Section 01Introduction

Letter of transmittal

Senator the Hon Chris Ellison

Minister for Human Services

Parliament House

CANBERRA ACT 2600

Dear Minister

It is my pleasure to present Medicare Australia’s Annual Report for 2006–07 as required by section 70(1) of the Public Service Act 1999 for tabling in Parliament.

This report has been prepared in accordance with the Requirements for Annual Reports, approved on behalf of the Parliament by the Joint Committee of Public Accounts and Audit as required under section 70(2) of the Public Service Act 1999.

Yours sincerely

Catherine Argall PSM

28 September 2007

Chief Executive Officer’s review

At a time where our key message has been ‘Medicare Australia is changing’, flagging our intention to leverage our great brand for greater public convenience, we have had a highly successful and productive year. While maintaining our focus on our traditional health related programs, we are becoming involved in other areas of service delivery, as our traditional business is increasingly moving to electronic services.

In addition to delivering major government programs such as Medicare, the Pharmaceutical Benefits Scheme and payments for aged care providers, Medicare Australia implemented a range of new government initiatives. Family Assistance services are now available through all Medicare offices and applications for the Australian Government’s LPG vehicle rebate can also be lodged at a Medicare office.

Medicare Easyclaim has been a major priority for the organisation. Medicare Australia has proved its responsiveness, with the delivery of this additional electronic service. Our systems and technical infrastructure were in place by April 2007, more than three months ahead of schedule.

The success of Medicare Easyclaim to date is the result of the substantial efforts we have made in working with banks, listening to stakeholders and supporting our people. Medical practitioners now have a choice of electronic channels to use to make Medicare claims. We continue to work cooperatively with all peak medical groups, suppliers and across government to deliver greater convenience to the Australian public in accessing Medicare. This will be a key focus for the coming year.

The take-up of PBS Online is an impressive achievement for Medicare Australia. We successfully partnered with the Pharmacy Guild of Australia and the software industry to encourage and support pharmacies to sign up to online claiming. There were 4 490 pharmacies registered for PBS Online at 30 June 2007.

Medicare Australia continues to work closely with the Department of Human Services to progress the development and implementation of the access card initiative. We are well advanced in ensuring that our organisation is able to seamlessly transition to the use of the access card across the broad range of programs we administer including Medicare and PBS.

More and more Australians are choosing to deal with Medicare Australia online. We now have more online services offering greater choice and convenience for people to do business with us. This is a clear demonstration that Australians trust us.

In March 2007, we added our latest online service—the ability to view and print Medicare benefit tax statements online—in addition to our real-time update of the Australian Taxation Office’s e-tax product.

At 30 June 2007, over 216 000 people were registered for Online Services, compared to 33 774 people registered the previous year. This year we successfully processed 516 549 online service transactions, including over 132 000 downloads to e-tax. People dealing with Medicare Australia

And the Australian Taxation Office now enjoys greater convenience in the way they do business with government. The service also reduces the need for the printing and mailing of statements.

The Family Assistance service offer is a huge success story for Medicare Australia. The rollout of extended Family Assistance services to all 238 Medicare offices was completed in November 2006, eight weeks ahead of schedule.

In 2006–07, nearly 540 000 people received face-to-face Family Assistance services through Medicare offices. In December 2006, 97 per cent of respondents to a feedback survey told us they were satisfied with our service. We see this service offering as a strong part of our future.

We are a leader in service delivery on many fronts. We are achieving great things by working in partnership with the public, providers, our policy and business partners and our people.

Medicare Australia cares about convenience for the Australian community. As an agency with one of the largest footprints in the community, we have a strong reputation for performance in service delivery. This year we achieved certification in the International Customer Service Standard for the third year in a row.

Our stakeholder satisfaction levels remain very high. The results from recent research continue to be positive, with high levels of satisfaction across all sectors ranging from 87 per cent to 96 per cent satisfaction with Medicare Australia. The most notable results were the increase in practitioner satisfaction, from 71 per cent in 2006 to 89 per cent in 2007 and the increase in practice manager satisfaction, which rose from 86 per cent in 2006 to 95 per cent in 2007. Public satisfaction was 90 per cent with an increase of 27 per cent in the very satisfied category.

