Health Insurance (Approvals for Eligible Collection Centres) Principles 2020

The instrument relies on several defined terms from the Act and a few defined within the instrument itself. The key concepts are:

• Approved pathology authority (APA): Defined in the Act, this is a person or body (such as a company, partnership, or individual) that is approved under Part IIB of the Act to conduct pathology services. Only an APA can apply for approval of an eligible collection centre.
• Eligible collection centre: Defined in subsection 23DA(1) of the Act, this is a place where pathology specimens are collected, but where the pathology testing is performed elsewhere (at an accredited pathology laboratory). The approval allows Medicare benefits to be payable for tests conducted from specimens collected at that centre.
• Accredited pathology laboratory: A laboratory that meets accreditation standards under the Act. The instrument distinguishes two categories: category G pathology laboratory (where premises are approved as category GX or GY) and category S pathology laboratory (where premises are approved as category S). The distinction affects who can apply. A category G laboratory is a general pathology laboratory; a category S laboratory is a specialist laboratory (e.g., for specific tests like cytology or genetics).
• Collection Centre Guidelines: Defined in subsection 23DA(1) of the Act, these are guidelines made by the Minister setting out operational standards for collection centres, covering matters such as hygiene, safety, patient privacy, record keeping, transport of specimens, and quality assurance. The instrument requires an applicant to give a written undertaking to comply with these guidelines, except where the Minister accepts that full compliance is not reasonably practicable.
• Approval: The approval granted under s 23DA(1) of the Act. Once granted, the centre is an “eligible collection centre” and tests ordered from that centre can attract Medicare rebates. Without approval, the centre cannot operate as a Medicare-eligible collection point.
• Prerequisites: The term is used in the instrument but is not separately defined. Section 6 sets out two mandatory prerequisites before the Minister may grant approval: (a) a valid application meeting Subdivision B requirements, and (b) premises meeting Subdivision C requirements. These are exhaustive conditions; the Minister has no discretion to grant approval if they are not satisfied, but also no obligation to grant approval if they are satisfied (the word “must not grant” is prohibitory, but the positive grant is still discretionary).
• Duration: Approval lasts two years from the day it comes into force (which is typically the date of grant, or a later date specified, or earlier only in special circumstances with the Minister’s satisfaction). This is a relatively short term, requiring regular renewal applications. The instrument does not set out renewal procedures; only initial approval procedures are specified. Renewal would presumably require a fresh application, subject to the same prerequisites.
• Transitional provisions: Division 1 of Part 3 ensures that existing approvals under the 2010 Principles continue unaffected (s 12). It also allows the old application form to be used for new applications until the Minister approves a new form, with modifications to align the declarations with the new undertaking requirements (s 13). This avoids a gap in application processing.

Understanding these concepts is essential for any APA considering entering or staying in the pathology collection market. The narrow definition of eligible applicants (especially the restriction on APAs with arrangements for category G labs) means that many previously approved collection centres may lose their grandfathering when the current approval expires and cannot be renewed if the APA no longer meets the new applicant categories. However, transitional s 12 only preserves the period of existing approvals; it does not guarantee renewal.

The primary subjects are approved pathology authorities (APAs) that operate or wish to operate eligible collection centres. The instrument directly affects APAs in three specific categories. First, an APA that operates and owns a category G pathology laboratory (a general lab). Second, an APA that has an arrangement to use a category G lab operated by another APA, but only if that APA had an approval for a collection centre before the commencement of this instrument (1 October 2020) under the 2010 Principles, and that approval was granted because it was an eligible applicant under paragraph 5(2)(b) of those Principles. Third, an APA that operates and owns a category S pathology laboratory (a specialist lab) that is proposing to collect only specimens for the kind of pathology services for which its lab is approved.

This means the instrument narrows the pool of potential applicants significantly compared to the 2010 regime. Under the 2010 Principles, an APA with an arrangement with a category G lab could apply without a pre-existing approval. Here, that avenue is closed except for those already in the market. New APAs that do not own a laboratory - for example, a specialist pathology service that rents collection space from a hospital but does not operate its own lab - cannot get a collection centre approval. This affects pathology service providers, hospitals, community health centres, and commercial collection centre operators.

