Editors at Nine Entertainment and the ABC have been diagnosed with Acute Journo’s Ear Syndrome and possible Craniorectal Inversion following reports of an $8 billion Medicare fraud. Callum Foote reports.
The investigation by The Age, SHM and ABC’s 7:30 into Medicare fraud has exposed serious allegations of GP service fraud, in one case from one of the country’s largest tele-health companies, Phoenix Health, however the claim that up to $8 billion is defrauded from our Medicare system each year does not appear to stack up.
This is not to say that fraud doesn’t happen – no doubt it is significant, as the National Audit Office has posited greater than $2bn a year. Yet the total Medicare system costs $28bn of which general practitioners account for $9bn in Medicare payments – just $1bn more than the alleged fraud figure.
GPs billed roughly $4.4bn from Medicare Benefits Schedule last year in time-based consults (one of the main scams highlighted in the reporting). GP billings have been in decline for a number of years.
The investigation homed in on Medicare fraud by general practitioners and not the other 102,805 registered medical practitioners who may be engaging in double-dipping; the likes of pathology, radiology and specialist outpatient services.
Moreover the scale of the alleged fraud appeared to rely on one source, and an acknowledgement by another source that the $8bn figure might be correct.
The Department of Human Services publishes up-to-date statistics on all items billed by doctors from Medicare.
According to Dr James Freeman, founding owner of online doctor service GP2U Telehealth, the vast majority of general practitioners’ Medicare revenue comes from four Medicare items numbered 3, 23, 36 and 44.
These represent GP consults all the way from five to over 40 minutes. “In general practice, the bulk of GP revenue comes from the first 40 minutes a doctor sees a patient,” Freeman said.
In the past year, from June 2021 to July 2022, there were 94.5 million of the above Medicare item numbers billed by GPs across Australia.
Chronic Elephantitis
This equals a total payment from the Medicare Benefits Schedule to GPs of just over $4.4 billion. This is roughly 16% of the $28 billion a year Medicare bill. Even if this amount was 100% fraudulent, it is still unclear how the $8 billion statistic stacks up.
However, there are many more items that GPs can bill, such as aged care services, chronic disease management, mental health, health assessments and so forth.
The Department of Health’s annual Medicare statistics shows that in 2021-22, there were over $9 billion in benefits paid for ‘GP non-referred attendances’. This category of items includes the vast majority of services that GPs provide on a daily basis, including general consults and more specific services such as CDM and mental health. It also includes tele-health items.
If these services combined totalled $9 billion, the $8 billion figure is looking more bloated, although it did include other health professionals as well.
Dr Freeman notes that “If you look at the volumes that are being paid out, GPs are being paid less during the pandemic than they were before the pandemic. We used to do 140 million consults per year, and now we’re down to 100 million.”
When looking at the amount billed by GPs over the past few years, we see that the cost to Medicare is decreasing.
From 2017 to 2018 the Medicare Benefits Schedule (MBS) funding for items 3, 23, 36 and 44 was just shy of $4.9 billion, around 10% more than it was this past year. If adjusted for inflation GPs were claiming roughly 20% more for consultations five years ago than they were last year.
Most observers concede there is rorting in the medical profession, and that it is probably pervasive. Indeed the actual instances identified in the media reports cite sufficient detail for the story to be published. For instance, according to Dr Freeman, the notion of “six-minute medicine” has definite roots in the incentive structure of the Medicare Benefits Schedule itself.
“The notion of primary health and six-minute medicine is that because Medicare pays $18 for a five-minute consult and $38 for a five-to-10-minute consult GPs can be incentivised to shove through patients at five minutes and one second, qualifying for the $38 and offering very little care.”
Tweed Headcase
This is also something that the Royal Australian College of General Practitioners readily admits in its media statement denying the claims published by the ABC.
“Let me be clear – any misuse of public funds is abhorrent, and anyone who rorts the system should be prosecuted, and I would welcome the government’s investigation into this matter.
“However, until we see actual evidence of ‘widespread rorting’, we are just dealing with baseless claims and the opinions of a loud few,” said RACGP president adjunct, Professor Karen Price.
However, one specific rort outlined in the investigation could permit higher rates of Medicare fraud. GPs from specific medical practices, such as Tweed Health for Everyone in northern NSW, has been accused of charging patients for services while secretly bulk-billing Medicare for their visit as well. This form of bulk billing is difficult to quantify and could represent a substantial rort of the MBS.
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Editor’s Note: that the Medicare system is now in crisis, or on the verge of crisis, is a serious public interest story. Media often errs; the problem in this instance is that headline grabbing figures undermine reporting on these serious matters, detract from the credibility of the reporting and allow other claims in medical coverage to be tainted.
Callum Foote was a reporter for Michael West Media for four years.