Introduction

1.1 Medicare is Australia’s national health insurance scheme. Under the scheme, patients may claim a rebate (referred to as a benefit) for specified health or medical services. Services covered by Medicare benefits are detailed in legislation and are collectively known as the Medicare Benefits Schedule (MBS). Each service listed in the MBS has an item number, a descriptor which outlines the type and scope of the service, the Medicare schedule fee¹ and the Medicare benefit (rebate).²

1.2 As the administering department for the Health Insurance Act 1973, the Australian Government Department of Health and Aged Care (Health) is responsible for advising the Australian Government on proposals to add, amend or remove health services listed on the MBS, implementing changes to the MBS as directed by the Australian Government, and ensuring that health providers³ are claiming rebates in accordance with the MBS. Medicare claims and payments are administered by Services Australia, which is directly accountable to the Australian Government for service delivery of programs such as Medicare. Health and Services Australia maintain a program agreement for administration of the Medicare program, which forms part of a joint Statement of Intent between the two entities.

1.3 The MBS has featured a limited range of telehealth service items since 2002. In this report ‘telehealth’ refers to real time clinical consultations conducted via videoconferencing or phone rather than face-to-face. The MBS defines a service via videoconference as ‘telehealth attendance’ and a service via telephone as ‘phone attendance’.

1.4 In late 2019 coronavirus disease 2019 (COVID-19) emerged as a global pandemic and was declared to be a ‘public health emergency of international concern’ by the World Health Organization on 30 January 2020. From January 2020 the Australian Government commenced the introduction of a range of policies and measures in response to the COVID-19 pandemic. The Australian Government’s health and economic response has included:

• travel restrictions, international border controls and quarantine arrangements;
• delivery of substantial economic stimulus, including financial support for affected individuals, businesses and communities; and
• support for essential services and procurement and deployment of critical medical supplies (including the national vaccine rollout).

1.5 In response to the COVID-19 pandemic, between March and May 2020 the Australian Government introduced 281 new telehealth items on the MBS to enable the entire Medicare-eligible population to access a broad range of health services via videoconferencing and phone. Although the temporary telehealth items introduced in response to COVID-19 were initially scheduled to expire on 30 September 2020, the Australian Government postponed their expiry on three occasions in 2020 and 2021.

1.6 On 13 December 2021 the Minister for Health and Aged Care⁴ (the Minister) announced that telehealth would become a permanent feature of Medicare, noting that since March 2020 over 86.3 million telehealth items introduced in response to COVID-19 had been billed for services delivered to 16.1 million patients by over 89,000 providers, totalling $4.4 billion in Medicare benefits. The 2022–23 Budget described the introduction of permanent telehealth as:

the most significant structural reform to Medicare since it began, and has revolutionised the patient-doctor relationship. It is one of the most significant, long term benefits of the Government’s response to the COVID-19 pandemic, providing all Australians with improved access to health services.

Telehealth prior to February 2020

1.7 In 2002 the Australian Government added telehealth psychiatry items to the MBS. In the 2011–12 Budget telehealth services were expanded to a broader range of specialists. The telehealth items were primarily directed at patients in remote and regional areas, residents of aged care facilities in remote and regional locations, and patients of Aboriginal medical services⁵ regardless of location. The telehealth items were provided over videoconference, including ‘patient-end’ support services provided in general practice.⁶ Some of the telehealth items required the provider to have an existing clinical relationship with the patient (defined as three face-to-face consultations with that provider in the preceding 12 months).

1.8 Between 1 November 2018 and 30 June 2020 the MBS contained mental health services provided to patients in drought affected areas⁷ by videoconference. In January 2020 the Australian Government expanded these MBS telehealth services to patients who experienced an adverse change in mental health as a result of bushfires occurring in 2019–20.

1.9 None of the telehealth services listed in paragraphs 1.7 to 1.8 could be provided by phone, or were subject to a requirement that the service be bulk billed.

Telehealth during the COVID-19 pandemic response

1.10 On 17 February 2020 the Australian Health Protection Principal Committee⁸ endorsed the Australian Health Sector Emergency Response Plan for Novel Coronavirus (COVID-19) (COVID-19 Plan). The COVID-19 Plan provided that the Australian Government and state and territory governments would work together to develop new models of care to manage patients during the COVID-19 pandemic and ensure that the provision of primary health care would be adapted to any changes in the needs of vulnerable groups during the outbreak. On 27 February 2020 the Prime Minister announced the activation of the ‘Targeted Action’ stage of the COVID-19 Plan. Health immediately commenced development of a National Primary Care Targeted Action Plan, which proposed six measures to be adopted as part of an overarching strategy for providing primary care during the pandemic. One of the six measures was the creation of temporary MBS items for medical, nursing and mental health attendances delivered via telehealth.

Telehealth for those vulnerable to COVID-19

1.11 On 11 March 2020 the Prime Minister announced that the Australian Government had allocated $100 million in funding for new Medicare telehealth services. The announcement noted that the new Medicare telehealth services would be available via phone or video; bulk billed; and available to people in home isolation or quarantine as a result of coronavirus, as well as specified vulnerable patient groups⁹ regardless of their home isolation or quarantine status.

1.12 Between 12 and 24 March 2020 the Minister and Health made nine determinations under section 3C of the Health Insurance Act 1973 (3C determinations) to implement this package.¹⁰ The 3C determinations specified that services should be provided by videoconference, or by phone where suitable videoconference capabilities were not available. The items could be claimed only if the service was bulk billed, the patient was not admitted to hospital; and there was an existing clinical relationship (defined as one face-to-face consultation in the preceding 12 months). Initially the telehealth items also could be used for any patient if the provider had been infected by COVID-19 or was required to self-isolate, to prevent the provider from transmitting COVID-19 to a patient. On 23 March 2020 Health expanded the eligibility for providers to align it with the definition for vulnerable patients.¹¹

Whole of population telehealth in response to COVID-19

1.13 On 18 March 2020 the Governor-General of the Commonwealth of Australia declared that a human biosecurity emergency exists.¹² Between 18 and 22 March 2020 the Australian Government announced restrictions on commercial and social gatherings, the closure of Australia’s international borders to non-residents and non-citizens, new measures aimed at preventing panic-buying of medicines, and economic stimulus and industry support packages.¹³

1.14 The Minister announced on 23 March 2020 that the Australian Government was examining the expansion of temporary telehealth to the whole population, and on 30 March 2020 that temporary telehealth services would be extended to all persons eligible for Medicare services. A new 3C determination expanded the range of medical services that could be provided by videoconference or phone; removed requirements for providers to have an existing clinical relationship with the patient; and inserted a restriction to prevent items being billed for services with multiple patients simultaneously.¹⁴

1.15 The requirement to bulk bill the new temporary telehealth services was retained for a further week before being limited to concessional and vulnerable patients from 6 April 2020 onwards. The bulk billing requirement was removed completely for specialists, allied health and other specified providers from 20 April 2020.

1.16 Between 3 April and 19 May 2020 the Minister and Health made seven further 3C determinations that expanded the range of services available and corrected errors with previous instruments. By 22 May 2020, 281 telehealth items had been created in response to COVID-19.

Maintenance of COVID-19 telehealth

1.17 As the new telehealth items were originally conceived as a six-month temporary measure, in May 2020 Health commenced planning for the expiry of these items by September 2020. However, due to the ongoing pandemic, the expiry date of the temporary telehealth items was extended in September 2020 (to 31 March 2021), March 2021 (to 30 June 2021) and June 2021 (to 31 December 2021).

1.18 During this period, Health made adjustments to temporary telehealth services, including:

1. reintroduction of the requirement for providers of non-referred services to have a pre-existing clinical relationship with the patient¹⁵;
2. removal of the requirement for providers in general practice to bulk bill telehealth services for concessional and vulnerable patients;
3. curtailment of the range of services that could be delivered by phone (as opposed to videoconference);
4. introduction of general practice phone items for patients located in a COVID-19 hotspot declared by the Australian Government Chief Medical Officer; and
5. introduction of 40 new temporary MBS telehealth services for specialists providing services to private patients admitted to hospital, where the specialist was located in a COVID-19 hotspot or was in mandatory isolation due to COVID-19.

Permanent telehealth

1.19 In June 2020 the Prime Minister wrote to the Minister to advise:

Due to our success in suppressing the spread of the coronavirus and our commitment to transitioning to a COVID-safe economy and society…I consider there is a diminishing need for further [temporary COVID-19] telehealth items. I ask that you seek my agreement to any further changes ahead of a strategic discussion on the future of telehealth and post-COVID-19 primary health care reform…

1.20 Health planned for the incorporation of telehealth as a core initiative in the Australian Government’s primary health care reform package that had been announced in May 2019. The package included the finalisation of a Primary Health Care 10 Year Plan, which would provide a national roadmap for primary health care policy and planning.

1.21 In October 2021 Health released a consultation draft of the Primary Health Care 10 Year Plan, which proposed the continuation of whole of population telehealth on a permanent basis. The consultation draft expressed an intent to increase the uptake of video for telehealth service delivery, and proposed that the requirement for a general practice provider to have an existing clinical relationship with a telehealth patient would be replaced by voluntary patient registration.¹⁶

1.22 On 13 December 2021 the Minister announced that whole of population telehealth would become a permanent feature of Medicare. On 16 December 2021 Health made a 3C determination to permanently retain 211 telehealth items used during 2021.

1.23 Sixteen days after the permanent arrangements commenced, the Australian Government announced it would temporarily reinstate 75 temporary videoconference and phone services that had been permitted to expire on 31 December 2021, in response to a spike in Omicron-variant COVID-19 cases.

1.24 Figure 1.1 depicts the developments in telehealth between January 2020 and June 2022.

Figure 1.1: The expansion of telehealth, January 2020 to June 2022

Note: Stages refer to telehealth expansion implementation stages outlined in a Health fact sheet and other Health documentation (see paragraphs 2.50 to 2.51).

Source: ANAO analysis.

