. In
2002-03, this activity focused on three specific drug groups: proton pump inhibitors, lipid lowering
agents and Cox-2s.
Strategies adopted included:
 revision of prescribing instructions to ensure there is a clear understanding of the restricted use of
the pharmaceutical where obtaining a pharmaceutical benefit;
 general feedback and education to all prescribers of the targeted medications on prescribing
requirements; and

targeted feedback and counselling to particular prescribers.
Authority PBS medicines
This project aims to enhance the PBS authorities process. It involves reviewing and, as necessary,
revising the wording of authority medication restrictions listed in the PBS Schedule to more
accurately reflect the intent of the listing restriction. The process is conducted in conjunction with the
Pharmaceutical Benefits Advisory Committee. During 2002-03, approximately 40 per cent of authority
items in the Schedule were reviewed. Additionally, HIC is developing an electronic authority system
which will provide prescribers with an alternative to the existing manual authority approval process.
The first release of this channel to prescribers is planned for 1 August 2003.
Prescription Shopping project
Through a range of strategies, the project aims to:

educate persons who may be obtaining PBS medicines in excess of therapeutic need;

identify persons who may be obtaining medicines in excess of therapeutic need; and

intervene with these persons or their prescribers.
Unlike the Doctor Shopping program, which it replaced and which was limited to three drug groups,
the Prescription Shopping project will examine all PBS medicines being used in excess of therapeutic
needs.
PBS Risk project
The project aims to identify and intervene in higher risk areas of PBS claiming. During 2002-03
initiatives included:
 an audit of pharmacy claims which identified and recovered from pharmacies receiving two or
more payments for the one prescribed supply of a PBS item;
 market research and a community awareness campaign in relation to the PBS Safety Net
program; and
 availability of high cost drugs on the PBS identified as a high risk factor in relation to the
program’s sustainability. HIC is undertaking detailed data analysis to reduce the risk associated with
these drugs.
Overseas Drug Diversion project
This replaces HIC’s Prescription Drug Smuggling (PDS) project. Its purpose is to develop and
implement a range of initiatives to reduce the amount of PBS medicines being illegally exported or
carried out of Australia.
The Overseas Drug Diversion project involves conducting, with the assistance of the Australian
Customs Service, a series of interventions at sea, air and land ports to detect and seize prescription
drugs illegally leaving Australia.
An HIC help line provides advice to consumers and practitioners on requirements when carrying
prescription drugs overseas.
Overseas Drug Diversion information line calls received in 2001-02 and 2002-03
PDS Help Line calls received
2001-02
2002-03
2,203
2,494
Source based audits
Comprehensive post payment audits are regularly conducted to ensure compliance with claiming and
payment regulations and to determine if HIC functions are being carried out in line with legislation.
To support the post payment audit process for PBS, source based audits are also conducted to
determine high-risk areas within the PBS. They identify incorrect payment in claims and indicate the
steps necessary to improve integrity.
During 2002-03, the source based audit program randomly reviewed 94,625 PBS-funded medicine
supply events nationally. The audit program identified incorrect payments, and also benign
paperwork errors that are technically non-compliant with PBS rules but do not result in any adverse
consequences.
Examples of incorrect payments included instances where the pharmacist had generated more
repeats than prescribed, and supply made on a prescription more than 12 months old. Examples of
benign paperwork errors include instances where the patient address was shown as a post office
box, instead of a street address as required by PBS regulations.
Suspension or revocation of PBS approvals
Section 133 of the National Health Act permits the Minister for Health and Ageing or the Secretary to
the Department of Health and Ageing to suspend or revoke the approval of a pharmacist to supply
pharmaceutical benefits under the PBS following a charge or conviction for offences related to PBS.
In 2002-03, action under section 133 of the Act was considered in respect of certain PBS approvals
involving four pharmacists. Two matters relating to convictions resulted in the pharmacists in question
ceasing to operate their pharmacies.
Education and promotion
The PBS education program targets pharmacists, medical practitioners and consumers, as well as
special case users such as those who use prescription medicines in excess of therapeutic need,
those who stockpile PBS medicines, and exporters of prescription drugs.
Community
As a member of the PBS Communication Working Group—made up of representatives from HIC and
the Department of Health and Ageing—HIC played an active role in ensuring delivery of consistent
messages around PBS communications and the 2003 PBS awareness campaign.
A suite of information products were produced to educate consumers about Saving Money on
Medicines.
The Good Health TV network and HIC’s Your Health Matters featured information about various
aspects of the PBS, including creating awareness about the availability of generic medicines and
Safety Net co-payments.
HIC purchased a sponsorship package from the Pharmaceutical Society of Australia, which includes
placing an article in each edition of the Society’s monthly magazine, inPHARMation, for one year.
A number of promotional activities also took place, including PBS Safety Net advertisements and
communication materials, developed in conjunction with the Department of Health and Ageing, to
promote generic brand medicines.
Pharmacists
Information and presentations on the PBS were provided at conferences, training venues and
information sessions for pharmacists, pharmacy assistants and other medical practitioners. Building
strategic relationships with pharmacists to support PBS online services also formed a large part of
communication activities in 2002-03. These focused on the benefits of HIC’s improved claiming
solutions.
HIC’s Bulletin Board continued to be a key means of communication with pharmacists. In addition,
the annual PBS Safety Net kit for pharmacists was distributed and articles and media releases were
written for professional publications and newspapers.
Updated education booklets and fliers for pharmacists included:

Reference guide for approved providers of PBS and RPBS medicines;

Pharmaceutical Benefits Scheme Explanation of Current Pricing—2003;
 Use of the Pharmaceutical Benefits Scheme in Private Hospitals and Nursing Homes— A Guide
for Staff; and

Pharmaceutical Benefits Entitlement Cards.
HIC supports the Pharmaceutical Society of Australia by assisting with the development of pharmacy
assistant training materials.
Medical practitioners
Communication to medical practitioners on pharmaceutical matters continued through HIC’s
newsletter, Forum, the reference publication, Mediguide, articles and media releases, new medical
practitioner sessions, talks and presentations, and conference participation. Information sheets were
also produced for medical practitioners on a range of PBS initiatives including Overseas Drug
Diversion, PBS Restrictions, Lipid lowering, PBS Risk, Enhancing PBS Authorities and the
Prescription Shopping project.
Customer research
Ninety-eight per cent of pharmacists surveyed indicated strong support for the overall policy of the
PBS and 79 per cent said they are satisfied with HIC’s PBS claims administration service.
Pharmacists continued to support the requirement for consumers to show a Medicare card to receive
a PBS medicine subsidy and the associated communication work undertaken by HIC and the
Pharmacy Guild of Australia. Also well received were HIC’s phone enquiry lines for PBS enquiries,
with 85 per cent of pharmacists describing the service as prompt, polite and efficient.
GIVING SOMEONE LIKE ME ANOTHER CHANCE AT LIFE IS THE BEST
PRESENT IN THE WORLD…I FEEL LIKE SUPERMAN!
CHAPTER-6
AUSTRALIAN ORGAN DONOR REGISTER
Key business results
The number of potential organ donor and tissue registrations increased 160.9 per cent during the
year. There are now 4,672,117 individuals who have had their details included on the Australian
Organ Donor Register (the Donor Register).
At a glance
Potential organ donor registrations at 30 June 2001-02 and 2002-03
Australian Organ Donor Register
2001-02
2002-03
% change
Number of potential organ donor registrations
1,790,967
4,672,117
160.9% increase
Number of serviced calls to enquiry line
14,891
29,757
99.8% increase
Overview
The Donor Register was officially launched on 12 November 2000 and is sponsored by the
Department of Health and Ageing. It has helped raise the profile of organ and tissue donation for
transplantation in Australia and provides a national coordinated method for Australians to record their
intentions in regard to organ and tissue donation for transplantation.
Individuals wishing to record their intention to donate may register online or download a paper
registration form to return to HIC. The form is available at www.hic.gov.au or from Medicare offices.
Entry onto the Donor Register is voluntary and allows individuals to have complete choice over which
organs and tissue they are prepared to donate for transplantation.
HIC developed a national database of intending organ and tissue donors and continues to work with
existing State registers to negotiate the transfer of State data. Existing State registers data has been
transferred from New South Wales, Victoria, Queensland,
South Australia, Western Australia and Tasmania (neither the Australian Capital Territory nor the
Northern Territory have existing data to transfer). Most States now include the donor register insert in
the driver’s licence renewal process.
Australian Organ Donor Register website
The website provides general information about:

organ and tissue donation for transplantation;

statistics on the number of potential organ and tissue donors; and

a registration mechanism for potential donors.
It contains a secured area where authorised members of the organ and tissue donation network can
identify the donation wishes of a potential organ donor throughout Australia,
24 hours a day, seven days a week.
How information in the register is used
Access to information on the Donor Register is strictly controlled utilising PKI security and protocols
to ensure privacy and confidentiality of participants are protected. Only authorised medical personnel,
upon the death of an individual, are able to use the information. With knowledge of the donor’s
intentions, as registered with the Donor Register, they notify the next of kin and seek final consent to
allow donor proceedings to begin.
Education and promotion
The Donor Register asks Australians to ‘sign on to save a life’. HIC delivered this message nationally
during 2002-03 through a marketing and communication strategy that included:
 distributing information brochures and registration forms through driver’s licence renewal mailouts
and Medicare card mailouts;

participating in Australian Organ Donor awareness week;

managing the Donor Register’s 1800 777 203 hotline;

liaising extensively with the media;

updating monthly Donor Register statistics on HIC’s website;
 using HIC publications such as Your Health Matters, Forum and Bulletin Board to reach key
audiences such as doctors, pharmacists and consumers;
 publishing monthly stakeholder newsletters, carrying current processing figures for the Donor
Register and general program information;
 distributing promotional material at conferences, workshops, educational seminars and in
Medicare offices; and
 assisting with the promotion of the 2002 Australian Transplant Games through the Medicare office
network.
Research
HIC commissioned Woolcott Research Pty Ltd to carry out extensive market research to gauge
attitudes towards, and awareness of, organ donation and the Donor Register. In developing the
research questions, HIC consulted closely with the Department of Health and Ageing and Australians
Donate, the organ donor network’s representative body. The research found there was overwhelming
public support (96 per cent) for the concept of organ donation, but revealed a gap between attitudinal
and behavioural support. The research will help the Donor Register to develop effective, targeted
communication strategies in 2003-04 and beyond.
Australian Organ Donor Awareness Week
The third Australian Organ Donor Awareness Week was launched by the Minister for Health and
Ageing, Senator The Hon Kay Patterson, at the Melbourne Cricket Ground, on Monday 17 February
2003. A collaborative effort between HIC, the Department of Health and Ageing, Australians Donate
and the state-based organ donation agencies, it was successful in achieving its objectives of raising
awareness of organ and tissue donation and encouraging Australians to join the Donor Register. The
key messages of ‘think, talk, tell’ and ‘sign on to save a life’ were well reported in the national and
regional media, resulting in a rise of 16,378 registrations over the six weeks following the launch.
Bowel Cancer Screening Register
In the 2000-01 Budget, the Australian Government announced it would invest $7.2 million over four
years to improve knowledge about the early detection of bowel cancer. This funding is being used to
implement the Bowel Cancer Screening Pilot Program, which is designed to assess the feasibility,
acceptability and cost effectiveness of a bowel cancer screening program in Australia.
The pilot aims to reduce the number of Australians who die each year from bowel cancer. On 1
January 2003 approximately 69,000 people, aged between 55-74 years, were invited to participate in
the pilot (which is not a clinical trial). The results will be used to decide whether and how to
implement a national bowel cancer screening program.
HIC’s role in the Bowel cancer screening pilot program is to assist in its administration including:

