Tuesday, August 23, 2016

The national regulator beats up the IVF clinics

The only national regulator of IVF clinics across the nation (in several States, IVF clinics have the misfortune to have both State and national regulators), the National Health and Medical Research Council, has written to IVF clinics suggesting that fixed fees to egg donors might in some way be improper, and noting that this is an issue that will be checked come audit time.

The threat is a serious one- because the penalty for payment to an egg donor under the nation's Human Cloning legislation is up to 15 years jail. A possible outcome is the NHMRC trying to remove the licences of the IVF clinics concerned.

But it would appear that the view expressed by the NHMRC is misconceived. Why? Because it has to be established that the amount that a donor has been paid is not "reasonable expenses". What is reasonable will depend, of course, on each case, but provided the amount is low enough it appears to me at least that it could also be reasonable.

A good comparison might be the amount that a person claims for interstate travel. Unlike the NHMRC, the regulator of our taxes, the Australian Tax Office, has published guidelines on the amount considered reasonable and therefore claimable in accommodation and food for each of our major capital cities. The amount varies from city to city and as to the income of the taxpayer concerned, in certain ranges of income. But- and this is the point- here are the amounts that would clearly be reasonable- even though each taxpayer's circumstances are different.

Imagine if a donor were to stay in accommodation in one of the capital cities in order to donate. How could it possibly be argued that if the donor were paid an amount for that accommodation, and the accommodation was for an amount within the ATO range (admittedly for another purpose), that that amount is not reasonable?

And what if there were a series of donors whose expenses were essentially the same? Should they not receive the same amount, in a standardised manner- or is the NHMRC simply being unreasonable and suggesting that each and every time a donor donates there must be an assessment of each and every expense of the donor?

Part of the difficulty is that the NHMRC has not published any guidance as to what constitutes "reasonable expenses", and nor has there been any prosecution, so there is no guidance from a court as to what reasonable expenses might or might not be. Instead the NHMRC has decided to throw its weight at clinics and seek to threaten them with their licenses. And what might be the outcome of this behaviour- clinics will be less inclined to pay donors for fear of crossing the regulator, and intended parents will therefore be more inclined to go overseas out of necessity- where donors are typically anonymous, might be paid, and the child will never know who the donor is. Nuts!

And the only case where the issue of payment under the Human Cloning Act came up? It was of all places in the High Court. Two doctors were arguing about damages arising from frozen sperm that was non-compliant with , you guessed it, the Human Cloning Act. The doctor who bought the IVF practice had to get new supplies of sperm, and did this from a US sperm ban called Xytex. This is what Justice Hayne said:

"As already noted, however, the Court of Appeal concluded that the appellant had mitigated her loss by buying replacement sperm from Xytex. In respect of "the loss of each straw of replacement sperm actually sourced from Xytex" before the date of assessment of damages, Tobias AJA concluded that the chief component of the appellant's "loss" would be "the sum (if any) representing that part of the overall cost of acquisition of that straw not recouped from a patient". And in respect of "the residue of the 'lost' 1996 straws over and above those in fact replaced by Xytex sperm up to the date of trial", Tobias AJA concluded that "the appropriate course would have been to assume that [the appellant] would continue to source straws of donor sperm from Xytex at a cost consistent with that which had prevailed since August 2005, and that she would continue to recoup from patients the same proportion of that cost as she had done in the past". On this footing, Tobias AJA concluded that the appellant's damages in respect of straws not "replaced" would be "the aggregate of the discounted present value of the un-recouped balances (if any) of that cost as at the date of their assessment" (emphasis added)."

You can bet that the doctor paid a fixed fee to Xytex and the Xytex donors for each donation and did not negotiate and assess an individual amount each time.

The doctor also charged a "buffer" between what she paid for the sperm and what she charged patients. Justice Keane stated:

"The appellant, in providing ART services for a fee, cannot sensibly be said to be engaging in commercial trading in sperm for a profit."

Surely if the payments being made to Xytex were improper, they would have been commented upon, and disapproved by members of the High Court. Quite simply, there were no such comments.

If it's good enough to pay sperm donors a fixed amount, and the legal basis is under the very same section of legislation dealing with egg donors, why is it not good enough to be paying egg donors a fixed  amount, provided that amount is reasonable?

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