Fed Govt orders inquiry into $8 billion MBS ‘leakage’ claims

Minister for Health Mark Butler has launched an independent inquiry into Medicare to investigate allegations of widespread fraud and abuse by doctors.

However, he says a departmental review has found no evidence to support claims made in the media that 30% of Medicare’s budget was being wasted due to a combination of errors, over-servicing and outright fraud by health professionals.

Rubbished by the AMA, the allegation is based on a PhD thesis by Dr Margaret Faux (PhD), a researcher and CEO of a medical administration provider called Synapse Medical.

She estimated the leakage at nearly 30% of Medicare’s annual budget, or about $8 billion a year, according to the reports published in the ABC and Nine newspapers.

Mr Butler said on Saturday: “Australians know that the overwhelming bulk of Australia’s doctors and health professionals are honest, hardworking and comply with Medicare rules. But they also understand that, after nine years of cuts and neglect, every dollar in Medicare is precious and must be spent directly on patient care.”

“My Department has provided a report on the existing compliance efforts, along with a rundown of the various estimates on the scale of the problem from the Australian National Audit Office (ANAO) and others.”

“The report found no evidence of the $8 billion in Medicare fraud and inappropriate billing estimated by Dr Faux.”

Nevertheless, he said a review was warranted to measure and report on the true extant of non-compliance in Medicare and to identify fixes to protect the system.

The inquiry will be chaired by health economist Dr Pradeep Philip (PhD) and will also assess the effectiveness, transparency and independence of the health department’s Practitioner Review Program and Professional Services Review (PSR).

Other issues within the review’s scope include:

  • PBS compliance
  • The current penalties for fraud and inappropriate practice and whether these should be increased
  • Government debt recovery processes for non-compliant claims

Dr Phillip, the Lead Partner at Deloitte Access Economics and a former secretary of the Victorian Department of Health and Human Services will also consider “measures available to slow, deter and prevent incorrect claiming such as system blocks and authorisations”, according to the department.

AMA president Professor Steve Robson promised to work with the inquiry, saying it needed to focus on supporting practitioners to navigate the complex Medicare system and not simply result in more red tape.

But the media reporting had been deeply upsetting to doctors, adding experts including the former head of the MBS Review, Professor Bruce Robinson and 2017-22 PSR director, Professor Julie Quinlivan, had both dismissed the claims as baseless.

“We have seen and heard from general practitioners and non-GP specialists who have told us how upsetting these stories are,” he said.

“They have told us about being confronted by angry patients. This is a direct result of inaccurate and misleading media reports.”

“Compliance is something the AMA takes very seriously, and we will work with the Medicare integrity review that has also been announced today. The profession has nothing to hide.”

More than 500 million Medicare services are delivered each year totalling around $32 billion in government spending, while a 2020 ANAO report estimated non-compliance at between $366 million and $2.2 billion a year.

Dr Philip is expected to report back early next year.

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