Medicals: CAA rewrites history, but they’re still way behind the times

17 December 2015 / by the GAA team / Consultation, Costs, Governance, Medical, Opinion

Authoritarian regimes have a bad habit of rewriting history. The CAA’s shameless U-turn over the medical certification fee is a classic example.

The medical issue: In New Zealand, we argue about the fee. Elsewhere, they’re scrapping the entire regime.

The medical issue: In New Zealand, we argue about the fee. Elsewhere, they’re scrapping the entire outdated, irrelevant system

When we presented the GAA case against increases in fees and charges to the Regulations Review Committee in March 2013, we submitted that the CAA was viewing the medical certification fee only as a “private good” and therefore the costs were to be borne solely by the person seeking medical certification. We strenuously argued in our written submission – and to the RRC – that there were also elements of “club goods” and “public goods”.

The MoT responded: “In developing the proposals that led to the Regulations, the Authority identified that participants requiring medical certificates were the direct beneficiaries of the medical system. As with other fees, the approach taken was to assign the costs of that system to those who directly benefitted.”

Our arguments fell upon deaf ears. The committee took the side of the MoT and the CAA and ruled our case invalid.

After more than three years of the CAA charging this exorbitant medical application fee, a significant number of pilots have been driven away from Class 2 certification to an RPL or to Microlights/LSAs.

The CAA has now stated that “the work completed on Stage One suggests that the ‘private good’ assessment needs to be adjusted, as part of the benefit derived from the medical certification process is assurance that a person is medically fit to fly. In other words, there is either a club or a public good benefit associated with the regulatory activity and this should be reflected in the cost recovery framework for medical certification”.

So the CAA and MoT now accept our argument (some three years after the fact) and have decided to reduce the medical certification fee from $313 to $210.45 including GST. Whilst this is a step in the right direction, the revised charge is still outrageous compared to the Australian Regulator, CASA, which charges only A$75.00 (NZ$76.06). A pilot who has just renewed his Canadian medical has reported that the fee in Canada is CA$55 (NZ$55.07).

The Regulations Review Committee rejected our argument simply because the new charges had been lawfully introduced – in other words, an erroneous process had been correctly executed.

Further to our argument on the “Private Good” assessment as it applies to Class 2 medical certification, we now believe that there is no more of a “Private Good” component to a Class 2 medical than could be derived from the LTSA medical for a bus driver. Depending on the charges of your local GP, a DL9 medical will probably cost you around $30.

We also note the current initiatives by the UK CAA to enable PPL privileges on a drivers licence medical. This is part of the British authority’s “cut the red tape challenge”.

In the USA on December 15, the US Senate passed the Pilot’s Bill of Rights 2 (PBOR2), which will now go to the House for consideration. The bill, which includes third-class medical reform (the equivalent of our Class 2 medical), was passed by unanimous consent less than a week after it was reported out by the Senate Committee on Commerce, Science and Transportation. The House must also pass the bill before it can go to the President for his signature.

Under the medical reforms of PBOR2, most pilots who have held a valid third-class medical, either regular or special issuance, within 10 years of the legislation’s enactment would never need to get another FAA medical exam. The rule would apply to pilots flying VFR or IFR in aircraft weighing up to 6000 pounds and carrying up to five passengers at altitudes below 18,000 feet and speeds up to 250 knots.

EAA’s Jack Pelton: The best way to manage health decisions

EAA’s Jack Pelton: The best way to manage health decisions

Experimental Aircraft Association President Jack Pelton says: “A pilot – along with that person’s individual doctor, who knows the patient best – now can have direct freedom and responsibility for best managing health decisions. The Pilot’s Bill of Rights 2 frees pilots to work with their personal physicians to manage their own health, wellness, and fitness to fly.”

Pilots who develop certain medical conditions, including a small list of specific cardiac, mental health, or neurological conditions, will have to get a FAA special issuance medical once only, significantly reducing the time and money spent navigating the FAA’s medical bureaucracy.

For pilots who have not had a valid medical in the past 10 years and those who have never applied for and received a medical certificate, a one-time third-class medical certification by an aviation medical examiner will be required. After a pilot has been medically certified once, either through the regular or special-issuance processes, he or she will also be able to fly indefinitely without needing to go through the FAA medical certification process again.