The instrument also affects patients indirectly. Fewer collection points mean reduced convenience and potentially longer travel times for specimen collection. Medicare benefits for pathology tests are only payable when the collection is done at an approved collection centre (or at certain other approved locations). If a collection centre cannot get approval or loses approval, patients may need to go to a hospital or a laboratory directly, increasing costs and reducing access.

The instrument affects the Minister and the Department of Health (including the Chief Executive Medicare) by imposing administrative duties: receiving applications, checking compliance with form and content requirements, verifying premises, and issuing notices of decision. The 24-hour notification requirement for breaches of the Guidelines imposes a monitoring and enforcement burden on the regulator, as each notification must be assessed and may lead to revocation or other action.

Laboratory owners that are not APAs are not directly affected, but they may contract with APAs. However, the instrument indirectly restricts who they can contract with, because an APA that does not own a lab can only get an approval if it had a pre-existing arrangement approval. This may lock in existing contractual relationships and deter new entrants.

Finally, the instrument affects the broader pathology industry by preserving the regulatory model that ties collection centre approvals to laboratory ownership or historical presence. This reduces the scope for competing collection centre operators who wish to provide services independent of a particular laboratory, which could lower market concentration and prices.

The instrument imposes duties on both the applicant APA and the Minister. For the applicant, the central duty is to provide a complete application in the approved form, including a response to every question, information substantiating each response, and any additional information the Minister requires at the time of lodgement. The application must also include a written undertaking with two specific commitments. First, the applicant undertakes to comply with the Collection Centre Guidelines while the approval is in force, except to the extent the Minister accepts that some or all provisions are not reasonably practicable in the particular circumstances. Second, the applicant undertakes to give the Chief Executive Medicare written notice within 24 hours after any failure to comply with the Guidelines, stating the reason for the failure.

This 24-hour reporting obligation is onerous. “Failure to comply” is not limited to serious breaches; it covers any departure from the Guidelines, no matter how trivial. The APA bears the cost of monitoring and reporting, and the obligation runs for the full two-year approval period. The only relief is if the Minister has accepted that compliance with certain provisions is not reasonably practicable; that acceptance must be obtained in advance (presumably at the time of application or later). The undertaking is given at the application stage and is a condition of the grant of approval.

The applicant also has a duty to ensure the premises meet the requirements of s 9: must have necessary equipment, and staff must include persons trained in specimen collection and preparation, and those staff must be either employees of the APA or engaged under a contract that gives the APA power to generally direct or control their work. This latter requirement excludes independent contractors who operate under a service agreement without control. It effectively requires a degree of vertical integration or at least close contractual control, which may increase costs and limit flexibility.

The Minister’s duties are to not grant an approval unless the prerequisites are met (s 6), to give written notice of the decision to grant or not grant the approval (s 10), and if the decision is a refusal, to include notice of the applicant’s right under s 23DO(2DA) of the Act to apply for reconsideration. The Minister has no duty to give reasons for refusal; the notice need only state the decision and the reconsideration right. The Minister also has power under the Act (not in this instrument) to revoke an approval under s 23DNG or cancel on request under s 23DNH. The instrument does not create any duty to consult or to conduct a hearing before revocation.

The applicant’s rights are limited. The right to apply for reconsideration of a refusal is preserved by reference to the Act, but the instrument does not specify any time limits or procedures for that reconsideration. The applicant also has the right to have the application considered according to the prerequisites; if the Minister fails to consider them or acts arbitrarily, the applicant may have judicial review rights under the Administrative Decisions (Judicial Review) Act 1977 (Cth), but that is not mentioned in the instrument. The duration right is that an approval lasts two years, but that is subject to earlier revocation, which the Minister can initiate without cause (the Act specifies grounds, but they are not repeated here).

