Medicare non-compliance costs taxpayers up to $3bn, government review finds

The likely cost of Medicare non-compliance to Australian taxpayers is $1.5–3 billion a year, according to the Independent Review into Medicare Compliance and Integrity.

The government commissioned health economist Dr Pradeep Philip to conduct the review last November in response to concerning reports about the potential for widespread Medicare rorting and fraud.

Dr Philip’s Review found 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. It also found no evidence to support the $8 billion figure highlighted in some media reporting.

“This comes with a significant caveat, in that there is real potential for the problem to scale to the order of magnitude in Dr (Margaret) Faux’ analysis should effective controls, systems and education not be put in place,” said Dr Philip in the report.

“It is my strong suggestion to commentators and policymakers that the actual number should not be the main subject of debate, attractive as that may seem, as the main lesson to learn from this Review is that we must focus on the structural issues and controls in the system, to build trust in Medicare and materially reduce non-compliance and fraud,” the report said.

The review suggests that these problems have been a long time in the making. The loss of billions of dollars a year in taxpayer money was consistently and repeatedly highlighted in no fewer than five separate reviews between 2016 and 2021, by industry bodies like the Australian National Audit Office, Boston Consulting Group, McKinsey and others.

The Philip Review makes 23 recommendations, including:

• Strengthening the governance model that oversees integrity from a whole of Medicare perspective, from policy and legislation through to payment systems and compliance.
• Removing the veto power of professional bodies in the selection process of the Director of the Professional Services Review.
• Ensuring that the legislation that underpins Medicare integrity is amended to be effective and fit for purpose.
• Improving the detection and disruption of fraud and non-compliance, and mechanisms to address inappropriate and incorrect claiming.
• Improving clarity and consistency for health providers through system improvements, simplification of policy, closer coordination and better education on Medicare rules.
• Up-lifting technological and systems capabilities across Medicare.
   

Minister for Health and Aged Care Mark Butler said, “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.”

The government is considering the recommendations in Dr Philip’s review and will now work closely with health professionals, patients and peak bodies to develop a comprehensive response.

Image credit: iStockphoto.com/Andrii Yalanskyi