National Health (Multiple Hospitals Paperless Claiming Trial) Special Arrangement 2017 (PB 14 of 2017)

The instrument introduces several defined terms and modifies existing concepts from the National Health Act and Regulations. A medication chart is a paper-based medication chart, as distinct from any electronic equivalent. The medication chart prescription is defined by reference to regulation 19AA of the Regulations, but this instrument expressly excludes medication chart prescriptions from its scope (section 6(3)), so that separate regulatory scheme does not interact. The core concept is that the medication chart is taken to be a prescription written under regulation 19, provided the conditions in section 7 are met. This deeming provision overrides the usual requirement for a paper prescription signed by the prescriber on a specific form, but only for the limited class of in-patients at the scheduled hospitals.

An in-patient of the hospital is defined narrowly as a person who occupies a bed for hospital treatment, excluding staff receiving treatment in their own quarters. This definition aligns with standard hospital admission concepts but may exclude day patients, out-patients, or persons in emergency departments not admitted to a bed. The instrument only applies to benefits supplied to in-patients.

The approved supplier is the pharmacy named in Column 2 of the schedule, which may be an individual, partnership, or company. The supplier must supply benefits as if the medication charts were original prescriptions, with two specific modifications: (a) where a chart directs supply of more than one benefit, the supplier must not defer supply of any one benefit (regulation 26A of the Regulations normally allows deferral); and (b) instead of the usual endorsement requirements in regulation 31, the supplier (or an authorised person) must certify on the chart that the benefit was supplied and the date. This certification is the evidentiary basis for the claim.

The electronic pharmacy record is a new concept created by this instrument. It must contain all information required by the Schedule to the Rules under section 99AAA for an online claim. That Rules schedule would specify fields such as prescriber identifier, patient Medicare number, date of supply, PBS item code, quantity, etc. The record must be retained for at least two years. This retention period is shorter than the standard prescription retention period (generally three years under state pharmacy laws), but the instrument does not override state requirements; compliance with both may still be needed.

The concept of a claim furnished unaccompanied by medication charts is central. Normally, a pharmacist must retain original prescriptions and furnish them to the Department on request or as part of claim substantiation. Here, the claim can be submitted online (via the PBS online claiming system) without attaching the paper charts. This is the “paperless” element. However, the Secretary retains the right to call for copies, meaning the paper charts must still be created, stored, and retrievable. The cost of scanning or copying is not shifted to the government.

The instrument does not define “online claim” with reference to any particular system, but subsection 8(8) requires conformity with the Rules made under section 99AAA for an online claim and with associated under co-payment data provision under section 98AC. This means suppliers must use approved PBS claiming software and meet technical standards. Any system failure or non-compliance could jeopardise payment. The trial thus tests the technical feasibility of relying on electronic records rather than paper scripts, but the paper chart remains the legal document for prescribing.

The instrument directly affects three groups: the seven named hospitals, their approved suppliers, and in-patients at those hospitals. Indirectly, it affects the Department of Health, the Chief Executive Medicare (who receives the claims data), and potentially the general PBS system through the lessons learned from the trial.

Hospitals: Cotham Private, Knox Private, St Vincent’s Private East Melbourne, St Vincent’s Private Fitzroy, St Vincent’s Private Kew, The Avenue Hospital, and Warringal Private. All are private, Victorian hospitals. They must ensure that their medication charts comply with the conditions in section 7, particularly the requirement to include the Medicare card number and the prescriber’s identification number. They must also be capable of producing copies of medication charts to the Department if requested (subsection 8(7)). The hospital holds the paper charts and has an ongoing record-keeping burden. There is no compensation for those costs. The hospital also loses the ability to authorise repeats or authority prescriptions for in-patients, which may conflict with clinical practice.