Usage of telehealth items

1.25 Figure 1.2 depicts the dollar value of benefits paid for telehealth services introduced in response to COVID-19.

Figure 1.2: Value of benefits paid for telehealth items introduced in response to COVID-19, January 2020 to June 2022

Source: ANAO analysis of Services Australia data.

1.26 Figure 1.3 depicts the billing of telehealth items introduced in response to COVID-19 by general practitioners, specialists, and allied health professionals between 1 March 2020 and 30 June 2022. The majority of GP and specialist telehealth services were delivered by phone during this period.

Figure 1.3: Medicare Benefits Schedule COVID-19 telehealth item billing, March 2020 to June 2022

Source: ANAO analysis of Services Australia data.

1.27 As a proportion of all MBS services delivered by general practitioners between March 2020 and June 2022, telehealth represented approximately 20 to 30 per cent, depending on the quarter (Figure 1.4).

Figure 1.4: Mode of MBS service delivery, July 2019 to June 2022

Note: Telehealth services preceding 1 January 2020 are not visible in the chart as they comprised less than 0.1 per cent of total services for GPs and all practitioners.

Source: ANAO analysis of Services Australia data.

Rationale for undertaking the audit

1.28 The COVID-19 pandemic and the pace and scale of the Australian Government’s response impacts on the risk environment faced by the Australian public sector. This performance audit was conducted under phase two of the ANAO’s multi-year strategy that focuses on the effective, efficient, economical and ethical delivery of the Australian Government’s response to the COVID-19 pandemic.¹⁷

1.29 The expansion of telehealth services in 2020 to provide whole of population access to health services during the COVID-19 pandemic has been described by Health as ‘10 years of reform in only 10 days’. Rapid implementation of policy changes can increase risks to effective and efficient delivery of public services. The audit was conducted to provide assurance to Parliament over the rapid implementation of health policy changes during a pandemic and the transition from emergency to permanent arrangements.

Audit approach

Audit objective, criteria and scope

1.30 The audit objective was to assess whether the Department of Health and Aged Care has effectively managed the expansion of telehealth services during and post the COVID-19 pandemic.

1.31 To form a conclusion against the objective, the following high-level criteria were adopted.

• Was the expansion informed by robust planning and policy advice?
• Was the expansion supported by sound implementation arrangements?
• Has monitoring and evaluation of the expansion led to improvements?

1.32 The audit examined whether appropriate treatments were applied to telehealth-specific integrity risks, however did not examine the effectiveness of these treatments or the treatment of broader integrity risks that are generic to all MBS items. The audit did not examine Services Australia’s administration of benefit payments, or telehealth services or subsidies not listed on the MBS.

Audit methodology

1.33 The audit involved:

• reviewing submissions and briefings to government;
• reviewing other entity documentation, including meeting papers and minutes, policies and procedures, and correspondence;
• analysing administrative data held in entity systems, including Health’s case management system for provider integrity activities;
• meetings with officers from relevant business areas within Health and Services Australia;
• analysing de-identified MBS transactional data provided by Services Australia;
• meetings with representatives of state and territory health departments with responsibilities relating to telehealth; and
• reviewing 31 submissions received by the ANAO from organisations and individuals.

1.34 The audit was conducted in accordance with ANAO Auditing Standards at a cost to the ANAO of approximately $637,000.

1.35 The team members for this audit were Michael McGillion, Kai Swoboda, Sam Jones, Dr Jennifer Canfield, Bezza Wolba, Alicia Vaughan, Daniel Whyte and Christine Chalmers.

2.1 The Australian Government’s Delivering Great Policy model¹⁸ specifies that when providing policy advice, agencies should clearly define the objectives of a proposed policy; provide options that identify the key risks and benefits; collaborate with people affected by the policy; incorporate lessons from past experience; and provide a practical plan for implementation. Implementation plans should identify deliverables and milestones and embed evaluation at the outset.

2.2 A 2015 independent review of Australian Government processes for the development and implementation of large public programmes and projects noted that ‘informed decision making requires assessment of the specific risks being accepted and the broader context’.¹⁹

Was policy advice consistent with the Australian Government’s objectives?

2.3 To assess whether the Department of Health and Aged Care’s (Health’s) policy advice was consistent with policy objectives, the ANAO reviewed how Health described the purpose of proposed changes to telehealth in advice given to the Australian Government in policy briefings and ministerial submissions, as well as in government announcements, approval minutes, portfolio budget statements and explanatory statements for determinations made under section 3C of the Health Insurance Act 1973 (3C determinations).²⁰

Temporary telehealth

2.4 Between March 2020 and February 2022 the government had several policy objectives for temporary telehealth.

1. Late February to early March 2020 — the objective was to enable continued access to essential health services for vulnerable populations, while mitigating the risks of vulnerable patients being exposed to COVID-19 and patients who are required to self-isolate or quarantine exposing others to COVID-19.
2. Late March to May 2020 — the objective was to enable continued access to essential health services for the whole population, while controlling the spread of COVID-19.
3. June 2020 to December 2021 — the objective was to continue to control the spread of COVID-19. This would involve making limited changes to temporary telehealth settings including extensions to temporary telehealth, as informed by advice from the Australian Health Protection Principal Committee. Any telehealth proposals that were not necessary to suppress COVID-19 were to be incorporated into future policy advice on permanent telehealth as part of long-term health reform plans.

2.5 Health’s policy advice and communications between 9 March 2020 and 14 September 2021 contained statements of purpose that aligned with these objectives and followed the Australian Government’s evolving priorities for temporary telehealth.

Permanent telehealth

2.6 Between late 2021 and February 2022 the Australian Government’s policy objective for permanent telehealth was to improve flexible access to health services for all Australians.

2.7 Health’s policy advice and communications between November 2021 and February 2022 contained statements of purpose that aligned with this objective. Advice and communications after 18 December 2021 noted that this objective remained in place despite the Australian Government’s decision to reinstitute certain temporary telehealth items in response to the Omicron outbreak and delay the introduction of some permanent telehealth measures (such as the introduction of new compliance measures).

Were the costs, benefits and risks of different policy options considered?

Telehealth as part of the COVID-19 pandemic response

2.8 Health considered several options before developing a proposal to expand telehealth services as a pandemic response measure. On 28 February 2020 the Chief Medical Officer for the Australian Government asked Health officials to consider how telehealth services could be used as a response for the pandemic. Health identified an initial four options involving the Medicare Benefits Schedule (MBS) (two introducing new telehealth MBS items to substitute for face-to-face services and two introducing new items for home visits for isolating patients), and two options that did not involve the MBS. Initial briefs to Health senior executives contained a short, high-level analysis of issues associated with these options, covering eligible populations, compliance risks, implementation considerations and cost impacts.

2.9 On 3 March 2020 the Minister through his office instructed Health to include ‘time-limited MBS items for telehealth in pandemic response planning’. Within seven days Health developed a policy proposal for expanded telehealth services alongside 17 other response measures. Advice on the proposed policy was presented to the Australian Government on 9–10 March 2020.

• Issues discussed included the requirement for patients to have a pre-existing face-to-face relationship with the provider and mandatory bulk billing.
• The advice covered the one option of telehealth delivered via videoconferencing. Health expressed a preference for videoconferencing over phone telehealth due to clinical risks associated with the latter.
• The advice did not explain the benefits of the proposed policy settings.
• The advice highlighted one risk specific to telehealth (that providers and patients may lack experience with videoconferencing) and noted that services could be delivered through widely-available video calling applications.
• The advice made a generic statement that compliance risks of the proposal would be adequately addressed by existing Medicare compliance procedures and audit protocols.

2.10 The Department of Finance agreed with Health’s view that the proposed policy would be cost-neutral on the basis that telehealth services would substitute for existing face-to-face services. Health advised the Australian Government that, as there was an element of uncertainty about how telehealth services would be taken up, a provision of $100 million should be set aside for a potential increase in MBS costs.

2.11 Health received approval to implement telehealth services in line with its policy advice on 10 March 2020.

2.12 On 11 March 2020 the Prime Minister announced that telehealth services would include both videoconferencing and phone services. The requirement to include phone services was unanticipated by Health. In response to the Prime Minister’s announcement, Health rapidly introduced phone telehealth items to the MBS with a requirement that these services could only be billed where providers and patients did not have the capability to undertake the service via videoconference. Health officials advised the ANAO that this requirement was largely unenforceable.

2.13 Following discussions with the Australian Medical Association and the Royal Australian College of General Practitioners, on 23 March 2020 the Minister announced that eligibility for telehealth was expected to be expanded to the whole Medicare-eligible population. Working with the Minister’s office, Health prepared formal advice for the Australian Government in line with the Minister’s announced approach.

• Similar to the previous advice, the advice examined one policy option and stated that integrity risks would be adequately addressed through existing compliance arrangements.
• Compared to previous advice, the advice contained greater detail on the benefits and risks of certain proposed policy settings such as removing the requirement for the provider and patient to have an existing clinical relationship.
• The advice identified as a risk that progressive implementation of telehealth MBS items might be required due to capacity constraints within Services Australia.
• The advice indicated that whole of population telehealth would be cost-neutral.
• The advice noted that further policy advice regarding additional specialist items would be provided at a later date.

2.14 Health provided advice to the Minister regarding additional specialist items in April and May 2020, in three tranches. The Minister approved the addition of specialist items as advised.

• The first tranche identified 11 priority face-to-face specialist services that would be offered also as telehealth services. It contained little discussion of the risks and benefits of the dual offering of the services via face-to-face and telehealth methods.
• The second tranche advised that an internal triaging process including clinical advice had been followed to evaluate all suggestions obtained through stakeholder consultation for mirroring existing face-to-face services as telehealth services. The advice proposed 28 face-to-face specialist services to be offered also as telehealth services. Again, it did not discuss risks or benefits of offering these dual services.
• The third tranche provided advice on the benefits and drawbacks of each of the remaining suggestions from stakeholders, including those not supported by Health, and from these suggestions proposed five additional face-to-face services that could be offered also via telehealth.