Given the amount of change facing Medicare Australia, one of the most pleasing results in 2006–07 was the increase in our overall staff satisfaction results. Our staff see a strong connection between what they do and the value we provide to the Australian public. More than 79 per cent of our people are satisfied with Medicare Australia as an employer. This is an increase of over seven per cent from the results in 2005–06. The increased satisfaction result is a tribute to the dedication and commitment of all our people.

In addition to the increased satisfaction result, Medicare Australia won two major awards in the Customer Service Institute of Australia’s 2006–07 Australian Service Excellence Awards. Medicare Australia was a finalist in three categories – National Service Charter, Large Business (Medicare Office Network) and Call Centre (Queensland). We won the National Service Charter and Large Business categories.

Financial performance has been a key focus area for Medicare Australia for the past three years. I am proud to report that we have achieved a real turnaround in our financial performance by exercising strong financial discipline. This year, Medicare Australia recorded a surplus of $2.3 million.

This is an improvement on the previous year, when we reported a loss of $6.8 million. Compliance activities are an important part of achieving community confidence. Medicare Australia’s focus in 2006–07 has been on reviewing the legislative, governance and resourcing framework supporting compliance activities and identifying opportunities for improvements. In 2006–07, this has resulted in a 32 per cent increase in the number of completed investigation cases into potential fraud committed against Medicare Australia’s administered payments and a 24 per cent increase in the number of completed reviews into potential inappropriate practice by medical practitioners. Referrals of cases to the Commonwealth Director of Public Prosecutions and the Director of Professional Services Review have also increased.

Closer working relationships have been developed with the Department of Health and Ageing, the Commonwealth Director of Public Prosecutions and the Director of Professional Services Review.

These relationships have helped to improve communications with health professionals and the outcomes of our compliance activities. In November 2006, Medicare Australia’s Corporate Management Committee endorsed the National Indigenous Strategy. The strategy was developed to provide a blueprint for the next three years of Medicare Australia’s actions to improve Indigenous access to our programs and services.

Since the establishment of the National Bowel Cancer Screening Register in August 2006, Medicare Australia has sent more than 405 000 invitations to participate in the screening, to eligible Australians in all states and territories. We have received positive feedback from a number of participants who strongly support the program. We have also received thanks from some participants whose test results were positive, indicating a possible problem to which they might not have been alerted had they not participated in the program.

One of the key challenges ahead for Medicare Australia is to promote the take-up of electronic Medicare claiming at doctors’ surgeries. A major focus for 2007–08 will be to execute contracts with more financial institutions to deliver Medicare Easyclaim, in order to increase the availability of this claiming choice. Medicare Australia will also be working closely with medical practices to enhance understanding of electronic claiming choices and on how each option, or a combination, can fi t their business needs.

Medicare Australia is actively identifying and responding to challenges arising from changes taking shape in the health system. These include impacts from eBusiness, growth in types of services and providers, community demand for services beyond medical needs, identity crime and the increasing complexity in how medicines are prescribed and medical services are provided.

These challenges create opportunity and pressure in the system for non-compliance, which generally takes the form of incorrect claiming or inappropriate practice. As a result, the National Compliance Program for 2007–08 has been developed to deal with these areas of potential non-compliance.

The coming year will be challenging, as we focus on business transformation in response to the changing nature of our service delivery. We will strive to build on our great reputation to ensure the community’s continuing confidence in Medicare Australia. We will be agile and flexible in our delivery of services for government and the community.

Catherine Argall PSM

Chief Executive Officer

Section 02

About Medicare Australia

Medicare Australia touches the lives of all Australians. We play a vital role in delivering a wide range of services on behalf of the government to the Australian public.

The programs we administered during 2006–07 included Medicare, the Pharmaceutical Benefits Scheme (PBS), the Australian Childhood Immunisation Register, the 30% Rebate on Private Health Insurance, the Bowel Cancer Screening Register and the Australian Organ Donor Register. These programs demonstrate our strong presence in the Australian community.

Medicare Australia also plays an integral role in the Australian health sector by administering a wide range of health-related programs, such as aged care payments, the Practice Incentives Program, the General Practice Immunisation Incentive Scheme, the Rural Retention Program and the Training for Rural and Remote Procedural GPs Program. Medicare Australia is also changing. While maintaining our focus on our traditional health-related programs, we are becoming increasingly involved in other areas of service delivery. Family Assistance services are now available through all Medicare offices and applications for the Government’s LPG Vehicle Scheme rebate can also be lodged at a Medicare office. Medicare Australia has heard what all Australians want from us.

