Practice owners and managers need to understand that risk is not just about what goes on in their clinic rooms; there is also plenty of risk and responsibility around what happens with Medicare claims and billing.
Your practice manager is away for four weeks of long overdue leave, so you bring in an experienced temporary administrator to help manage billing and reception. A few days into the role, she quietly asks if you have changed your bulk billing policy.
According to your software, several pensioners and health care card holders have recently been recorded as owing small cash gaps. Yet the processed Medicare claims show bulk billed services with no patient contribution.
She also notices that item numbers for some tests appear in the system without corresponding clinical entries. When she raises her concerns, you realise these entries occurred before she arrived and were processed under your regular manager’s login.
At first, you assume it is a staff training issue or a documentation error. But as you compare records more closely, more inconsistencies emerge. You start to worry not only about the financial implications, but also about the risk to your professional reputation if Medicare considers these anomalies fraudulent.
Situations like this are deeply uncomfortable for practitioners. Most optometrists and ophthalmologists trust their staff and work in close teams. However, Medicare misuse and internal fraud can stay hidden for long periods, often only surfacing when someone new looks at the data with fresh eyes. Even honest practices can unintentionally create opportunities for misuse if their internal systems are not strong enough.
Understanding your legal obligations and improving oversight can significantly reduce your risk.
Medicare fraud in eyecare practices
Fraud in health settings often begins with small administrative shortcuts rather than deliberate wrongdoing. Common patterns include:
Skimming gap payments
A staff member bulk bills a patient but collects a separate cash or EFTPOS gap that is not recorded in the system.
Altering item numbers
This includes modifying billed items without the practitioner’s knowledge. For example, upgrading a consultation item or adding a diagnostic test such as optical coherence tomography or visual fields that was never performed.
False cancellations and reversals
This occurs when a staff member reverses or reprocesses claims to manipulate payments or hide discrepancies.
These acts exploit administrative vulnerabilities rather than clinical decision making. However, responsibility for what is billed under your provider number rests with you, even when you delegate tasks to staff.
Your obligations
As a practitioner, you must take reasonable steps to ensure all claims made under your provider number are accurate and supported by clinical records. Delegating billing responsibilities does not remove your accountability.
That means taking an active interest in how billing is handled in your practice. You do not need to micromanage staff, but you do need appropriate oversight of administrative processes, clear expectations, and systems that are followed consistently.
If Medicare identifies irregularities, you may be required to repay benefits or undergo a Professional Services Review. In more serious cases, fraudulent activity can lead to criminal investigation.
This is why oversight must be deliberate and consistent. The aim is not to introduce suspicion into your team, but to ensure your systems are strong enough to protect both your staff and your practice.
Practical steps to protect your practice
1. Strengthen recruitment and screening
Ensure that all staff who handle billing or payments undergo appropriate integrity checks, including reference checks and a probationary period. Temporary staff can also help reveal blind spots, as in the vignette.
2. Limit access within your systems
Configure your practice management software so staff can only perform functions relevant to their roles and so changes are automatically recorded. Your systems should clearly show who made an entry or amendment, and when they made it, making it easier to identify and resolve issues if questions are later raised. Limit who can alter item numbers, reverse transactions, create new patient records or modify bank details and ensure staff do not access systems using shared log-ins.
3. Review Medicare billings regularly
Practitioners should receive and review daily or session-based summaries of the items billed under their provider number. These reviews help detect errors and irregularities early.
4. Reconcile accounts frequently
Weekly and monthly reconciliation of Medicare payments, EFTPOS reports, diagnostic testing volumes and practice software records is essential. Any inconsistencies should be followed up quickly.
5. Require shared approval for high-risk tasks
Where possible ensure two authorised staff members approve refunds, reversals and adjustments. Staff who reconcile accounts should ideally have read-only access.
6. Maintain strong financial controls
Clear processes for cash handling, overtime approval, banking and payroll reduce opportunities for misuse. Cash should be banked daily.
7. Consider independent book-keeping or external review
Engaging an external provider to handle bookkeeping or payroll introduces separation of duties that protects the practice. Confirm they comply with privacy obligations, store data within Australia and follow strong cyber security standards.
About the authorS: Sonya Black is legal team manager – Workplace Law, Avant. Gail Wang is risk advisor, Member Advisory Services, Avant.