Maintenance of temporary telehealth

2.15 In July 2020 Health adopted an approach to modelling telehealth costs that did not assume cost-neutrality and was based on observed trends during the early pandemic. The costs of subsequent material changes to telehealth policy were advised to government based on Health modelling.

2.16 Australian Government budget policy requires entities to complete a Risk Potential Assessment Tool for new policy proposals with an estimated financial implication of $30 million or more.²¹ Between September 2020 and April 2021 Health presented three new policy proposals to extend temporary telehealth settings. Each proposal had an estimated financial implication exceeding $30 million. Health did not prepare Risk Potential Assessment Tools for these three proposals.

2.18 New policy proposals to change the MBS may require the completion of a Regulation Impact Statement (RIS) in accordance with the Australian Government Regulatory Impact Analysis Framework.²² RISs must include the policy options being considered, the likely net benefit of each option, an implementation plan for the recommended option and an evaluation plan. The Office of Best Practice Regulation, which administers the framework, describes regulatory impact analysis as helping policymakers develop the evidence base for well-informed decision-making.²³

2.19 Health was not required to prepare a RIS for the introduction of temporary telehealth services and extensions of these services in September 2020 and February 2021 due to an exemption granted by the Prime Minister on 31 March 2020 for urgent and unforeseen Australian Government measures made in response to COVID-19.²⁴

2.20 For the third extension of temporary telehealth in May 2021, Health prepared a draft RIS that also included analysis of voluntary patient registration proposals.²⁵ The RIS proposed two policy options. The first option considered a reversion to pre-COVID-19 MBS settings by permitting the temporary telehealth items to lapse and abandoning work on voluntary patient registration. The second option, nominated as the preferred option, proposed a further extension to temporary telehealth, the introduction of new temporary telehealth services, a redesign of telephone telehealth services for general practitioners (GPs), the introduction of new compliance arrangements, and continued development of voluntary patient registration. Under the heading of a third option, Health advised ‘at this stage, there is no other viable option’.

2.21 The draft RIS was informally reviewed by the Office of Best Practice Regulation, which provided feedback that the analysis of policy options ‘pre-empted’ the preferred solution because the definition of the problem and the description of the options alerted the reader to which of the options was preferred before the analysis of the impacts was stated. The Office of Best Practice Regulation review indicated that the draft RIS ‘would need significant further development’ to be able to support a final decision by the Australian Government regarding permanent telehealth and voluntary patient registration (see paragraph 2.24). The draft RIS was the form of regulatory impact analysis that supported a final decision on the third extension of temporary telehealth in May 2021.

Permanent telehealth

2.22 Between 2 June 2020 and 6 August 2021 Health officials provided seven ‘deep dive’ briefs to the Minister to discuss the benefits, risks and costs of permanent telehealth policy options. The briefs covered pre-pandemic utilisation of telehealth; lessons from temporary telehealth; potential policy options for GP and specialist post-pandemic telehealth including compliance arrangements; extensions of temporary telehealth arrangements; and the potential timing of new measures.

2.23 Advice on permanent telehealth was provided to the Australian Government in December 2021. The advice identified that permanent telehealth offered economic and productivity benefits, improved patient access, and was able to provide sufficient quality of care when offered in conjunction with face-to-face services. The advice discussed the evidence base that supported Health’s preference for videoconferencing rather than phone telehealth and noted that some stakeholders had raised concerns that this preference could affect equality of access for patients.

2.24 The advice included a RIS which evaluated five policy options (Table 2.1). The RIS recommended option five.

Table 2.1: Policy options for permanent telehealth presented in a December 2021 Regulation Impact Statement

Note a: MyGP is the brand name for voluntary patient registration. Voluntary patient registration is a system whereby patients register with their usual general practice and nominate their usual doctor.

Source: Health records.

2.25 The recommended option was costed using a detailed methodology that compared a hypothetical scenario in which COVID-19 had not happened with actual telehealth data for the same period, to estimate the extent to which telehealth services substituted for face-to-face services during the pandemic. This approach aimed to control for other factors potentially influencing MBS costs. The analysis supporting the RIS was assessed as ‘adequate’ by the Office of Best Practice Regulation, the second lowest rating on a four-tier rating scale.²⁶

2.26 Although the RIS examined the proposal for MyGP and permanent telehealth collectively, two separate Risk Potential Assessment Tools (RPATs) were prepared. The first RPAT examined the risks associated with MyGP, which included consideration of the impact of restricting GP telehealth to patients registered under MyGP. A second RPAT examined the risks of permanent telehealth for GPs, specialists, nursing, midwifery and allied health providers. The RPATs assigned a low risk rating to both MyGP and permanent telehealth.

Did policy advice consider stakeholder opinion and previous experience?

Consultation on temporary telehealth

2.27 The introduction of temporary telehealth services in response to COVID-19 during March 2020 was not subject to a formal or structured consultation process, reflecting the short period in which rapid changes were required. However, during the 28-day period in which the fundamental policy options for temporary telehealth were developed and implemented, Health discussed telehealth proposals with primary health care stakeholders at ad hoc and standing meetings used to share broader information on the COVID-19 pandemic response.

1. On 6 March 2020 Health hosted a pandemic preparedness forum (at which it discussed telehealth as a possible response measure) with representatives from peak bodies in general practice, allied health, practice management, nursing, rural and Indigenous health, pharmacy and pathology; primary health networks; state and territory governments; and National Disability Insurance Scheme representatives.
2. Between 18 March and 16 December 2020 Health hosted 44 meetings of the GP Peak Body COVID-19 Response Teleconference. Participants included the Australian College of Rural and Remote Medicine (ACRRM), Royal Australian College of General Practitioners (RACGP), Royal Australasian College of Physicians (RACP), Rural Doctors Association of Australia (RDAA), Australian Medical Association (AMA), National Aboriginal Community Controlled Health Organisation (NACCHO), Council of Presidents of Medical Colleges, and Medical Indemnity Industry Association of Australia. Telehealth was discussed at 24 of these meetings.
3. Between 25 March and 16 December 2020 Health hosted 35 meetings of a broader ‘Primary Health Care COVID-19 Response Teleconference’. Participants included organisations representing allied health and specialist professions, nursing, practice managers, universities, and rural and regional health services. Telehealth was discussed at 21 of these meetings.
4. Between 31 March and 9 April 2020 Health approached 148 specialist and allied health peak bodies and interest groups, requesting that respondents complete a feedback form to suggest existing face-to-face specialist services that would be suitable to also be offered as telehealth services. The ANAO observed that Health provided tailored feedback to at least six respondents on whether their suggestions were progressed or not supported.²⁷

2.28 Between 2020 and 2022 Health provided policy advice regarding further adjustments to temporary settings that originated from peak body feedback and opinion received by the department or Minister.

2.29 In accordance with a direction from the Australian Government, Health sought advice from the Australian Health Protection Principal Committee (AHPPC) on 10 August 2020 about extending temporary telehealth past September 2020 and briefed the Australian Government on this advice. The Australian Government directed that consideration of further extensions of telehealth and other pandemic response measures should also be informed by AHPPC advice. In December 2020 Health asked AHPPC to endorse advice that, while not specifically referencing telehealth, indicated that emergency response measures would be required until 31 December 2021. The AHPPC endorsed the advice on 23 December 2020. Advice on subsequent extensions of temporary telehealth settings in 2021 noted that the extensions were in accordance with AHPPC advice.

Consultation on permanent telehealth

2.30 From June 2020 onwards, responsibility for stakeholder consultation in relation to telehealth was divided between two divisions within Health. One division examined GP and allied health provider telehealth, and the second division examined telehealth for specialists.

Consultation on GP and allied health provider telehealth

2.31 Health consulted on GP and allied health provider telehealth under a stakeholder engagement strategy developed for the Primary Health Care 10 Year Plan (the 10 Year Plan).²⁸ The strategy listed six mechanisms for consultation, of which four materially contributed to the formulation of policy for permanent telehealth: the Primary Health Reform Steering Group²⁹, a series of roundtable discussions on specific issues in the primary health care system, and two rounds of formal public consultation on the draft 10 Year Plan.

• Primary Health Reform Steering Group — Meeting records show that telehealth was discussed substantively at six out of 20 meetings between 20 March and 11 December 2020.
• Roundtable discussions — Between 16 July and 11 December 2020 Health convened 12 roundtable discussions that included discussion on telehealth.
• Public consultation — Health published a Primary Health Reform Steering Group discussion paper and draft recommendations for the 10 Year Plan on its Consultation Hub³⁰ between 15 June and 27 July 2021. A report that summarised the 201 submissions (including six relating to telehealth) was considered by the Steering Group on 13 August 2021. Health published the draft 10 Year Plan on its Consultation Hub between 13 October to 9 November 2021. Health received 185 submissions (including 142 referring to telehealth) from peak bodies, health service delivery organisations, businesses, not-for-profit organisations, primary health networks, individuals, state and territory governments, universities and research institutes and other respondents.

2.32 The remaining two mechanisms listed in the stakeholder engagement strategy were: convening meetings of a Primary Health Reform Consultation Group (which had a broader membership than the Steering Group), and targeted consultation meetings with states and territories. Neither of these mechanisms was used after June 2020 and they did not inform permanent telehealth policy.

2.33 In July 2020 Health commenced negotiations with four peak bodies (RACGP, AMA, ACRRM and RDAA) to request suggestions for policy settings and seek the support of these bodies for the Australian Government’s primary health care reform package. Between November 2020 and March 2021 Health and the four peak bodies met six times to discuss GP telehealth. At a meeting on 3 March 2021, Health presented a brief that summarised a proposal for permanent GP telehealth based on input from the peak bodies and the Primary Health Reform Steering Group Co-Chairs. Health shared preliminary costings of the proposed option with the four peak bodies. Policy advice to the Australian Government for the 2021–22 Budget noted the policy parameters were subject to ongoing discussion with RACGP, ACRRM, RDAA and AMA.

Consultation on specialist telehealth

2.34 In July 2020 Health prepared a brief for the Minister summarising unsolicited feedback from Australian Association of Consultant Physicians (AACP), Royal Australian and New Zealand College of Psychiatrists (RANZCP), and RACP on extending specialist telehealth.