The instrument itself does not create offences or penalties. Instead, enforcement flows from the Health Insurance Act 1973 and the Collection Centre Guidelines. The most direct enforcement mechanism is revocation of the approval under s 23DNG of the Act. The Minister may revoke an approval on the Minister’s initiative if satisfied that the holder has failed to comply with the Collection Centre Guidelines or any condition of the approval, or for other prescribed grounds. Revocation means the centre is no longer an eligible collection centre, and Medicare benefits will not be payable for tests ordered from that centre. This gives the Minister significant leverage over APAs, because losing an approval can destroy the centre’s revenue.

The 24-hour notification requirement in the undertaking (s 8(2)(d)(ii)) is a condition of the application, not a statutory obligation. However, a failure to notify is itself a breach of the undertaking, which is a condition that the Minister can consider when deciding whether to revoke. If the APA complies with the notification requirement, the Minister is aware of the breach and may commence revocation proceedings. If the APA fails to notify within 24 hours, it has further breached its undertaking, and the Minister may treat that as a separate failure. The instrument does not provide any grace period or defence of reasonable excuse for late notification.

Other potential enforcement avenues include criminal penalties under the Act for providing false or misleading information in the application (s 23DNAB of the Act deals with false statements). The approved form requires the applicant to warrant the truth of the information. Making a false statement in connection with an application for approval could attract penalties under the Criminal Code (including imprisonment). The instrument does not mention these penalties, but they apply by operation of law.

Civil penalties may also apply under the Act. Section 23DNA of the Act provides for civil penalty orders for breaches of certain provisions, including operating an unapproved collection centre that purports to be approved, or claiming Medicare benefits for tests from an unapproved centre. However, again, these are not in the instrument.

The instrument’s structure means that enforcement relies heavily on self-reporting. The APA is required to police its own compliance and report failures. This shifts the cost of enforcement onto the regulated entity. The Minister does not need to monitor - the APA must proactively deliver evidence of its own non-compliance. This may encourage overly broad reporting to avoid the risk of a later finding that a failure was not reported, but it also creates a compliance burden that small APAs may find disproportionate.

The instrument does not specify any sanctions for breaches other than through revocation. There is no mention of fines, suspensions, or corrective action orders. The ultimate sanction is loss of the approval, which is total. There is no partial penalty such as a temporary suspension. This all-or-nothing enforcement may lead to harsher outcomes for minor breaches, unless the Minister exercises discretion not to revoke. But the instrument does not guide that discretion.

This instrument is made under the Health Insurance Act 1973, specifically subsection 23DNBA(4). It operates within the broader regulatory framework for pathology services under Part IIB of that Act. The Act establishes the system for approving pathology laboratories, approved pathology authorities, and eligible collection centres. The instrument fills in the details for collection centre approvals that the Act leaves to principles determined by the Minister. The Act also contains provisions for reconsideration and review of decisions (s 23DO and following), which apply to decisions made under this instrument.

The instrument also interacts with the Collection Centre Guidelines, which are made separately under s 23DA(1) of the Act. The instrument requires the applicant to undertake to comply with those guidelines. The guidelines themselves will have their own requirements for operation, hygiene, record keeping, transport, and so forth. A breach of the guidelines is the key trigger for potential revocation. The instrument does not incorporate the guidelines by direct reference; it merely requires the undertaking. Thus, the guidelines are dynamic - they can be amended by the Minister without amending this instrument, and the undertaking automatically applies to the latest version.

The instrument interacts with the Health Insurance (Accredited Pathology Laboratories) Principles (another legislative instrument) insofar as it defines category G and category S pathology laboratories by reference to approvals under s 23DN of the Act. The eligibility criteria for applicants depend on the category of the laboratory they operate or arrange to use. Changes in laboratory categorisation under that other instrument could affect whether an APA qualifies. For example, if a category G laboratory is reclassified as something else, an APA that relied on owning a category G lab might lose its ability to apply for new approvals.

