A Five-Minute Guide to the Estimated $8 Billion Medicare Rorts

medicare fraud australia explained

A huge investigation into Medicare has found that almost 30% of its annual budget may be being eaten up by dodgy doctors rorting the system illegally.

Journos from the ABC, The Sydney Morning Herald, and The Age have joined forces to uncover flaws in the medicare system that make it easy to scam and almost impossible to detect.

The $28 billion dollar system, that we all pay into, is potentially being massively defrauded by practices that have been ongoing for decades.

The problem does not seem to be isolated to a few bad actors but is, in fact, systemic, with the SMH reporting that doctors are attending courses on how to “pack and stack” patients with Medicare bills.

Responding to the news, Treasurer Jim Chalmers has labelled the reports “absolutely atrocious” and said that the government is investigating the claims.

“If these numbers are true, it’s absolutely atrocious. Every dollar rorted, whether it’s from Medicare or the NDIS, is a dollar thieved from people who need and deserve good health care,” he told reporters on Monday.

“If you’re stealing from Medicare or the NDIS, you’re a grub. It means that money that’s not exactly thick on the ground in the budget is not going to people who need it.”

Chalmers said that there will likely be a crackdown on this kind of “troubling” behaviour.

“(It is) something that we will get to the bottom of because we don’t want to see a single dollar rorted or thieved from the system when it could go to helping people who are vulnerable,” he said.

What The Hell Is Happening with Medicare?

Medical practitioners have reportedly been billing Medicare for services that either didn’t happen, were unnecessary, or shouldn’t have been charged to Medicare.

It appears to be a massive and very granular series of frauds. Doctors’ offices, corporate health clinics, and GP ‘super clinics’ are some of the bad actors at work, but it seems much of the medical profession is caught up in illicit cash-grabbing.

What’s been happening is partially accidental, but clearly at least partially on purpose, according to the reports.

Millions of Medicare claims are made each year through the universal healthcare system that covers some 5800 services. Many of them are payments of less than $100, but, at a high volume, these add up and they’re very difficult to verify if they were accurate or not.

Some of the examples cited include the prescription of the highly addictive opioid painkillers oxycodone to “drug-dependent patients” without proper management plans in place, Medicare bills for cosmetic surgeries, and simply claiming for procedures that were never carried out. There are also reports of doctors billing Medicare for people who had died, and radiologists performing too much work on terminally ill cancer patients to claim payments.

The $8 billion figure comes from Dr Margaret Faux, a lawyer with a PhD in Medicare compliance. This figure is in line with another PhD report that suggests up to 25% of Medicare claims could be fraudulent or inappropriate. It’s also been corroborated by the former head of the Medicare watchdog.

Faux has said that previous reports of bad actors in the system are not isolated incidents.

“Aged care facilities have some of the greatest vulnerabilities to Medicare fraud,” she told the SMH.

“Billing dead people, billing for ward rounds that didn’t happen or billing residents who are cognitively impaired and don’t have a recollection of what was discussed make it an area of concern.”

Why Is This Happening?

“The bottom line is we don’t know exactly how much is fraud, deliberate abuse and how much is errors. Whether it’s deliberate or unintentional, it has to stop,” Faux has said.

The Australian Medical Association (AMA) has already responded to the allegations, saying that many doctors will be “sickened” by the claims and that the coverage is inaccurate and damaging.

AMA boss Steve Robson has said that “Australia’s doctors have worked incredibly hard through COVID … so today’s coverage is as appalling as it is inaccurate,” he said.

He described the report as “an undeserved attack on the whole profession based very much on anecdotes and individual cases”.

The Department for Health and Aged Care have said that they have a “strong” compliance programme to ensure the integrity of the Medicare system and that allegations of non-compliance are treated seriously.

We’ve been warned for years that the medical system in Australia is on the verge of collapse. Inadequate government funding, increasing demand, and the cost of living crisis is pushing many health institutions to breaking point. There are far more people relying on the public healthcare system now than there were a few years ago, with people giving up their private insurance to rely on Medicare.

This creates some push factors in why medical professionals would be over-reliant on a public rebate for services, otherwise they’d be out of pocket as payments haven’t kept up with inflation.

Economics doesn’t quite capture the full picture however, as many of these scams are suggested to have been going on for many years. Less forgivable is the role that greed plays in why medical professionals would engage in fraud, Faux has said.

“I think most Australians believe that doctors are honest people,” she said.

“And I’d like to think that most of them are. But the reality is anywhere where you’ve got a huge pot of money that is super easy to access, you are going to get bad actors building business models just taking the money unlawfully. And it’s a huge problem in the Medicare system.”

The system has long been due for an overhaul for a long time, with experts sounding the alarm on the viability of the entire medical structure in the country. This report is only likely to increase the chances of that, particularly as the government is seeking to limit wasted public spending as a global recession looms.

Government Services Minister Bill Shorten told the Today programme that Medicare does indeed have a “payment integrity” problem but that “the vast majority of GPs do the right thing.”

“It drives taxpayers to despair if they think that some people are opportunistically rorting the system,” he said.

Shorten blamed previous Liberal governments for neglecting oversight procedures in Medicare and stated that wherever there is government money to be made, people will try and con the system.

“If you don’t put enough effort into payments integrity and guardianship, you will get rorts,” he said.

“There needs to be tougher payment integrity checking.”

The journalist who fronted the investigation, Adele Ferguson, has done similar work into the banking sector and the cosmetic surgery industry, sparking a royal commission into the finance industry in 2017.

It feels like this time around we could well be looking at a royal commission into just how and why the Medicare system has been so badly abused for so long.

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