2.35 In anticipation that temporary specialist telehealth would continue past 30 September 2020, Health commenced drafting a stakeholder engagement and communication strategy to inform the development of policy options for permanent specialist telehealth before the 2021–22 Budget. The draft strategy was not finalised.

2.36 The draft strategy identified four peak bodies (AMA, RACP, RANZCP and the Royal Australasian College of Surgeons (RACS)) as priority stakeholders. Between October 2020 and September 2021 Health held meetings with and sought feedback from the four peak bodies identified in the strategy and three other peak bodies, including the AACP (which had requested to be involved). Policy advice provided to the Australian Government for the 2021–22 Budget and in November 2021 conveyed the views of the AMA, RACP, RANZCP and RACS on the proposed policy options.

Reported difficulties with consultation

2.37 The ANAO received 31 submissions to the audit. Eight submissions from peak bodies representing providers and one state government provided positive feedback on the ability to discuss telehealth policy matters with Health between 2020 and 2022. Three submissions from organisations other than peak bodies (a state government, a patient advocacy group, and a private company) stated that it was difficult to contribute to the formulation of telehealth policy.

2.38 In a meeting with the ANAO, representatives from three states and territories advised that in their view, while the Australian Government consults with providers on changes to the MBS it largely does not consult with states and territories. The representatives noted the following.

1. While state and territory health departments are represented at a high level in fora such as AHPPC and its sub-committees, these committees do not generally discuss the details of proposed changes to the MBS.
2. The details of MBS telehealth items affect state and territory health departments. Where state and territory health providers offer virtual care services (health services that are equivalent or analogous to MBS telehealth) to a hospital outpatient, the practicalities of dealing with or choosing between two differently designed systems may impact on overall patient experience and the course of clinical treatment chosen.
3. Some state and territory health departments are progressing virtual care strategies that are trying to promote cultural change in Medicare-eligible populations regarding how health services are accessed. States and territories have relevant experience to share with the Australian Government including the evaluation of virtual care initiatives.

2.39 The ANAO asked senior Health officials whether state and territories are a stakeholder for changes to the MBS. Health officials advised the following.

1. Consultation and coordination via AHPPC and National Cabinet was substantial throughout the pandemic and involved senior decision-makers from each jurisdiction.
2. State and territory authorities were not worried about the Australian Government’s regulatory approach to telehealth during the pandemic, other than requiring assurance that continuity of service would be maintained.
3. Health would not normally consult with states and territories on the detail of MBS changes as the bulk of MBS funding is directed towards private providers and the amount of MBS funding provided under an intergovernmental agreement that permits state and territory health workers in remote locations to submit MBS claims is considered negligible. Peak bodies are the experts on the detail of MBS changes.
4. Two states (New South Wales and Tasmania) were represented on the Primary Health Reform Steering Group (discussed in paragraph 2.31).
5. The nature of consultation with state and territory health departments regarding changes to the MBS should be considered in the context of the consultation that is meant to occur under the National Health Reform Agreement.³¹

2.40 A submission to the audit from the National Aboriginal Community Controlled Health Organisation (NACCHO)³² stated that the 1 July 2021 removal of telephone MBS items was made without consultation with the Aboriginal Community Controlled Health Sector. As noted in paragraph 2.27, NACCHO met regularly with Health in the GP Peak Body COVID-19 Response Teleconference meetings and had representation on the Primary Health Reform Steering Group, however it was not represented in the meetings described in paragraph 2.33, where the specifics of telehealth policy settings were negotiated. The Minister received correspondence from NACCHO that noted the Australian Government’s commitment under the National Agreement on Closing the Gap to provide Aboriginal and Torres Strait Islander people with a greater say in policy making that affects them. Internal Health correspondence also noted that the interests of NACCHO were significant and different to those of other peak bodies.

Incorporation of lessons from past experience

2.42 In December 2019 the MBS Review Taskforce³³ convened a working group to examine telehealth as a concept, develop a set of MBS ‘Telehealth Principles’ to guide future telehealth policy, and provide recommendations to the Australian Government through the MBS Review Taskforce regarding telehealth. The MBS Review Taskforce endorsed the final report of the working group on 30 June 2020.³⁴ The findings of the MBS Review Taskforce relating to telehealth, which included an emphasis on video rather than telephone as a telehealth medium, were referenced by Health in advice to the Australian Government in April 2021 and November 2021.

2.43 In June 2020 the Australian Government directed that proposals for permanent telehealth items should be assessed by and receive a recommendation from either the Medical Services Advisory Committee (MSAC)³⁵ or the MBS Review Taskforce. Health did not implement this direction.

• Health determined that MSAC would be unlikely to be able to provide advice of the nature requested before August 2021, which did not meet Health’s intended timeframe to provide advice in April 2021 to the Australian Government for the 2021–22 Budget.
• The MBS Review Taskforce held its final meeting to complete its review of existing MBS items on 30 June 2020, and in May 2020 had already commenced drafting its final report, which was submitted to the Australian Government on 14 December 2020.

2.44 In November 2020 Health commissioned a Bond University research institute³⁶ to provide a systematic literature review of the efficacy and value of telehealth services within primary care. The final report of the literature review was presented to the Australian Government and considered at a meeting of the Primary Health Reform Steering Group in April 2021.

2.45 Policy advice presented to the Australian Government in support of extensions of telehealth or proposals for permanent telehealth progressively contained greater analysis of telehealth billing trends during the pandemic.

Was an appropriate implementation plan developed?

Implementation plan for temporary telehealth

2.46 In the period of rapid implementation of the initial temporary telehealth expansion, there was no documented implementation strategy or plan that outlined in advance deliverables and milestones. Consistent with the Australian Health Sector Emergency Response Plan for Novel Coronavirus, which states that ‘it will be important to commence measures as quickly as possible’ and before there is likely to be a good understanding of the disease, Health prioritised rapid implementation of telehealth changes over documented planning in March 2020.

2.47 Initial policy advice to government on 10 March 2020 sought only high-level approval to implement changes to the MBS to enable telehealth to be accessible for nominated classes of patients, with further details to be worked out with the Department of Finance. The advice did not identify specific health services as deliverables or nominate milestones for implementing these as MBS items. The advice did not specify the mechanism by which the changes would be made. The advice nominated an expiry date for the new services and the conditions under which an extension might be recommended to government, but did not otherwise discuss how the changes might be evaluated.

2.48 The Minister may add a health service to the MBS by making a 3C determination. The power to make a 3C determination has been delegated to specified senior executives within Health. 3C determinations were used as the mechanism to implement the expansion of telehealth in response to the COVID-19 pandemic.

2.49 Health advised the ANAO that making a 3C determination is an established process that is suited to implementing changes to the MBS that are temporary or urgent. Although only partly documented, the ANAO found that the roles and responsibilities, and steps in the process of implementing a 3C determination, were well understood.

2.50 The further expansion of telehealth between March and July 2020 was implemented incrementally, with Health adopting the terminology of ‘staged implementation’ to describe changes made in this period. On 23 March 2020 Health issued a fact sheet that categorised actions taken since 13 March 2020 into three stages, and stated that a fourth stage would be conducted (Figure 2.1).

Figure 2.1: Telehealth expansion implementation stages 1–4 outlined in Health fact sheet, 23 March 2020

Note: On 30 March 2020 Health provided further policy advice to the government regarding Stage 4. Health advised that approximately 70 new telehealth items would be implemented via a 3C determination, but due to operational limitations might not be implemented in one tranche. Health advised that it had already solicited stakeholder advice on implementation priorities in the event progressive implementation of the items would be necessary.

Source: Health records.

2.51 Two further implementation stages are outlined in Health documentation.

1. Stage 5 — Policy advice on 30 March 2020 foreshadowed that further advice would be provided regarding a future Stage 5, which would consider a range of specialist items for expansion. On 3 April 2020 Health requested the Minister approve a ‘stepped approach to implement stage 5 of the Government’s response to COVID-19’, and subsequently progressed this stage in three tranches.
2. Stage 7 — On 10 July 2020 the Minister announced the reintroduction of the requirement for telehealth patients to have an existing clinical relationship with the provider, and referred to this change as Stage 7 of the telehealth reforms.

2.52 ANAO identified inconsistent usage of the term ‘Stage 6’ in departmental records to refer to the second and third tranches of Stage 5. The ANAO also identified records that referred to the first tranche of Stage 5 changes as part of Stage 4. These inconsistencies illustrate that Health did not maintain a reliable reference that tracked what implementation activities occurred in each stage and how these stages related to one another. Health advised the ANAO that the discrepancies are a reflection of the operational pressures of the COVID-19 response at that time.

Implementation plan for transition to permanent telehealth

2.53 In April 2021 Health provided advice to the Australian Government that set out its implementation plan at a high level for a transition from temporary to permanent telehealth settings. The plan clearly outlined deliverables and timeframes for delivery up to 31 December 2021, and proposed that permanent telehealth items would commence on 1 January 2022 with the exact settings to be determined closer to that date. Health noted that the permanent telehealth implementation plan and 10 Year Plan were interdependent and the permanent telehealth implementation plan addressed the interaction between the two plans.

2.54 The permanent telehealth implementation plan discussed including GP telehealth items in the ‘80/20 rule’.³⁷ At the time the advice was provided to the Australian Government, the proposed implementation date for this deliverable could not be met due to resourcing constraints in business areas within Health responsible for preparing the necessary legislative changes.

2.55 The permanent telehealth implementation plan was updated in December 2021 advice to government. The updated plan clearly outlined deliverables and timeframes in 2022 and 2023 (including the introduction of a new ‘30/20 rule’ from 1 January 2022)³⁸ and addressed the interaction between permanent telehealth and the implementation of voluntary patient registration.

