Medicare billing faces tougher scrutiny under new legislation

With Medicare fraud and non-compliance estimated to cost taxpayers between $1.5 – $3 billion annually, the government has reintroduced the Health Legislation Amendment (Improved Medicare Integrity and Other Measures) Bill to Parliament.

The legislation, originally introduced before Parliament was prorogued in March, seeks to implement key recommendations from the Independent Review of Medicare Integrity and Compliance, led by Dr Pradeep Philip.

Central to the legislation are reforms to identify and prevent non-compliant and fraudulent Medicare claims before payments are made – an area the Philip Review identified as dangerously under-regulated. The Bill also seeks to improve recovery processes for incorrect claims that have already been paid. Without intervention, the Philip Review warns, losses are likely to grow under the current legislative framework.

The amended legislation would empower regulatory bodies to take timely action against serious threats to health or professional misconduct, closing gaps that currently prevent appropriate responses to public reports of fraud.

While some reforms have already received funding approval – one during the 2023–24 Mid-Year Economic and Fiscal Outlook (MYEFO), and another in the 2024–25 Federal Budget with anticipated savings of up to $33.6 million – the broader implementation hinges on passing the Bill during the current sitting period. Failure to do so would stall progress on all Philip Review recommendations, significantly weakening the Commonwealth’s ability to tackle Medicare fraud and non-compliance.

However, not all stakeholders are fully on board. During consultations, the Australian Medical Association (AMA) raised red flags, contending that the legislation had not achieved an appropriate balance, and emphasised that these powers should only be used when the Chief Executive Medicare has formed a strong view that fraud or non-compliance may have occurred.

In addition to Medicare-specific reforms, the Bill proposes amendments to the Therapeutic Goods Act to enhance the Department of Health’s capacity to manage therapeutic goods shortages and provide clearer guidance on when unregistered medical products, biologicals, or medical devices may be approved for supply or importation in Australia.

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