The federal government has introduced a bill into parliament that will enable it to transform its stalled e-health records regime by automatically creating a record for every Australian by default.

The bill entered parliament before the Department of Health commenced pilots of the new ‘opt-out’ approach to getting healthcare recipients registered for an electronic record.

The bulk of the pilots are due to be carried out in 2015-16, at a range of sites.

The new laws will allow health authorities to automatically set up online accounts for selected participants using names, addresses and health identification numbers pulled out of the Medicare database.

Once the pilots are complete, the legislation - if passed - will allow for the opt-out approach to be expanded to all Australian healthcare recipients, should the trials prove successful.

The bill, which seeks to replace existing legislation governing the personally controlled electronic health record (PCEHR), also expands the mandatory reporting regime for information security breaches, and introduces new criminal penalties for unlawful disclosure of information.

The penalties come with a maximum sentence of two years' jail, and civil fines for organisations capped at $540,000.

Should the bill become law, all registered healthcare providers and their service providers will be brought into the mandatory reporting regime, which previously only applied to information repository and portal operators.

A new organisation called the Australian Commission for eHealth will be set up in 2016 to operate the system, which would also receive a statutory name change to My Health Record under the bill.

The existing PCEHR Jurisdictional Advisory Committee and Independent Advisory Council are abolished under the bill.