2.56 Neither the April 2021 or December 2021 advice contained detailed plans for performance monitoring or evaluation for permanent telehealth.³⁹

2.57 Shortly after the Minister announced the Australian Government’s plan to implement permanent telehealth on 13 December 2021, there was an outbreak of the Omicron variant of COVID-19. Implementation activities deviated from the permanent telehealth implementation plan in response to the outbreak. Deviations included:

1. on 17 January 2022, reinstating temporary telehealth items that had expired on 31 December 2021, with a new expiry date of 30 June 2022; and
2. on 20 January 2022, removing telehealth items from the 80/20 rule and repealing the 30/20 rule.⁴⁰

2.58 Submissions to the audit relating to the implementation approach adopted by Health are summarised in Table 2.2. A consistent theme was that the number, frequency and speed of changes to telehealth arrangements was problematic for some stakeholders.

Table 2.2: Feedback on the implementation approach in submissions to the audit

Note a: For example, investing in hardware, software, or staff training to provide telehealth via videoconference.

Note b: For example, by necessitating updates to billing systems, education and training of staff, and communications to patients on service options and costs.

Source: ANAO analysis of 31 submissions to the audit.

3.1 The delivery of Medicare Benefits Schedule (MBS) changes relating to telehealth needed fit-for-purpose governance arrangements; collaboration with and support to delivery partners; a structured approach to managing risks to successful implementation; and an assessment of how integrity risks associated with new telehealth items could be mitigated.⁴¹

Were governance arrangements fit-for-purpose?

Senior management oversight

3.2 Accountability for the MBS rests with the Secretary of the Department of Health and Aged Care (Health) and the Services Australia Chief Executive Officer (who is also the Chief Executive of Medicare).

3.3 The Secretary of Health is assisted by two standing advisory committees (the Program Assurance Committee and the Digital, Data and Implementation Board) with mandates that include providing oversight of new measures affecting the MBS. The committees report to the Executive Board. Neither committee provided material oversight of the expansion of telehealth in 2020 and 2021.

3.4 In February 2020 Health suspended the operation of the Program Assurance Committee and the Digital, Data and Implementation Board. A temporary COVID-19 Working Group was established in March 2020 to oversee the department’s primary and aged care pandemic response measures. Similar to the standing committees, the working group was co-chaired by two Deputy Secretaries, and intended to coordinate and report to the Executive Board on the status of the pandemic response measures. The COVID-19 Working Group was wound up in May 2020 at which time the operation of the two standing committees was resumed.

Operational governance

3.5 Within Health, two divisions within the Health Resourcing Group have primary responsibility for the MBS (Figure 3.1). These are:

1. Medical Benefits Division, which is responsible for policy proposals to change the MBS, implementing changes to the MBS, and Medicare program outcomes; and
2. Benefits Integrity and Digital Health Division, which is responsible for protecting the integrity of Medicare payments and supporting healthcare providers with education and information on the appropriate use of Medicare.⁴²

3.6 The COVID-19 Working Group understood that the Medical Benefits Division was accountable for the COVID-19 expansion of telehealth. Other divisions within Health (such as Primary Care Division) may be responsible for policy initiatives that require consequential changes to the MBS. Where this occurs, Medical Benefits Division implements the required changes to the MBS following direction from the policy division.

Figure 3.1: Main business units involved with telehealth changes, 2020 to 2022

Source: ANAO analysis of Health records.

Standard procedures for implementing Medicare Benefits Schedule changes

3.7 Health has a documented standard process that outlines functional responsibilities for developing new policy proposals for consideration by the Australian Government.

3.8 Health’s internal standard procedures for implementing changes to the MBS are largely undocumented. Documented processes focus primarily on providing guidance to staff within Medical Benefits Division on the process of drafting legislative instruments to give new MBS items legal effect. These procedures are not controlled documents, meaning there is no record that the content has been approved by a Senior Responsible Officer and there are no controls to ensure staff follow the most current version of the procedure. The standard procedures do not require key decisions or implementation issues to be recorded; require implementation and integrity risks to be managed; provide mechanisms for senior responsible officers in separate divisions to share oversight and management of shared risks; require performance monitoring or evaluation of new items to be considered; or key activities such as stakeholder consultation and implementation planning to be documented.

3.9 In 2019 Health and Services Australia developed the ‘New and Changed Work Protocol’ (the Protocol), which forms part of a bilateral agreement between the organisations (discussed further in paragraph 3.35). The Protocol outlines a generic process and checklist for developing and implementing changes to Services Australia systems at the request of Health (as would be required when MBS billing systems are updated to reflect new and changed MBS items). The process provides for:

• the use of co-design sessions to discuss elements of a change proposal;
• developing documentation to support the change process (see paragraph 3.37);
• ensuring appropriate approvals are made at specific points in the development process; and
• quality assurance of the proposed solution and validation as appropriate.

3.10 The generic process and checklist outlined in the Protocol are not supported by documented specific procedures or guidance that could assist staff in the Medical Benefits Division to apply the process to changes to the MBS.

3.11 Between May and July 2020 Health conducted a live assurance review of the telehealth expansion, which examined governance arrangements specific to the telehealth response measure. The review found issues with documentation and data collection; and the application of the new policy proposal process (Box 1). The ANAO found that the issues identified by the review were authorised by senior Health officials in March 2020 in order to meet rapid implementation deadlines.

Project management framework

3.12 The COVID-19 Working Group and standing oversight committees used a reporting tool called ‘Health Tracker’ to assign responsibility for COVID-19 response measures to a Senior Responsible Officer and to monitor progress towards outcomes. The tool comprises two parts.

1. ‘Health Tracker — Planner’ is used to prioritise, monitor and report to stakeholders on the department’s progress in implementing initiatives such as election commitments, budget measures and ministerial announcements. Initiatives tracked as items in ‘Health Tracker – Planner’ are not required to be managed as projects in accordance with Health’s project management framework.⁴³
2. ‘Health Tracker — Implementation’ is used for tracking and reporting on projects. Projects in ‘Health Tracker – Implementation’ must follow Health’s project management framework and templates.⁴⁴

3.13 The ANAO identified four ‘Health Tracker – Planner’ items covering the expansion of telehealth services to March 2022.

1. The first item concerned the expansion of telehealth in March and April 2020, and was reused for further telehealth changes between April to December 2021.
2. Two items were created to track the extension of GP and allied health telehealth, and specialist telehealth, from October 2020 to April 2021.
3. The fourth item tracked the transition to permanent telehealth in January to March 2022.

3.14 Two ‘Health Tracker – Implementation’ items were created in September 2020 covering: an expansion of mental health services with consequential changes to telehealth items on the MBS; and the extension of temporary specialist telehealth services.

3.15 Despite the existence of some ‘Health Tracker – Implementation’ items, the telehealth expansion was not managed as a project in accordance with Health’s project management framework.

1. Although Health’s project management framework gives Senior Responsible Officers the discretion to decide that initiatives in ‘Health Tracker – Planner’ do not need to be managed in accordance with the project management framework, the project management framework also states that new policy proposals and budget initiatives will ‘typically be run as a project, as they are discreet packages of work that will deliver a change’.
2. Documentation required under Health’s project management framework for the two relevant ‘Health Tracker – Implementation’ items was incomplete or not developed.
3. Health retrospectively drafted project management documentation in May 2020 for the initial telehealth extension commencing in March 2020. These documents were provided to the live assurance review undertaken in May to July 2020 (discussed in Box 1). There is no record that the documents were formally approved or materially governed expansion of telehealth items on the MBS.

3.16 In April 2022 Health introduced a new rapid implementation framework. The rapid implementation framework, which operates in conjunction with the project management framework, permits projects to be managed with abbreviated project governance arrangements in exceptional circumstances if approved to do so by Health senior management. This includes scenarios where compliance with the usual processes set out in the project management framework is not feasible due to the urgency of implementation. The rapid implementation framework does not apply to initiatives that the senior responsible officer decides should not be managed as a project.

3.17 Administering initiatives that involve material changes to the MBS in accordance with Health’s project management or rapid implementation frameworks would strengthen the controls over those changes.

Were implementation risks effectively managed?

3.21 Successful implementation of a new initiative relies on the identification and management of risks that may hamper the introduction and administration of the change. The risks of a change need to be managed until the initiative has successfully transitioned to business-as-usual. Rapid implementation may alter risk appetite and tolerance but does not alter the need for effective risk management.

Health’s risk management framework

3.22 Throughout the period of the telehealth expansion, Health maintained a risk management policy as required by the Commonwealth Risk Management Policy. Health’s risk management policy:

• nominated the Commonwealth Risk Management Policy and AS/NZS ISO 31000:2009 Risk Management – Principles and Guidelines as standards of reference for risk management at Health;
• defined Health’s risk management approach, risk appetite and risk tolerance; and
• set out the key accountabilities and responsibilities for managing and implementing Health’s risk management framework.

3.23 At the time of the initial telehealth expansion in March 2020, Health’s risk tolerance as expressed in its risk appetite statement was permissive of policy, delivery and governance risks and restrictive for regulation, use of information and mismanagement of administered funding risks.

3.24 Health’s risk management policy allocated specific responsibilities to senior officials for managing program and project risks. First Assistant Secretaries were responsible for identifying, managing and reporting new and emerging risks; updating divisional risk registers either quarterly or more often if required; and embedding risk management into all key business processes.

Divisional risk management

3.25 In its 2019–20 Annual Report, Health described the rapid introduction of temporary telehealth in response to COVID-19 as ’10 years of reform in only 10 days’, and the 2022–23 Budget described the introduction of permanent telehealth as ‘the most significant structural reform to Medicare since it began’. The expansion of telehealth posed risks for multiple divisions within Health, including new shared risks.

3.26 Medical Benefits Division, Benefits Integrity and Digital Health Division, and Primary Care Division risk registers for 2019–20 and 2020–21 did not contain any telehealth-specific risks. The registers were not reviewed on a quarterly basis as required under the risk management policy and the events of 2020 did not prompt an out-of-cycle review of divisional risk registers to ensure their currency.

3.27 The ANAO reviewed business and risk planning documents aligned to the annual corporate planning cycle for these three divisions.