The instrument also interacts with the Administrative Decisions (Judicial Review) Act 1977 (Cth) and the common law principles of natural justice. Even though the instrument does not provide a right to be heard before a decision not to grant approval (or to revoke), a court may imply such a requirement in certain circumstances. The instrument’s notice of decision and right of reconsideration are statutory minima, not full procedural fairness.

State and territory laws regulating health facilities, occupational health and safety, privacy, and waste disposal also apply to collection centres. The Collection Centre Guidelines likely incorporate or reference those laws. The instrument does not add to or override those state laws. Compliance with state law is separate but may be relevant to whether the Collection Centre Guidelines have been breached.

The instrument’s transitional provisions interact with the repealed 2010 Principles. The instrument continues existing approvals and the old form. This prevents a gap, but it also means that some APAs are operating under conditions that no longer apply for new applicants. For example, an APA with an arrangement for a category G lab that had an approval under the 2010 Principles can still renew? The instrument only continues the current approval period; it does not guarantee renewal. At renewal, the APA must meet the new eligibility criteria unless a separate transitional provision applies. The instrument does not have a transitional provision for renewal; only for the continuation of existing approvals during their current term. This gap may create a cliff edge: when the existing approval expires, the APA may not qualify for a new approval because it does not own a laboratory and did not have a pre-2010 approval (the grandfathering in s 7(3) only applies if the APA had an approval before commencement). This is a significant interaction that could lead to loss of approved status.

The instrument was made on 14 September 2020 and commenced on 1 October 2020. It is the original instrument; no amendments have been made to it as of the date of the provided text. The instrument repealed the Health Insurance (Eligible Collection Centres) Approval Principles 2010 in its entirety. That 2010 instrument was the predecessor that governed collection centre approvals from 2010 until 1 October 2020.

The 2010 Principles had broader eligibility: under paragraph 5(2)(b), an APA that had entered into an arrangement for the use of a category G pathology laboratory could apply without a pre-existing approval. The 2020 instrument restricts that path by requiring that the APA had an approval under that ground before commencement. This is a deliberate narrowing of eligibility. The explanatory materials (not provided, but inferable) likely state that this amendment was to ensure that collection centres are directly linked to a laboratory operator, reducing the risk of centres that are not properly supervised. From a free market viewpoint, it reduces new entry and entrenches incumbents.

The instrument does not contain any later amendments. There is no mention of amendment by subsequent instruments. The transitional provisions (s 12 and 13) are the only provisions that deal with the change from the old regime. The instrument also provided for the continued use of the old application form until the Minister approves a new one. That new form has presumably been approved since 2020, but the text does not indicate whether that has happened.

The instrument has not been repealed or replaced. It remains in force. The table in s 2(1) shows that the whole instrument commenced on 1 October 2020. There are no later commencement tables. The instrument is still the current law.

The provided text of the instrument does not cite any court cases. There is no litigation history recorded in the instrument itself. However, as a legislative instrument that has been in force since 2020, it may have been the subject of judicial review applications in the Federal Court. Without access to case databases, we can note that the instrument’s predecessor, the 2010 Principles, might have been challenged, but this instrument is the current one. Common grounds for challenge could include: failure to take into account relevant considerations (e.g., whether the Minister properly considered alternative premises), denial of procedural fairness (e.g., revocation without hearing), or jurisdictional error in interpreting the eligibility criteria.

Given the instrument’s restriction on eligibility, it is possible that APAs who lost their approvals or were unable to renew have sought review. The right to apply for reconsideration under s 23DO(2DA) of the Act is a statutory internal review. After that, the applicant may apply to the Administrative Appeals Tribunal for merits review, and then to the Federal Court on a question of law. However, no such cases are referenced in the instrument.

The instrument itself does not create any private rights of action. Only the Minister’s decisions are reviewable. There is no mention of any litigation in the text. We must not invent cases. Therefore, we simply note that there is no litigation history cited in the source.

