A joint investigation by The Sydney Morning Herald, The Age and the ABC’s 7.30 yesterday suggested that a nearly third of Medicare spending was “wasted” in a combination of fraud, rorting, errors, inappropriate billing and overservicing, to a combined estimate of $8 billion annually.
This caught the attention of doctors, lay people and the health minister — but it is a report that should be treated with caution.
There’s no doubt that there are fraudulent and bad faith actors in healthcare, whether individual practitioners or companies — and all are costly for our precious universal healthcare system. But an accusation of this magnitude requires nuance and clarity. Fraud is clearly unacceptable and should never occur. But in this investigation, bundled in with fraud was a suite of other offences contributing to this so-called “leakage” — such as billing errors, perceived overservicing and low-value care.
The volume of Medicare item numbers is thicker than a phonebook, and even Medicare cannot provide consistent answers on which item numbers to use in specific contexts. So I wonder how PhD researchers were able to determine optimal/erroneous billing so certainly?
In the investigation, addressing multiple issues over multiple consultations was considered inappropriate, even though it might not be necessary or possible to discuss every complaint in a single consultation. Ordering certain radiology and pathology tests was suggested to be inappropriate, as was providing radiation therapy to terminally ill cancer patients. Billing when providing care in a nursing home on the basis that a patient might not recollect the conversation was also considered inappropriate. None of these scenarios constitutes fraud — some are examples of good quality medical care, and any argument that they are not faces a high burden of proof.
As such, it’s hard to know how much of the $8 billion “leakage” is due to actual fraud. Even though the quoted experts suggested that a third of Medicare spending is wasteful, up to 47% of GPs in the RACGP Health of the Nation Report 2022 reported that they avoided claiming patient rebates despite providing a service due to fear of Medicare compliance ramifications.
So I worry that the actual fraud is only a small part of this “leakage” report, one that will result in subjective notions of what Medicare should and should not pay for. And if a substantial proportion of that $8 billion is based on those subjective ideas, then the Australian public needs to ask who is best placed to determine if they need a screening test, radiation for cancer symptom control at the end of life, or optimal medical care despite their dementia — a lawyer, a bureaucrat, a politician… or their own treating doctor.
The reality is that Medicare is broken — doctors largely believe it isn’t serving the best interests of either clinicians or patients. The RACGP report found 70% of GP practice owners are concerned about the viability of their practice, and 61% worry about the complexity of Medicare outside work hours.
Unlike the exposé that led to the banking royal commission, which was resisted by the banks, many clinicians would welcome an overhaul of Medicare — such that item numbers are indexed annually to rise with inflation, appropriately valued to ensure practice viability, simple to use with little risk of error, and allow time for direct patient care rather than increasingly onerous Medicare compliance activities.
The value of Medicare is taught to doctors from medical school, and appropriate, ethical billing is part of many conversations through specialist training. I’ve seen more education, mentoring, reporting, doctor-led Medicare item numbers and fee reviews than I can count. Doctors care about fraud and rorting: it’s our profession under scrutiny, but also our tax dollars being wastefully spent.
Medicare needs an overhaul. But aggressive compliance of all because of a few bad actors, and managed care where non-clinicians determine what care can and cannot be provided, are not the right solutions.
What do you think about the Medicare investigation? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
Fee for service is the mistake in Medicare’s origin. To be paying out more than a prime ministerial salary to an individual practitioner in rebates as well as co-contributions is just silly. These people are employees not contractors. Let the state provide practice nurses and so on and pay people an appropriate lifetime wage for reasonable hours. But alas whilst we have specialists charging international rock star prices this will never happen. General Practice is not attractive because other paths are way more lucrative. These people are professionals are vastly overpaid compared to other professionals, eg engineers, lawyers. There was a work value study, let’s reread it.
My plumber and lawn mower man earns more than a GP once the insurance and practice costs are taken into consideration.
And silly me, my husband is a specialist who bull bills a lot of his patients and certainly doesn’t come across as a rock star.
He went into medicine in service to the common good. Most engineers don’t have a minimum of an insurance bundle of about $95,000 and so , take that into consideration, he would have earned more as a mining engineer.
I agree that not every lawyer, dentist, clinician etc. enters their chosen profession based on getting rich quick. Unfortunately the majority do. Medicare is broken. Our health system is getting closer and closer to the US style medical system. It is a lucrative market for many specialists, as for pathology corporations and the private health insurer. Many and every day more are now owned by US companies. I wonder why????
Majority don’t go into it for get rich quick if they want to get rich quick they would go into finance.
quoting “Unfortunately the majority do.” what is your EVIDENCE for that assertion!
Few would get paid more than the Prime Ministerial salary, and you should also not confuse gross billings with what the paractitioner actually makes. A private practice is a business, and there is rent, staff wages and super, consumables, software, regulatory and compliance costs, and much much more to come out of that. The actual taxable income is high to be sure, but in keeping with politicians, legal practitioners, and senior public servants. If you would prefer a low paid grease monkey to rumage around your insides, go right ahead.
One glaring error I noted in the report wsa the criticism that some clinicians are ordering expensive and perhaps unessecary tests to inflate their incomes. Except the referring clinician gets none of that fee, it all goes to the radiologist or the pathologist so that argument just does not hold water. The parallel omission I noted is there is no mention of just how many such referrals for high value tests are a feature of “defensive medicine”, where the clinician orders these tests to provide a defence against any claim for negligence.
