Report on the regulatory framework for hearing services

Option C - Fundamentally reform the framework for the scheme

Review of the efficiency and effectiveness of the regulatory framework for hearing services July 2012. The Report was prepared for the Office of Hearing Services by MP Consulting

Page last updated: 28 November 2012

Description of the option

This option would involve repealing the Hearing Services Administration Act 1997 and related delegated legislation.

In order to enable payments to be made to service providers (and describe eligibility requirements), there would need to be a foundation in legislation but this could be achieved simply through the National Health Act 1953.

The details of the scheme could then either be set out in:
  • one piece of delegated legislation (made under the National Health Act 1953); or
  • a contract with service providers (and if necessary, with device suppliers).

The advantages and disadvantages of the option

This option:
  • eliminates ‘stand alone’ hearing services legislation
  • it locates the hearing services program alongside other funding programs described in the National Health Act 1953
  • the provisions in the National Health Act 1953 would be minimalist with all of the detail in either delegated legislation or a contract.
If the details of the scheme were included in delegated legislation (the preferred approach), the advantages are that:
  • the entirety of the scheme would be described in one document that is clearly identified in the primary Act. The delegated legislation would replace all of the existing determinations, standards, contracts and other documents. The one piece of delegated legislation would include eligibility, conditions relating to service provision, prohibitions and a schedule of service items. This would provide transparency and clarity
  • there would be regulatory certainty. Changes to the scheme could only be made though amendments to the delegated legislation
  • there is Parliamentary oversight of the scheme. Each time changes are made (including to the schedules of items and fees), a Regulation Impact Statement (RIS) would need to be prepared, the delegated legislation would be made by the Minister and the legislation would be tabled in Parliament and subject to disallowance. This reduces the risk of excessive coverage and regulatory creep. Currently the Rules of Conduct are subject to disallowance but other standards are not (e.g. the outcomes, the schedule of service items, the fees and the eligibility criteria for refitting).

If the details of the scheme were included in a contract the advantages are that stakeholders are more familiar with a contractual approach and the contract can more readily be amended. The disadvantage of this is that such changes are subject to less independent scrutiny and the ability to make regular changes reduces regulatory certainty.

Another potential disadvantage of a contract is that it may not be possible to include all relevant requirements in the one contract. There may continue to be the need to have a contract with device suppliers and potentially also primary or delegated legislation to describe the eligibility criteria. This would require further investigation but potentially reduces the clarity that could be achieved through a scheme that is described entirely through legislation.

    The extent of legislative drafting required

    This would require repeal of the existing Act and delegated legislation, amendment to the National Health Act 1953 and creation of a new piece of delegated legislation under the National Health Act 1953.

    Implementation timeframes

    Once the policy has been settled, between nine months and one year will be necessary to develop the RIS and drafting instructions, enable OPC to draft the Bill, undertake further consultation on the legislative changes and secure passage of the legislation through Parliament.

    Drafting of the delegated legislation (or contracts) could occur in parallel with consideration of the primary legislation.

    Additional time would also be required to develop supporting explanatory documents, make changes to IT systems and train OHS staff against new processes.

    Cost implications

    This option has more significant implementation costs than other options. It would require:
    • a dedicated team to develop the policy, consult stakeholders, develop the necessary RISs, draft drafting instructions, liaise with the Office of Parliamentary Counsel and Office of Legislative Drafting and Publishing, develop new procedures and processes, educate industry and clients about the changes and undertake staff training
    • legal advice to be sought on various matters
    • changes to IT systems.

    However, once the changes have been made, this option provides greater potential for long-term savings than options A or B.