establishment of the Bowel Cancer Screening Register;

collection of information about participation in the pilot; and

mailing house functions.
Through the Bowel Cancer Screening Register HIC is responsible for:

creating and maintaining a register of pilot participants;
 inviting participants to be screened (pilot sites are located in the town of Mackay, parts of
Southern and Western Adelaide, and parts of North East Melbourne);
 reminding participants who have been called or recalled to screening, but who have not
completed a screening test within a specified interval, to undertake screening;
 issuing reminders to participants at agreed intervals, where a participant has had a positive
Faecal Occult Blood Test (FOBT) result, and where a participant has not commenced follow-up
investigation procedures;
 creating payment arrangements for the medical services components of the screening program,
e.g. GP consultations, pathology and colorectal procedures;

collecting clinical and diagnostic data about patients participating in the pilot;

providing monitoring and performance reporting mechanisms; and

operating and servicing a 1800 information line for participants and providers.
DAD COULD FIND ALL THE INFORMATION ABOUT THE AUSTRALIAN
CHILDHOOD IMMUNISATION REGISTER ON THE INTERNET…I JUST HAD TO
HELP HIM TURN THE COMPUTER ON.
CHAPTER-7
AUSTRALIAN CHILDHOOD IMMUNISATION REGISTER
Key business results
Over four million valid immunisations were recorded on the Australian Childhood Immunisation
Register (the Immunisation Register) and almost $8.7 million was paid to immunisation providers
during 2002-03.
More than 400,000 meningococcal C episodes were recorded on the Immunisation Register this year
following introduction of the National meningococcal C vaccination program in January 2003.
Consistent with the maturing of the Immunisation Register, immunisation coverage rates were
expanded to include an older cohort of children in the 72 to 75 month age range.
At a glance
Immunisation of Australian children 2000-01 and 2001-02
Australian Childhood Immunisation Register
2001-02
2002-03
% change
Number of children under 7 years registered at 30 June
1,860,689 1,844,679 0.9%
decrease
Number of valid immunisation episodes recorded
3,582,703 4,028,036 12% increase
Children 12-15 months age appropriately immunised at 30
June
90.2%
91.2%
1% increase
Children 24-27 months age appropriately immunised at 30
June
88.1%
89.3%
1.2% increase
Children 72-75 months age appropriately immunised at 30
June
80.6%
82.3%
1.7% increase
Overview
The Immunisation Register is a national online database which was established in January 1996. Its
aims are to increase the level of immunisation coverage for children under seven years against
vaccine-preventable diseases capable of causing serious complications and even death, to promote
age-appropriate childhood immunisation in Australia through the provision of payments and
information, and to improve the level of immunisation service delivery.
Details of vaccinations given to children under seven years in Australia are recorded on the
Immunisation Register and are available upon request to the provider, the parent or child’s guardian.
The Immunisation Register was enhanced to record Meningococcal C vaccinations as an
amendment to the Australian Standard Vaccination Schedule from 1 January 2003. Changes were
also made to support the catch-up provisions of the National Meningococcal C vaccination program
for children born since 1 January 1998.
First and second readings of the Health Legislation Amendment Bill 2003 occurred in March 2003.
The Bill proposes changes to the legislation governing the Immunisation Register arising from
recommendations to the Australian Government Department of Health and Ageing by two national
immunisation committees, that immunisations given to children while overseas should be able to be
recorded on the Register.
Pending passage of this legislation and Royal Assent, the Immunisation Register will be able to
contain a complete immunisation record for more children. It will also assist parents of children
immunised overseas, to claim the Australian Government child care benefit and maternity
immunisation allowance. At present, these immunisations cannot be recorded on the Immunisation
Register.
In the Australian Capital Territory (ACT), immunisation records for children under seven years of age
have previously been forwarded to the Immunisation Register after they are processed by the ACT
Health Department’s Immunisation Unit. Plans to decommission the ACT’s immunisation processing
function were brought forward immediately following the January bushfires in Canberra so
immunisation providers could report immunisation services directly to the Immunisation Register.
At 30 June 2003, 1.8 million children under seven years were recorded on the Immunisation Register
and 27,188 immunisation providers had supplied information since its inception in 1996.
How information in the Immunisation Register is used
Health professionals use the Immunisation Register to monitor immunisation coverage levels and
service delivery, and to identify regions at risk during disease outbreaks.
The data also:
 enables immunisation providers and parents to check on the immunisation status of an individual
child, regardless of where in Australia the child was immunised;
 forms the basis of an optional immunisation history statement which informs parents and
guardians of their child’s recorded immunisation history;
 provides information about a child’s immunisation status to help determine payment of the child
care benefit and the maternity immunisation allowance;
 provides feedback and incentive payments to registered general practitioners who monitor,
promote and provide age-appropriate immunisation services to children under seven years in their
practice; and
 provides reporting mechanisms to assist the Australian Government’s monitoring of national
immunisation programs.
Challenges
An independent evaluation about the operations of the Immunisation Register was completed in
2003. HIC will take advice from the Australian Childhood Immunisation Register Management
Committee in its response to the evaluation’s findings and recommendations.
Challenges for the Immunisation Register include promotion and uptake of improved immunisation
electronic lodgement data streams for immunisation providers and the establishment of long-term
strategies to improve data collection and immunisation coverage rates. HIC will undertake the setting
up of longer-term strategies in collaboration with the Australian Childhood Immunisation Register
Management Committee and stakeholder participation.
HIC will continue to work closely with immunisation stakeholders to improve complete and timely
reporting of data to the Immunisation Register. For example, reductions in the time taken by
providers to report immunisation services and in the numbers of children receiving late immunisations
(not age-appropriate to the Australian standard vaccination schedule) will improve immunisation
coverage rates reported by the Immunisation Register.
Education and promotion
Parents
Initiatives include:
 changes to Immunisation history statements provided to parents and guardians as their child turns
one, two and five years of age, and at any other time at their request, to include details of
meningococcal C vaccinations notified to the Immunisation Register;
 publishing information about the Immunisation Register in a number of parent and family
magazines and outlets, including HIC’s Your Health Matters;

attending expos and health information days; and

publishing a five-step guide on how to access immunisation history statements.
Immunisation providers
Promotional material aimed at immunisation providers includes:
 information about the National meningococcal C vaccination program and changes to the General
Practice Immunisation Incentives scheme via the Immunisation network newsletter;

new guides and publications to assist providers accessing the secure side of the website; and

maintaining and enhancing the website.
HIC staff also participated at forums for immunisation provider groups.
BEING A LONG WAY FROM THE NEAREST TOWN IS NO LONGER A BARRIER
TO ACCESSING HEALTH SERVICES…WOOF!
CHAPTER-8
OTHER HEALTH PAYMENTS AND ACTIVITIES
1 Medical Indemnity
Key business results
Under new legislation, HIC is responsible for administering two schemes on behalf of the Australian
Government: the Incurred But Not Reported (IBNR) indemnity scheme and the High Cost Claim
Indemnity scheme.
In line with legislative requirements, HIC is developing policy and systems to support the payment of
claims under both schemes and collection of contributions under the IBNR indemnity scheme.
Overview
In October 2002, the Prime Minister announced a new framework for Medical Indemnity insurance.
Some of the measures under the new framework are outlined in the Medical Indemnity Act 2002 and
other associated legislation that came into effect on 1 January 2003: Medical Indemnity (IBNR
Indemnity) Contribution Act 2002, Medical Indemnity (Enhanced UMP Indemnity) Contribution Act
2002, and the MedicaJ Indemnity (Consequential Amendment) Act 2002.
The Government’s main objective in introducing the legislation is to support the continued provision
of medical services to the Australian community by ensuring health professionals have access to
affordable indemnity cover.
The Medical Indemnity Act gives effect to some new measures including:
 Australian Government funding of IBNR liabilities of medical defence organisations (MDOs) that
have not set aside sufficient funds to cover IBNR claims for incidents that occurred on or before 30
June 2002;
 recouping the cost of unfunded IBNR claims through a contribution from members and former
members of Medical Defence Organisations (MDOs) that the Minister for Health and Ageing has
determined will participate in the IBNR indemnity scheme;
 Australian Government funding for part of the cost of large claims against all MDOs or other
Medical Indemnity insurers for incidents notified after 1 January 2003;
 the Australian Government subsidising the cost of indemnity cover of some groups of medical
practitioners; and
 collection of payments by members of United Medical Protection Ltd (UMP) to cover the cost to
the Australian Government of any payments under a deed of indemnity should UMP go into full
liquidation.
Education and promotion
A comprehensive communication and media strategy is being developed for major stakeholders
including:

development of the Medical Indemnity contact centre in HIC’s Tasmanian State Office;

a Medical Indemnity website;

information kits for health professionals; and

consultation with key stakeholders including MDOs and the Stakeholder Advisory Committee.
2 General Practice Immunisation Incentives Scheme
Key business results
At 30 June 2003, the General Practice Immunisation Incentives scheme (the GPII scheme) had 5,487
registered practices. Using the Department of Health and Ageing’s baseline figure of 6,000 practices
nationally, this represents a participation rate of 91.45 per cent.
The average immunisation coverage rate for practices was calculated at 90.20 per cent for May
2003, with 67.9 per cent of participating practices achieving rates of 90 per cent or higher.
At a glance
Costs of and participation in the General Practice Immunisation Incentives scheme 2001-02
and 2002-03
General Practice Immunisation Incentives
scheme
2001-02
2002-03
% change
Practices registered
5,585
5,487
1.7% decrease
Service incentive payments
$19.4
million
$19.9
million
2.5% increase
Outcomes payments
$16.7
million
$17.0
million
1.7% increase
Adjustment outcomes payments
$382,223
$298,825*
21.8%
decrease
Total outcomes payments
$16.8
million
$17.2
million
2% increase
Highest quarterly outcomes payment
$11,261.95
$11,252.15
0.09%
decrease
Average outcomes payment
$917.41
$913.60
0.4% decrease
*In 2002-03 only three adjusted outcomes payments were made.
Overview
The GPII scheme began in August 1997 with the introduction of quarterly immunisation coverage
feedback statements to general practitioners and Divisions of General Practice.
It aims to improve levels of immunisation coverage and service delivery and encourage 90 per cent of
practices to have 90 per cent of children in their practice fully immunised. Financial incentives are
provided to immunisation providers who monitor, promote and provide age-appropriate immunisation
services to children under seven years.
On 7 November 2002, the Federal Minister for Health and Ageing, Senator the Hon Kay Patterson,
announced a number of changes to the GPII scheme.
They include:

funding for the scheme to continue to 30 June 2004;
 vaccinations administered as catch-up schedules to be included in calculations for GPII outcomes
payments from 1 July 2003; and
 the planned increase in eligibility for receiving outcomes payments from 85% to 90%
immunisation coverage, due to become effective from 1 January 2003, to be postponed until 1 July
2003.
Payments and information
The GPII scheme is made up of three components:
 service incentive payment — an $18.50 payment is made to general practitioners and other
medical practitioners who notify the Australian Childhood Immunisation Register of a vaccination that
completes one of the six age-appropriate vaccination schedules for children under seven.
 outcomes payment — a tiered series of payments made to practices that achieve certain
percentage proportions of full immunisation.
 immunisation infrastructure funding (previously divisional funding) — provides funds to Divisions
of General Practice and state based organisations and also funds a National General Practice
Immunisation Coordinator to improve the proportion of children who are immunised at local, State
and national levels.
Education and promotion
A quarterly information sheet is sent to practices and Divisions of General Practice to provide
comprehensive and regular program updates.
3 Practice Incentives Program
Key business results
At 30 June 2003, 4,624 registered practices were participating in the Practice Incentives Program
and $244 million in payments were made.
At a glance
Services provided by general practices participating in PIP 2001-02 and 2002-03
Practice Incentives Program
2001-02
2002-03
% change
Number of practices participating at 30 June
4,513
4,624
2.5% increase
Provision of data to the Australian Government
4,513
4,624
2.5% increase
Electronic prescribing
3,978
4,158
4.5% increase
Capacity for electronic transfer
3,950
4,121
4.3% increase
Practice Incentives Program
2001-02
2002-03
% change
Ensuring patients have access to 24-hour care
4,418
4,514
2.2% increase
Provision of at least 15 hours care from the
practice
3,147
3,177
0.95% increase
Provision of all after-hours care for practice
patients
1,302
1,333
2.4% increase
43,868
60,950
39% increase
Quality Prescribing Initiatives
1,211
1,422
17.4% increase
Total amount paid
$202
million
$224
million
10.9%
increase
After-hours care
Teaching
Number of teaching sessions
Targeted incentives
Overview
The Practice Incentives Program replaced the Better Practice Program on 1 July 1998 following a
series of recommendations from the General Practice Strategy Review conducted by the Department
of Health and Ageing.
It aims to recognise and provide financial incentives to general practices that provide comprehensive,
quality care and are working towards meeting the Royal Australian College of General Practitioners
Entry Standards for General Practices. Payments made through the program are in addition to other
income earned by general practitioners.
HIC assesses all applications from general medical practices for participation in the program and
administers the day-to-day operations. The Department of Health and Ageing manages program
policy development, including eligibility criteria.
Types of incentive payments
There are five broad elements to the payments:
 Information management — practices receive incentives for providing data to the Australian
Government, using electronic prescribing software to generate scripts, and for having the capacity to
send and receive data electronically. An additional payment was made in May 2003 to all practices to
assist them with the move towards the capture and electronic storage of patient records.
 After-hours care — payments are available to practices that ensure patients have access to 24hour care or provide 24-hour care from within the practice. This includes the provision of after-hours
home visits where necessary and appropriate.
 Rural status — a rural loading is paid to all practices where the main location is situated outside
a capital city or other major metropolitan area.
 Teaching — an incentive payment is available for general practices that host undergraduate
students for teaching placements.
 Targeted incentives — Quality Prescribing Initiative — this helps practices to keep up-to-date
on the quality use of medicines.
New incentives
The 2001 Budget provided incentives to general practices to improve the management of diabetes,
mental health, asthma and cervical screening, and incentives for employment of practice nurses in
rural and remote Australia and other areas of need. These incentives, beginning with ‘sign on’
payments for practices indicating a willingness to meet certain criteria for diabetes, asthma and
cervical screening, have been progressively implemented under the Practice Incentives Program
from November 2001.
The diabetes outcomes payment was implemented in the May 2003 quarter (providing back-payment
for the November 2002 and February 2003 quarters). The cervical screening outcomes payment will
be introduced in the August 2003 quarter which will include back- payment for the previous three
quarters. These incentives were developed in close consultation with the General Practice
Memorandum of Understanding, other professional representatives, expert advisory groups and
consumer groups.
Eligibility
Practice accreditation provides a mechanism for acknowledging the quality of a general practice.
Practices undergoing the accreditation process are assessed against the Royal Australian College of
General Practitioners Standards for General Practices 2nd Edition.
In line with the 1988 general practice strategy review recommendations, access to the Practice
Incentives Program is only available to accredited practices. Practices joining the program must be
either fully accredited or registered for accreditation with one of the two accrediting bodies, and be
fully accredited within 12 months of joining.
Program integrity
A comprehensive review of general practices currently enrolled in the Practice Incentives Program
was undertaken in 2002-03 in line with the Strategic Partnership Agreement between HIC and the
Department of Health and Ageing.
There were 195 practices audited nationally, including rural and metropolitan practices in each State.
Of these, 29 practices did not meet the program’s eligibility criteria, mainly in the areas of electronic
data and provision of after-hours services. In some instances recovery of Practice Incentive Program
(PIP) payments was undertaken.
In late 2002 HIC completed additional review activity of 139 practices by specifically examining
payments to practices for the provision of after-hours care. The report of the review has gone to the
Department of Health and Ageing.
The majority of practices audited this year responded favourably, with many finding the process
useful and productive.
Education and promotion
Providers are kept up to date on changes to the Practice Incentives Program by:
 News Update — a quarterly information sheet about current and future program activities and
incentives that are accessible on the Practice Incentives Program website;
 the website — displays statistics, general program information and downloadable forms for
providers and Divisions of General Practice; and
 staff — provide support to practices and providers through the Practice Incentives Program
enquiry line.
4 Rural Retention Program
Key business results
HIC made 1,907 payments totalling $18.0 million to 2,309 medical practitioners participating in the
Rural Retention Program during 2002-03.
At a glance
Medical practitioner participation in the Rural Retention Program 2001-02 and 2002-03
Rural Retention Program
2001-02
2002-03
% change
Eligible medical practitioners participating
2,147
2,309
7.5% increase
Total payments made
1,966
1,907
3% decrease
Total amount paid
$22.9 million
$18.0 million
2% decrease
Total percentage paid
99.5%
99.7%
0.2% increase
Overview
In the 1999 Budget, the Australian Government committed $171 million over four years (2003-04 to
2006-07) to a range of programs to strengthen the rural health workforce including an amount of $60
million to help retain long serving doctors in rural and remote Australia.
The Rural Retention Program aims to improve health care for people in rural and remote areas of
Australia through a system of incentive payments to medical practitioners practising in these areas. It
encourages medical practitioners to remain in rural and remote practices beyond the current average
of two years and rewards those who do. This is expected to result in improved access to primary
health care, greater stability and continuity in medical services and improved health outcomes for
Australians living in these areas.
The Rural Retention Program comprises two components:
 Central Payments System administered by HIC since December 1999. It seeks to recognise
general practitioners, based on their Medicare service data in rural and remote locations, over a
number of years; and
 Flexible Payments System administered by State and Territory-based Rural Workforce
Agencies since December 2000. It recognises long serving general practitioners who do not receive a
fair and equitable level of support under the Central Payments System because their services are not
captured by Medicare or their locations are not adequately taken into account.
Achievements and outcomes
This year payment rates have increased by 25 per cent.
Prior and revised qualifying periods and maximum payment rates by Retention Payment
Category
Retention payment
category
Qualifying
periods
Payment rates
Prior maximum
payment
New maximum
payment
A
6 years
$4,000
5,000
B
5 years
$8,000
10,000
C
3 years
$12,000
$15,000
D
2 years
$16,000
$20,000
E
1 year
$20,000
$25,000
5 General Practice Registrars’ Rural Incentive Payments Scheme
Key business results
HIC made payments totalling $5.5 million to 374 medical practitioners participating in the General
Practice Registrars’ Rural Incentive Payments Scheme during 2002-03.
At a glance
Medical practitioner participation in the General Practice Registrars’ Rural Incentive Payments
Scheme 2002-03
General Practice Registrars’ Rural Incentive Payments Scheme
2002-03
Medical practitioners paid
374
Total number of payments
695
Total amount paid
$5.5 million
Overview
The Government’s commitment to major reform in the area of general practice vocational training is
reflected in the allocation of $102 million over four years in the 2000 Budget.
This will be used to boost general practice training in rural and remote areas by creating a dedicated
200-place Rural Training Pathway, which operates alongside a (primarily urban) general training
pathway.
The Rural, Remote and Metropolitan Area (RRMA) location categories are:
1. Capital City;
2. Other Metropolitan Centre;
3. Large Rural Centre;
4. Small Rural Centre;
5. Other Rural Area;
6. Remote Centre;
7. Other Remote Area; and
8. Offshore Island.
Financial incentives are offered to medical practitioners who commit to undertake training in the rural
training pathway in practices located in Rural, Remote and Metropolitan Area (RRMA) classification
4-7. Up to $60,000 is available per registrar over the three years of general practice training.
(Incentive payments are not available to registrars for undertaking their mandatory hospital training
year.)
Further information on the RRMA can be found at www.health.gov.au.
6 Compensation Recovery Program
Key business results
Changes in legislation, implemented from 1 January 2002, streamlined the operation of the program
for all customers (insurers, lawyers and compensable persons). This resulted in the number of
Compensation Recovery cases processed by HIC falling from a peak of 81,275 in 2000-01 to 65,970
in 2002-03. Actual recoveries have subsequently fallen from $42.1 million to $38.1 million.
At a glance
Compensation recovery cases and benefits 2001-02 and 2002-03
Compensation Recovery Program
2001-02
2002-03
Cases finalised
79,945
65,970
Benefits recovered
$42.2 million
$38.1 million
Overview
The Compensation Recovery Program, which began in February 1996, aims to prevent ‘double
dipping’ in Medicare and nursing home benefits/Residential care subsidies paid by the Government,
in relation to an injury/illness where a person receives compensation for that injury/illness.
It is administered under the provisions of the Health and Other Services (Compensation) Act 1995
(HOSC Act) by HIC on behalf of the Department of Health and Ageing.
The operational requirements for the program are managed under the terms of the Output Pricing
Agreement (OPA), a Strategic Partnership Agreement (SPA) and a Schedule, all agreed between
HIC and Department of Health and Ageing.
Eligible people who are claiming compensation are able to claim Medicare and/or nursing home
benefits and/or residential care subsidies, from the date of their injury/illness to the date of
judgment/settlement of their case. However, once a case reaches judgment/settlement the HOSC Act
requires insurers or other compensation payers to advise HIC of claims for compensation where the
amount of compensation provided to a compensable person, is more than $5,000 inclusive of all
costs.
HIC then determines the amount of Medicare and/or nursing home benefits and/or residential care
subsidies, if any, that have been paid in the course of treatment of that injury/illness. This amount
must be repaid to the Australian Government.
HIC’s National Office is responsible for the program’s policy and systems development and
operational or processing aspects are carried out in the New South Wales and Queensland State
Offices.
7 HECS Reimbursement Scheme
Key business results
HIC made payments totalling $459,951 to 67 medical graduates participating in the HECS
Reimbursement Scheme during 2002-03.
At a glance
Medical graduates participation in the HECS Reimbursement Scheme 2002-03
HECS Reimbursement Scheme
2002-03
Eligible medical graduates participating
67
Medical graduates paid
52
Total payments made
91
Total amount paid
$459,951
Overview
The HECS Reimbursement Scheme was announced in the 2000 Budget as part of the Regional
health strategy: more doctors, better health services. This initiative aims to promote careers in rural
medicine and increase the number of doctors in rural and regional areas in the longer term.
Participants who undertake training or provide medical services in rural and remote areas of Australia
have one fifth of their HECS debt reimbursed for each year of service. Through the Scheme, as more
doctors move to work in rural areas, communities gain improved access to health services with
benefits also to general health levels over the longer term.
The Scheme will use the RRMA classification 3-7 to define eligible areas (see page 105).
8 Federal Government 30% Health Insurance Rebate
Key business results
At a glance
Federal Government 30% Health Insurance Rebate 2001-02 and 2002-03
Federal Government 30% Health Insurance
Rebate
2001-02
2002-03
% change
Memberships registered
4,686,455
4,816,238
2.8%
increase
Total paid in cash claims
$3.5 million
$2.8 million
20%
decrease
Total paid to health funds
$1,972.9
million
$2,163.43
million
9.7%
increase
Overview
HIC administers the 30% Rebate on behalf of the Australian Government and works with the
Department of Health and Ageing, the Australian Taxation Office, the Private Health Industry
Advisory Council and health funds to do so.
The Australian National Audit Office Performance Audit Report, Administration of the 30% Private
Health Insurance Rebate, was tabled in Parliament in May 2002. The main recommendations
affecting HIC were that:
 HIC reviews its Premium Reduction Scheme registration procedures to ensure they comply with
the Private Health Insurance Incentives Act 1998, all eligible Premium Reduction Scheme applicants
are registered, and health funds are fully informed of their responsibilities with respect to the
registration process;
 HIC ensures arrangements for Premium Reduction Scheme reimbursements have adequate
financial controls;
 pending any changes in policy and related legislation for the Incentive Payments Scheme, HIC
strengthens financial controls surrounding the scheme;
 HIC and the Australian Taxation Office review their data exchange arrangements to ensure the
Australian Taxation Office obtains timely access to the data it requires to undertake adequate data
matching checks for inappropriate multiple claiming under the 30% Rebate; and
 The Department of Health and Ageing and HIC develop clear performance indicators and
standards in relation to the 30% Rebate payment accuracy by HIC (that is, the extent to which eligible
people receive a rebate of the correct amount).
HIC generally accepted the Australian National Audit Office’s assessment and has already
implemented improvements to bring administration of the 30% Rebate in line with HIC’s Business
Improvement Program and the relevant legislation. These include:

forming a working group to review the legislation;
 implementing new claiming procedures to allow validation of claims and facilitate identification and
enforcement of registration requirements;
 establishing working groups and processing manuals for health funds to enable them to better
understand their responsibilities;

initiating an audit program;

reviewing the Schedule to the Strategic Partnership Agreement; and

forming a working group with the Australian Taxation Office to address data exchange issues.
Program audit
Private health funds supply an annual audit certificate on the operation of the 30% Rebate. HIC
checks claims made at Medicare offices to ensure no premium reduction has been applied to a
policy.
Audits at 11 health fund entities that participate in the 30% Rebate for Private Health Insurance
Premium Reduction Scheme were carried out during 2002-03. They identified the degree of
congruence between HIC and health fund data relating to the registration of persons who pay
reduced premiums for private health insurance cover.
The audits also established the extent to which claims for payment made by health funds are
accurately calculated and in respect of persons who are valid participants in the Premium Reduction
Scheme. There was a significantly lowered level of risk than existed in the previous financial year.
Where necessary, recommendations designed to strengthen and correct aspects concerning data
completeness or evidence of participant validity have been made and acted upon by the health funds
concerned.
Education and promotion
As part of the broader 30% Rebate campaign managed by the Department of Health and Ageing,
HIC continues to provide information to consumers through articles in Your Health Matters. The
claiming form, which is available from Medicare offices and HIC’s website, has been updated.
9 Veterans’ treatment accounts
Key business results
At a glance
Costs and service claims for Veterans’ treatment accounts 2001-02 and 2002-03
Veterans’ treatment accounts
2001-02
2002-03
% change
Cards produced
83,604
193,113
131% increase
Lines processed
19.70 million
18.11 million
8.1% decrease
Total benefit expenditure
$1,511.9 million
$1,610 million
6.4% increase
Overview
HIC began processing medical and allied health services claims for Veterans’ treatment accounts on
behalf of the Department of Veterans’ Affairs on 1 December 1996. Hospital claims processing began
on 22 September 1997. This activity is carried out in accordance with a memorandum of
understanding between HIC and the Department of Veterans’ Affairs that covers services, service
standards and financial arrangements.
10 Family Assistance Office
Key business results
While lodgement of Family Assistance Office (FAO) forms to HIC continues to increase, the number
of enquiries and HIC customer contact has decreased overall as customers make greater use of
telephone and internet facilities.
At a glance
Family Assistance Office 2001-02 and 2002-03
Family Assistance Office
2001-02
2002-03
% change
Services provided by HIC
170,108
194,737
14.5% increase
Overview
The FAO is a virtual organisation in partnership between the Department of Family and Community
Services, Centrelink, the Australian Taxation Office and HIC that uses existing facilities and staff from
all four agencies.
It delivers assistance for families in three main areas:

Family Tax Benefit Part A that provides help with the cost of raising children;
 Family Tax Benefit Part B that provides extra help for families with one main income, including
sole parents; and

Child Care Benefit that helps with the cost of child care.
HIC provides services such as responding to enquries on FAO services, and receiving and checking
claims for benefits, before the claims are passed onto Centrelink for payment processing.
HIC is working with the Department of Family and Community Services and Centrelink to identify
opportunities to extend the variety and volumes of FAO work processed through Medicare offices. A
trial, including the rollout of software developed by Centrelink, will be conducted during 2003-04 to
test the variability of its implementation throughout HIC’s Medicare office network.
Further information about FAO can be obtained at www.familyassist.gov.au
11 Hearing Services Program
Key business results
The Office of Hearing Services has encouraged the use of electronic claiming by hearing service
providers and this has resulted in internet facility use increasing to 91 per cent of all claims.
At a glance
Hearing Services Program services and payments 2000-01 and 2001-02
Hearing Services Program
2001-02
2002-03
% change
Services processed
722,825
769,538
6% increase
Total amount paid
$143.2 million
$153.6 million
7.2% increase
Comparison of electronic and manual hearing services claims 2001-02 and 2002-03
Claims
2001-02
2002-03
% change
Electronic data interchange
489,888
564,902
15% increase
Paper
79,619
57,036
28% decrease
Total claims
569,507
621,938
9% increase
Electronic data interchange
622,177
697,250
12% increase
Paper
100,648
72,288
28% decrease
Total services
722,825
769,538
6% increase
Services processed
Overview
The Hearing Services program operates under the provisions of the Hearing Services Administration
Act 1997. The Australian Government provides hearing services and products to eligible people
under the Hearing Services Program administered by the Office of Hearing Services in the
Department of Health and Ageing.
HIC processes and pays claims on behalf of the Office of Hearing Services to accredited hearing
service contractors.
ORDERING A MEDICARE TAX STATEMENT ON THE INTERNET ANYWHERE,
ANYTIME…ALL FROM THE COMFORT OF MY OWN HOME.
CHAPTER-9
Financial Statements
WE IMPROVE OUR BUSINESS EFFICIENCY WITH NEW PRODUCTS, IDEAS AND
WAYS OF WORKING…THE HEALTH OF MY CHILDREN IS IN SAFE HANDS
Chapter-10
APPENDIXES
APPENDIX A: Statutory Reports
Functions
HIC is a statutory authority established by the Health Insurance Commission Act 1973 (HIC Act).
HIC’s functions include:
 paying Medicare benefits as provided for in the Health Insurance Act 1973 and undertaking all
administrative activities necessary to ensure the effective performance of this function (authorised by
the HIC Act);
 paying pharmaceutical benefits and undertaking all administrative activities necessary to ensure
the effective performance of this function (subject to the National Health Act 1953 and authorised by
the HIC Act and regulations);
 preventing and detecting the occurrence of fraud and inappropriate servicing with respect to the
payment of benefits under the programs administered by HIC (authorised by the HIC Act and
regulations);
 administering the Compensation Recovery Program (under the provisions of the Health and Other
Services (Compensation) Act 1995);
 administering the Federal Government 30% Health Insurance Rebate (under the provisions of the
Private Health Insurance Incentives Act 1998);
 maintaining and administering the Australian Organ Donor Register (authorised by an
arrangement made under section 7 of the HIC Act);
 maintaining and administering the Australian Childhood Immunisation Register (under the
provisions of the Health Insurance Act);
 undertaking all administrative activities under the General Practice Immunisation Incentives
scheme, the Practice Incentives Program, the General Practice Registrars’ Rural Incentive Payments
Scheme and the Rural Retention Program (authorised by arrangements made under section 7 of the
HIC Act);