The problem is not the fee for service model. The problem is the lack of a closed loop between the practitioner and the patient. Bulk billing is the means by which most, if not all fraud, is executed. If practitioners billed all patients directly, and the patient then claimed back from Medicare then the patient will be far more aware of which services are being delivered. Right now with bulk billing the patient has no visibility, and no interest, in what’s in their bill, it’s an open invitation for the unscrupulous.
Completely agree Jackson that is the root of the problem ,bulk-billing where the patient has no visibility.
‘It is also the root cause of the demoralisation of the profession and the lowering of standards of care in some places,perhaps even the demise of the profession as new graduates vote with their feet.
I work for a medical specialist who bull bills a substantial number of his patients.
Students, aged pensioners and disability pensioners along with the just too poor to afford a specialist’s bill and too urgent to be languishing on the waiting list for a waiting list.
I have post graduate qualifications in Medical imaging and a computer program which is integrated into both the private health funds and Medicare computers.
Sounds fool proof?
If Medicare refuses to pay an item number, then the private health fund does too.
I had a question regarding the appropriate medicare number for a procedure performed in hospital under a general anaesthetic as the initial claim was rejected.
I called the Medicare number for practitioners and waited on hold with some recording rattling down the phone, on speaker for 27 minutes and 40 seconds..
When finally answered, after identifying myself, the medical practitioner I was representing and then the case in question. I asked my question regarding the differentiation between two numbers.
I received a 3 minute speech which was obviously read out reminding me of my obligations under the Medicare Act to understand my responsibilities under the act with no explanation of the differentiation between the two numbers given.
Had I been the patient, I would have gone away and not received a Medicare and Health Fund rebate.
I escalated the claim, still got no answer and so, handed it to our local member of federal parliament who took 2 tries to get payment and then Services Australia didn’t pass it on to the ori to the private health fund. for payment.
Priceless and breathtakingly awful.
My staff have had the exact same experience.
The GP I see is fantastic but the usage and billing of all Medicare based ‘Care Plans’ needs to be investigated.
The Medicare based “Care Plan” is to allow a GP to devote more time to people with complex needs.
A GP friend won’t take them on because he doesn’t get paid enough for the time and energy needed.
Mostly these Care Plans are done by the practice Registered Nurse while the GP sees other patients. The Health Care Plans are then bulk billed – item number 707 is paid out at $284.20 to the GP. While the nurse has done the bulk of the work for this care plan timewise the GP is still seeing other patients and getting paid for those consultations concurrently. Most people have no idea how much the doctor is paid for the Health Care Plans.
Reading one of the articles on Monday, it made me wonder if one interaction I had would constitute fraud.
I go into the doctor’s about seasonal hayfever, and the doctor then here me to take a battery of blood tests, no-one of which were relevant to the hayfever, followed by a follow-up to discuss those findings. So I went in asking for help with hayfever and came out with a diagnosis of a mild dust mite allergy and a printout on lowering cholesterol.
I’m fairly certain no improper Medicare numbers were used, but was ordering those blood tests diagnostically relevant? Maybe there’s a case to make either way, but from reading the article it’s this kind of interaction that contributed to the excess costs of Medicare.
… One thing I wonder about in those cases “Is there finder’s fee, for that clinic, from the lab used?”
If there is you run the risk of being prosecuted. “Finders fees” and kickbacks for referrals are quite, quite illegal.
The most I have ever gotten from a pathologist or a radiologist is a pad of pre-printed test order forms with my name and provider number already on them, which saves me the hassle of writing it out each and every time. And as pretty much every diagnostic practice will accept a request on one of their competitors forms it’s hardly a competition issue either. Oh, and one of them squeezed me in quickly when I needed a test myself.
I daresay “Medicare fraud” is illegal too?
Yes, and people get done for it, and do time.
So it’s not sufficient deterrent for those rorters?
Read toady’s The Age. The most egregious rorters appear to be cosmetic surgeons, who are already operating in a contentious manner. If AHPRA acted to shut them down much of this would cease.
I’d be very surprised if it wasn’t. It did otherwise make me wonder what’s in it for the practice for me to get all that blood work done, beyond the need for a follow-up appointment which presumably can be knocked out quickly and still get the basic Medicare code 23 payout.
I’d be very surprised if there was, that’s a quick way to court and your leaving by the back stairs.
Fair enough, thanks for the explanation above as to why its implausible.
There’s certainly extra income for the lab….
Be careful Kel if you are placing yourself above the clinical expertise of the doctor. You may have presented with hayfever but a good doctor might also quite properly reckon on your cardiovascular risks eg related to age, gender and cholesterol status. That would be quite proper and at a certain age you might have that done annually or even more frequently if you are prescribed a treatment program. Doctors are required to monitor the health of their regular patients particularly given the epidemic of diabetes. Properly managed patients costs the community less than hospital and surgeries of advanced cases. As a result it is harder for patients to decide what is unnecessary and there are ways that the authorities can detect abnormalities in the way practices/particular practitioners operate based on good clinical backgrounds. Not a medical person myself and have once reported what I suspected to be overservicing to the Health Commission for them to follow up but have to say that most GP’s in my narrow experience have been very diligent and proper in their practice.