  • “Make it easy for me”
  • “Get it right”
  • “Be genuinely interested in me”
  • “Respect my rights”.

Medicare Australia cares about choice and convenience for the Australian public. All aspects of our service delivery are tested against the community ‘wants’. We listen when people tell us what they really want from us. Every staff member takes pride in providing friendly, timely and accurate service, protecting the privacy of the personal information we hold and making the experience of the public and health providers positive. Medicare Australia sits within the Human Services portfolio, under the responsibility of the Minister for Human Services, Senator the Hon Chris Ellison. We work together with health care providers, peak health bodies, external stakeholders and other agencies within the portfolio.

Our purpose is ‘working together to improve the health and wellbeing of Australians by delivering information and payment services’.

Medicare Australia is a prescribed agency under the Financial Management and Accountability Act 1997 and a statutory agency under the Public Service Act 1999.

We administer programs on behalf of the Department of Health and Ageing (DoHA), the Department of Veterans’ Affairs (DVA), the Department of Families, Community Services and Indigenous Affairs (FaCSIA), the Department of Industry, Tourism and Resources (DITR) and the Department of Health, Western Australia. Section 4 of this annual report has further information about our role and performance for these programs.

Each year, Medicare Australia processes around 500 million transactions and pays more than $30 billion in benefits and payments to the Australian public and health care providers.

The government expects Medicare Australia to protect the integrity of the programs it administers. An important part of this role is ensuring that the right person gets the right payment at the right time.

We actively support and promote a system of voluntary compliance through a range of education programs aimed both at the public and health care providers. We use a range of strategies to identify, monitor and change non-compliant behaviour, escalating to rigorous pursuit of deliberate non-compliance and fraud.

Medicare Australia uses a range of communication tools to inform the public, health care providers and our stakeholders about our services and programs. Medicare offices and Access Point booths enable us to communicate with the Australian public through posters, brochures and flyers. Information our service officers receive, through face-to-face interactions, also allows us to target our communications.

As the need arises, we use media liaison and paid media advertising to communicate information about specific programs and services. Pharmacies and doctors’ surgeries carry Medicare brochures and our website also carries a wide rangeof information.

Human ServicesPortfolio

Overview

In October 2004, the Department of Human Services was established within the Finance and Administration Portfolio. In January 2007, the Department became an

Australian Government portfolio department in its own right. Its primary role is improving the development and delivery of government social and health related services to the Australian people.

The Minister

The Minister for Human Services is Senator the Hon Chris Ellison, who has been a senator for Western Australia since 1993 and Minister for Human Services since 9 March 2007.

The Minister is responsible for the administration of the following legislation:

  • Australian Hearing Services Act 1991, except to the extent that it is administered by the Minister for Health and Ageing insofar as it relates to the exercise of the powers and functions conferred on the Child Support Registrar under the Act
  • Child Support (Assessment) Act 1989, insofar as it relates to the exercise of the powers and functions conferred on the Child Support Registrarunder the Act
  • Child Support (Registration and Collection) Act 1988, Insofar as it relates tothe appointment of theRegistrar and the exercise of the powers and functionsconferred on the ChildSupport Registrar underthe Act
  • Commonwealth Services Delivery Agency Act 1997
  • Medicare Australia Act 1973.

During the reporting period, the position of Minister For Human Services was also held by The Hon Joe Hockey MP (to January 2007) and the then Senator the Hon Ian Campbell (to March 2007).