delivering services as part of the Family Assistance Office;
 providing services for the processing of the Department of Veterans’ Affairs treatment accounts
and Australian Hearing Services (authorised by regulations to the HIC Act);
 administering the Incurred But Not Reported (IBNR) Indemnity scheme and High Cost Claim
Indemnity scheme (under the provisions of the Medical Indemnity Act 2002, Medical Indemnity (IBNR
Indemnity) Contribution Act 2002, Medical Indemnity (Enhanced UMP Indemnity) Contribution Act
2002, and the Medical Indemnity (Consequential Amendment) Act 2002);
 undertaking the Prescription Shopping project (authorised by a Ministerial determination made
under subsection 8AA(4) of the HIC Act); and
 providing ex-gratia payments for victims and family members of victims of the Bali terrorist
attacks.
The HIC Act determines the constitution of the Board of Commissioners, appointment of the
Managing Director, HIC staffing and financial arrangements. It provides the Minister’s ability to
delegate powers and HIC’s reporting requirements. The Act also permits HIC to operate outside
Australia and to form companies.
HIC is a non-Government Business Entity Commonwealth authority under the Commonwealth
Authorities and Companies Act 1997 (CAC Act), which provides the general governance, reporting
and accountability framework for HIC and imposes a detailed regime for the conduct of officers.
Responsible Minister
The Minister responsible for HIC in 2002-03 was Senator The Hon Kay Patterson, Minister for Health
and Ageing.
Directions by the Minister
Under section 8J of the HIC Act, the Minister may give written directions to HIC. This power was not
exercised during 2002-03.
Notifications of general policy of government
Under section 28 of the CAC Act, HIC was not notified of any general policies of the Government
during the financial year.
Delegations
HIC operates its business in accordance with a number of instruments of delegation. These include
the Financial and Human Resources Delegations made under the HIC Act and delegations under
other relevant health legislation including, but not limited to the Health Insurance Act, the National
Health Act, the Health and Other Services (Compensation) Act, the Private Health Insurance
Incentives Act and the Medical Indemnity Act.
Instruments of delegation specific to HIC officers have been made by the Minister for Health and
Ageing, HIC’s Board of Commissioners, the Managing Director and the Secretary of the Department
of Health and Ageing and are updated by HIC as and when required.
Powers of investigation
The HIC Act, as amended by the Health Legislation (Powers of Investigation) Amendment Act 1994,
provides for the Managing Director to authorise the exercise of power to require a person to give
information that the person has, or to produce a document that a person holds, and the power to
obtain a search warrant to seize information or material needed to complete a chain of evidence. The
use of these powers must be reported annually (see table below).
Statutory report under section 42 of the HIC Act 2002-03
Action
Section
No.
Instruments appointing an HIC officer as an authorised person
8M
26
Action
Section
No.
Notices requiring information from non-patients
8P
81
Notices requiring information from patients
8P
100
Searches of premises for the purpose of monitoring compliance
8U
3
Occasions during searches when powers were used
8V
5
Searches of premises and seizure of evidential material
8X
7
Search warrants issued in relation to possible offences
8Y
11
Search warrants issued by telephone or other electronic means
8Z
0
Patients advised in writing of the seizure of their clinical records
8ZN
511
Where records are taken from a medical practitioner, patients whose details are included in those
records are issued with a section 8ZN notice advising that the records have been obtained (see
above table). The notice does not imply the patient is under investigation. Below is a list of the type of
cases in which these powers were used during 2002-03.
Use of Powers of Investigation 2002-03
Type of case
No.
Medical practitioners
Magnetic Resonance Imaging
0
Diagnostic imaging
0
Pathologists
0
Pharmacists
12
General practitioners
11
Optometrists
1
Psychiatrists
0
Other specialists
1
Members of the general public
Benefit claims
0
Prescription drug smuggling
0
Prosecutions
The prosecuted cases involved benefits claimed for services not rendered, rendered other than as
claimed, or itemised for payment when the service was not payable.
Summary of prosecutions 2002-03
Prosecutions
No.
Members of the public for offences against Medicare
21
Medical practitioners for offences against Medicare
5
Fifty-nine cases were referred to the Director of Public Prosecutions during the reporting period.
Judicial Decisions and Reviews
Judicial decisions and administrative tribunal decisions that have had, or may have, a significant
impact on the operations of HIC from 1 July 2002 to 30 June 2003 include:
Clare v. Health Insurance Commission (V878 of 2002) - at 30 June 2003 the Federal Court
proceedings in relation to this matter have not been concluded. The case involves an application
made by provider Dr Clare, disputing a decision made by HIC on the Medicare eligibility of a MRI
machine located at Bundoora Radiology, Melbourne. The Federal Court decision may impact upon
HIC’s interpretation of the term ‘contract in writing’ in the relevant Regulations under the Health
Insurance Act 1973, governing the eligibility of MRI machines for the purposes of Medicare benefits.
Sydney X-Ray v. Health Insurance Commission (641 of 2003) - at 30 June 2003 the Federal Court
proceedings in relation to this matter have not been concluded. The case involves an application
made by Sydney X-Ray Pty Ltd, disputing a purported decision by HIC regarding the Medicare
eligibility of a MRI machine located at Randwick NSW. The Federal Court decision may impact upon
HIC’s interpretation of the term ‘contract in writing’ in the relevant Regulations under the Health
Insurance Act 1973, governing the eligibility of MRI machines for the purposes of Medicare benefits.
Medtest Pty Ltd v. Medicare Participation Review Committee and Health Insurance Commission
(N2002/1953) - at 30 June 2003 this matter has not yet been heard by the Administrative Appeals
Tribunal (AAT). This matter concerns Medtest’s refusal to allow an inspection of its laboratory
premises. HIC formed the view that Medtest’s refusal to allow an inspection of its premises might
constitute a breach of Medtest’s Approved Pathology Authority undertaking and referred the matter to
the Medicare Participation Review Committee (MPRC). The MPRC determined that Medtest had
breached its Approved Pathology Authority Undertaking by not allowing the inspection. It is likely that
the AAT’s decision may have an impact upon the power to enter premises and the assessment of
penalty for breach of an undertaking.
Nguyen v. Minister for Health and Ageing (2001) FCA 1241; Nguyen v. Secretary, Department of
Health and Ageing (2002) FCA 1441; Nguyen v. Minister for Health and Ageing (2002) FCA 1462;
Secretary, Department of Health and Ageing v Nguyen (2002) FCAFC 416. These matters concerned
a decision by the Minister under section 133 of the National Health Act 1953, to revoke the approval
of Teresa Phan and Kimberly Nguyen to supply pharmaceutical benefits. Teresa Phan claimed
payment from HIC for drugs which had never been supplied. Teresa Phan was charged with
defrauding the Commonwealth and was convicted of this offence. In October 2002, the Federal Court
decided to set aside the Minister’s decision to revoke the approval on the basis that the Minister did
not consider the option of partially revoking the approval. In November and December 2002, the
Federal Court decided that the Secretary could not delay cancelling an approval on request while the
Minister conducted procedural fairness in relation to a decision to revoke. The Federal Court’s
decision will have an impact on any decision to revoke an approval held by a partnership, and the
revocation of an approval where the holder or holders of the approval decide to sell the pharmacy to
which the approval relates before the revocation decision is made.
Grey v. Health Insurance Commission & ors (M83 of 2002) - on 14 February 2003, the High Court
dismissed an application for special leave made by Dr Grey. The case involved interpretation of Part
VAA of the Health Insurance Act 1973, relating to the Professional Services Review Scheme, and
whether the Professional Services Review Scheme involved an exercise of judicial power contrary to
the Constitution.
Doan v. Health Insurance Commission & ors (V202 of 2002) - on 18 September 2002, the Federal
Court (Marshall J) dismissed the application by Dr Doan. The case involved a challenge to the validity
of the investigative referral made under Part VAA of the Health Insurance Act 1973, which relates to
the Professional Services Review Scheme. Issues included the relationship between counselling and
the referral period, and whether HIC could be estopped from making a referral by statements made
during counselling.
Crowley v. Holmes & ors (V259 of 2002) - on 18 December 2002, the Federal Court (North J)
dismissed the application by Dr Crowley with costs. This case related to whether material in an
investigative referral and an adjudicative referral relating to past conduct of the doctor invalidated the
referrals. It also raised the question of whether this material resulted in bias on the part of the
Professional Services Review Committee established under Part VAA of the Health Insurance Act
1973 to consider the adjudicative referral.
Ombudsman
Between 1 July 2002 and 30 June 2003, the Commonwealth Ombudsman received 125 complaints
about HIC. The following table shows 130 complaints covering 140 issues were closed.
Number of issues identified by the Commonwealth Ombudsman 2001-02 and 2002-03
Action taken
2001-02
2002-03
Closed/finalised by Ombudsman
149
130
Withdrawn/lapsed
11
9
Discretion exercised by Ombudsman
76
84
Investigated by Ombudsman
66
56
No defect found
34
31
Agency defect found
9
9
No need to investigate further
23
16
Secrecy provisions and privacy legislation
Section 130 of the Health Insurance Act and section 135A of the National Health Act provide for the
confidentiality of information obtained by HIC in the performance of its functions. These provisions
make it an offence for an HIC officer to disclose information about a person except in the
performance of their duties under the relevant Act. The secrecy provisions also provide specific
powers enabling the release of personal information in certain circumstances. For example,
information may be released to State health regulatory authorities, such as medical and
pharmaceutical boards, in relation to matters affecting the registration of professional health
providers. There is also provision under section 130(3) of the Health Insurance Act and section
135A(3) of the National Health Act for the Minister, or a HIC officer to whom this authority is
delegated, to certify that it is in the public interest for information to be released.
Section 135AA of the National Health Act, and associated guidelines issued by the Privacy
Commissioner, provide for limits on the maintenance and storage of claims information and the
separation of Medicare and PBS databases.
Privacy Act
HIC is subject to the Privacy Act 1988, which regulates the collection, handling and use of personal
information by most Australian government agencies. In accordance with the Privacy Act, HIC
submits annual returns to the Privacy Commissioner listing the types and use of information it holds.
The Privacy Commissioner has audited HIC’s compliance with the Privacy Act and found its
procedures were satisfactory.
During 2002-03, HIC did not receive any complaints under the Privacy Act from the office of the
Federal Privacy Commissioner. There was one complaint outstanding from the previous year and this
has been partially resolved.
Of nine complaints about use and disclosure of personal information held by HIC, six have been
resolved, two are ongoing and one was unsubstantiated.
Occupational Health and Safety Report
HIC is required under section 74 of the Occupational Health and Safety (Commonwealth
Employment) Act 1991 to provide a report on occupational health and safety incidents that occurred
during the year.
Statutory report under section 74 of the Occupational Health and Safety Act
Action
No.
Deaths that required notice under section 68
0
Accidents that required notice under section 68
2
Dangerous occurrences that required notice under section 68
14
Investigations conducted under part 4
0
Tests on plant, substance, or thing in the course of investigations considered
0
Directions given to HIC under section 45 (that the workplace etc. not be disturbed)
0
Notices given to HIC under section 30 (requests from health and safety representatives)
0
Notices given to HIC under section 46 (prohibition notice)
0
Notices given to HIC under section 47 (improvement notice)
0
APPENDIX B: Freedom of Information
HIC is a prescribed authority under the Freedom of Information Act 1982 (FOI Act). HIC is therefore
required to publish in its annual report information about the way it is organised, its functions and
powers, the categories of documents held by HIC and how the public can access them. Also included
in this report are FOI statistics for the financial year, 2002-03.
Organisation, functions and powers
Organisation
An organisational structure chart appears on page 41.
Functions and powers
A description of HIC’s functions and powers as required by section 8 of the FOI Act is detailed in
Appendix A on page 165.
List of documents held by HIC
Brochures explaining the Medicare program, the Pharmaceutical Benefits Scheme, the Australian
Childhood Immunisation Register, the Compensation Recovery Program, the Federal Government
30% Health Insurance Rebate, the Australian Organ Donor Register, the Family Assistance Office
and the Charter of Care are available free of charge from Medicare offices.
HIC’s website www.hic.gov.au features publicly available publications and forms that can be viewed
or downloaded.
In accordance with section 9 of the FOI Act, the following types of documents are held by HIC:

administration and policy files;
 agendas, minutes and records of meetings of various internal and external committees and
tribunals;

agendas, minutes and submissions for Commission meetings;

applications for approval as an accredited orthodontist;

applications for approval as a dentist or dental practitioner;

applications for recognition as a specialist or consultant physician;

applications for recognition as a vocationally registered general practitioner;

brochures relating to all HIC operations;

committee and tribunal files created as a result of a specific enquiry or hearing;

committee and tribunal member appointment papers;

computer records relating to all HIC operations;

financial budgetary documents;

internal audit terms of reference, reports and files;

legal advice and opinions;

legislative documents in the form of Acts, regulations and interpretations;

listings of approved Medicare pathology practitioners, authorities and laboratories;

listing of certified patients for the Cleft Lip and Palate Scheme;

listings of participating Medicare medical practitioners, dentists and optometrists;

listings of Pathology Licensed Collection Centres and Accredited Pathology Laboratories;

listings of Pharmaceutical Benefits Scheme approved persons and pharmaceutical prescribers;

Medicare Benefits Schedule item rulings and interpretations;

Ministerial, Commonwealth Ombudsman and general correspondence;

Ministerial submissions;
 operation instructions, circulars and directives relating to Medicare, Pharmaceutical Benefits
Scheme, Australian Childhood Immunisation Register, Practice Incentives Program, Compensation
Management System, Federal Government 30% Health Insurance Rebate, Veterans’ treatment
accounts, Australian Organ Donor Register, Hearing Service Payments and Health Research and
Coordinated Care Trials;

personnel records;

processed enrolment, withdrawn forms and claims documentation relating to all HIC operations;

property documents including leases, tenders and maintenance agreements;

records created as a result of a specific complaint, enquiry or review;
 records in relation to the regulatory functions of Pathology Licensed Collection Centres and
Accredited Pathology Laboratories;

records of contact between medical advisers and medical practitioners;

statistical reports and analyses; and

undertakings for participating optometrists.
Access to HIC documents
Procedures and initial contact points
A formal request under the FOI Act for access to HIC documents should be made in writing, be
accompanied by a $30 application fee made payable to HIC and sent to:
Freedom of Information Officer HIC
PO Box 1001
TUGGERANONG DC ACT 2901
Telephone: (02) 6124 6025
Fax: (02) 6124 6935
Remission of the application fee may be sought. Applicants may be liable to pay charges for costs
associated with processing a request and providing access to documents.
Freedom of Information liaison officers in HIC State Offices can help with initial enquiries.
Freedom of information statistics 2002-03
Requests
No. or $ amount
On hand at 30 June 2003
1
Received
14
Resolved by being:

withdrawn (following consultation)
2

granted in full
3
Requests
No. or $ amount

granted in part
5

denied in full
2
Outstanding at 30 June 2003
3
Requests finalised in:

0-30 days
4

31-60 days
6

61-90 days
0

91 days or more
0
Fees and charges levied
Application fees received
310
Charges notified
1,460
Charges collected
223
Internal reviews
Received
1
Finalised
0
Administrative Appeals Tribunal appeals
Received
0
Outstanding at 30 June 2003
7
APPENDIX C: Ecologically sustainable development and
environmental performance
Section 516A of the Environment Protection and Biodiversity Conservation Act 1999 (EPBS Act)
requires HIC to include in its annual report a section detailing HIC’s environmental performance and
contribution to ecological sustainable development during the year.
The requirements of the EPBS Act are designed to promote the development of frameworks within
which HIC, along with other Government organisations, integrates environmental, economic and
social considerations. The identification, monitoring and reporting of environmental issues are
intended to help HIC and other Government organisations improve their environmental performance.
HIC is committed to environment protection and biodiversity. As part of this commitment, HIC’s
National Office continued the following activities during the year:

general waste recycling (aluminium and steel cans, PET bottles, glass);

photocopier toner cartridges recycling;

waste paper and cardboard recycling; and

security waste recycled via wet pulp methods.
APPENDIX D: Staffing overview
Employee numbers at 30 June 2003 compared with 30 June 2002
State
2002
2003
Change
National Office
934
1158
23.9%
New South Wales
1152
1121
-2.7%
Victoria
851
882
3.6%
Queensland
720
721
0.13%
South Australia
332
327
-1.5%
Western Australia
328
331
0.9%
Tasmania
154
166
7.8%
Total
4471
4706
5.25%
Senior management* by gender at 30 June 2003
Classification
Male
Female
Total
Senior Professional Staff
49
26
75
Total
49
26
75
*Senior Management includes all Senior Executives and Medical Advisors.
Employee numbers by gender and location at 30 June 2003
State
Male
Female
Total
National Office
504
654
1158
New South Wales
117
1004
1121
Victoria
111
771
882
Queensland
95
626
721
State
Male
Female
Total
South Australia
42
285
327
Western Australia
48
283
331
Tasmania
28
138
166
Total
945
3761
4706
Staffing by classification and location at 30 June 2003
Classification
Nat. Off.
NSW
VIC
QLD
SA
WA
TAS
Total
Deputy Managing Director
1
-
-
-
-
-
-
1
General Managers
6
-
-
-
-
-
-
6
Commission Secretary
1
-
-
-
-
-
-
1
2
2
1
1
1
1
8
State Managers & Deputy State
Managers
Senior Executives
39
6
6
4
2
2
-
59
Professional Officers
9
10
14
12
4
8
2
59
Senior IT Officers
193
-
-
-
-
-
-
193
Principal Executive Officers
337
19
14
13
7
5
7
402
IT Officers
69
-
-
-
-
-
-
69
Executive Officers
333
150
92
88
29
35
17
744
Administrative Officers
170
141
175
92
59
59
21
717
Customer Service Officers
-
793
579
511
225
221
118
2447
Total
1158
1121
882
721
327
331
166
4706
Culturally and linguistically diverse (CALD) employees by classification at 30 June 2003
Classification
CALD-1*
CALD-2*
Total
Administrative Officers
92
96
188
Customer Service Officers
260
240
500
Executive Officers
40
64
104
Classification
CALD-1*
CALD-2*
Total
IT Officers
26
4
30
Principal Executive Officers
39
25
64
Science Officers
10
5
15
Senior IT Officers
32
7
39
Senior Executive Service
6
3
9
Total
505
444
949
*CALD-1 - Employees from a culturally and linguistically diverse background where a language other
than English is spoken at home. F
*CALD-2 - Employees from a culturally and linguistically diverse background where English is spoken
at home but the parents speak a language other than English.
Culturally and linguistically diverse (CALD) speaking employees by State at 30 June 2003
State
CALD-1*
CALD-2*
Total
National Office
135
79
214
New South Wales
201
140
341
Queensland
26
30
56
South Australia
10
51
61
Tasmania
5
5
10
Victoria
113
103
216
Western Australia
15
36
51
Total
505
444
949
*CALD-1 - Employees from a culturally and linguistically diverse background where a language other
than English is spoken at home.
*CALD-2 - Employees from a culturally and linguistically diverse background where English is spoken
at home but where the parents speak a language other than English.
Aboriginal or Torres Strait Islander employees by classification and gender at 30 June 2003
Classification
Male
Female
Total
Administrative Officers
0
1
1
Classification
Male
Female
Total
Customer Service Officers
1
23
24
Executive Officers
0
2
2
Principal Executive Officers
0
1
1
Total
1
27
28
Aboriginal or Torres Strait Islander employees by State and gender at 30 June 2003
State
Male
Female
Total
National Office
0
3
3
New South Wales
1
5
6
Queensland
0
10
10
South Australia
0
3
3
Tasmania
0
1
1
Victoria
0
4
4
Western Australia
0
1
1
Total
1
27
28
Employees with a disability by gender and classification at 30 June 2003
Classification
Male
Female
Total
Administrative Officers
6
10
16
Customer Service Officers
6
48
54
Executive Officers
2
9
11
Principal Executive Officers
6
5
11
Science Officers
1
0
1
Senior IT Officers
4
0
4
Senior Executive Officers
1
1
2
Total
26
73
99
Employees with a disability by gender and State at 30 June 2002
State
Male
Female
Total
National Office
14
5
19
New South Wales
4
19
23
Queensland
2
10
12
South Australia
2
6
8
Tasmania
0
2
2
Victoria
3
28
31
Western Australia
1
3
4
Total
26
73
99
HIC employees covered by a Certified Agreement or an Australian Workplace Agreement at 30
June 2003
Type of Agreement
Senior Executives
Other employees
Total
2001-03 Certified Agreement
0
4419
4419
Australian Workplace Agreement
75
212
287
Total HIC employees
75
4,631
4,706*
*Excludes Managing Director
APPENDIX E Consultancy services engaged by HIC
The following table lists new and extended consultancy contracts let to the value of $10,000 or more
(inclusive of GST) during 2002-03. Included is the name of the consultant; a summary description of
the nature and purpose of the consultancy; the contract price for the consultancy; the selection
process used, including whether the consultancy was publicly advertised; and the reason for the
decision to employ consultancy services for each individual consultancy.
Key:
Selection process:

1 = publicly advertised tender;

2 = selective tender; and

3 = direct engagement without tender.
Reason:

a = project required specialist knowledge and/or skills not available within HIC at the time;
 b = consultant was a recognised expert in the field and/or had particular skills/experience gained
from similar work for HIC; and

