Private health insurers and the Australian Medical Association have welcomed the report of the independent review of Medicare 'integrity'.
The review, led by Dr Pradeep Philip, found that $1.5 to $3 billion is lost annually primarily due to billing errors rather than premeditated fraud. Dr Philip has attributed the errors to the program's complexity and an outdated billing system.
In a statement, health minister Mark Butler said the review makes clear that most health practitioners are well-meaning and protective of Medicare and provide a high level of care to their patients.
Mr Butler also said the Albanese government is committed to strengthening Medicare and safeguarding taxpayer funds.
Private Healthcare Australia CEO Dr Rachel David said the review into Medicare Compliance and Integrity was timely and long overdue.
“While the majority of healthcare practitioners are doing the right thing, some are gaming the system, with the review finding that Medicare is haemorrhaging at least $3 billion a year in waste," she said.
“Furthermore, it is clear it is not only doctors who are at fault. Business models have been created to specifically take advantage of the cash flows generated by the Medicare Benefits Schedule (MBS) in ways that lead directly to fraud and low-value care.
“The MBS is a complex and high-cost program that requires sophisticated stewardship 24/7. Failure to manage this rapidly causes pressure on the Commonwealth Budget, increases to private health insurance premiums, and can lead to potentially unsafe outcomes for patients."
AMA President Professor Steve Robson said the report clearly identified that a factor in non-compliance is the complexity of the system.
“Last year we said the claims made in some media outlets were not only vastly inflated, but they were also unsubstantiated,” he said, referring to some report that claimed fraud costs Medicare around $8 billion per year.
“This report reinforces what the AMA consistently said - the vast majority of doctors are doing the right thing. Indeed, as University of Sydney research released this week found, many doctors actually underbill Medicare to ensure that they stick within the often vague and conflicting Medicare rules. This, combined with an underfunded primary care system means patients risk going without much-needed care and medical funding.
“Today’s report also confirms what we already knew, that Medicare is too complex and not keeping up with modern medical practice. This leads to mistakes in billing by doctors trying to map best-practice patient care to an out-of-date system, exacerbated by a lack of education and definitive advice about how to correctly bill some Medicare-funded services.
“The report also highlights how Medicare’s labyrinth-like structure has not kept up with the community’s needs, the burden of disease or evolving medical care.
“The AMA has said all along it doesn’t tolerate fraud. We are ready to work with government, as we have consistently done in the past, to improve the governance of Medicare payment systems and associated compliance arrangements.”