Approved suppliers: HPS Pharmacies entities (for the St Vincent’s and Knox/Cotham hospitals) and Ramsay Health Care Australia Pty Ltd (for The Avenue and Warringal). These suppliers gain the benefit of being able to claim without supplying the paper scripts upfront, which may speed cash flow and reduce physical storage. However, they must create and retain electronic pharmacy records for at least two years, which is a new compliance cost. Their internal processes must ensure the electronic record matches the paper chart and is transmitted to Medicare accurately. They also bear the risk of audit: if the Secretary requests electronic records or paper copies, they must respond promptly.

In-patients: The patient group is the one most affected in terms of treatment limitations. A patient who is an in-patient at one of these hospitals cannot receive a PBS benefit that requires an authority prescription (e.g. many high-cost or restricted drugs) through this mechanism. The prescriber must either use a separate prescription form outside this trial, or the benefit must be supplied under another arrangement. Similarly, a prescription for repeats is invalid. If a clinician wants to prescribe a repeat, they must issue a new medication chart or a separate prescription. This reduces flexibility. The patient also loses the ability to have a larger than maximum quantity dispensed (the instrument converts any direction for increased quantity to the maximum). If a patient needs a larger supply for clinical reasons, the prescriber must use a different pathway.

Department of Health and Medicare: They receive claims electronically and can audit electronically. The trial generates data on the accuracy and completeness of electronic records versus paper charts. The Secretary gains a new power to request electronic records and paper copies, which may be used to test the reliability of the paperless system.

The instrument does not affect patients outside these seven hospitals, prescribers at other hospitals, or other approved suppliers. It is a closed trial. The exclusion of authority prescriptions and repeats means the trial cannot assess paperless claiming for those categories, limiting its utility.

Duties of the approved supplier: Under subsection 8(3), the supplier must prepare an electronic pharmacy record for each medication chart where a claim is made. This record must be retained for at least two years. Under subsection 8(4), the record must contain all information required by the Schedule to the Rules for an online claim. Under subsection 8(8), information provided electronically for the claim must conform to the Rules under section 99AAA and 98AC. Under subsection 8(6), if the Secretary notifies the hospital that a copy of electronic records is required, the supplier must submit a copy to the Chief Executive Medicare. The supplier must also certify on the medication chart that the benefit has been supplied and date it (subsection 8(2)(b)). The supplier must not defer supply if the chart includes multiple benefits (subsection 8(2)(a)). The supplier must not supply a benefit that requires an authority prescription (section 7(g)) or one that is only available under another special arrangement (section 6(2)).

Duties of the hospital: Under subsection 8(7), if the Secretary notifies the hospital that a copy of medication charts is required, the hospital must submit a copy to the Department. The hospital also has the implicit duty to ensure that medication charts meet the requirements of section 7, including having the prescriber’s identification number and Medicare card number. The hospital must ensure that the medication chart does not include repeats or authority prescriptions.

Duties of prescribers: Prescribers must write the medication chart in a way that complies with section 7. Notably, they must not include a direction for repeats (subparagraph 7(1)(e)). If they do, that direction is invalid; the prescription becomes a one-off supply. If they direct a quantity exceeding the maximum, it is taken as a direction for the maximum (subparagraph 7(1)(f)). They must not prescribe a benefit that requires an authority prescription (section 7(g)). They must write the medication chart for a person who is an in-patient; if the patient is discharged, the chart may remain valid but the definition of in-patient would not apply. The instrument does not address discharge.

Rights: The approved supplier has the right to claim payment under Part VII for benefits supplied under this arrangement (section 5). The supplier can claim without attaching the paper charts (subsection 8(5)). The supplier has the right to retain the electronic pharmacy record for the two-year period and then destroy it, subject to other laws. The hospital has the right (and obligation) to hold the medication charts and produce them on demand. Neither the supplier nor the hospital has any right to be compensated for compliance costs; the trial is a regulatory imposition. The Secretary has the right to demand copies at any time, with no specified limit. This creates uncertainty about the volume of requests and the cost of compliance.

Interaction with other duties: The instrument does not override the duty to retain original prescriptions under state pharmacy laws. It adds a new duty to create an electronic record. The supplier may be required by state law to keep the paper chart for a longer period (e.g. three years), so the two-year minimum is a floor, not a ceiling. The supplier must also comply with the Privacy Act 1988 regarding the handling of patient information in the electronic record, though the instrument does not mention privacy.