1. Neither the Primary Care Division nor the Benefits Integrity and Digital Health Division identified or assessed risks relating to the implementation of telehealth within these documents.⁴⁵
2. In 2020–21 Medical Benefits Division identified three divisional-level risks relating to telehealth (Table 3.1). The risks were not evaluated to determine whether the risks were within tolerance or required further treatment.

Table 3.1: Telehealth risks identified in Medical Benefits Division 2020–21 divisional business plan

Note a: The offsetting rule requires entities to identify savings within the existing portfolio budget commensurate with the additional spending proposed in a new policy proposal.

Source: ANAO reproduced from Health records.

1. In 2021–22, Medical Benefits Division identified one divisional-level risk relating to telehealth (Table 3.2). Two existing controls were identified for this risk. The plan did not document an assessment of the effectiveness of the controls. No further treatments for the risk were specified in the plan.

Table 3.2: Telehealth risks identified in Medical Benefits Division 2021–22 divisional business plan

Note a: Health advised the ANAO that these fields were left blank as the existing controls listed in the preceding column were considered sufficient to manage the risk.

Source: ANAO reproduced from Health records.

Operational risk management

3.28 Health maintains standard operating procedures for amending the MBS through a 3C determination (see paragraph 3.8). Although Health’s Risk Management Policy requires risk management to be embedded into key business processes, the standard operating procedures included no requirement to conduct a structured assessment of the risks of material changes to the MBS before implementation, or to monitor and manage implementation risks for a period after the introduction of the material change.

3.29 As discussed in paragraph 3.15, the expansion of telehealth was not governed as a project and accordingly did not require the preparation and use of a risk register using the template provided under Health’s project management framework. Despite this, in May 2020 staff from Medical Benefits Division supported by Health’s Corporate Assurance Branch developed a draft risk management plan and draft risk register. The draft plan and register were not finalised and were not used in practice to inform decision making and implementation activities.

3.30 The draft risk register identified 14 operational risks associated with the expansion of telehealth between March and May 2020, of which six were assessed and assigned a risk rating. The first risk identified was ‘failure to appropriately implement risk management into the project’, which was assessed as ‘acceptable’.

3.31 The ANAO identified two significant implementation risks for the expansion of telehealth services that were not managed by Health (Box 2 and Box 3).

Note a: The bulk billing incentive is a set of MBS items that can be billed at the same time as a bulk billed health service. The incentives are intended to promote the provision of bulk billed services to vulnerable patient groups. The incentives can be billed in conjunction with face-to-face or telehealth services.

Note b: MBS items are listed in one of three tables (general medical services, pathology services, or diagnostic imaging services) that are ordinarily prescribed in regulations made under the Health Insurance Act 1973.

Note c: MBS Online [www.mbsonline.gov.au] is a webpage used to publish the MBS and accompanying guidance.

Note a: The guidance stated that the provider writing ‘patient unable to sign’ is an acceptable substitute for the patient’s signature in limited circumstances, such as where the patient does not have a guardian or relative who may sign on their behalf and is unconscious or has an injured hand.

Note b: Subsection 20B(3) and section 127 of the Health Insurance Act 1973 respectively.

Was support to delivery partners appropriate and timely?

3.34 Successful delivery of material changes to the MBS requires Health to provide timely, relevant and accurate information to delivery partners, including Services Australia (which administers the MBS payments system and provides billing support to providers); providers and associated business participants such as practice managers (who deliver health services and bill the MBS); and industry groups (which advise and support providers to implement new business practices).

Services Australia

3.35 Since 2018 Health has maintained a bilateral agreement with Services Australia (the Statement of Intent between the Secretary, Department of Health and the Chief Executive Officer, Services Australia (Statement of Intent)) that sets out objectives, principles and governance arrangements for joint work undertaken by the entities.⁴⁶

3.36 Pursuant to the Statement of Intent, in December 2019 Health and Services Australia established the ‘New and Changed Work Protocol’ (the Protocol) that provides agreed processes, frameworks and guidelines to design, cost and implement Australian Government health policies and services. Although the Protocol provides that it will be reviewed every 12 months or more frequently if necessary, the Protocol was last updated in August 2020. Health advised the ANAO that this was because of competing operational priorities.

3.37 In accordance with the Protocol, policies that require Services Australia to deliver new services or change existing services under Health’s direction must be supported by a service delivery costing document called an External Costing Request (ECR). The ECR is intended to specify the details of the change so that Services Australia’s business and ICT teams have an agreed reference point to plan for and implement the change. The ECR must be approved by a Senior Executive Service Band 1 officer from both entities.

3.38 During the initial implementation of temporary telehealth, Health and Services Australia did not prepare ECRs to support policy changes as required by the Protocol. Services Australia advised that for this was ‘under agreement from [senior executives] for both Services Australia and Health’.

3.39 Instead of ECRs, during the initial implementation of temporary telehealth, Health used informal information sharing and liaison to inform Services Australia of likely telehealth changes that were yet to be finalised, so that Services Australia could commence preliminary work on systems changes as soon as possible (see case study 1). Services Australia staff advised the ANAO that while short lead times were provided to implement changes, Services Australia was largely comfortable with the amount of information provided informally by Health and the timeliness of this information.⁴⁷

Note a: See paragraph 2.12.

3.40 Upon request for the ECRs that supported the 16 major telehealth changes implemented between 30 March 2020 and 19 July 2022, Health provided the ANAO with seven. The ANAO also identified a further seven ECRs in Health’s records relating to these major changes. In summary, an ECR could not be found for two of the 16 major telehealth changes.

3.41 Of the 14 ECRs for which Health maintained a record, 12 were provided to Services Australia in advance of the changes being implemented, and the date of provision for the remaining two was not recorded.

Providers and peak organisations

Communications plan

3.43 Health did not establish a communications plan for the implementation of new telehealth MBS items that forecasted the information needs of providers and peak organisations, identified the communications channels that would be used to reach these entities, or scheduled the release of change messaging and guidance materials to providers in advance of changes being made to the MBS. The absence of a communications plan resulted in issues such as the duplication of content creation between Services Australia and Health, the risk of inconsistent messaging and a lack of clarity regarding which area of Health was responsible for removing obsolete guidance. Health advised the ANAO that changes to temporary telehealth followed normal processes for communicating changes to items on the MBS and that these processes were supplemented by a broader COVID-19 communications strategy.

Communications, guidance material and other support

3.44 Health developed communications materials and engaged in communications activities to support the telehealth changes.

1. Health created or updated fact sheets relating to new and amended telehealth items and published these on MBS Online. The first set of fact sheets with detailed information on the telehealth changes were published on 17 March 2020, with further fact sheets between April to June 2020 published on the dates the changes were implemented.
2. AskMBS is an email-only advice service for providers for queries related to services listed on the MBS. In May 2020 Health published an ‘AskMBS Advisory’ concerning telehealth services introduced in response to COVID-19, which contained similar content to the August 2020 ‘Telehealth Items Guide’ (see sub-paragraph 3.44(f)). Health published and maintained two other ‘AskMBS Advisories’ on MBS Online containing guidance on temporary specialist telehealth items introduced in response to COVID-19 (August 2020) and the requirement for providers in general practice to have a pre-existing clinical relationship with temporary telehealth patients (December 2020).
3. In March 2020 the Australian Information Commissioner requested that Health prepare a Privacy Impact Assessment (PIA) on the new temporary telehealth MBS items.⁴⁸ In the course of developing the PIA, Health published a privacy ‘checklist’ for providers on 4 May 2020. Based on Health internal reporting, by this date at least 7.6 million temporary telehealth services had already been provided to a total of 4.7 million patients by nearly 69,000 providers. Health submitted the PIA to the Office of the Australian Information Commissioner on 10 June 2020.
4. Health worked directly with peak organisations to assist them to provide tailored guidance to their members on issues such as assignment of benefit in the absence of a patient’s signature, telehealth-related compliance activity and clarification of compliance requirements. Health officials attended webinars hosted by Health or by key peak bodies such as the Australian Association of Practice Management and the Australian College of Rural and Remote Medicine in March and early April 2020 to answer questions about the introduction of new telehealth items.
5. To support telehealth provision, between 17 April 2020 and 31 December 2022 Health offered licences to ‘healthdirect video call’, a secure video conferencing platform, at no cost to general practices, Aboriginal Medical Services and Aboriginal Community Controlled Health Organisations.
6. In August 2020 Health emailed around 121,000 medical practitioners and nine peak bodies a link to a ‘Telehealth Items Guide’ which was produced to ‘support health professionals in understanding the requirements associated with telehealth items and their appropriate use’. Two submissions to the ANAO provided feedback that the guide was a good initiative, however its usefulness was limited by delays in its distribution and a failure to update the guide to reflect policy changes on a timely basis.

Responding to provider enquiries

3.45 In the 12 months to March 2020, AskMBS received and closed an average of 579 and 549 inquiries per month, respectively. In March 2020 AskMBS received 1603 inquiries, 2.8 times the monthly average in the preceding 12 months. The increase in AskMBS inquiries coincided with the implementation of telehealth on 13 March 2020, and there was a substantial spike in telehealth-related inquiries with the introduction of whole of population telehealth on 30 March 2020 (Appendix 3). Over 5000 telehealth-related inquiries were received between 1 January 2020 to 14 June 2022.

3.46 Prior to August 2021 Health had an internal target to respond to AskMBS queries within 10 working days (except for complex questions requiring input from policy areas). The target was changed to 15 working days in August 2021 due to consistently high volumes of inquiries. The average response time for telehealth-related inquiries (measured as the average time taken by Health to respond to inquiries received in a specified week) ranged from nine working days in the week commencing 9 March 2020 to 25 working days in the weeks commencing 8 June 2020 and 26 October 2020. The average response time for telehealth-related inquiries exceeded service standards for 66 of the 115 weeks between 30 March 2020 and 12 June 2022.

3.47 Although AskMBS was an established channel for provider enquiries, between 30 March and 19 April 2020 Health included a dedicated email address for telehealth-related inquiries as part of some of the initial telehealth factsheets published on MBS Online, with telehealth inquiries being directed to a different email address and queries for all other MBS items being directed to AskMBS. Internal reporting recorded 414 telehealth-related inquiries being received at this email address, with around 90 per cent of these received by 30 April 2020.

