Medicare benefits for psychiatric services

Report of an examination by the Human Rights and Equal Opportunity Commission under the Disability Discrimination Act of Group A8 of the Health Insurance (1996 - 1997 General Medical Services Table) Regulations.

Summary of findings

In the Human Rights and Equal Opportunity Commission's view, the restrictions which were introduced in the 1996 Budget on Medicare benefits in relation to certain psychiatric services included restrictions which had a discriminatory impact on people with a psychiatric disability and which accordingly were not consistent with the objects of the Disability Discrimination Act.

Modifications which were made to the relevant regulations (effective from 1 January 1997) with the introduction of Medicare Item 319 addressed some but not all concerns in this respect.

It is regrettable that the Government considered that it was not able to undertake the consultations which led to these modifications prior to the original Budget decision.

As a result of further modifications to the regulations, introduced effective from 1 November 1997 following further consultations, HREOC is unable to conclude that the Regulations as most recently revised remain discriminatory or inconsistent with the objects of the DDA.

In HREOC's view the restrictions which remain are now more closely comparable with those which apply to Medicare benefits in relation to a range of other areas of medical treatment, rather than being properly characterised as discriminatorily singling out or stigmatising psychiatric treatment and psychiatric patients.

HREOC urges continued review of the operation of the relevant provisions, in consultation with consumers and the professional bodies concerned, to ensure that they operate in a manner which is non-discriminatory and which is consistent with and promotes the right of people with a psychiatric disability to equality with all members of the Australian community.

Introduction

In its 1996 budget the Federal Government announced a change in the Medicare scheme which resulted in a reduction in the scheduled fee, and therefore the Medicare refunds available, after patients have attended a private psychiatrist more than 50 times in a year. These changes were effected in Group A8 of the Health Insurance (1996 - 1997 General Medical Services Table) Regulations (No. 230 of 1996). (Consultations in nursing homes and hospitals were not included within these items and are not subject to these limitations.)

The Group A8 Regulations were later amended to include item 319, which commenced on 1 January 1997. Item 319 made provision for an extension to up to 160 consultation fees, which however were only able to be claimed where certain preconditions were met. Those preconditions were that the patient should have:

a history of severe sexual or physical abuse which has lead to a psychiatric illness, or has been diagnosed as suffering from borderline personality disorder or anorexia nervosa or bulimia nervosa; and
been rated with a level of functional impairment within the range of 1 to 50 according to the Global Assessment of Functioning Scale; and
a history of failed related psychiatric treatment.

(It is important to note that further revisions to the Regulations, effective from 1 November 1997, make substantial revisions in this respect. These revisions and their relevance to the Commission's examination will be discussed later in this report.)

The Human Rights and Equal Opportunity Commission ("HREOC") received a number of complaints under the DDA that the Regulations discriminated against people with psychiatric disabilities. Those complaints were dismissed because the subject matter of the complaints concerned the law itself rather than a discriminatory action of any person or organisation. The DDA makes discrimination unlawful in the administration of Commonwealth laws or programs. It does not make discrimination unlawful in the law itself.

However, the functions of HREOC under the DDA do include examining enactments for consistency with the objects of the DDA and reporting on the results of any such examination. The Regulations are an enactment for this purpose.

At its meeting in February 1997 HREOC resolved to examine the Regulations concerned for consistency with the objects of the Disability Discrimination Act (DDA). This examination, under section 67(1)(iI) of the DDA, was conducted on behalf of the Commission by the Disability Discrimination Commissioner.

There are substantial differences between an inquiry into a complaint under the DDA and the present examination. The subject matter into which HREOC may inquire in this examination is broader than in dealing with a complaint, but HREOC's authority to determine what the outcome should be is considerably more limited in this examination than in dealing with a complaint of unlawful discrimination.

The DDA does not transfer to HREOC, or to the courts, the power of government to decide how extensive its programs should be, including in providing assistance with medical treatment. Nor does the DDA confer on HREOC or the courts the power of Parliament to decide what the law will be.

For this reason, the DDA makes it unlawful only to discriminate in the administration of laws or programs. The DDA does not give HREOC power to determine authoritatively that the scope of a program or a law should be broader or different.

