Tip for the medical lobbyists: When you’re debating how many billions of dollars are leaking from Medicare every year, you’ve already lost the real fight.
The AMA has experienced a degree of vindication in its dispute with researcher Dr Margaret Faux (PhD), who sensationally claimed in October that $8 billion a year in MBS benefits was being lost to doctor fraud and errors – roughly 30% of Medicare’s annual budget.
The allegations were splashed across the Sydney Morning Herald and The Age, as well as on the ABC, with headlines like “Medicare is haemorrhaging: The rorts and waste costing taxpayers billions of dollars a year”.
“Medicare costs us almost $30 billion per year,” said reporter Adele Ferguson on the ABC’s 7.30.
“But we’ve discovered the system is being rorted by health professionals fabricating medical records and billing unnecessary services to boost their profits.”
![](https://thelimbic.com/wordpress/wp-content/uploads/2022/08/margaret-faux.jpeg)
Dr Margaret Faux (PhD)
Fast forward six months and the independent review ordered by Minister for Health Mark Butler has finally come out, finding no evidence to support the claim of $8 billion in annual leakage.
Authored by Deloitte health economist Dr Pradeep Philip (PhD), the report stresses there is major cause for concern (link here).
“On a conservative definition of non-compliance and fraud it is entirely feasible the value of non-compliance could exist in the range of $1.5 billion to $3 billion, not inconsistent with previous studies,” it says.
“This comes with a significant caveat, in that there is real potential for the problem to scale to the order of magnitude in Dr Faux’ analysis should effective controls, systems and education not be put in place.”
So Dr Faux’ analysis, and the sensational media reports that followed, were only out by $6 billion or so, according to the report.
Mistakes, not fraud
The review goes on to conclude the bulk of the leakage comes from errors rather than fraud, and – as both the AMA and Dr Faux agree – that Medicare is complex, confusing and fast becoming outdated to meet the changing health needs of modern Australia.
To illustrate this complexity, Dr Philip goes into a few of the numbers involved in Medicare in 2021-22:
- 511 million transactions; with no continuous monitoring
- Around 6,000 Medicare items
- 176,000 practitioners who claim
- 14 different claiming channels with different levels of risk and controls
Against this, health officials conducted less than 60 compliance projects examining claiming patterns by different cohorts of providers over the years, he says.
But as Dr Philip himself argues, the actual number of dollars being wasted may not be where the real debate lies, particularly when Mr Butler has already shown an appetite for major reform.