The instrument itself does not create specific penalties. Enforcement relies on the existing provisions of the National Health Act 1953 and the National Health (Pharmaceutical Benefits) Regulations 1960. However, because this is a trial under section 100, non-compliance may result in the loss of the benefit of the trial (i.e., claims may be rejected, or the special arrangement may be revoked for that hospital or supplier). The Secretary has administrative powers to withhold payment or seek recovery of overpayments under Part VII. The instrument gives the Secretary a notification power (sections 8(6) and 8(7)) which, if not complied with, could lead to claims being disallowed or the supplier being removed from the trial.

Under the Act, a person who makes a false or misleading statement in connection with a claim may be liable for criminal offences under section 103 (false statements) or general Criminal Code offences. The electronic record is the basis for the claim; if it is inaccurate, the supplier may face recovery action. The requirement to retain electronic records for two years is enforceable under the Act; destruction before that time without authorisation could be an offence under section 70 of the Crimes Act 1914 (Cth) (fraud on the Commonwealth) or under public service offences, if it impedes audit. The instrument does not specify a penalty for failure to create a record, but the Secretary could refuse payment.

The hospital’s duty to submit medication chart copies on request is enforceable by direction; failure might lead to the hospital being excluded from future trials or the Department seeking an injunction. The Department could also use its general audit powers under the Act to inspect hospitals and suppliers.

There is no penalty for a prescriber who writes a medication chart that includes a repeat or authority prescription; the consequences are that the prescription is invalid under the trial (the repeat direction is ignored, the authority prescription cannot be supplied). The prescriber may be liable if they knowingly cause an incorrect claim, but the instrument itself does not penalise the prescribing act.

Given the trial nature, the primary enforcement mechanisms are administrative: denial of payment, clawback of amounts paid, and removal from the trial. The instrument gives the Secretary a strong hand: electronic records must be provided on request, and if they are not, the supplier cannot rely on the paperless claiming benefit. The supplier must also ensure that all information in the electronic record is correct; if an error leads to overpayment, the supplier may be liable for the amount plus any administrative penalty under the Act.

The instrument sits under section 100 of the National Health Act 1953. Section 100(3) provides that Part VII of the Act applies subject to the special arrangement. This means that the standard provisions of Part VII (e.g., on pricing, supply obligations, claims) apply unless explicitly modified. The instrument modifies certain provisions: regulation 19 (prescription content), regulation 26A (deferral of supply), regulation 31 (endorsement), and the rules about repeats and increased quantities. It does not modify provisions on who may prescribe (PBS prescribers), patient eligibility, or co-payments.

The instrument expressly excludes drugs that can only be supplied under another special arrangement (section 6(2)). This includes section 100-only drugs (e.g., chemotherapy drugs, some immunosuppressants) that are typically supplied through specialised programs. It also excludes medication chart prescriptions under regulation 19AA of the Regulations (section 6(3)). Regulation 19AA is a separate hospital medication chart arrangement that allows certain hospitals to use medication charts for PBS claiming without a special arrangement. The instrument effectively carves out a subset of hospitals that cannot use the regulation 19AA pathway and must use this trial instead, or vice versa. The interaction is confusing: the three St Vincent’s hospitals and two Ramsay hospitals are private; they may not be eligible for regulation 19AA (which may be limited to public hospitals or have other conditions). The instrument does not explain this.

The instrument must be read together with the National Health (Pharmaceutical Benefits) Regulations 1960, particularly regulation 19 (prescriptions), regulation 19A (accommodation details for non-general patients), regulation 8A (prescriber identification numbers), regulation 24 (increased quantities), regulation 26A (deferral), and regulation 31 (endorsement). The Rules under section 99AAA (online claiming) and under section 98AC (under co-payment data) also apply.

