Pathology Rents

In the 2017 – 18 Budget, the Government announced its commitment to strengthening compliance for Pathology Approved Collection Centre (ACC) rents under the prohibited practices provisions of the Health Insurance Act 1973.

Page last updated: 02 March 2021

Payment of rent for pathology premises or other benefits may, in certain circumstances, breach the prohibited practices provisions on Part IIAB of the Health Insurance Act 1973. Those provisions include civil penalties for offering, providing, asking for, or accepting a benefit, or making a threat, that would be reasonably likely to induce a requester of pathology services to request those services from a provider, or is related to the business of rendering pathology services. The Red Book provides guidance on how the laws (Part IIBA of the Health Insurance Act 1973) affect both requesters and providers of pathology and diagnostic imaging services. It also outlines the Department’s compliance and enforcement strategy.

It is very important to understand that the prohibited practices provisions affect anyone who can request or provide a Medicare-eligible pathology or diagnostic imaging service. ‘Requesters' include general practitioners, medical specialists, dental practitioners, podiatrists, physiotherapists, osteopaths, chiropractors and nurse practitioners.

Reporting pathology or diagnostic imaging prohibited practice(s)

If you are a requester or provider of pathology or diagnostic imaging services and you know a person connected to you has asked for or accepted or offered or provided a prohibited benefit, or made a threat, you can avoid contravention of a civil penalty provision in Part IIBA of the Health Insurance Act 1973 if you report it to the Department within 30 days of becoming aware of those practices.   You can report your knowledge of prohibited practices to the Department through the 'Reporting pathology or diagnostic imaging prohibited practice(s) form (PDF 1702 KB)'.

Concerns relating to suspected breaches of the prohibited practices provisions can also be reported by:

Compliance activities

In line with the Pathology Rents Compliance and Enforcement Strategy (Appendix A of the Red Book), the Department has been working with providers and requesters of pathology services to understand the nature of ACC lease arrangements of concern and encourage voluntary compliance with the Health Insurance Act 1973.

We also engage in ongoing monitoring of the pathology sector, including closed, updated, reopened and new ACC arrangements, to ensure compliance with the prohibited practice provisions in Part IIBA of the Health Insurance Act 1973.

The Department issues Requests for Information to both lessors and lessees of ACCs as part of it compliance activities.

Enforcement of the Prohibited Practices Provisions

In addition to voluntary compliance activities, the Department may take enforcement action including against parties who:

  • are unwilling to comply with the prohibited practice provisions; or
  • may be engaging in repeated, deliberate or systematic contravention of the prohibited practice provisions.

Enforcement actions may include:

  • accepting a voluntary compliance undertaking from parties that have expressed their commitment to compliance; an
  • legal proceedings when there is evidence of a serious breach.

Voluntary Compliance Undertaking

Compliance undertakings are one of the ways in which we can encourage ACC lessors and APAs to comply with the prohibited practices provisions set out at Part IIBA of the Health Insurance Act 1973.

Under a voluntary undertaking, a lessor or APA will make a legally binding commitment to take steps aimed at improving compliance with the prohibited practices provisions with respect to rents and/or other benefits 

Legal Proceedings

The Department’s compliance efforts may be escalated where attempts to secure voluntary compliance are unsuccessful or there is evidence of a deliberate intention to contravene the prohibited practices provisions.

Civil penalty proceedings may be commenced on behalf of the Commonwealth where the Department has evidence of serious non-compliance and there are reasonable grounds to do so.  i.e. an application may be made to t to the court for an order that a provider or requester pay the Commonwealth a pecuniary penalty.

The Department can make a referral to the Commonwealth Director of Public Prosecutions for criminal prosecution where we have reasonable grounds to believe that a provider or requester has committed a criminal offence.

Chief Executive Medicare commences proceedings in the Federal Court against Specialist Diagnostic Services Pty Ltd Word 12 KB

Approved Pathology Authority Undertaking

According to Part 5 of the APA Undertaking (pages 6 – 10 of the Approved Pathology Authority application, renewal or amendment form (HW011), all APAs have undertaken to ensure that the information they give is accurate and complete, and that they will advise in writing within 14 days of any change in any of the particulars in applications provided for f approval as an APA, APL and ACC. A breach of the APA Undertaking may lead to several determinations, including that Medicare payments should not be payable for up to five years.

Examples of changes that must be reported to Services Australia include (but are not limited to) ACC lessor and sub lessor details, rent per year, the area of premises used by the ACC (exclusively or otherwise), change of facility name (e.g. medical centre name change), change of room, and options to extend the lease. Supporting documents should also be kept up to date and provided to Services Australia.  Changes of ACC location must be made by applying for a new ACC and cancelling the previous ACC.

The Services Australia website provides more information on how to keep details updated.

More information

For More information you can contact the Pathology Collection Centres Compliance team at pathology.rents@health.gov.au

PDF version: The Red Book - Guidance on Laws - PDF 623 KB Relating to Pathology and Diagnostic Imaging - Prohibited Practices

Word version: The Red Book - Guidance on Laws Relating to Pathology and Diagnostic Imaging - Prohibited Practices - Word 497 KB

Reporting pathology or diagnostic imaging prohibited practice(s) form (Fillable PDF)

Legislation relating to Pathology

Legislative Amendments Relating to Pathology and Diagnostic Imaging

Department of Health Privacy Policy

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