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No evidence of Medicare rorting and premeditated fraud: Allegations damaging to struggling primary care workforce

Health Industry Hub | April 5, 2023 |

Medical: The government has released the findings of a review into the compliance system that underpins Medicare.

The government commissioned health economist Dr Pradeep Philip to conduct the Independent Review into Medicare Compliance and Integrity last November in response to last year’s media reports of widespread Medicare rorting and fraud of at least $8 billion annually – approximately 30% of Medicare’s annual budget. The accusations resulted from a report produced by Dr Margaret Faux, a health regulation expert who has been administering Australian medical billing since Medicare began.

Dr Philip’s Review makes clear that the overwhelming majority of health practitioners are well meaning and protective of Medicare, and they provide a high level of care to their patients. Dr Philip also found no evidence to support the $8 billion figure highlighted in some media reporting.

The Review found that the likely cost to Australian taxpayers is $1.5 to $3 billion a year, with a significant part stemming from non-compliance errors rather than premeditated fraud. But without concerted action this figure could increase.

Dr Pradeep Philip said in the Review “On the basis of my consultations and my experience with Australia’s health system, the overwhelming majority of practitioners are well meaning and protective of the Australian health system, particularly of the care they provide to their patients. 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.

“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. Indeed, one could argue that 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.”

In fact, a new analysis reported on Monday by the University of Sydney has found GPs were significantly more likely to undercharge than overcharge Medicare for their services, with an estimated $351 million in savings in 2021-22. The study analysed data from the Bettering the Evaluation And Care of Health (BEACH) program* and found that of 2,760 GPs, 84.6% undercharged Medicare for at least one consultation within a sample of 40 consultations. The study also found GPs undercharged 11.8% of total consultations and only overcharged 1.6%.

Lead author, Dr Christopher Harrison, from Menzies Centre for Health Policy and Economics at the University of Sydney, stated “General practice is in crisis. Allegations of fraud have been damaging to a workforce that is struggling to attract medical graduates to general practice.”

AMA President, Professor Steve Robson, said the research confirmed that there is no evidence to support the media claims.

“This really demonstrates that not only are GPs working with extreme underfunding, the significant fear of compliance and the confusion around our overly complex Medicare system means they actually undercharge the MBS,” Professor Robson said.

“General practice is under-funded, under-indexed, and under-valued, and at the end of the day it is the patient that wears the impact, as they are not able to access the care they need, when they need it. We have seen increased out-of-pocket costs for patients, a steady decline in bulk-billing, and some practices being forced to close their doors due to financial pressures. When added to the fictitious claims of $8 billion in fraud, it is no surprise that medical students are no longer seeing general practice as a viable career option.”  

Mark Butler MP, Minister for Health and Aged Care, noted “The former government was given five separate reviews, including from the Australian National Audit Office, that told them billions of dollars in taxpayer money was being lost each year. They failed to act to protect Medicare.

“Australians know that the overwhelming majority of our doctors and health professionals are honest, hardworking and comply with Medicare rules. But they also understand that, at a time of great pressure on household and Government budgets, every dollar in Medicare is precious and must be spent directly on patient care. Strengthening Medicare also means safeguarding the taxpayer funds that underpin it and this Government is committed to that task.”

The AMA is calling on the government to rectify these issues in the upcoming May budget.

“Last week we launched our budget submission on general practice, which outlines targeted, implementable and costed initiatives that could be implemented now to improve general practice viability and modernise Medicare – initiatives like supporting GPs to spend longer with patients, including after hours, deliver wound care, and deliver care in aged care facilities.  

“The AMA would also like to see targeted investment in Medicare to improve access to GPs for our most vulnerable communities, as they are the ones that are being impacted the most from this. General practice is tired of being the scapegoat and tired of being the savings bank – it’s time to support and properly fund general practice.”

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*The BEACH program was funded in 2013-2016 through arm’s length research agreements with AstraZeneca Australia; Australian Government Department of Health; Novartis Pharmaceuticals Australia; Seqirus Australia; Sanofi-Aventis Australia; Australian Government Department of Veterans’ Affairs; AbbVie Australia; and Merck, Sharpe and Dohme (MSD Australia).


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