Public outpatient doctors ‘legally vulnerable’ over refused referrals


By Geir O'Rourke

24 Aug 2022

Specialists in public hospital outpatient clinics that require named referrals are leaving themselves vulnerable to medicolegal issues and could even be ordered to repay Medicare rebates billed in their name, a leading expert is warning.

Margaret Faux

The message comes amid a recent uptick in the practice, which enables the public hospital to treat patients privately – with the care funded under Medicare rather than a state or territory health budget.

However, the federal Department of Health has raised concerns, declaring hospitals are legally prohibited from rejected unnamed referrals under clause G19b of the current National Health Reform Agreement.

Pledging to crack down on the problem last year, it also launched a dedicated tip-off line for GPs to dob-in any hospital they believe is mandating named referrals.

But any consequences are also likely to fall on the doctors working in the outpatient clinics themselves, says Dr Margaret Faux (PhD), a lawyer and researcher into health regulation.

“These specialists are actually really vulnerable,” says Dr Faux, who is also the CEO of medical administration company Synapse Medical Services.

“The Commonwealth is very focussed on public hospital outpatient departments right now and I think they would like to make an example of one if they can.”

“That would also mean coming after doctors whose Medicare provider numbers had been used.”


Dr Faux told the limbic she was aware of multiple cases where specialists had been ordered to repay Medicare rebates claimed on public hospital outpatient consultations, even though their billing had been directed by the hospital.

“There was an example involving a physician in my PhD thesis on Medicare billing last year,” she said.

“She was ordered to repay the rebates and the hospital refused to help, which left her on the hook for the whole thing.”

Given the uncertainty, those affected should demand visibility over their billing and retain control of it to the greatest extent possible, Dr Faux said.

“At a bare minimum, the public hospital should provide them with regular detailed reports of every MBS item billed under their name and provider number.”

Dr Faux stressed it was a legally complex area, because the National Health Reform Agreement, which governed public hospital funding, appeared to lay out a different set of rules to the Health Insurance Act, that underpinned Medicare.

Additionally, many hospitals used a mix of public and private outpatient clinics, while some specialists in public hospitals worked under contracts that entirely relied on their Medicare billings for income, she said.

“So it’s all a bit convoluted and complex, because does that mean they are entirely responsible for the patient? Or is it the hospital?”

“That’s why many of us are now calling for a Law Commission to get out of the reeds and fix the thing properly.”

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