State and territory poisons legislation continues to apply. The medication chart must still meet state requirements for prescribing Schedule 4 or Schedule 8 drugs. The instrument only deals with PBS claiming, not with state jurisdictional requirements for controlled substances. For example, Victoria’s Drugs, Poisons and Controlled Substances Act 1981 still governs how Schedule 8 drugs are prescribed and recorded; the paper medication chart must comply with those state requirements separately. The electronic pharmacy record may need to meet state record-keeping standards as well, which may require additional fields not covered by the PBS Rules.

Privacy law: The collection, use, and disclosure of patient information in the electronic record is subject to the Privacy Act 1988 (Cth). The instrument does not grant any exemptions. The supplier must ensure that the electronic record is stored securely and not used for purposes other than PBS claiming. The requirement to submit records to the Chief Executive Medicare is likely covered by the existing authority under the National Health Act for PBS administration.

The instrument does not interact with the National Health (Continence Aids) Scheme, the Repatriation Pharmaceutical Benefits Scheme, or other programs. It only covers benefits generally available under Part VII of the Act.

The previous trial (PB 59 of 2016) is revoked, but transitional arrangements apply for prescriptions written under that trial (section 9). This shows that the Department intends to continue the trial with periodic renewals or modifications. The revocation may also affect ongoing audits: the previous trial’s rules remain relevant for historical claims.

The instrument does not interact with the National Health (Pharmaceutical Benefits) (COVID-19) Special Arrangement or other temporary measures, as it predates them.

This instrument is the National Health (Multiple Hospitals Paperless Claiming Trial) Special Arrangement 2017 (PB 14 of 2017), made on 17 February 2017 and commencing 1 March 2017. It revokes the National Health (Multiple Hospitals Paperless Claiming Trial) Special Arrangement 2016 (PB 59 of 2016). The previous instrument (PB 59 of 2016) would have been made in 2016, likely with similar terms but perhaps different hospitals or suppliers. The instrument does not publish the content of the previous arrangement. It appears the trial has been running since at least 2016 and is being renewed with the same or similar parties.

The instrument itself has not been amended; it is a standalone trial. However, the instrument references the Rules under section 99AAA and section 98AC, which may have been amended from time to time. The instrument also references the Regulations, which are amended periodically. Any such amendment could change the compliance requirements without an amendment to this instrument. For example, if the Schedule to the Rules for an online claim is updated, the electronic pharmacy record must include the new fields.

The instrument does not include an expiry date. It remains in force until revoked or replaced by a later instrument. The Department may issue a new trial arrangement each year, as suggested by the 2016 to 2017 progression. Practitioners should check whether a later instrument has superseded this one; as of the source text, this is the current arrangement. The lack of an expiry date creates uncertainty; the trial could continue indefinitely without legislative oversight. However, because it is a legislative instrument, it is subject to disallowance by Parliament under the Legislation Act 2003. It is registered on the Federal Register of Legislation.

The transitional provisions (section 9) show that the Department recognised the need for continuity when replacing the trial. This suggests that future replacements will also include transitional provisions. Users of this instrument should be aware that the trial may be replaced at any time, and that the instrument may be revoked without notice, though typically the Department would give some lead time.

The instrument does not mention any review or evaluation. There is no sunset clause. The trial could theoretically continue for years without assessment. This is a governance weakness; the trial should have a review date to assess whether the paperless claiming trial achieves its objectives and at what cost.

There is no litigation reported in the instrument or in the source text. The instrument itself does not reference any court cases. Given the instrument is a narrow trial for specific parties, it is unlikely to have generated litigation. However, there may be Administrative Appeals Tribunal (AAT) reviews of decisions by the Secretary regarding claims under this trial, but these are not part of the instrument.

The absence of litigation does not mean the instrument is uncontroversial. The restrictions on prescribing (no authority prescriptions, no repeats, no increased quantities) could lead to disputes if a patient suffers harm because the prescriber could not legally prescribe a repeat on the same chart. Any such dispute would likely be a clinical negligence claim against the prescriber or hospital, not a challenge to the instrument. If the Secretary rejects a claim under this arrangement, the supplier could seek merits review in the AAT, but that would be under the general provisions of the National Health Act, not specific to this instrument.