On these issues, HREOC is rather allocated the function of reporting and providing advice. Government and Parliament may take into account this advice in exercising their undisputed responsibilities, although not legally bound to do so. The public, of course, may also consider advice provided by HREOC in forming their own views of the exercise by government and Parliament of their responsibilities. In this sense, HREOC's power to examine and report on enactments is not a replacement for the political process or the responsibility of government, but may serve as an aid to their functioning.

Objects of the DDA

The objects of the DDA are:

"to eliminate, as far as possible, discrimination against persons on the ground of disability," in areas including existing laws, the administration of Commonwealth laws and programs, and the provision of services;
to ensure, as far as practicable, that persons with disabilities have the same rights to equality before the law as the rest of the community; and
to promote recognition and acceptance within the community of the principle that persons with disabilities have the same fundamental rights as the rest of the community.

Draft report issued for consultation

In August 1997 the Disability Discrimination Commissioner circulated a "draft report" for consultation with interested parties.

The draft report referred to evidence of financial and emotional disadvantage being experienced or apprehended as a result of the restrictions imposed on Medicare benefits in this area. It expressed the view that this disadvantage did not constitute discrimination as defined for the purposes of the DDA, but that the regulations did not promote the objects of the DDA.

This final report maintains the view expressed in the draft report that no direct discrimination can be found.

HREOC accepts the view indicated in a number of submissions that a finding of indirect discrimination should not have been excluded in relation to the regulations as originally issued and as modified up to August 1997. However, as discussed later in this report, this revised finding of indirect discrimination itself now requires revision in view of further modifications made to the regulations, effective from 1 November 1997.

The draft report discussed arguments of defects in the regulations, and evidence of disadvantage which had resulted or might result from those defects, in relation to the second and third objects of the DDA (those of ensuring that persons with disabilities have the same rights to equality before the law as the rest of the community and of promote recognition and acceptance within the community of the principle that persons with disabilities have the same fundamental rights as the rest of the community).

HREOC accepts that this evidence and argument would have been more appropriately taken into account in considering whether the regulations were discriminatory, rather than being applied (as in the draft report) only to issues of whether the enactment concerned promoted the objects of the DDA (or, more properly speaking, was consistent with those objects).

If an enactment is discriminatory, it follows that it will not be consistent with the objects of promoting equality before the law and promoting recognition of the principle that people with a disability have the same fundamental rights as all members of the community.

If an enactment establishing entitlement to benefits is not discriminatory but is less extensive in the entitlements provided for than may be desired, this does not mean that the enactment is inconsistent with the objects of the DDA, notwithstanding that a more extensive or generous set of entitlements might be found to promote the objects of the DDA more extensively.

Direct discrimination

The DDA defines direct discrimination as occurring where a person with a disability is less favourably treated, because of the disability, than a person without the disability would be treated in comparable circumstances.

As noted in the draft report, direct discrimination on the basis of disability cannot be found in the regulations which are the subject of this examination.

People with a psychiatric disability are not, under the regulations, denied access to benefits in relation to the same treatment for which people without a psychiatric disability are granted benefits. Distinctions in available benefits are not made by reference to the disability which a person has, but by reference to the type and extent of medical treatment concerned.

(The situation is similar in this respect to that dealt with by the President of HREOC in Scott and others v Telstra Corporation. Mr Scott was not refused telephone service on the basis of his disability; Telstra was ready to provide him with a standard handset on the same terms as other subscribers, although it was acknowledged this would be no use to him as a Deaf person. The problem was rather one of indirect discrimination, in that there was found to have been a condition or requirement imposed of being able to use a standard handset in order to use the network.)

Indirect discrimination

Indirect discrimination under the DDA occurs where a condition or requirement is imposed; which a person with a disability cannot or does not comply with; which a substantially greater proportion of persons without than with the disability can comply with; and which is not reasonable.

The draft report circulated by the Disability Discrimination Commissioner stated that HREOC was unable to find indirect discrimination in the relevant regulations. It referred to difficulties in identifying a condition or requirement which had been imposed with disparate impact as between people with a psychiatric disability and people without, as well as to difficulties in finding that there had been a condition or requirement imposed with which people with a psychiatric disability could not comply.

A number of submissions in response to the draft report took issue with this failure to find indirect discrimination.

