An exploration of the Independent Review of Medicare Integrity and Compliance

On 5 November 2022, Mark Butler, the Health Minister, commissioned the Independent Review of Medicare Integrity and Compliance (the Review) following concerning media allegations of potential fraud in the Medicare system.

The Review was conducted by Dr Pradeep Philip, health economist and Lead Partner at Deloitte Access Economics, who published his findings on 4 April 2023.¹ This article explores the findings of this Review and encourages practitioners to be proactive in implementing reforms in Medicare billing practices that we are likely to see in the foreseeable future.

Overview of the Review

The Review ultimately dismissed claims of an $8 billion fraud alleged by the media last year. Rather, it found that Medicare compliance issues are overwhelmingly caused by complexity of the system, confirming allegations about Medicare fraud were inflated and speculative. Despite media controversy surrounding the exact figure of non-compliance and fraud, Dr Philip did not directly make a conclusion on this matter. Although he noted that the value of non-compliance in the range of $1.5 billion to $3 billion is 'entirely feasible', he emphasised that 'there is greater value to be gained from a focus on the structural recommendations in this review than on the numeric value debate that has been a focus of public discourse to date'.²

Dr Philip critically recognised that the legislative basis for Medicare is becoming outdated, and does not reflect the changing needs and modes of delivery of the healthcare system. He cautioned that without significant attention to the legislation, governance, systems, processes, and tools which are 'currently not fit for purpose', significant levels of fraud can ensue.

The Review identified the following factors as 'significant forces'³ which are increasing vulnerabilities in the Medicare system:

• Changing burden of disease in Australia;
• Changing nature of healthcare delivery;
• Complex and ever-changing nature of the MBS;
• Growing corporatisation of medicine;
• Growth in billing software;
• The opaque nature of MBS billing arrangements in public hospitals;
• Economics of medicine; and
• Lack of continuous monitoring and compliance.

The Review acknowledged the difficulty for practitioners to keep up with the frequency of changes which occur to MBS items, noting that approximately 3,000 items had changed in the past few years. Dr Philip also identified the 'altruistic' and the 'well-meaning and protective' nature of health practitioners,⁴ alleviating reputational damage which doctors faced following the allegations last year.⁵

The Review concluded that the current Medicare system is 'overly fragmented, disjointed, and lacking in contemporary tools to detect and address non-compliance and fraud'.⁶

Recommendations of the Review

Dr Philip concluded that major reforms are needed into how the system is designed and how non-compliance is managed, and established 23 recommendations including:

1. Strengthening the governance model overseeing Medicare operations;
2. Improving the 'claiming journey' to enable continuous monitoring of claim transactions;
3. Redesigning the frontline operational processes and business rules to support earlier identification of fraud and serious non-compliance;
4. Redesigning the payments system to a level of capability 'commensurate with the size and complexity of the scheme'; and
5. Considering ongoing review of Medicare's legislation to include a contemporary approach to regulation.

Of most relevance to practitioners, the Review recommended that a 'comprehensive system for continuously improving and updating education and awareness for providers regarding the application and use of the MBS must be introduced, including the involvement of key stakeholders'.⁷ Although we are yet to see how these recommendations will be implemented, we consider that practitioners are likely to see a focus on education in respect to MBS billing.

What to look out for

The Review has identified recommendations which are vital to ensure the long-term viability of Medicare, and importantly, aims to strike a better balance between continuous quality and safety improvement and the detection of non-compliance and fraud. However, it is important to reiterate that the effects of the Review are yet to be seen and we do not expect prompt reform any time soon given the significant costs likely to be associated with the broad range of recommendations.

However, Mark Butler has reported that the Government will work with health professionals, patients and peak bodies in developing a comprehensive response.⁸ We look forward to the government's pursuit of Dr Philip's recommendations as a matter of priority. When the Medicare system proceeds to be overhauled, we recommend that practitioners contact their insurer to ensure that they are aware of critical changes to their billing practices. In the meantime, we encourage practitioners to attend CMEs and read available materials in order to refine practices in compliant MBS claiming.

We consider that the findings of the Review will relieve reputational concerns held by practitioners following the publicised media allegations in October 2022. We remain optimistic that updates in the Medicare system will empower practitioners with the necessary compliance tools and techniques to ensure best practice.

Footnotes

¹ Dr Pradeep Philip, Independent Review of Medicare Integrity and Compliance (Final Report, 4 April 2023).

² Ibid 4.

³ Ibid 6.

⁴ Ibid 5.

⁵ Jolyon Attwooll, '"A kick in the guts": Frontline GPs respond to Medicare story' (online, 21 October 2022) < https://www1.racgp.org.au/newsgp/professional/a-kick-in-the-guts-frontline-gps-respond-to-medica>.

⁶ Dr Pradeep Philip, Independent Review of Medicare Integrity and Compliance (Final Report, 4 April 2023) 54.

⁷ Dr Pradeep Philip, Independent Review of Medicare Integrity and Compliance (Final Report, 4 April 2023) 54.

⁸ The Hon Mark Butler MP, 'Medicare non-compliance and fraud costing Australians' (Media Release, 4 April 2023).