Reported difficulties with support to providers

3.48 Of the 31 submissions to the audit, 15 provided feedback on the support provided by Health for the implementation of telehealth (Table 3.3). Feedback about the quality and timeliness of services and communications included comments about fact sheets being regularly updated but delays in information being provided on specific issues.

Table 3.3: Feedback on Health support to providers in submissions to the audit

Source: ANAO analysis of 31 submissions to the audit.

Were integrity risks for the new arrangements effectively managed?

3.49 Two divisions in Health have responsibilities related to managing the risk of fraudulent and non-compliant MBS claiming by providers. Health’s risk management policy provides that risks shared between different areas of Health require shared oversight and cooperation to understand and effectively manage the risk.

Compliance risk assessment

3.50 Between 2020 and 2022 Health’s procedures for changing the MBS did not require a structured assessment of integrity risks. A structured assessment prior to implementation might include:

1. the identification of potential integrity risks for proposed telehealth MBS items;
2. an assessment of whether identified risks associated with specific MBS items could be prevented or mitigated through preventative (pre-payment) treatments such as legislative design (such as the item descriptor or claiming restrictions), implementation strategies, or automated controls within MBS billing systems⁴⁹;
3. a documented decision on whether the risks fell within risk tolerances, and for shared risks, which risk tolerance was applicable if tolerances were different⁵⁰; and
4. the assignment of responsibility for implementing any necessary risk treatments.

3.51 In the absence of a structured assessment of integrity risks for new telehealth items, officials from Medical Benefits Division and Benefits Integrity and Digital Health Division used standing interdivisional meetings and other informal means to discuss the compliance implications of the items.

Pre-payment treatment of integrity risks

3.52 Although it did not conduct a structured assessment of integrity risks of new telehealth items, or the sufficiency of existing controls, Health advised the Australian Government that integrity risks specific to the temporary telehealth items would be adequately managed by post-payment (corrective) regulatory activity.

3.53 In relation to potential preventative treatments during the temporary telehealth expansion, Health officials advised the ANAO that automated pre-payment controls over eligibility criteria for telehealth MBS items would have been impractical in the context of the initial pandemic response. Moreover, Health advised the ANAO that few practical options were available with the IT systems at the time for implementing such treatments.

Post-payment treatment of integrity risks

3.54 Health uses several treatments for health provider fraud and non-compliance (Table 3.4). With the exception of education, the treatments are corrective and apply after an MBS service has already been billed.

Table 3.4: Treatment types for health provider non-compliance

Source: Adapted from Auditor-General Report No. 17 2020–21 Managing Health Provider Compliance.

3.55 In 2020 Health adopted a new compliance operating model known as 1CAB to improve its post-payment prioritisation and treatment of potentially non-compliant billing behaviour (Figure 3.2).⁵¹

Figure 3.2: Treatment of non-compliance through 1CAB model

Source: ANAO analysis of Health records.

3.56 Health incorporated telehealth risks into the 1CAB model, and completed telehealth compliance activities largely in line with the model. Between March 2020 and July 2022, Health identified 600 potentially non-compliant or fraudulent claiming behaviours, of which 23 related to misuse of telehealth MBS items. Seven of the 23 behaviours relating to telehealth were chosen for formal risk assessment and four were ultimately approved for treatment (Table 3.5). Health advised the ANAO that the decision to assess the risk of a potentially non-compliant or fraudulent behaviour is informed by several considerations such as the capacity of analytical and operational teams, the significance and urgency of the issue, and whether there has been recent compliance activity in that area.

3.57 The treatment strategies applied compliance treatments that aimed to be proportionate to identified compliance risk. Providers were selected for treatment based on outlier behaviour that exceeded criteria expressed in absolute terms (such as exceeding a threshold number of potentially non-compliant services) or based on a peer-comparison (such as the top 90^th percentile of providers displaying the identified behaviour).

Table 3.5: Telehealth risks considered for treatment by Health, March 2020 to July 2022

Note a: This column shows the number of providers exhibiting a pattern of claiming considered under the risk at a point-in-time. They do not represent a confirmed assessment of the prevalence of a non-compliant pattern of claiming. Health advised the ANAO that the final threshold for intervention considers analysis and research, medical advice and stakeholder input. This then results in the number of providers recommended to be approved for compliance action.

Note b: The continuous care requirement refers to the requirement for a telehealth provider in general practice to have a pre-existing clinical relationship with a patient. On 20 July 2020 Health reintroduced a requirement that providers must have a pre-existing clinical relationship with a telehealth patient, defined as one face-to-face service in the preceding 12 months.

Note c: The approved strategy was subsequently revised; no awareness raising letters were sent, 457 providers were selected for a targeted letter and 37 providers were audited.

Source: ANAO analysis of Health records.

3.58 Three of the four telehealth risks approved for treatment were executed as planned. The treatment approach to the remaining risk (potential non-compliance with continuous care requirements) was revised following further consultation with peak bodies⁵² and new targeting data. Health discontinued plans to send generic awareness letters to over 9000 providers following consultation with peak bodies. Shortly before sending the targeted letters, Health identified that its targeting methodology was affected by a data issue that produced false positive results. Health discontinued plans to audit or send targeted letters to 77 providers, transitioned seven providers to less invasive treatments, and discontinued action against one provider.

3.59 In addition to non-compliance identified through the 1CAB model, Health may also identify and treat potential non-compliance in response to tip-offs received from the public. The ANAO examined a manually collated spreadsheet of 456 tip-offs received between 13 March 2020 and 30 June 2021 that contained allegations of non-compliant or inappropriate MBS claiming in relation to telehealth. The spreadsheet identified 137 tip-offs that were sufficiently substantiated to warrant further examination.⁵³ As of August 2022, 76 of these cases had been treated with regulatory activity, 59 had been evaluated and closed without treatment, and two remained under evaluation for potential treatment.

4.1 Australian Government guidance such as the Delivering Great Policy Model and the Australian Government Guide to Regulatory Impact Analysis provide that entities should plan at the outset for how performance against intended policy outcomes will be measured, monitored, and evaluated.

4.2 Monitoring and evaluation of material changes to the Medicare Benefits Schedule (MBS) could examine whether the changes support:

1. affordable and universal access to health care;
2. the provision of contemporary best practice health services;
3. the delivery of services that are appropriate to the patient’s needs and that do not expose patients to unnecessary risk or expense; and
4. improved value for the health system by preventing or reducing funding for health services with little or no clinical value.

4.3 The Australian Health Sector Emergency Response Plan for Novel Coronavirus (COVID-19 Plan) provided that measures under the COVID-19 Plan (such as temporary telehealth arrangements) should be regularly reviewed and tailored to ensure they remain effective and proportionate to risk. The COVID-19 Plan further provides that after measures under the COVID-19 Plan have transitioned to normal business, an evaluation of the response should rapidly occur so that lessons from the pandemic can be applied to subsequent waves of COVID-19 or future pandemics.

Were performance measures established and monitored?

Planning for monitoring performance

4.4 Health did not establish a plan to monitor the expansion of telehealth in 2020 and 2021 against expected results. In the initial telehealth expansion between March and May 2020, and in planning further changes after this time, Health did not nominate criteria against which the achievement of policy objectives would be measured, or what data would be necessary to accurately and sufficiently measure performance. Health did not document the allocation of roles and responsibilities for monitoring performance, the frequency and format of performance reporting, or the approval of these arrangements by senior officials. Advice provided to the Australian Government in December 2021 stated it was ‘critical’ that ‘telehealth services are patient-focussed, based on patient need and do not undermine the role of face-to-face care, consistent with the principles outlined by the MBS Review Taskforce Telehealth Recommendations 2020’ but did not identify how Health would obtain assurance that these critical requirements were met.

4.5 Health officials advised the ANAO that to the extent compliance with the MBS was an indicator of telehealth performance, Health’s provider compliance framework provided an existing mechanism for monitoring performance.⁵⁴ Moreover, Health officials advised the ANAO that because every telehealth service provided is by nature a socially-distanced health service that would reduce the risk of COVID-19 transmission between provider and patient, usage of telehealth services was an indicator of success. The uptake of telehealth services was measurable in MBS billing records.

4.6 Health’s decision to design most telehealth MBS service items as a mirror of equivalent face-to-face service items was informed by advice from the Department of Finance on 7 March 2020 that this approach would facilitate performance monitoring. Although most items were mirrored individually, two submissions to the audit provided feedback that the consolidation of multiple allied health chronic disease management services from individual face-to-face MBS items into a single telehealth and phone item⁵⁵ negatively affected the ability of stakeholders to monitor and evaluate the usage of these services. One submission asserted that Health had advised this was done for ease of implementation.

Performance monitoring activities

4.7 Health monitored telehealth MBS billing through MBS billing records maintained by Services Australia. A June 2020 live assurance review commissioned by Health found that performance monitoring to that date had been limited to reporting on MBS telehealth item usage.

Figure 4.1: Example of Health internal reporting of billing patterns in Victoria, 13 April 2021

Note: Based on the context in which this figure appeared, a ‘COVID Flag’ of ‘Yes’ refers to telehealth items, a ‘COVID Flag’ of ‘No’ refers to face-to-face items.

Source: Health.

4.8 Recent performance audits by the ANAO have identified weaknesses in Health’s controls to ensure the integrity and quality of third-party data sources used to monitor and report on performance.⁵⁶ In response to a recommendation in Auditor-General Report No. 3 2022–23 Australia’s COVID-19 Vaccine Rollout that Health establish processes to ensure it regularly obtains assurance over the data quality and IT controls for externally managed systems, Health advised that it will undertake an independent review of its IT controls and application of its internal quality assurance framework, although it did not indicate when this would be done.⁵⁷ This audit did not test the effectiveness of Health’s system-level controls over the integrity and quality of telehealth billing data.