HREOC is persuaded by these submissions that a condition or requirement could be found to have been imposed in terms such as the following: that in order to have access to benefits without the restrictions imposed by the regulations, the type of treatment required by a patient needed to be other than intensive psychotherapy.

Clearly, such a condition or requirement would at least be capable of having a disparate impact on people with a psychiatric disability, or with a particular type or degree of psychiatric disability (compared to people without such a disability), notwithstanding that not all people with a psychiatric disability require this type of treatment, and notwithstanding that (as pointed out be the Department of Health and Family Services) some other types of treatment are also subject to restrictions.

It could be argued that limitation of Medicare benefits to a particular level in relation to some types of treatment is not a "condition or requirement" imposed on access to the program, but simply reflects the limits of the program itself.

As noted above, this argument indicates one reason why HREOC was unable to deal with this matter as a valid complaint of unlawful discrimination. However, the current examination is concerned with decisions by government on what the extent of the relevant program should be, as reflected in the regulations. In this context HREOC considers that it should be much less ready to take the extent of a program as given, and any limitations on that extent, as features of the program itself, rather than as conditions or requirements capable of being reviewed for discriminatory effect.

It is necessary, accordingly, to examine the reasonableness of restrictions imposed by the regulations.

High Court and Federal Court authority on the meaning of reasonableness in Australian discrimination law indicates that reasonableness should be assessed in all the relevant circumstances, taking into account the impact on persons affected by the condition or requirement, as well as the circumstances of the person or organisation imposing the condition or requirement. The purpose for which a condition or requirement is imposed is relevant, as is the proportionality of the condition or requirement to that purpose. It is also clear that a condition or requirement which might otherwise be reasonable can be found to be unreasonable if administered unreasonably.

In announcing the relevant regulations, the Government identified two principal purposes: to redress uneven distribution of scarce psychiatric resources; and to address possible over-servicing by some practitioners at public expense.

These must be conceded to be legitimate and important purposes for Government in administering the Medicare program. However, submissions to HREOC, reflected in the draft report, questioned the appropriateness of the means adopted in the regulations for these purposes in view of a number of concerns. These concerns related both to the details of Item 319 and to the adequacy of access to benefits apart from that item.

Item 319 created a special category for patients who fit certain criteria to receive up to 160 consultations at the full scheduled fee. The preconditions, when the item was introduced, were that the patient:

has a history of severe sexual or physical abuse which has lead to a psychiatric illness, or has been diagnosed as suffering from borderline personality disorder or anorexia nervosa or bulimia nervosa; and
has been rated with a level of functional impairment within the range of 1 to 50 according to the Global Assessment of Functioning Scale; and
has a history of failed related psychiatric treatment.

Reasonableness of these restrictions

In its response to the draft report issued by the Disability Discrimination Commissioner, the Department of Health and Family Services emphasised the requirement of the Health Insurance Act 1973 that Medicare benefits be paid only for services which are clinically relevant. A "clinically relevant service" is defined as "a service rendered by a medical or dental practitioner or an optometrist that is generally accepted in the medical, dental or optometrical profession (as the case may be) as being necessary for the appropriate treatment of the patient to whom it is rendered". The Department pointed out that the fact that a particular treatment might be regarded as effective and be the treatment of choice in certain circumstances by some patients or some practitioners did not suffice to meet this definition of clinical relevance, for medical treatment generally and for psychiatric treatment in particular.

HREOC considers that it must accept that it will generally be reasonable, having regard to the purposes of the Medicare program and to the responsibilities of government for effective use of public funds and for equitable access to health care, for Medicare benefits to be restricted to treatments which meet this test of clinical relevance defined by reference to general professional acceptance. (There may, however, be exceptional cases where treatment is of sufficiently clear benefit that it would be unreasonable to deny benefits in respect of this treatment although it does not command, or has not yet attained, general professional acceptance.)

It appears clear from statements by the Minister for Health and Family Services, and from submissions to HREOC by the Department of Health and Family Services, that the limitations on benefits as originally announced in the 1996-97 Budget were more restrictive than has been found to be required or justified by reference to this standard of clinical relevance. The Minister's standard response to correspondence on this matter stated:

I regret that the necessity for budget confidentiality prevented any consultation with the medical profession or patients on this issue prior to the Budget. However, since then my Department has met with the Royal Australian & New Zealand College of Psychiatrists (RANZCP) and the Australian Medical Association (AMA) to discuss these savings measures, including whether there are other means of achieving the Government's objectives.

