Regulatory Impact Statement (PDF Downloadable 172KB)

Proposed Pathology Services Accreditation (General) Regulations 2001(PDF Downloadable 64KB)

Proposed Pathology Services (Exempted Tests) Regulations 2001 (PDF Downloadable 19KB)

Regulatory Impact Statement

Table of Contents

Executive Summary

1.Introduction

2.Objectives

3.Authorising provision.

4.Background

5.Nature and extent of the problem

5.1 Overview

5.2 Accreditation

5.3 Complaints

5.4 Inquiries and investigations

5.5 Prosecutions

5.6 Suspension, cancellation and non-renewal of accreditation

5.7 Inspection reports

5.8 Conclusion

6 The nature and impact of the proposed regulations

6.1 The proposed Pathology Services Accreditation (General) Regulations

6.2 Differences between the proposed Pathology Services (Accreditation) Regulations and the existing regulations and reasons for change

6.3 The proposed Pathology Services (Exempted Tests) Regulations

7 Expected Costs and benefits of the Proposed Regulations

7.1 Incremental costs and benefits versus the existing regulations

7.2 Costs and benefits versus an unregulated alternative

7.2.1 Pathology Services Subject to Dual Accreditation

7.2.2 Pathology Services Not Accredited at Commonwealth Level

7.2.3 Costs to government

8 Summary of costs and benefits

9 Alternatives to the proposed regulations

9.1 Remake the existing regulations without amendment

9.2 Make the regulations as proposed, but without the additional requirement for a quality management system to be documented

9.3 Alternative fee structures

9.3.1 Retain the existing fees

9.3.2 Charge fees consistent with full cost recovery

10 Consultation

11 Conclusion

Appendices

Acknowledgements

How to Respond to this Document

Executive Summary

The Pathology Services Accreditation Act 1984 provides for a state-based system of accreditation of pathology services. The proposed Pathology Services Accreditation (General) Regulations 2001 would specify a range of matters necessary to give effect to the Act's requirement for a Victorian accreditation scheme.  They would replace the existing Pathology Services Accreditation (General) Regulations 1990 which will sunset on 26 February 2001 due to the operation of the Subordinate Legislation Act 1994. The Pathology Services (Exempted Tests) Regulations 2001 would replace, without amendment, the existing Pathology Services (Exempted Tests) Regulations 1990, which will sunset on the same date as the principal regulations. These regulations specify pathology tests that can be conducted by service providers other than those accredited under the Act.

This Regulatory Impact Statement (RIS) sets out the likely benefits and costs associated with making the proposed regulations. The RIS compares these likely costs and benefits with the alternatives of remaking the existing regulations in an unamended form and making the proposed regulations without the inclusion of new quality management system requirements. 

The context for the making of the proposed regulations is provided by the review of the primary legislation that is currently underway as part of Victoria's obligations under the National Competition Policy (NCP) Agreements. Given this context, the proposed regulations are transitional in nature.  This is indicated by the fact that they incorporate a 'sunset clause'. This means that the proposed regulations would cease to have effect after 30 June 2003. In addition, the general approach taken has been to make the minimum necessary changes to the existing regulations in order to ensure maximum continuity for the industry and eliminate the possibility of two major regulatory changes occurring within a few years. 

In this context, the range of possible alternatives for consideration is quite narrow.  Moreover, the size and exact nature of many of the identified benefits and costs of the regulations is somewhat uncertain. It is anticipated that a more extensive consideration of these factors will become possible within the context of the review of the primary legislation. However, for the purposes of the current regulatory proposal, it is concluded that the costs of the proposed regulations are relatively small and that the offsetting benefits are sufficient to justify them. This conclusion takes into account the benefits of ensuring stability and predictability of the regulatory environment pending the NCP review outcome.

1. Introduction

The proposed Pathology Services Accreditation (General) Regulations 2001 are intended to remake, with limited changes, the current Pathology Services Accreditation (General) Regulations 1990. The current regulations set out a range of minimum standards for accreditation of pathology services, including standards relating to equipment, facilities and minimum qualification requirements for employees and specify a range of related matters. Their primary purposes are to protect consumers in relation, in particular, to quality and safety in terms of the taking and handling of specimens and conducting tests, and to protect employee health and safety. The current regulations will sunset in February 2001 as a result of the operation of the Subordinate Legislation Act 1994 which provides that all statutory rules shall sunset ten years after coming into operation[1] .

The proposed regulations are intended to be transitional in nature and will therefore include a 'sunset clause' providing that they will cease to have effect after 30 June 2003. The need for transitional regulations arises because the authorising legislation - the Pathology Services Accreditation Act 1984 - is currently being reviewed as part of Victoria's legislative review obligations under the National Competition Policy (NCP) Agreements. While the NCP review commenced in 2000, it is not anticipated that it will be completed before mid-2001. Hence, to avoid a regulatory hiatus with the sunsetting of the current regulations in February 2001, a key objective in relation to the remaking of the regulations has been to ensure continuity and predictability.

The proposed sunsetting date for the transitional regulations has been set to ensure that the NCP review of the Act can be completed, appropriate consultation undertaken and any replacement legislation developed and implemented prior to the sunsetting of the existing arrangements. Similarly, it has been decided that limited changes should be made to the regulations in advance of the likelihood of a more thoroughgoing overhaul of the legislation in this area following the Act's NCP review.