After pilots have met these requirements, they will need to visit their personal physician once every four years for a medical exam. Pilots will need to fill out a form and provide it to the doctor performing the exam. The pilot must make a note of the visit and keep the signed form in his or her logbook.

The form will include a short medical history questionnaire as well as a list of items the doctor must include in the examination. Following the exam, the physician and the pilot must sign the form verifying that the items were examined and discussed.

In addition to medical reform, PBOR2 legislation includes a number of protections for pilots facing FAA enforcement actions.

Differential hourly rates

During the Phase 1 consultation process in the current funding review, the CAA presented an option to introduce differential rates for Professional / Technical and Administrative staff contribution to activities for which fees and charges are made. There was strong support from respondents to this proposal.

In the Phase 2 consultation document, it is stated that the charge-out rates for Professional / Technical and Administration were re-assessed to reflect variations in the time taken to carry out the specific functions charged for.

The CAA says that the actual time involved in processing administrative tasks (paragraph 141 of the Phase 2 consultation document) averages about 15 minutes per task.

We note that the proposed fixed fee charges in the Phase 2 consultation document, which apparently take into account a reduction in the administrative charge-out rate, do not contain any specific detail as to what the administrative charge-out rate is or what percentage of the overall fee it comprises.

Further – despite the supposed application of an administrative hourly rate – there is no reduction proposed to the existing overall hourly rate of $284 hour during the 2016-19 period and the intention is to hold all fixed fee charges at their 2012 levels.

The CAA now states that the reason for this is “due to unavoidable movements in direct and overhead costs in the period from 2012”.

This not entirely surprising when one realises that the CAA has spent $11,252,000 on ‘consultancy’ since 2012 (the beginning of the last triennial funding period) – and in the last financial year, a check of the CAA Annual Report discloses that 68% of the CAA’s employees now earn more than $100,000 per annum.

Another compelling reason for not introducing the differential hourly rate could be that it’s a great income generator. CAA has disclosed that clerical staff take an average of 15 minutes to process administrative tasks and the minimum charge-out rate is 1 hour @ $284 for tasks that do not have a set fee. Four such administrative tasks accomplished per hour @ $284 hour equates to $1136 an hour – which is a spectacular return on a clerical salary.

As an indication of how an apparently simple administrative task – an amendment to a Part 115 exposition to show a change of address – can prove to be a horrendously expensive exercise, an operator was recently charged $355 (1.25 hours) when he advised the CAA that he had changed his address for service from one hangar to another on the same airfield.

The CAA response was that “An hour is conservative for the time taken to complete this, and again it was actual work done. The remaining 15 minutes was for all administration tasks associated with the work request”.

In comparison, the LTSA makes no charge for updating a change of address to a passenger service licence, a goods service licence or drivers licence, all of which – unlike similar tasks at the CAA – can be done online.

CAA Director Graeme Harris: Unable to answer the question

CAA Director Graeme Harris: Unable to answer the question

When Des Lines questioned the Director during the Phase 2 consultation meeting in Christchurch as to what specific cost savings had been achieved by the CAA since 2012, Graeme Harris was unable to answer the question other than to say that the CAA had managed to reduce accommodation costs by sub-letting floor space.

The GAA has made repeated efforts to determine cost-savings and efficiency improvements at the CAA since the Martin Jenkins Value for Money Review of 2011, which criticised the Authority’s poor performance. We have been rebuffed at virtually every turn – and the CAA demanded almost $4000 in advance from the GAA, to pay for the Authority to research itself.

The only reasonable conclusion is that – apart from sub-letting part of its hugely expensive office accommodation in Asteron House, and despite broad-brushed, detail-free claims of improvement by the CAA Board – no significant savings or productivity gains have been achieved.

The deadline for submissions

Submissions to Phase 2 of the CAA Funding Arrangements for 2016-19 close at 5pm on Friday 19 February 2016.

The proposed changes will have the greatest impact on commercial aviation businesses.

If you haven’t done so already, we strongly recommend that you assess the impact that it will likely have on your own individual operation. This will, of course, depend on what Rule Part you come under.

For more information from the CAA, click here