HREOC finds it surprising and regrettable that budget confidentiality should be interpreted as preventing consultation prior to the introduction of the restrictions announced in the 1996 Budget. As indicated by submissions to HREOC, and by comments in public debate, restrictions in this area had the potential to cause, and did cause, fear, uncertainty and distress to particularly vulnerable members of the community, and caused many psychiatric patients to feel adversely singled out by the government in its efforts to control budget expenditures and restructure patterns of service provision.

HREOC's examination was concerned, however, with the regulations as modified by the inclusion of Item 319 rather than with the Budget measures as originally introduced.

The response of the Department of Health and Family Services to the draft report issued by the Disability Discrimination Commissioner stated:

Although the Government announced in the 1996 Budget its intention to better target Medicare outlays on psychiatry by reducing the Schedule fees for out-of-hospital psychiatrists' consultations where those consultations exceed 50 in a year for an individual patient, it also clearly was prepared to modify the changes where there was evidence that more than 50 consultations were clinically required. This was the purpose of the working party that was established with the Australian Medical Association and RANZCP which led to the introduction of Item 319 on 1 January 1997.

The Department's submission continued, regarding Item 319:

The basis of the item description sets out those circumstances where the clinical need for more than 50 out-of-hospital psychiatric attendances has been supported by scientific evidence as to the efficacy and effectiveness of the treatment. Let me emphasise this last point again. In the opinion of the working party, which included the most authoritative body of psychiatric expertise in Australia, the new Item 319 took account of all the circumstances where there was evidence that more than 50 out-of-hospital consultations might be required for the effective treatment of the patient.

HREOC accepts that the conclusions of this Working Party should be given considerable weight in examining whether the restrictions in Item 319 as introduced were based on reasonable grounds at the time of their introduction and were reasonable; and that this point could have been more clearly stated in the draft report circulated by the Disability Discrimination Commissioner.

However, as detailed in the draft report, a number of substantial concerns remained after the introduction of Item 319.

Restricted range of causes of disorders covered

Item 319 in its original form applied to disorders other than borderline personality disorder, anorexia nervosa or bulimia nervosa only where such other disorder arose from "a history of severe sexual or physical abuse". Submissions to HREOC questioned the exclusion of severe psychological abuse and also questioned the meaning of "severe" sexual abuse in this context. Submissions also referred to difficulties for patients in identifying or disclosing the cause of their own illness.

Restricted range of disorders covered

Other than psychiatric illnesses caused by a history of severe sexual or physical abuse, Item 319 in its original form applied only to the disorders of borderline personality disorder, anorexia nervosa or bulimia nervosa. Submissions questioned the exclusion of other forms of personality disorder.

Loss of privacy

Qualification for benefits under item 319, as originally introduced, required express identification on rebate documents of highly sensitive and potentially stigmatising information (beyond the necessary disclosure of the fact of a psychiatric disability). In particular HREOC received evidence of Medicare benefit claimants being publicly questioned regarding a history of sexual abuse which the conditions of Item 319 necessarily identified to staff processing claims.

Evidence indicated that the humiliation involved was sufficiently serious to deter some people from making claims to which they were entitled.

History of failed psychiatric treatment

Submissions criticised this requirement as inappropriately privileging other (in some cases more intrusive or expensive) forms of treatment over intensive psychotherapy, and as likely to exclude some patients (in particular young people) from early access to effective therapy.

Required level of functional impairment

Submissions criticised the requirement to be assessed at a level of 50 or less (that is, at the most severely impaired level) under the Global Assessment of Functioning to qualify for benefits under Item 319. Concern was expressed that the effect of this would be that people could receive treatment for a crisis, but not treatment which prevents one. Concern was also expressed that a person could become ineligible for benefits for counselling or psychiatric treatment precisely because the treatment was being effective in improving or maintaining the person's functioning, even though the need for that treatment had not abated.