4.9 The ANAO tested the accuracy of selected departmental reporting on telehealth MBS item usage against billing data that was sourced directly from Services Australia by the ANAO. The analysis found that the reporting was accurate when compared to this data.

Regular reporting on telehealth usage data

4.10 Two data analytics teams in Health were independently tasked with collating MBS telehealth billing data for reporting to senior officials on billing patterns. From 16 March 2020 Health generated and disseminated reporting of billing patterns for temporary telehealth items on at least weekly basis to senior officials and on a monthly basis to the Minister for Health (the Minister).

4.11 The first team was within Medical Benefits Division. Activities comprised:

• from 19 March 2020, an interactive application that allowed users within Medical Benefits Division to generate on-demand reporting on billing data for temporary telehealth items introduced in response to COVID-19;
• between 9 February and 31 March 2021, a weekly update on MBS items provided to the First Assistant Secretary of Medical Benefits Division comparing telehealth and face-to-face service uptake and bulk billing trends;
• between May 2020 and March 2021, monthly reporting on COVID-19 telehealth items (comparing the number of MBS services provided and the benefits paid against the year prior to demonstrate the impact of COVID-19 on different categories of healthcare) at the request of the Minister through the Minister’s office; and
• adaptation of these reports in response to requests from senior Health officials and, over the course of the pandemic, ad hoc reporting at the request of senior Health officials.

Figure 4.2: Example of Medical Benefits Division reporting on billing patterns, 21 March 2021

Source: Health.

4.12 The second team, within Benefits Integrity and Digital Health Division, developed three automated reports that monitored telehealth usage patterns over time, in part to assist in the identification of potential non-compliance (Table 4.1). Production of these reports ceased upon the transition to permanent telehealth.

4.13 In 2020 and 2021, the two data analytics teams conducted analysis of telehealth MBS data largely to service the specific needs of their respective divisions (policy or compliance respectively). However, the absence of defined roles for separate teams analysing the same dataset caused some confusion between March and June 2020 over how information requirements on the performance of telehealth measures could be best met and how duplication of effort could be avoided.

Receipt of performance information from other sources

4.14 Senior officials responsible for the expansion of telehealth received or identified research conducted by peak bodies and other third parties. This research was based on surveys of providers and patients about their experiences of the early stages of implementation. Health did not maintain a formal process to assess the implications of this research, and the extent to which the reporting was considered by responsible officials is undocumented. A list of third-party reporting received by Health is provided in Appendix 4.

4.15 Health officials advised the ANAO that informal liaison with key stakeholders was another mechanism by which implementation issues were identified. Peak bodies, the Director of the Professional Services Review⁵⁸, members of the Primary Health Reform Steering Group, medical professionals, and academics contacted Health to raise issues.

4.16 The ANAO identified evidence of implementation issues through complaints and inquiries from members of the public to Services Australia, and provider inquiries to AskMBS. The theme of complaints and inquiries received by Health included:

1. perceived lack of clarity or gaps in policy guidance on telehealth use;
2. suggestions on health services to be added to telehealth; and
3. the distribution of inaccurate information about telehealth by third-parties.

4.17 Health did not use these complaints and inquiries in a systematic way to analyse and monitor performance.

Has the effectiveness of the expansion of telehealth been evaluated?

Planning for evaluation

4.18 Health did not make plans at the time of the initial telehealth expansion in March 2020 to conduct an evaluation of temporary telehealth settings. While this reflected the focus on rapid implementation in the initial response, extensions of temporary telehealth in September 2020 and February 2021 also did not include evaluation plans.

4.19 Advice provided to the Australian Government for the third telehealth extension in May 2021 contained three short statements that proposed future evaluation arrangements.

1. A review of temporary telehealth items would be conducted prior to 31 December 2021 to inform the Australian Government.⁵⁹
2. Health would undertake a review of certain new temporary telehealth items (relating to blood borne viruses and sexual and reproductive health) via the Medical Services Advisory Committee⁶⁰ before 30 June 2023; the review would consider the appropriateness of making these items permanent.
3. An ongoing review of telehealth services would be conducted under a proposed ‘MBS Continuous Review’.⁶¹

Note a: See previous advice from Health regarding a broader review into the COVID-19 pandemic in Auditor-General Report No. 3 2022–23 Australia’s COVID-19 Vaccine Rollout, paragraph 23.

4.23 Advice provided to the Australian Government proposing permanent telehealth arrangements in December 2021 did not discuss arrangements for an evaluation of permanent telehealth and noted the absence of a formal evaluation framework. ‘Ongoing monitoring for fiscal impacts in the context of Budget and [Mid-Year Economic and Fiscal Outlook] processes’ and compliance activity were identified as sources of performance information.

4.24 From May 2020 planning for permanent telehealth was conducted concurrently with extensions of temporary settings. Policy advice for all three extensions noted that a review of telehealth experience during the COVID-19 pandemic would be used to inform policy settings for permanent telehealth. No specific criteria against which the success of temporary telehealth as a pandemic response or as a prototype for permanent telehealth were identified, however the advice articulated specific sources of temporary telehealth evidence that would be used to inform permanent telehealth policy proposals (Table 4.2).

Table 4.2: Evidence sources nominated by Health as a means to capture temporary telehealth experience to inform future policy

Note a: The appointment of expert advisors in the Primary Health Reform Steering Group is discussed in footnote 29.

Note b: Tertiary analysis refers to interpretative analysis of empirical studies of patient outcomes and experiences.

Source: ANAO analysis based on Health records.

Use of evidence to inform permanent telehealth policy

4.25 Nine of the 31 submissions to the audit (29 per cent) provided feedback on a perceived lack of evaluation by the department or insufficient evidence to support the policy decisions for permanent telehealth. The ANAO examined whether the sources of evidence cited in policy advice (MBS data analysis, independent expert advice and tertiary analysis, see Table 4.2) were used in practice to inform policy development for permanent telehealth. Stakeholder consultation undertaken on permanent telehealth is discussed in paragraphs 2.30 to 2.36.

Analysis of MBS data

4.26 In 2020 and 2021 Health periodically collated insights drawn from MBS billing data about how telehealth was being used during the pandemic and briefed decision makers on how this analysis should inform the design of permanent telehealth. Analyses conducted by Health considered the volume and cost of services billed; comparisons between telehealth and equivalent face-to-face items; the use of videoconferencing compared to phone only items; the impact of telehealth on access to health care in rural and regional areas; and the prevalence of bulk billing. Analysis of MBS data was featured in six of seven ‘deep dive’ briefs provided to the Minister between 2 June 2020 and 6 August 2021 to discuss potential policy settings for permanent telehealth.⁶²

Independent expert advice and tertiary analysis

4.27 During 2020 and 2021 Health commissioned primary and tertiary research from independent experts to contribute to an evidence base for permanent telehealth. The research focussed on the benefits and clinical suitability of telehealth services. Two of the three research projects either collected evidence from consumers who had experience with telehealth during the pandemic, or considered academic studies that had been conducted in relation to telehealth in Australia during the pandemic. The remaining project largely examined research conducted prior to the pandemic. None of the projects evaluated the administrative aspects of the expansion of telehealth services during COVID-19.

4.28 The Australian Institute for Health and Welfare (AIHW)⁶³ released seven reports relevant to telehealth across 2020 and 2021. The ANAO observed one instance of senior Health officials using AIHW reporting in April 2021 to inform decision making around telehealth.

Future evaluation of permanent telehealth

4.29 On 12 April 2021 a Medical Research Future Fund grant was awarded to the Australian National University to conduct research between 1 May 2021 to 30 April 2024 on the effect of telehealth on the uptake and quality of primary health care.⁶⁴ Two senior Health officials are members of the steering committee for this research project. The research plans to consider the impact of telehealth on primary health care uptake and quality (including safety, accessibility, continuity and acceptability), and the management of safety in telehealth consultations.

4.30 The terms of reference for the MBS Review Advisory Committee are confined to examining the effectiveness of health services on the MBS and do not include consideration of whether the administrative experience of implementing MBS changes such as the expansion of telehealth holds lessons for the administration of the Medicare program.⁶⁵ Health undertook preliminary work in August 2022 to prepare tasking for the MBS Review Advisory Committee to conduct an evaluation of telehealth under the auspices of the MBS Continuous Review.

Appendix 1 Entity response

Appendix 2 Improvements observed by the ANAO

1. The existence of independent external audit, and the accompanying potential for scrutiny improves performance. Improvements in administrative and management practices usually occur: in anticipation of ANAO audit activity; during an audit engagement; as interim findings are made; and/or after the audit has been completed and formal findings are communicated.

2. The Joint Committee of Public Accounts and Audit (JCPAA) has encouraged the ANAO to consider ways in which the ANAO could capture and describe some of these impacts. The ANAO’s 2021–22 Corporate Plan states that the ANAO’s annual performance statements will provide a narrative that will consider, amongst other matters, analysis of key improvements made by entities during a performance audit process based on information included in tabled performance audit reports.

3. Performance audits involve close engagement between the ANAO and the audited entity as well as other stakeholders involved in the program or activity being audited. Throughout the audit engagement, the ANAO outlines to the entity the preliminary audit findings, conclusions and potential audit recommendations. This ensures that final recommendations are appropriately targeted and encourages entities to take early remedial action on any identified matters during the course of an audit. Remedial actions entities may take during the audit include:

• strengthening governance arrangements;
• introducing or revising policies, strategies, guidelines or administrative processes; and
• initiating reviews or investigations.

4. In this context, the below actions were observed by the ANAO during the course of the audit. It is not clear whether these actions and/or the timing of these actions were planned in response to proposed or actual audit activity. The ANAO has not sought to obtain assurance over the source of these actions or whether they have been appropriately implemented.

• Following information requests from ANAO for copies of approved External Costing Request (ECR) forms, additional ECR forms that had not been placed on file in Health’s records management system were added to the file.

Appendix 3 Weekly queries received and timeliness of responses through Health’s AskMBS email advice service

 

Source: ANAO analysis of data provided by Health on AskMBS inquiries.

Appendix 4 Third-party research on temporary telehealth received by Department of Health and Aged Care