The proposed Pathology Services (Exempted Tests) Regulations 2001 will remake the existing Pathology Services (Exempted Tests) Regulations 1990 without amendment. These regulations specify a range of simple pathology tests that can be performed by persons other than accredited pathology services. The purpose of these regulations is to ensure that certain relatively simple pathology tests can be performed outside of accredited pathology laboratories. This is considered necessary to ensure that the availability of these tests is not unduly restricted and their cost is not unduly increased. In line with the approach taken with regard to the Pathology Services Accreditation (General) Regulations, favouring regulatory stability pending the outcome of the current NCP review, these regulations have been made in unamended form.

It is considered appropriate to discuss both regulations in a single Regulatory Impact Statement in order to enable affected parties and the public to reach a fuller understanding of the regulatory environment in this area and the relationship between the two sets of regulations.  It is considered that the two sets of regulations are clearly interdependent, as indicated inter alia by their identical proposed commencement and sunsetting dates.

2. Objectives

The overriding objectives of the proposed Pathology Services Accreditation (General) Regulations 2001 are to protect the public by ensuring that all pathology services meet acceptable minimum standards and to ensure that adequate provision is made for the Pathology Services Accreditation Board to act effectively as an accreditation, supervisory and disciplinary body.

Within this context, the specific objectives of the regulations are to:

(a)  prescribe minimum standards for accredited pathology services;

(b)  prescribe minimum qualifications for persons in charge of pathology services and persons conducting       pathology tests;

(c)  prohibit certain advertising practices;

(d)  prescribe various fees, forms and other matters authorized or required to be prescribed by the Pathology Services Accreditation Act 1984.

The objective of the proposed Pathology Services (Exempted Tests) Regulations 2001 is to ensure that the availability of certain simple pathology tests is not unduly restricted by the accreditation regime established in relation to pathology services under the primary legislation.  A subsidiary objective is to ensure that the cost to the public of such tests is not unreasonably increased.

3. Authorising provision

The proposed regulations will be made under the authority of Sections 30A and 40 of the Pathology Services Accreditation Act 1984.

4. Background

The history of pathology services accreditation can be traced back at least to 1974. A review of pathology services conducted for the Commonwealth Government found that the costs of pathology services were rising more rapidly than those of other medical services and recommended the adoption of an accreditation scheme in order to both curb the potential for abuse of services and protect patients through good quality control.

The proposed accreditation scheme was intended to operate on a nationally uniform basis and received in principle approval from the Australian Health Ministers' Conference in 1976. In 1979 the National Pathology Accreditation Advisory Council (NPAAC) was created to develop nationally uniform accreditation standards and to encourage and co-ordinate the introduction of accreditation. 

However, progress following the establishment of NPAAC was slow. This led two jurisdictions - New South Wales (NSW) and Victoria - to develop their own accreditation legislation independently of the stalled national process. The NSW Pathology Laboratories Accreditation Act was passed in 1981 and the Victorian Pathology Services Accreditation Act was passed in 1984. The existing Victorian regulations were adopted in 1990, and the accreditation of pathology services under Victorian law also dates from this time. However, the NSW Act was never proclaimed. This meant that Victoria was, and remains, the only State or Territory to establish an operational system of pathology accreditation. 

While no other state or territory has moved to accredit pathology services, the Commonwealth has adopted an Australia-wide accreditation system for services seeking Medicare rebates. The Commonwealth system came into effect in 1986, and is thus likely to have been significant in other States' decisions not to adopt their own accreditation systems. The Commonwealth legislation contains an emphasis on cost containment, but is also concerned with service standards and quality.

The ambit of the Victorian legislation largely overlaps with that of the Commonwealth, but is not identical. As noted, the Commonwealth accreditation system applies to all pathology services wishing to be eligible for Medicare rebates. The Victorian system effectively covers all such services but, in addition, applies to the following broad categories of pathology service that may not be covered by the Commonwealth accreditation system:

• Services which only perform testing for screening purposes, including State and Commonwealth funded screening services;
  
  
• Research laboratories;
  
  
• Reference laboratories; and
  
  
• Red Cross Blood Banks.

The Victorian accreditation system is administered by the Pathology Services Accreditation Board (PSAB), which is established as a statutory body under the Pathology Services Accreditation Act 1984.

A comparison of the numbers of services accredited under the two systems indicates that as at September 2000, 179 services were accredited under the Victorian legislation compared with 137 accredited under the Commonwealth's legislation.  That is, 42 more services are accredited under Victorian law, or 31 per cent more than under Commonwealth law.

The Victorian accreditation regime was reviewed in 1994-1995 as part of the Licence Simplification Programme established by the Minister for Small Business and managed by the Office of Regulation Reform. The review report recommended the retention of the system of accreditation, noting inter alia that the Victorian system included extensive investigative powers and sanctions, which the Commonwealth system lacked.

The current review of the Pathology Services Accreditation Act is part of the National Competition Policy's (NCP) legislative review requirement. Under the Competition Principles Agreement of 1995, all participating jurisdictions were required to identify all legislation that imposed restrictions on competition and to review that legislation by 31 December 2000. The review requirement is that legislative restrictions on competition should be removed unless:

• The benefits of the restrictions to the community as a whole outweigh their costs; and
  
  
• There is no way of achieving those benefits without restricting competition.

The Pathology Services Accreditation Act has been identified as imposing restrictions on competition both by erecting barriers to entry to the business of providing pathology services and via the regulation of minimum standards and establishment of restrictions on conduct.  The NCP review will therefore weigh the costs of these restrictions against the benefits achieved in terms of prevention of abuse of the services and consumer protection against unsafe or incompetent practices.

The proposed regulations will, in the broad, maintain the legislative status quo pending the outcome of this review.