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Consultation on the Practising Certificate Fee and Disciplinary Levy 2019/2020

18 April 2019

Executive summary
The purpose of this consultation document is to advise stakeholders that the Medical Council of New Zealand (Council) is proposing to gazette an increase to the practising certificate (PC) fee and disciplinary levy, to be effective from 1 September 2019. Before making a final decision, Council is seeking feedback from stakeholders. This needs to reach us by close of business Friday 31 May 2019.

The current proposed increases are:

  • PC fee increase of $15.79 (excl GST) to $571.39 (excl GST).
  • Disciplinary levy increase of $29.36 (excl GST) to $154.36 (excl GST).

Components of the PC fee and disciplinary levy
Doctors’ PC fees and disciplinary levies are set by Council under s130 and s131 of the Health Practitioners Competence Assurance Act 2003 (HPCAA).

The components making up the combined PC fee and disciplinary levy are set out in the following table. All figures are GST exclusive.

PC fee and disciplinary levy

2018/19 Current Fee

2019/20 Proposed Fee

$ Change

% Change [i]

Practising certificate fee

$555.60

$571.39

+ $15.79

+ 2.8 %

Disciplinary levy

$125.00

$154.36

+ $29.36

+ 23.5 %

Total PC fee and disciplinary levy

$680.60

$725.75

+ $45.15

+ 6.6 %

The proposed PC fee and disciplinary levy is based on:

  • Council’s actual and budgeted results for the current 2018/2019 financial year
  • Council’s draft budget for the 2019/2020 financial year
  • the actual general and disciplinary fund reserves as at 31 March 2019.

Council abides by the good practice guidelines established by the Office of the Auditor-General and by Treasury. In doing so, Council ensures it takes into account the principles of authority, efficiency and accountability when setting fees; as well as equity issues and likely costs.

In preparing the draft 2019/2020 budget, Council remains committed to ensuring that it operates in a cost effective manner and strives to maintain a balance between the efficient and effective discharge of its public safety obligations and practitioner affordability. The increases proposed, if agreed, will establish a near breakeven budget. The Council remains mindful of its reserves to ensure financial sustainability. 

Rationale for proposed changes to the PC fee
The PC fee is a reflection of the ongoing operational costs for Council to continue to fulfil its statutory obligations and strategic objectives. The two largest components of Council’s operational costs are its people and premises.

Council’s current fee structure was developed based on an activity-based costing methodology. The framework was introduced in 2015, following an extensive consultation with the profession, and is designed to ensure that there is greater transparency and equity across all fees charged by Council. The methodology also ensures that
cross-subsidisation amongst fees is minimised.

At the same time, Council agreed to adopt a conservative approach to any future increases to fees; continuing to apply the activity-based costing methodology to newly-identified fees but otherwise limiting increases to the current year’s inflation rate. In June 2017, Council adopted an increase of 2.2 percent across all gazetted fees, with effect from 1 September 2017, and in June 2018 adopted an increase of 1.1 percent across all gazetted fees, with effect from 1 September 2018. 

Council continues to recognise inflationary pressure and has appropriately incorporated a 1.9 percent[1] inflation adjustment into the proposed fees, similar to recent fee increases in 2017 and 2018.

After factoring in all of the above considerations the PC fee is proposed to increase by $15.79 (excl GST) or approximately 2.8 percent to $571.39 (excl GST).

Rationale for proposed changes to the disciplinary levy
Both the number and complexity of disciplinary cases is increasing. This is reflected in the number of referrals to a Professional Conduct Committee (PCC) and to the Health Practitioners Disciplinary Tribunal (the Tribunal). Sixteen charges were filed in the Tribunal last year and 31 cases were referred to a PCC. We currently have 13 cases set down for hearing in the 2019/2020 financial year already. A number of these cases are complex and six of those cases are expected to be fully defended hearings, which is unusual.

In setting the proposed levy, Council has taken a prudent approach to ensure disciplinary costs are adequately recovered while remaining cognisant that specific one-off cases can result in extraordinary costs. By its nature these costs are difficult to budget as Council has no control over disciplinary matters and must act in the public interest at all times.

The Council is responsible for all costs associated with an investigation and prosecution of unethical conduct from any doctor. These costs may include:

  • investigation costs of any compliant by a PCC
  • prosecution costs when charges are laid before the Tribunal
  • appeal costs
  • the risk of bad debts and collection costs for any costs awarded.

Council does not have any legal authority to set a separate fee in these matters. However, the direct legal cost of disciplinary proceedings are intended to be recoverable. 

Under s131 of the HPCAA, Council is empowered to impose on all every doctor registered with it, a disciplinary levy for the purposes of funding the costs arising out of PCC investigations and the proceedings of the Tribunal.  

The PCC legal costs and associated Tribunal costs are now directly allocated to the disciplinary fund.  Previously these costs were recognised as part of the general operational fund. Council acknowledges this is a more equitable allocation of the drivers of these costs, and reflects its ongoing commitment to activity-based costing methodology. 

After factoring these considerations the disciplinary levy is proposed to increase by $29.36 excluding GST (or approximately 23.5 percent) to $154.36 excluding GST. 

Consultation proposal
Council invites you to provide feedback on the proposed 2019/2020 PC fee and disciplinary levy to be effective from 1 September 2019 as follows:

  1. To increase the practising certificate fee by $15.79 to $571.39 (excl GST) per doctor.
  2. To increase the disciplinary levy by $29.36 to $154.36 (excl GST) per doctor.

Conclusion
The objective of this consultation is to seek input from stakeholders before Council makes a final decision. Council therefore seeks any comments on the proposal by close of business Friday 31 May 2019. Council will consider all submissions at its meeting on Tuesday 11 and Wednesday 12 June 2019, prior to the fee and levy being gazetted for an effective date of 1 September 2019.

In accordance with s130 and s131 of the HPCAA and Council’s consultation guidelines, copies of this consultation document have been sent to all doctors, the Ministry of Health, District Health Boards and other organisations with an interest in this area.

This document has also be published on the Council’s website, with an invitation to comment.

Responses should be sent to:

Fee Consultation                                           
Medical Council of New Zealand
PO Box 10509
The Terrace
Wellington 6143
Email: feeconsultation@mcnz.org.nz

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