The instrument was made by a delegate of the Minister for Health. It could theoretically be challenged on grounds of ultra vires if it exceeds the scope of section 100. Section 100(1) allows special arrangements for the supply of pharmaceutical benefits to patients receiving treatment at hospitals. The instrument defines “in-patient” narrowly, but this is likely within the power. Any challenge would need to argue that the modifications to prescribing rules are not authorised by section 100. Given the wide discretion in section 100, a challenge would be difficult.

The instrument is a legislative instrument and is subject to parliamentary disallowance. It has been registered. There is no evidence it has been disallowed. If it were disallowed, it would cease to have effect, and the previous arrangement (PB 59 of 2016) would automatically revive under section 48 of the Legislation Act 2003. However, the previous arrangement has been revoked, so its revival might cause confusion.

Practitioners should be aware that the instrument is a trial and may be subject to administrative changes without litigation. The most likely legal activity would be debt recovery actions by the Commonwealth if overpayments are identified during audits. Those would rely on the general provisions of the Act, not on the instrument itself.

Several traps in the instrument can catch the unwary. The most significant is the ban on authority prescriptions. Section 7(g) states the medication chart must not prescribe a benefit that requires an authority prescription. If a prescriber writes a medication chart for a standard PBS item that does not require authority, that is fine. But many common drugs in hospital settings, such as certain antibiotics or immunosuppressants, may be listed as authority required. The medication chart cannot be used. The prescriber must write a separate prescription on an approved form and send it to the pharmacy directly, outside this trial. The trial thus effectively reduces the range of drugs that can be supplied under the paperless pathway. A hospital that assumes all in-patient PBS items can be handled via medication chart will find some claims rejected.

The prohibition on repeats is also a trap. Many hospital discharge prescriptions include repeats to cover the period until a GP can see the patient. Under this instrument, any repeat direction is invalid. The pharmacist must treat the prescription as a one-off supply. The patient must get a new prescription from the prescriber for any further supply. This could cause delays and patient frustration. The prescriber must be aware that the “repeats” field on the medication chart must be left blank or marked zero. Even a well-intentioned “x2” for two repeats will be ignored.

The increased quantity direction being converted to the maximum is another trap. If a clinician writes for a larger quantity than the PBS maximum (e.g., for a long stay patient), the pharmacist can supply only the maximum. If the patient needs more, the prescriber must write a new medication chart or a separate prescription for the additional amount. This increases workload and may lead to medication errors if the pharmacist does not catch the change.

The electronic pharmacy record must contain “all information required to be included in a prescription record by the Schedule to the Rules”. The Schedule may be complex. A common oversight is failing to include the prescriber’s identifier or the patient’s Medicare number correctly. If the electronic record is incomplete, the claim may be rejected, or later audited and recovered. The record must be retained for two years from the date of supply, not from the date of the claim. If a claim is made later, the retention period still runs from supply. The two-year minimum may conflict with the three-year retention under state law, so the supplier should retain for the longer period.

The Secretary’s power to request copies of electronic records or medication charts is open-ended. There is no limit on frequency or scope. A hospital or supplier could receive a request for thousands of records at once, creating a significant administrative burden with no reimbursement. The instrument does not require the Secretary to pay for copying or retrieval. The trial gives the government an audit lever with no cost constraint.

The definition of in-patient excludes staff quarters. If a staff member is admitted as a patient but treated in their own quarters (e.g., in a staff clinic), the medication chart cannot be used. The prescriber must use a standard prescription.

Transitional provisions apply only to prescriptions under the previous trial. If a medication chart was written under the general law (not under the previous trial) but not yet supplied, it cannot be supplied under this trial. Similarly, if the previous trial had different hospital or supplier names, those prescriptions might not be valid under this trial if the hospital or supplier has changed.