c = project required input from a person/organisation accepted as independent of HIC.
Consultancy services provided to HIC in 2002-03
Company Name
Purpose
Price
Process Reason
90East Asia Pacific
Pty Ltd
Assist with planning and scheduling
Consultancy DSD Certificate - Risk
Assessment for Gateway; Participation
in risk assessment for Gateway
$21,625.00
3
a
ABRM International
Pty Ltd
Provision of OH&S Program
$42,741.74
3
b
Accenture Australia
Ltd
Business Architecture Organisation
design and change;
$5,438,055.93 2/3
a/b
Directories Project;
Business Improvement Planning and
review Strategy and planning;
IT Architecture;
BMMS Risk Management;
PBS On-line eAuthorities;
Completion of high level BR
Consultancy
Access Economics
Pty Ltd
PBS Initiatives savings measurement
and reporting
$31,800.00
3
a
Acumen Alliance
Support business analysis and
business planning;
$144,001.26
2/3
a/b/c
4 year plan review;
PBS Initiative group;
Review of Audit processes and
practices; Financial Management;
PBS Initiative - prescription shopping
and overseas drug diversion;
PBS electronic authorities and
approvals; Midyear financial review;
HIC Desktop;
SAP Project Accounting;
IT transition and cost structure costing
methodology; Asset revaluation for
hard close and financial year end.
Company Name
Purpose
Price
Process Reason
Alchemy
Management
Solutions P/L
CDD input into WEB content
management solution
$22,800.00
3
a
APIS Consulting
Group
Development of scoping and vision/
parameters documentation for project
requirements;
$12,672.00
4
a/b
Provision of advice on an evaluation
framework for the HIC Learning and
Development strategy 2003-06; PMSS
Project
APT Associates
Robyn Woodrow - Contract
$21,000.00
1
a/c
AR Liband &
Associates Pty Ltd
ITSD Organisation Development;
Leadership Team Development;
$43,962.80
3/2
(a/b/c)
$276,909.05
(1)
(a/c)
HR Forum Planning and Facilitation;
Develop On-line Integration;
Modern Stake Workshop;
Aspect Computing
Pty Ltd
HIC On-line
Avanade Australia
Pty Limited
Management Architecture
$31,461.09
3
b
BOOZ Allen
Hamilton
Develop BI support strategy and
implementation plan
$11,905.66
1
a
CHIK Services Pty
Ltd
PKI Site Identification - Consultancy
Services
$47,730.27
3
a/c
Combined
Management
Consultants Pty Ltd
Manage BI infrastructure performance
and schedule;
$22,526.46
3
a
$792,370.16
2/3
a
Document Writing and Training for
PMD Reference Suite
HALO project management;
IBIS project management;
WEB Channel content management
system EDW project management;
FAO project management
Coolong Consulting
(Aust) Pty Ltd
Communications Review;
Channel Improvement Project;
Company Name
Purpose
Price
Process Reason
CCA Project high level business and IT
input;
CCA Project Phase 3;
Performance compliance platform
specialist - voice
Deloitte Consulting
Pty Ltd
Simplified Billing Tender Evaluation
$121,380.00
3
a/b
Deloitte Touche
Tohmatsu
IT Audit
$20,460.00
1
a
Department of
Health & Ageing
Simplified Billing Project
$47,365.02
3
a
Diversiti Pty Ltd
Client services for performance
compliance
$34,000.00
3
a
Dr Ian Breadon
Professional Services - Dr Ian Breadon
$25,036.23
3
b
Dr Stephen
Vaughan
Professional Services - Dr Stephen
Vaughan
$21,087.37
3
b
Dr Steve G Zantos
Optometric Adviser Services
$34,830.39
3
b
Empower Research
Pty Ltd
HIC Staff Survey
$103,172.68
1
c
EP Safety &
Rehabilitation
Rehabilitation Case Management;
Work Station Assessment Services
$97,595.25
2
b
Ernst & Young
HIC Security Policy
$101,963.00
2
a
FOTJOL Pty Ltd
HIC Desktop Applications
Rationalisation; Network
disengagement;
$246,290.65
3
a
Develop an OO Metrics Tool
$19,584.00
3
a
Professional Services for the BI
Service Level Project;
$190,121.82
3
a
Disaster recovery - Business continuity;
PABX Strategy
Foundation
Technology
Services
Galt
Business
Services
Completion of Optus Negotiations
Company Name
Purpose
Price
Process Reason
Hay Group Pty Ltd
Top Team Effectiveness Project Step 1
Planning
$154,325.75
1
c
Hays Personnel
Services (Australia)
Professional Services - Colleen Doyle
$16,132.75
3
b
HBA Consulting
Professional Services for HIC
Classification Review
$68,810.60
3
a
Health Infotech
Solutions Pty Ltd
Simplified Billing Project
$40,740.09
3
a
Hermes Precisa Pty Scanning Improvement Project
Ltd
$10,000.00
1
c
IBM Global
Services Australia
Security Architecture
$854,136.38
3
a
IISM Group
Program Management Medicare
Reform; Eclipse, HIC On-line;
$287,744.00
3
a
Indigenous Recruitment Services;
Delegates and Coordinator Workshop
$14,200
2
a
Iterative Consulting
Pty Ltd
IT Architecture
$243,950.52
3
a
Kaz Technology
Services Pty Ltd
Consultancy Services - David Ritchie
$26,940.32
3
a
Kenneth C - Turbet
Disciplinary Consultancy Services
$11,892.18
3
b
Kestral Computing
Pty Ltd
Provision of expert advice regarding
HL7 specifications
$28,766.27
3
a
KPMG
Professional Services - Issues
Medibank and HIC
$15,060.95
3
b
Lumbers
Consulting
IT Planning
$52,003.18
3
a
Integrity of Medicare Card Review;
Business Case development Simplified Billing
Indigenous
Employment
Specialists
Company Name
Purpose
Price
Process Reason
M&T Resources
Account Management Framework
within the area of Stakeholder
Relations; Telephone Booth Rollout
$29,680.00
2/3
a/b
Mallesons Stephen
Jacques
Legal Services
$14,180.00
1/3
a/b/c
Mastech Asia
Pacific Pty Ltd
HeSA Development
$22,800.00
3
a/b
Moz Consulting
Professional Fees for Management
Consulting - Evaluation of PSP
$36,588.85
2
c
Naccho
HIC Aboriginal and Torres Strait
Islander Strategy
$30,000
3
c
NLP Australia Pty
Ltd
Consulting Transition Planning
$16,193.17
Open Health Pty
Ltd
Simplified Billing New Claiming Model
$40,000
3
b
Palm Management
Pty Ltd
Property Management Services Project
$10,500
1
a
Price Waterhouse
Coopers
IT Audit Services
$241,404.59
2/3
a
QMS
Inquiry into ACT staff complaints;
Investigation of Disciplinary Cases;
Consultancy Disciplinary Services
$49,246.74
3
b/c
Rational Software
Pty Ltd
IT architecture
$419,843.57
1/2/3
a/b
Red 3 Pty Ltd
Project to incorporate PSTC Reference
Group's Amendments;
$32,853.50
1
a
Development Architecture and
Implementation Office
Pathology Service Table Maintenance
Results Consulting
(Australia) Pty Ltd
Review and develop HIC's Equity and
Diversity Plan 2003-2006
$11,790.91
2
b
Ruth Perrett
Professional Services
$27,550.00
3
a
SMS Consulting
Group Limited
Development of ODC Database for
Business Modelling;
$42,100.00
1/3
a/c
Company Name
Purpose
Price
Process Reason
$108,500.00
1
c
Review of Diploma of Project
Management Training;
CCA Project
Taylor Nelson
Professional Service - BIP Research
Sofres Australia P/L
Terra Firma Pty Ltd
Automated Risk Management System
Project
$34,750.00
The Boston
Consulting Group
Pty Ltd
Professional Fees - Strategic Advice
$105,800.00
2
a/b/c
Tier Technologies
(Australia) P/L
Review of Consolidation Criteria;
Transition Strategy
$43,786.67
3
a
University of
Wollongong
ARC SPIRT Automated Fraud
Detection
$40,000
3
a
Urbis
Professional Fees - Jones/Fallon
$12,687.50
1
a
Value Focusing Pty
Ltd
Consultancy Services - Relationship
Value Workshop
$13,517.23
3
b
Waldrons
Provision of Optometrical advice for
QLD/WA/NT
$34,429.89
3
a
Walter and Turnbull
Pty Ltd
Review Property Management Project
$24,981.83
2
c
WalterTurnbull
Consultancy Services Risk
Management PBS On-line;
$82,863.18
1/3
a/c/b
$62,131.74
3/1
a/b
Optometrists Pty
Ltd
Professional Fees Business Strategic
Sourcing
WST Pacific Pty Ltd Consultancy Services - PMSS
APPENDIX F Charter of Care Report
The following tables detail HIC’s performance against its Charter of Care standards and provide
information about customer feedback for 2001-02 and 2002-03.
Table 1
Claims processing and payment standards for HIC public customers
Table 2
Claims processing and payment standards for service providers
Table 3
Telephone enquiry standards
Table 4
Correspondence standards
Table 5
Medicare office counter enquiry standards
Table 6
Freedom of Information standards
Table 7 Customer feedback
Table 1: Claims processing and payment standards for HIC public customers
Service
Medicare
Service standard
Performance
2001-02
2002-03
Paid accounts will be reimbursed by cash on the day at
a Medicare office (daily limits apply).
100%
100%
Paid accounts will be reimbursed by electronic funds
transfer (EFT) to your nominated account (not available
for passbook accounts) or by cheque posted to you 10
days after lodgement.
94%
97%
Claims for unpaid general practitioner (GP) accounts will 99%
be reimbursed by cheque made out to the doctor. The
cheque will be posted to you 16 days after lodgement.
100%
Claims for other unpaid medical provider accounts will
be reimbursed by cheque made out to the provider. The
cheque will be posted to you 18 days after lodgement.
99%
100%
Paid accounts will be reimbursed by EFT to your
nominated if requested (not available for passbook
accounts) or by cheque posted to you 10 days after
lodgement.
95%
92%
Claims for unpaid GP accounts will be reimbursed by
cheque made out to the doctor and sent to you 14 days
after lodgement.
99%
99%
Claims for other unpaid medical provider accounts will
be reimbursed by cheque made out to the provider. The
cheque will be posted to you 15 days after lodgement.
99%
99%
98%
98%
A Notice of Past Benefits will be processed within 28
days of receipt of an accepted Medicare Claims History
Statement.
98%
98%
On receipt of an accepted Medicare Claims History
Statement, refunds from an advance payment will be
98%
98%
For claims made electronically (including via a doctor’s practice):
Compensation A Medicare History Statement will be processed within
28 days of receipt of a Request for Notice of Past
Benefits.
Service
Service standard
Performance
2001-02
2002-03
made within 3 months of HIC receiving both the Notice
of Judgment or Settlement and the advance payment
amount.
Table 2: Claims processing and payment standards for service providers
Service
Service standard
Performance
2001-02
2002-03
Manual bulk bill claims for all services except
pathology and GP services will be reimbursed
to providers by cheque 15 days after
lodgement.
99%
98%
Manual GP claims will be reimbursed to
providers by cheque 14 days after lodgement.
99%
99%
Manual pathology claims will be reimbursed to
providers by cheque 28 days after lodgement.
96%
97%
Electronically lodged claims for all services
except pathology will be reimbursed to
providers by cheque or EFT 8 days after
lodgement.
82%
84%
Electronically lodged pathology claims will be
reimbursed to providers by cheque or EFT 28
days after lodgement.
95%
96%
Australian Childhood
Immunisation
Register
Australian Childhood Immunisation Register
notification payments will be made by EFT,
and a statement mailed to providers within 7
days of the end of each month.
100%
100%
General Practice
Immunisation
Incentives
A General Practice Immunisation Incentives
payment calculation will be run quarterly in
February, May, August and November of each
year. All payments will be made and
statements sent within 2 weeks of the quarterly
calculations.
100%
100%
(payments)
(payments)
75%
75%
Service Incentive
Payments
Service Incentive Payments will be made
within 5 days of the end of each month.
100%
100%
Practice Incentives
Payments
A Practice Incentives Program payment will be
run quarterly in February, May, August and
November of each year.
100%
100%
(payments)
(payments)
Medicare (Bulk bill)
(statements) (statements)
Service
Service standard
All payments will be made and statements
sent within 2 weeks of the quarterly
calculations.
Performance
2001-02
2002-03
75%
50%
(statements) (statements)
When correct documentation is provided:
Pharmaceutical
Benefits Scheme
Veterans’ Affairs
Processing
Cash payments for claimants of patient
refunds will be processed on the day at a
Medicare office (daily cash limits apply).
100%
100%
Cheque payments for eligible patient refunds
will be issued within 28 days of lodgement.
91%
94%
Claims Transmission System (CTS) benefits
claims will be paid to the pharmacy within 17
days.
99%
100%
Written authority approvals will be provided
within 3 working days from date of receipt.
98%
99%
Prescription pad orders will be dispatched
within 4 weeks of receipt.
100%
100%
Medical claims will be reimbursed to medical
practitioners within 28 days.
99%
99%
Hospital claims will be reimbursed to hospitals
within 28 days, unless otherwise contracted.
98%
98%
Ancillary service claims will be paid to
providers within 28 days, unless otherwise
contracted.
98%
92%
Telephone enquiry standards
Standard:
We aim to answer the majority of your phone calls within 30 seconds and resolve your enquiry during
that call.
Performance:
Of the 10.4 million calls received in 2002-03 (9.6 million in 2001-02), the majority were answered in
less than 30 seconds. These statistics are automatically recorded using call centre software.
A breakdown of performance figures for HIC’s major programs is shown below.
Table 3: Telephone enquiry standards
Enquiry line
Performance*
2001-02
2002-03
92%
93%
Australian Childhood Immunisation Register internet enquiry line 93%
94%
Australian Organ Donor Register
96%
96%
Botulinum Toxin
-
100%
Compensation
98%
97%
Department of Veterans’ Affairs - Allied
96%
95%
Department of Veterans’ Affairs - Hospital
99%
99%
Department of Veterans’ Affairs - Medical
99%
99%
Federal Government 30% Health Insurance Rebate
97%
95%
Improved Medicare Entitlement Program
-
94%
Location Specific Practice Number - Registrations
-
75%
Medclaims
92%
94%
Medicare easyclaim
99%
99%
Medicare provider enquiries
94%
95%
Medicare public enquiries
93%
96%
Optometrical - transfer to operator
91%
97%
Pharmaceutical Benefits Scheme authority approvals
93%
93%
Pharmaceutical Benefits Scheme general enquiries
91%
93%
Practice Incentives Program payments
99%
99%
Rural Retention Program
98%
100%
Rural Transaction Centres
-
99%
Simplified Billing
-
94%
Telephone Claiming
95%
96%
Australian Childhood Immunisation Register enquiry line and
reports
* Proportion of calls answered by an operator within 30 seconds (average across Australia).
Table 4: Correspondence standards
Standard
Performance in 2002- 03
We will respond to you as quickly as
possible within 28 days when you:

ask for information;

seek a decision;