Portfolio structure
  1. The Portfolio Department of Human Services (DHS) includes the Core Department, the Child Support Agency (CSA) and CRS Australia:
  • the Core Department directs, coordinates and brokers improvements to service delivery across Human Services agencies
  • the Child Support Agency helps separated parents transfer payments for the benefit of their children
  • CRS Australia provides vocational rehabilitation services to people with a disability, injury or health condition, and helps employers keep their workplaces safe.
  1. Centrelink delivers a range of government payments and services for retirees, families, carers, parents, people who are seeking work or studying, people with disabilities, Indigenous people, and people from culturally and linguistically diverse backgrounds, and provides wider services at times of major change.
  2. Medicare Australia administers a range of health and payment programmes, including Medicare, the Pharmaceutical Benefits Scheme, the Australian Organ Donor Register, the Australian Childhood Immunisation Register and aged care payments to approved aged care providers. Medicare Australia also delivers Family Assistance services.
  3. Australian Hearing provides a range of hearing services for a broad group of eligible Australians, including children and young people up to the age of 21 years, eligible adults and aged pensioners, and war veterans.
  4. The HSA Group focuses primarily on providing occupational health, safety and medical assessments.

Performance informationfor outcome

Outcomes and outputs

Medicare Australia has one outcome This is achieved through one output.

Outcome 1: Improving Australia’s health through payments and information.

Output Group 1.1: Delivery of Australian Government health payments and information.

Performance information for Outcome 1

Medicare Australia’s business performance is guided by the themes articulated in the Medicare Australia Strategic Direction Statement.

Table 1 – Performance information for Outcome 1

Strategic Themes / Key Performance Indicator / Business Performance
Delivering great customer service / Client and provider satisfaction with the services provided by Medicare Australia. / 2006–07 Satisfaction research results
Initiatives are implemented on time, within budget and to expectations. / Community – 90%
Pharmacists – 87%
Practice Managers – 95%
Practitioner – 89%
Aged care providers – 96%
Medicare Australia continues to work closely with our strategic partners to provide advice and guidance and to implement new policy and government initiatives in accordance with agreed schedules. We continue to deliver services on behalf of other agencies in line with agreed Key Performance Indicators.
Providing accurate and reliable information and payments / Payments are accurate and timely.
Staff awareness and procedures protect Customers privacy / Medicare Australia achieved 96% of claims within stipulated payment times against a target of 90%. Accuracy of payments for Medicare was 97.8% (target 97.8%) and 98.4% (target 97.6%) for PBS.
There is a strong culture in Medicare Australia of maintaining our reputation as a reliable custodian and protector of private information. This was identified as the number one priority for Medicare staff in the 2006–07 staff survey. We continue to foster this culture through a number of measures including mandatory privacy training for all staff.
Being a well run organisation / Resources are managed in accordance with the requirements of the Financial Management and Accountability Act and to the financial plan. A sound governance framework is in place. / Medicare Australia achieved an operating surplus of $2.3 million in 2006–07, demonstrating a strong financial management framework.
Medicare Australia has a range of structures in place to ensure that our governance is strong. The primary governance committee is the Corporate Management Committee, which is supported by five subcommittees covering customer service, people, security and eBusiness and technology.
Ensuring the integrity of the government programs we deliver / Education and compliance programs minimise system leakage.
Payments are accurate and timely. / In 2006–07 we developed a range of new approaches in managing compliance across the programs we administer including:
  • the introduction of new risk analysis tools
  • the introduction of a new streamlined Practitioner Review Program
  • an increase in the visibility of the compliance program
  • an improvement in the productivity of compliance operations

Being a valued strategic partner in delivering agreed health and other government initiatives / Strategic partners including the Department of Health, Veterans’ Affairs, Families, Community Services and Indigenous Affairs and Human Services are satisfied with Medicare Australia’s performance. Government initiatives are implemented on time, within budget and to expectations. / Medicare Australia has current Service Level Agreements with DVA, FaCSIA, DIAC, DITR and the Department of Health in Western Australia. A new Memorandum of Understanding is expected to be finalised with DoHA shortly, while its intent and governance framework is already in place.
Being a great place to work / Feedback gained through staff survey is acted on. Staffs have access to development opportunities and participate in individual performance assessments and absenteeism is reduced. / The response rate for Medicare Australia’s 2006–07 staff survey increased by 1% to 91.8% with 78.9% of staff indicating that they experience job satisfaction at Medicare Australia. This is up 7.9% on the 2005–06 staff survey result. Medicare Australia has made a significant achievement in reducing absenteeism. Average unplanned leave was 12.17 days per FTE at 30 June 2007, down from 12.91 days per FTE at June 2006.

Our structure

Medicare Australia’s structure is designed to support our strategic direction and the achievement of our outcome of improving Australia’s health through payments and information.