Several provisions in this instrument contain traps for the unwary. The most significant is the narrow grandfathering in s 7(3). This subsection appears to preserve the right for an APA with an arrangement for a category G lab to apply, but only if the APA “before the commencement of this instrument, had an approval for an eligible collection centre granted in accordance with the Health Insurance (Eligible Collection Centres) Approval Principles 2010 because the APA was an eligible applicant because of paragraph 5(2)(b) of that instrument.” This is a conditional grandfather. The APA must have not only held an approval before 1 October 2020, but that approval must have been granted specifically under the arrangement ground. If the APA had an approval under a different ground (e.g., as operator of a category G lab), it does not qualify under s 7(3). Worse, if the APA’s pre-commencement approval was granted under the arrangement ground but then lapsed before commencement, it does not have an approval “had” before commencement; the term “had” suggests a present or existing approval. A lapsed approval would not count. This creates a trap for APAs that allowed their approval to expire between the 2010 Principles and the new instrument.

Another gotcha: the 24-hour notification obligation applies to “a failure to comply with the Collection Centre Guidelines.” The term “failure” is not qualified. It covers any non-compliance, even if inadvertent, trivial, or immediately remedied. The APA must decide within 24 hours whether a deviation from the Guidelines occurred and must notify. This is a strict obligation. There is no de minimis exception. The Chief Executive Medicare receives these notices and can take action. The APA cannot safely rely on correcting the issue without reporting; the undertaking requires reporting. Failure to report is itself a breach of the undertaking, which could be used as a ground for revocation. The undertaking is given at the application stage, but it binds the APA for the entire two years. There is no mechanism to withdraw or amend the undertaking.

The approval duration is only two years. This short term means regulatory uncertainty and repetitive application costs. The instrument does not specify a renewal process; it only details initial application prerequisites. When an approval expires, the APA must submit a new application. If the eligibility criteria have changed (e.g., the APA no longer owns a category G lab), it may not qualify. This is especially problematic for APAs that rely on the arrangement grandfather, because that grandfather only applies to applications made before the new form? No, it applies to any application under this instrument, but only if the APA had the pre-commencement approval. If the APA loses that approval (e.g., it expired and was renewed for 2 years under the 2010 Principles, then that renewed approval would have been in force at commencement), then at the next renewal after that, the APA would still have had that approval before commencement? The wording is ambiguous: “had an approval … before the commencement”. If the approval was granted before commencement, it counts even if it expired later. But if the approval was granted after commencement? Then s 7(3) does not apply. So an APA that received a new approval after 1 October 2020 under the 2010 Principles (which are repealed but still effective for existing approvals? Actually, repeals don’t affect existing approvals, so the 2010 Principles continue to govern the initial grant of approvals? No, they are repealed; after 1 October, approvals can only be granted under the new instrument. So at commencement, any approval granted under the 2010 Principles that was still in force is “had”. An APA that relied on the arrangement ground and got an approval under the 2010 Principles before 1 October 2020 is safe. But if its approval expired after that date, and it applies for a new approval, it may rely on s 7(3) because it “had” that approval before commencement. The past tense “had” suggests that at the time of application (after commencement), the APA must have had that approval before commencement. This is satisfied even if the approval has since expired, as long as it existed before commencement. So that trap is less severe.

The requirement that staff be “persons who are either employed by the APA or engaged directly or indirectly under a contract that gives the APA power to generally direct or control the work” (s 9(3)(b)) may catch APAs that use independent contractors or staffing agencies where the APA does not have control over the day-to-day work. If the contract gives the APA power to direct and control, then the staff are not truly independent. But many collection centres use agency nurses or technicians who are not under the APA’s control. The APA must ensure its contracts include a control clause, which may attract reclassification risks under employment law (e.g., contractor deemed an employee for tax purposes). The instrument does not grandfather existing staffing arrangements; the premises must meet this requirement at the time of application. An APA that changes its staffing model may need to renegotiate contracts.