The instrument does not address what happens when a patient is discharged. The medication chart written for an in-patient may still have remaining doses to be supplied after discharge. Can the medication chart be used for supply after the patient is no longer an in-patient? The definition of “in-patient” applies to the time of admission, but the supply occurs later. The instrument’s provisions (section 8(1)) apply to supply to in-patients. The source likely intends that the patient must still be an in-patient at the time of supply. The pharmacist should not supply a benefit under this arrangement after discharge. Instead, the standard PBS prescription process should be used. This nuance is not explicit and could trip up hospital pharmacists.

Finally, the instrument is a trial and may be discontinued or replaced without notice. Any investment in systems to support the electronic record keeping may be wasted if the trial ends. The lack of a sunset date means the trial could continue, but equally it could be revoked at any time.

To comply with this special arrangement, the named hospitals and approved suppliers must implement processes addressing each modification. The hospital should ensure that all medication charts used for in-patients include the patient’s Medicare card number (including sub-numerate) and the prescriber’s identification number issued by the Chief Executive Medicare. The chart must not contain any direction for repeats or any prescription for an authority-required item. Prescribers must be trained not to write repeats or authority items on these charts. If a repeat is needed, a new chart or a separate paper prescription must be written. The hospital should also ensure that the medication chart clearly shows the patient’s location within the hospital (e.g. ward and bed number) to satisfy the address requirement.

The approved supplier must ensure that it does not defer supply when a chart lists multiple benefits. All listed items must be supplied at once, unless another legal basis for deferral exists outside this instrument. The supplier must separately certify each medication chart supplied, with the date of supply and signature of an authorised person. This certification can be done electronically or on the paper chart; the instrument does not prescribe the form, but it must be on the chart. The supplier must create an electronic pharmacy record for each chart where a claim is made. This record must be in the format required by the PBS online claiming rules and must contain all fields listed in the Schedule to those Rules. The supplier must retain the record for at least two years from the supply date. The supplier should also retain the paper chart for the required period under state law (typically three years) and additional time if any audit is pending.

When lodging the claim, the supplier must not include the medication charts. Instead, they submit the claim online using the standard PBS claiming system. The supplier must ensure that the claim conforms to the Rules for online claims and that under co-payment data is provided if applicable. The supplier should maintain a log of claims made under this arrangement for reconciliation purposes.

If the Secretary notifies the hospital or supplier to provide copies of records, the supplier must provide electronic records to the Chief Executive Medicare, and the hospital must provide paper copies of medication charts to the Department. The instrument does not specify a time limit; presumably the request will include one. Hospitals and suppliers should have a clear process for quickly retrieving and copying records. They should designate a contact person for responding to such requests.

All parties should document their compliance processes. The hospital should keep a record of which patients are in-patients at the time of prescribing, because the definition excludes out-patients. The supplier should verify that the patient is an in-patient before relying on the medication chart. Practical steps include reconciling admission lists with the pharmacy’s supply records.

Because the instrument prohibits the supply of benefits that require an authority prescription or that are only available under another special arrangement, the supplier must have a system to check PBS item codes against the authority requirement and the section 100-only list. The PBS online system typically flags items requiring authority, but the supplier must ensure that the medication chart is not used for those items. If an authority item is mistakenly supplied under this arrangement, the claim will be invalid and the supplier may have to write off the cost.

The supplier should also monitor any amendments to the Regulations or the Rules under section 99AAA, because those changes automatically affect the compliance requirements for the electronic record and claiming method. The hospital and supplier should review the instrument annually to check if it has been revoked or replaced. Given the trial nature, it is prudent to have a contingency plan for reverting to standard PBS claiming if the trial ends abruptly.

The compliance burden is not insignificant. Training for prescribers, pharmacists, and administrative staff is necessary. The benefits of paperless claiming (faster payment, less paper storage) must be weighed against the restrictions on prescribing and the audit risk. For a trial, the parties have presumably accepted these terms voluntarily, but the instrument does not allow them to opt out; they are bound by its provisions once listed in the schedule. The Department should evaluate the trial’s efficiency and costs before extending it further.