Private health insurers call for change to enable the pursuit of wrongly-paid benefits

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Private Healthcare Australia has called for changes to current legislation that would enable insurers to pursue providers that are found by Medicare to have been wrongly paid benefits.

In a recent letter to the federal minister for government services, Bill Shorten, the association said that Services Australia encourages private health insurers to inform the agency of any concerns regarding a provider's Medicare billing. However, the National Health Act 1953 (Act) currently prohibits the agency from reporting the result of any investigation to the insurer.

The correspondence has been revealed against the backdrop of wider claims of significant provider fraud against Medicare.

"Currently, where a private health insurer informs the Chief Executive Medicare of an issue, and the Chief Executive Medicare finds that the issue resulted in an incorrect payment of Medicare Benefits to a provider, the insurer has no way of knowing that they have also made an incorrect payment to the same provider," said PHA CEO Dr Rachel David.

"The result is that the provider who has been found to have been wrongly paid Medicare Benefits (part of the payment they have received) gets to keep some, or in many cases, most of the money they have wrongly claimed (the private health insurance component, including hospital benefits). This fails the tests of natural justice and of common sense. Further, it increases upwards pressure on premiums for Australian families."

The association has recommended what it describes as "minor changes" to the Act that would allow the chief executive of Medicare to provide advice to a private health insurer on the outcomes of any relevant disclosure regarding a provider's billing.

"Feedback from the Chief Executive Medicare would encourage more disclosures and allow private health insurers to take complementary action to recover members’ funds in the event of fraud or error on behalf of providers," said Dr David.

"The Australian Government would benefit, as around 24 per cent of premiums are subsidised through the Private Health Insurance Rebate. Consumers would also benefit, with lower costs for funds reducing pressure on premiums."