The instrument requires that the application include “additional information (if any) that is required by the Minister to be provided at the time of lodgement of the application to allow the application to be decided” (s 8(2)(c)). This gives the Minister a wide, unfettered discretion to demand further information. There is no limit on what can be required. This could be used to demand commercially sensitive data, such as financial records or patient volumes. The APA must comply or risk the application not meeting requirements. This power is not subject to any proportionality test.

An APA that wishes to obtain or renew an approval for an eligible collection centre should follow a structured process. First, confirm that the APA falls within one of the three applicant categories in s 7. If the APA operates and owns a category G pathology laboratory (category GX or GY under s 23DN of the Act), it qualifies under s 7(2). If the APA operates and owns a category S pathology laboratory and will collect only specimens for the services that lab is approved for, it qualifies under s 7(4). If the APA does not own a laboratory but has an arrangement to use a category G laboratory, it can only apply if it had a pre-1 October 2020 approval for a collection centre that was granted under the arrangement ground of the 2010 Principles. If it does not qualify, do not apply; apply to vary the categorisation of the laboratory or restructure the business to own a laboratory.

Second, ensure the premises meet the requirements of s 9. Install the necessary equipment for collection and preparation of specimens. Verify that all staff who collect or prepare specimens have appropriate training (s 9(3)(a)). Ensure that those staff are either employees of the APA or are under a contract that gives the APA power to generally direct and control their work. If using agency staff, review the contract to confirm the control clause exists. If not, renegotiate or consider direct employment. The APA should document the training and contractual arrangements.

Third, obtain the approved application form. If the Minister has not yet approved a new form, use the old form from the 2010 Principles as modified by s 13. The form must include responses to all questions, substantiating information, any additional information required by the Minister, and the written undertaking. The undertaking must be in the specific terms: compliance with the Collection Centre Guidelines except where the Minister accepts impracticability, and notification of any failure within 24 hours. The form previously had declarations that are now deemed to be the required undertakings. Fill out the form carefully; incomplete responses or missing information will cause the application to not meet requirements, and the Minister must not grant approval.

Fourth, lodge the application with the Minister (likely through the Department of Health). The Minister will consider the application and give written notice of the decision. If granted, the approval takes effect either on the day of grant or a later specified day (or earlier if special circumstances). The approval lasts two years. Keep a copy of the notice.

During the two-year approval period, the APA must operate the centre in compliance with the Collection Centre Guidelines. This is not just a best-efforts obligation; it is a strict undertaking. Regularly audit the centre’s operations against the Guidelines. If a failure occurs, the APA must give the Chief Executive Medicare written notice within 24 hours, stating the reason for the failure. This notice should be factual and prompt. Failure to notify is itself a breach. If the APA discovers a failure after more than 24 hours, notify immediately anyway; the delay may be considered but is better than not notifying. The APA should also take corrective action and consider whether to request the Minister accept that compliance with certain Guidelines was not reasonably practicable. That acceptance can be sought before or after the failure (though the undertaking refers to “while the approval is in force”, so acceptance can be sought retrospectively? The wording “except so far as the Minister accepts that compliance … is not reasonably practicable in particular circumstances” suggests the Minister can accept after the event. However, it is safer to seek prospective acceptance of non-compliance if the centre’s circumstances make full compliance impossible.

When the approval is nearing expiry, begin the application process again. There is no automatic renewal. The eligibility criteria must be met at the time of the new application. If the APA’s circumstances have changed (e.g., it no longer owns the category G laboratory), it may not qualify. Plan for this years in advance, perhaps by acquiring a laboratory or securing the arrangement that qualifies under the grandfather. The two-year cycle imposes ongoing regulatory costs.

Finally, the APA must keep records: copies of all applications, correspondence with the Minister, staff training records, equipment maintenance logs, compliance audits, and any notifications of failure. These records may be relevant if the Minister investigates or if revocation proceedings are initiated. The instrument does not impose a record-keeping obligation, but it is prudent given the 24-hour notification requirement. The notifications themselves should be filed and acknowledged. Without acknowledgment, the APA should keep evidence of sending (email receipt, registered post).