The Private Health Insurance Ombudsman says it has "commenced preliminary planning" for the new powers it has been granted under reforms announced by health minister Greg Hunt.
The reforms were announced last October and a Senate inquiry is currently considering enabling legislation.
The legislation includes expanded powers from the Private Health Insurance Ombudsman (PHIO).
The expanded powers include an inspection and audit function.
The enabling legislation will provide the PHIO with the power to conduct inspections and investigations associated with complaints or complaint-related matters, and to conduct audits at the premises of private health insurers or brokers. Offence provisions will also be established to support the enforcement of these powers.
"The Office [PHIO] is committed to working with the private health insurance industry and other stakeholders to develop a practical inspection and audit process that will assist the industry in improving practices for the benefit of consumers," said PHIO in its submission to the Senate inquiry.
"The Office believes that a process that aims to educate and inform insurers and brokers with an external assessment of their processes will drive improvements across the private health insurance industry and as a result better outcomes for consumers."
According to the PHIO, while it will work with the industry on the implementation of its new inspection and audit powers, an example of an issue potentially subject to an inspection would be the record keeping of verbal advice provided by health insurer telephone and retail centres.
"The Office is already aware that there are a variety of practices and procedures adopted by health insurers with respect to the storing, reporting and destruction of consumer records of health insurer advice, some of which result in records not being readily accessible or fulsome when required to deal with a complaint."
It added that, pending passage of the enabling legislation, it will deliver a series of educational forums for industry and other stakeholders early next year in relation to its inspection and investigation powers.
"The Office will consult with industry stakeholders to refine the agreed processes before commencing inspections and audits," it concluded.