Effect of these issues on reasonableness of restrictions on benefits

The Commission considers that, in view of these concerns, there would have been grounds for concluding that the limitations on entitlements to benefits regarding psychiatric treatment remained unreasonable in some respects even after the introduction of Item 319, and thus that issues of discrimination as defined in the DDA continued to be raised.

However, in its response to the draft report circulated by the Disability Discrimination Commissioner, the Department of Health and Family Services advised that:

... the working party has continued to meet and recently agreed on some modifications to the description of Item 319, again based on evidence and expert opinion, to ensure that people in genuine need of intensive long term psychiatric care have access to such treatment without undue financial hardship, where there is evidence that such treatment is likely to be effective.

The Department advised that, subject to Ministerial and parliamentary approval, the revised item description was expected to commence from 1 November 1997. Details were not provided to HREOC in the Department's response pending Cabinet consideration of the changes concerned.

The Department requested more time to provide further information to HREOC. The Disability Discrimination Commissioner agreed to this request on 26 September 1997. On 15 October 1997 HREOC received advice from the Department of Health and Family Services regarding the revised description for Medicare Item 319, which as foreshadowed in the earlier submission was to come into effect from 1 November. The submission noted that the modifications had been agreed with the Royal Australian and New Zealand College of Psychiatrists.

Effect of revised regulations

The revised item 319 covers an attendance of more than 45 minutes at consulting rooms, where the patient has:

been diagnosed as suffering from severe personality disorder, anorexia nervosa, bulimia nervosa, dysthymic disorder, substance-related disorder, somatoform disorder or a pervasive developmental disorder; and
for persons 18 years and over, been rated with a level of functional impairment within the range 1 to 50 according to the Global Assessment of Functioning Scale;
where that attendance and any other attendance to which items 300 to 308 apply do not exceed 160 attendances in a 12 month period.

(The accompanying Explanatory Notes indicate that where a patient who meets the criteria defined in item 319 attends a psychiatrist on more than 160 occasions in 12 months these attendances would be covered by items 310 to 318, and that it is expected that in normal clinical practice it would be generally inappropriate for treatment out of hospital to exceed 220 sessions in any 12 months.)

Accordingly, by reference to the areas of concern set out above, it can be seen that the item description:

no longer refers to patients having a history of severe sexual or physical abuse;
covers personality disorders generally rather than being restricted to borderline personality disorder and also extends to person with a pervasive developmental disorder; and
no longer requires that patients must have had a history of failed related psychiatric treatment (although the accompanying Explanatory Notes indicate that it is "generally expected" that other appropriate psychiatric treatment such as shorter term psychotherapy, long term but less frequent psychotherapy, pharmacological therapy or cognitive behaviour therapy has been used for a suitable period).

HREOC welcomes these modifications.

It can also be seen that the requirement that a patient be assessed with a level of functional impairment of from 1 to 50 according to the Global Assessment of Functioning Scale has been removed in relation to patients under 18 years old (although the accompanying Explanatory Notes indicate that for these and other patients "it must be evident that a significant level of impairment exists which interferes with the patient's quality of life").

In relation to patients 18 years old or more, the requirement that a patient be assessed with a level of functional impairment of from 1 to 50 according to the Global Assessment of Functioning Scale has been maintained.

The accompanying Explanatory Notes now make clear that the score on this scale should be recorded at the time of commencement of the course of treatment in question. This would appear to address at least partially one of the concerns expressed in this area, in relation to the prospect that the effectiveness of treatment in improving a person's functioning could render the person ineligible for treatment which remained necessary.

To the extent that concerns expressed in submissions remain relevant, in particular in relation to the required level of impairment, HREOC is unable to conclude that the Regulations as most recently revised remain discriminatory or inconsistent with the objects of the DDA, having regard to the substantial modifications which have now been made in consultation with the Royal Australian and New Zealand College of Psychiatrists.

HREOC hopes that the conduct of this examination, and the contributions of the people with a psychiatric disability, mental health professionals and others who made submissions, has assisted in achieving these improvements. HREOC urges continued review of the operation of the relevant provisions, in consultation with consumers and the professional bodies concerned, to ensure that they operate in a manner which is non-discriminatory and which is consistent with and promotes the right of people with a psychiatric disability to equality with all members of the Australian community.

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