Documents released by the Department of Health and Aged Care have revealed its annoyance at being excluded from negotiating a pre-election memorandum of understanding (MoU) between former health minister Greg Hunt and the Medical Technology Association of Australia (MTAA).
Mr Hunt signed the MoU with the association on 14 March last year, including changes to planned reforms of the Prostheses List that were announced in the 2021-22 Budget.
The Prostheses List has been the focus of highly contested reform proposals for several years.
According to departmental briefings provided to new health minister Mark Butler in June last year, just weeks after his appointment, the MoU was negotiated directly by Mr Hunt and his office in response to ongoing differences over the implementation of the planned reforms.
"MTAA wrote to the former Minister to provide a proposal for an alternative approach to the PL reforms," says the briefing, adding that the association met Mr Hunt to discuss the proposal on 28 January with the details subsequently provided to the department.
On 16 February, "The former MO [Minister's Office] emailed MTAA confirming the final policy parameters for the PL Reforms." The timeline shows the MO then requested that the department seek legal advice regarding a letter of agreement with the MTAA. The letter was subsequently converted to an MoU format at the request of the MO.
The MoU was formally signed on 14 March.
Some stakeholders, including private health insurers, were highly critical of the MoU.
The health department has used its briefings to Mr Butler to disown the process leading to its announcement and even suggest that the MoU's inclusions do not bind the new Government.
"The MoU was not drafted or negotiated by the Department," it says, contrasting the process with that used in the negotiation of the former Government's agreement with Medicines Australia.
It says the negotiation of the MoU "did not include consultation with central agencies" and, "in the view of the Department, predominantly benefitted industry rather than providing a negotiated balance of benefits to industry and the Australian community/government."
Mr Hunt sought and received Government approval for the agreement on 14 February.
"Legal advice obtained by the Department at the time of drafting indicated the MoU was between the former Minister and MTAA and would not bind (legally) or impose a good faith requirement (ethically/ morally) on the next Minister or Government," says one briefing.
However, while the department urges Mr Butler to "consider other options" outside the MoU, it does acknowledge the MTAA's claim that "it was given a commitment that Labor would honour its MoU".
On the wider issue of reform, it says, "There is no option that will be supported by all stakeholders, and any change in approach will lead to criticism by some stakeholders."
The parliament recently backed legislative changes that provide a legal framework for the Government to impose changes on the Prostheses List through delegated instruments.