Regardless of our situation, we are all likely to become dependent on health and/or disability providers at some stage in our life. In this article, Todd Whitcombe, a solicitor with the Dunedin and Queenstown Lawlink firm of Anderson Lloyd Caudwell, reviews the changes taking place as a result of the Health and Disability Services (Safety) Act 2001.

Passed in November 2001, this Act comes in force in two main stages (1 October 2002 for new providers, and 1 October 2004 for existing providers), enabling current providers of health and disability services time to adapt to the necessary changes. In the main, it replaces the current system of licensing with a new system of certification. The new system focuses on auditing care against service standards designed to ensure services are provided safely.

All providers of the following will require certification under the new regime:

• hospital services;

• residential disability services;

• rest home services; and,

• mental health services provided as part of the above services.

Those who provide mental health services as a stand-alone service will also require certification. However the date when they will become subject to the Act has not yet been set.

Existing health and disability service providers who are appropriately licensed or registered will continue to be so under their existing statutory scheme through to 1 October 2004. After that they will become subject to the new Act. (This covers those licensed under the Hospitals Act 1957 or the Old People's Homes Regulations 1987 and those registered under the Disabled Persons Community Welfare Act 1975.)

Providers established on or after 1 October 2002, however, will require certification under the new system.

Providers' services will be audited against service standards. The service standards (eg the Health and Disability Sector Standards NZS 8134:2001) will be approved by the Minister of Health, and auditors will be approved by the Director-General of Health.

Providers will receive their audit report prior to it being sent to the Director-General. In determining certification, the Director-General may also consider any other relevant information. The ability of a provider to give some reassurance to the Director-General regarding audit report criticisms may be the difference between certification being granted or declined. It will therefore be critical for providers to develop responses to audit reports, and to send these responses to the Director-General, together with the application for certification.

Unlike the current licensing system, certification may be granted on conditions, where the Director-General is satisfied that these are necessary or desirable to ensure the safe delivery of services. A provider's level of compliance with the service standards is likely to have a big impact on whether or not conditions are attached to the certification.

The Act provides wide powers of inspection and monitoring. These powers come into effect on 1 October 2002. They include the power to enter, to inspect, to take possession of, and to remove equipment, to take copies of documents, and to question people. If necessary, the Act provides for search warrants to assist with such inspections.

The Act also provides some teeth to its enforcement mechanisms. It sets grounds under which the Director-General can serve cessation orders and closing orders on providers. Such orders are likely to result from complaints made to the Ministry of Health, and/or inspections undertaken by the Ministry of Health, but could also arise out of other matters, such as Health and Disability Commissioner investigations. The provision of services by non-certified persons, or during a cessation or a closing order, are offences liable to a $50,000 fine. Obstruction of authorised persons, refusal to answer their questions or providing false/misleading answers can also amount to offences liable to $1,000 fines.

If certification is revoked or declined, or a cessation or closing order is issued, all is not lost.

The Act provides one right of appeal to the District Court. Providers have one month to appeal decisions cancelling or declining certification. Where a cessation order or a closing order is served on a provider, the right of appeal is restricted to fourteen days only.

The other main option for challenging a decision or order of the Director-General of Health is by way of judicial review. In determining whether or not to grant certification, or to issue a cessation or a closing order, the Director-General of Health is exercising a statutory power of decision. The decisions are subject to review by the High Court to ensure that they are not unreasonable or unfair, that they have taken into account relevant matters, and that they have not been influenced by irrelevant matters.

The Act radically changes the certification process for health providers, providing a strong focus on quality and safety. Providers will need to ensure they have systems in place to deal with the changes as they come into force. This is only a brief summary of the main aspects of the Act. For more information, contact Todd Whitcombe at Anderson Lloyd Caudwell.

Postal: Private Bag 1959, Dunedin

Phone: 03 477 3973

Fax: 03 477 3184