lodge an objection; or
Number
recorded*
Average number of Average
days to
number of
days to
acknowledge
resolve
12,200
6
8
 give us feedback, such as a complaint or
suggestion, and you ask us for a response.
If we cannot meet the 28-day standard we
will advise you of an expected reply date,
and who to contact in the meantime, within
14 days of receipt of your query.
Table 5: Medicare office counter enquiry standards
Standard
We aim to keep waiting times
below 10 minutes.
Performance
2001-02*
2002-03**
100% of customers were served
in under 10 minutes
100% of customers were served
in under 10 minutes
*Based on 2,720 external observations conducted in Medicare offices during 2001-02.
**Based on 2,516 external observations conducted in Medicare offices during 2002-03.
Table 6: Freedom of information standards
Standard
We will acknowledge your request
under the Freedom of Information
Act 1982 within 14 days of receipt
and respond within 30 days of
receiving your request. If other
parties need to be consulted, the
law provides for another 30 days for
a decision to be made.
Performance
2001-02
2002-03
3 requests were carried over and
14 requests were received in
2001-02. Of these, 14 decisions
were made, 2 were withdrawn and
1 was carried through to 2002-03.
All were acknowledged within 14
days of receipt. Of 14 decisions,
1 request was carried
over and 14 requests
were received in 200203. Of these, 10
decisions were made,
14 were responded to within the
legislated time frames.
2 were withdrawn and 3
were carried through to
2003-04.
Standard
Performance
2001-02
2002-03
All were acknowledged
within 14 days of receipt
and, of 10 decisions, 10
were responded to
within the legislated time
frames.
Table 7: Customer feedback as recorded in HIC’s customer feedback register
Feedback
type
Volume
Further details
200102
200203
2001-02
2002-03
Suggestions
81
87
77% of all suggestions were
Medicare related
89% of all suggestions were
Medicare related
Compliments
131
185
83% of all compliments were
Medicare related
80% of all compliments
were Medicare related
Complaints*
392
300
Top 4 complaints categories were:
 Top 4 complaints
categories were:
 Medicare claims — general
feedback
 Medicare claims —
general feedback
 Pharmaceutical Benefits
Scheme — miscellaneous
 Medicare offices —
general feedback
 Medicare offices — general
feedback
 Medicare Public —
miscellaneous
 Medicare cheque — general
feedback
 Medicare cheque —
general feedback
*A complaint is entered onto the Customer Feedback Register only if it is not satisfactorily resolved
by either the staff member initially contacted by the customer or the staff member’s supervisor.
APPENDIX G Telephone calls received
Telephone call volumes for major programs in each of the States and the Australian Capital Territory
are listed below.
Telephone call volumes received by States and in the Australian Capital Territory 2002-03
Program
Total
ACIR enquiry line and 210,922
reports
NSW
QLD
29,892
VIC
SA
TAS
WA
4,484
176,546
ACT
Program
Total
NSW
ACIR internet helpline 7,409
ATSI access line
28,247
Australian Organ
Donor Register
34,994
QLD
VIC
SA
TAS
782
3,206
6,198
WA
ACT
6,627
400
10,325 22
10,121
8,096
24,873
Botulinum Toxin (from 65
May 2003)
65
Compensation
198,839
110,909 87,93
DVA — Allied
61,386
DVA — Hospital
6,040
3,072
2,968
DVA — Medical
56,704
34,798
21,906
Easyclaim booth
enquiries
74,556
Easyclaim fax
enquiries
40,296
IME line
284,914
LSPN (from March
2003)
2,023
Medclaims
93,573
Medicare levy
exemption
15,609
Medicare provider
enquiries
1,437,989 424,177 279,333 386,608 140,373 29,928 177,570
Medicare public
enquiries
1,959,996 637,337 363,384 474,102 214,085 46,233 224,855
61,386
74,556
26,562
76,548
13,734
208,366
2,023
33,413
24,273
20,978
7,567
7,342
15,609
Optometrical — IVR* 1,203,058
1,203,058
Optometrical —
transfer to operator
14,715
PBS authority
approvals
4,438,018 1,330,832 1,068,552 1,020,168
324,953
14,715
104,488 589,025
Program
Total
NSW
QLD
VIC
SA
TAS
PBS general
enquiries
250,189
82,064
80,761
42,365
18,485 5,593
PIP payments
23,132
23,132
Rural Retention
Program
869
869
WA
ACT
20,921
Simplified Billing (from 17,544
March 2003)
5,849
2,402
Telephone claiming
18,384
2,846
10,737
30% Rebate
1,733
565
159
TOTALS
10,481,204 2,707,746 2,214,167 1,989,470 801,728 323,919 1,239,093 1,205,081
6,788
191
17
40
2,448
182
4,279
340
354
15
449
Note: Blank areas indicate telephone calls for a particular program are not handled in that State.
*Calls to the optometrical interactive voice response line are not recorded by State.
APPENDIX H Accessing HIC
HIC’s National Office
134 Reed Street
North GREENWAY ACT 2900
Telephone: (02) 6124 6333
Fax: (02) 6282 5025
Postal Address:
PO Box 1001
TUGGERANONG
DC ACT 2901
State Offices
New South Wales
150 George Street
PARRAMATTA NSW 2150
Telephone: (02) 9895 3333
Fax: (02) 9895 3082
Victoria
460 Bourke Street
MELBOURNE VIC 3000
Telephone: (03) 9605 7333
Fax: (03) 9605 7980
Queensland
444 Queen Street
BRISBANE QLD 4000
Telephone: (07) 3004 5333
Fax: (07) 3004 5410
South Australia
209 Greenhill Road
EASTWOOD SA 5063
Telephone: (08) 8274 9333
Fax: (08) 8274 9371
Western Australia
Bankwest Tower
108 St Georges Terrace
PERTH WA 6000
Telephone: (08) 9214 8333
Fax: (08) 9214 8322
Tasmania
242 Liverpool Street
HOBART TAS 7000
Telephone: (03) 6215 5333
Fax: (08) 6215 5700
HIC’s national telephone enquiry service
HIC can be contacted by using HIC’s national telephone enquiry service. Calls to 13 numbers cost 25
cents from anywhere within Australia. Calls to 1800 numbers are free of charge. Calls from public pay
phones or mobile phones may be charged at higher rates. Information is also obtainable from HIC’s
website www.hic.gov.au
24-hour 7 day enquiry lines
Telephone number
Australian Childhood Immunisation Register enquiry line and
reports
1800 653 809
24-hour 7 day enquiry lines
Telephone number
Australian Childhood Immunisation Register internet enquiry
line
1300 650 039
Australian Organ Donor Register
1800 777 203
Australian Organ Donor Register (Approved Medical
Practitioner)
1800 556 455
Customs Prescription Drug Smuggling
1800 032 258
General Practice Immunisation Incentives scheme
enquiries/immunisation reports
1800 246 101
Medicare easyclaim fax
1800 633 201
Medicare easyclaim fax enquiries
1800 722 008
Pharmaceutical Benefits Scheme authority approvals
1800 888 333
PKI Customer Service Centre
1300 660 035
Telephone claiming
1300 360 460
Business hours enquiry lines
Aboriginal and Torres Strait Islander Access Line
1800 556 955
Bali special health care benefits hotline
1800 660 026
Compensation
132 127
Department of Veterans’ Affairs — Allied
1300 550 051
Department of Veterans’ Affairs — Hospital
1300 551 002
Department of Veterans’ Affairs — Medical
1300 550 017
Doctor shopping hotline
1800 631 181
Federal Government 30% Health Insurance Rebate
136 221
HIC Online
1800 700 199
Improved monitoring of entitlements (IME)
1300 302 122
Medclaims
1300 788 008
Medical advisory line
1800 800 314
24-hour 7 day enquiry lines
Telephone number
Medicare provider enquiries
132 150
Medicare public enquiries
132 011
National electronic data interchange help desk
1300 550 115
Optometrical IVR Date of Service Check
1300 652 752
Pharmaceutical Benefits Scheme general enquiries
132 290
Practice Incentives Program payments
1800 222 032
Rural Retention Program
1800 010 550
Simplified billing
1300 130 043
Source based audit
1800 675 235
Teletypewriter (hearing impaired)
1800 552 152
HIC public email addresses
email
Australian Childhood Immunisation Register
acir@hic.gov.au
Australian Organ Donor Register
aodr@hic.gov.au
Compensation
medicare.enq@hic.gov.au
General Practice Immunisation Incentives scheme
gpii@hic.gov.au
HIC general enquiries
hic.info@hic.gov.au
HIC’s Service Charter - Charter of Care
service.charter@hic.gov.au
Medicare provider enquiries
medicare.prov@hic.gov.au
Medicare public enquiries
medicare.enq@hic.gov.au
Pharmaceutical Benefits Scheme
pbs.enq@hic.gov.au
Public Key Infrastructure
pki@hic.gov.au
Practice Incentives Program
pip@hic.gov.au
Better medication management system, now known as
MediConnect
bmms@hic.gov.au
MediConnect
mediconnect@hic.gov.au
24-hour 7 day enquiry lines
Telephone number
Software vendor helpdesk
edihelp@hic.gov.au
Software vendor liaison
Edi.liaison@hic.gov.au
HIC Online
Hic.online@hic.gov.au
Software Vendor Account Management
sam@hic.gov.au
Pathology
Pathology.section@hic.gov.au
HIC Statistics
hicstats@hic.gov.au
Public Affairs
Public.affairs@hic.gov.au
Program Review Division
Professional.review@hic.gov.au
GPMOU 90 Day Scheme
90daypay@hic.gov.au
Feedback Reporting Facility for providers and specialists
Provider.feedback@hic.gov.au
GST enquiries
Gst.enquiries@hic.gov.au
Victorian EDI Helpdesk
vicedi@hic.gov.au
Simplified Billing
Simplified.billing@hic.gov.au
Qld.simplified.billing@hic.gov.au
Sa.simplified.billing@hic.gov.au
Wa.simplified.billing@hic.gov.au
Nsw.simplified.billing@hic.gov.au
Vic.simplified.billing@hic.gov.au
Tas.simplified.billing@hic.gov.au
GLOSSARY
ABN
Australian Business Number
ACIR
Australian Childhood Immunisation Register
Australian Standard
Vaccination
Schedule
Recommendations made by the National Health and Medical Research
Council which provide details of vaccinations and vaccines for all Australian
children
AWA
Australian Workplace Agreement
Balimed
Assistance to victims of the Bali tragedy for medical treatment
BI
Business Improvement
BMMS
Better Medication Management System
Budget
Refers to Australian Government Budget
Bulk billing
When a medical practitioner bills Medicare directly, accepting the Medicare
benefits as full payment for the service
CAC Act
Commonwealth Authorities and Companies Act 1997
Consumer Advisory
Committee
Stakeholders who advise HIC on key consumer health issues
Clinical Advisory
Groups
Medical practitioners who are responsible for identifying indicators of best
practice that can be supported using HIC data
CPI
Consumer Price Index
CPSU
Community and Public Sector Union
CTS
Claims Transmission System
DC
Distribution centre
eBusiness
The application of electronic communication methods such as the internet
or computer networks to conduct business transactions between HIC and
other stakeholders
eLearning
Electronic means (intranet, internet, CD ROM) to deliver course content
EFT
Electronic funds transfer
EHR
Electronic health record
FASAC
Fraud and Service Audit Committee
FOI
Freedom of Information
GP
General practitioner
GPII
General Practice Immunisation Incentives scheme
GST
Goods and Services Tax
HALO
Health Analysis Online project
HeSA
Health eSignature Authority Pty Ltd
HIC
Health Insurance Commission
HIC Act
Health Insurance Commission Act 1973
IBIS
Integrated Business Information system
IBM GSA
International Business Machines Global Services Australia
IBNR
Incurred But Not Reported
IME
Improved Monitoring of Entitlements
Immunisation
Registered medical practitioner or ancillary providers such as hospitals,
local councils and immunisation clinics
provider
Inappropriate
practice
Information
management
Where a Professional Services Review Committee could reasonably
conclude a medical practitioner's conduct in relation to the rendering or
initiation of a service would be unacceptable to their general body of peers
Management of the acquisition, organisation, storage, retrieval, and
distribution of health information in order to improve health outcomes
ISB
Information Services Branch
IT
Information technology
KM
Knowledge Management
LSPN
Location Specific Practice Number
MDOs
Medical Defence Organisations
Medicare easyclaim
Provides customers with the option of lodging Medicare claims from
locations other than a Medicare office
NACCHO
National Aboriginal Community Controlled Health Organisations
OH&S
Occupational health and safety
Output Pricing
Agreement
An agreement that defines the financial relationship between HIC and
another government agency
PBS
Pharmaceutical Benefits Scheme
PHARIA
Pharmacy Accessibility / Remoteness Index of Australia
PIP
Practice Incentives Program
Professional
Services Review
Committee
An independent committee comprising a medical practitioner's peers
formed to determine if a medical practitioner has engaged in inappropriate
practice
PKI
Public Key Infrastructure provides a secure method for the electronic
transfer of data or information
Reciprocal Health
Care Agreement
An agreement between the Australian Government and another nation to
provide immediately necessary medical treatment to overseas visitors
RPBS
Repatriation Pharmaceutical Benefits Scheme
Stakeholder
Any individual or organisation with an interest, stake or ownership in the
outcome of an activity conducted by HIC
SWIM
Senior Women in Management program
UMP
United Medical Protection Limited