An independent review into Medicare compliance has found no evidence of the $8 billion fraud quoted in media reports last year, instead finding that Medicare Benefits Schedule (MBS) compliance issues are overwhelmingly caused by the complexity of the system.
On 4 April, the Federal Government released the findings of a review by respected health economist Dr Pradeep Philip into Medicare Compliance and Integrity. It came in response to reports about the potential for widespread Medicare rorting and fraud.
Philip’s review found the overwhelming majority of health practitioners are well meaning and protective of Medicare, with there being no evidence to support the $8 billion figure highlighted in some media reporting. The review found that the likely cost to Australian taxpayers is closer to $1.5 to $3 billion annually. But without action this figure could increase.
“A large part of the success and efficacy of Australia’s health system, to date, is due to this level of altruistic behaviour by health professionals. That said, my review highlights growing vulnerabilities and forces of change which could, in a short period of time, result in significant leakages, including fraud, in the system,” Philip, head of Deloitte Access Economics, said.
“It is my view that a significant part of the leakage in the Medicare payment system stems from non-compliance errors rather than premeditated fraud.”
In a November 2022 Insight article, medical defence organisation Avant said optometrists have been reprimanded over the use of items that require patients to have been previously seen at the same practice as the providing optometrist, not at another practice within a corporate group.
Items 104 and 110, involving multiple specialities, have been a recent focus of the regulator. Concerns included poor record-keeping as well as a lack of evidence of a referral requesting a specialist consultation, inadequate communication of outcomes to the referring practitioner, and co-billing a consultation with a procedural service when the record did not support that a separate consultation was performed.
In his report, Philip said one could argue there is a significant amount of ‘fear’ of the compliance regime.
“Notwithstanding it is not as far reaching or effective as it could or should be in practice. But there is no room for complacency. Critical to addressing this is a recognition that the legislative basis for Medicare is fast becoming out-of-date, unable to reflect the changing health needs and modes of health service delivery in Australia.”
After conducting the review, Philip said it was clear Medicare had “grown organically over time” in response to changing needs and government agendas, rather than based on clear strategy, changing demography, burden of disease and emerging therapeutics, models of care and technology.
“An unintended consequence of this growth over the last nearly 40 years is that there is no longer the same connection that there used to be between patient, the practitioner, and the payment,” he said.
“All these changes open the door for integrity and compliance risks.”
In highlighting Medicare’s “vulnerabilities”, Philip pointed to the changing nature of healthcare delivery that now encompasses: more than 6,000 Medicare items, many which are frequently updated; multidisciplinary teams for more complex cases bringing a broader range of healthcare professionals into the Medicare system remit, and where the biller isn’t always the service provider; and corporatisation of medicine where, increasingly, practitioners have less control over what is billed in their name.
Surprisingly, Philip said entities that run medical centres don’t need to be registered for submitting Medicare claims and being paid by Medicare.
The review made 23 recommendations to the Federal Government.
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