Illegal billing by doctors and other health providers is rampant, with as few as three-in-10 patients being properly bulk-billed despite federal government claims that rates are close to 90%, the first comprehensive review of Medicare claiming and compliance has found.
The review, authored by Dr Margaret Faux, found a primary cause of Medicare fraud was ignorance by healthcare providers, who do not comprehend the complex billing system and often have no idea they are not complying with regulations.
Faux says the government is turning a “blind eye” to illegal billing and that the bulk-billing statistics presented by officials are a “lie”.
“Bulk-billing statistics have become nothing more than a powerful gaslighting tool because they make us think we must be imagining out-of-pocket medical costs,” Faux said.
“The more we continue to believe this lie, the more we are contributing to Medicare’s slow demise, and sending our own out-of-pocket costs further up.”
The report on Faux’s findings have been sent to the auditor general’s office and the health minister.
Faux said most of the time the illegal billing activity flies under the radar because very few people check their Medicare records, and even if they did, most would not understand what they see.
A common example of illegal billing she sees is patients having to pay a fee, despite their records saying they were bulk-billed.
“Many providers mistakenly believe that it is legal to bulk-bill, and charge a separate gap at the same time,” she said.
“It’s not.”
A spokesperson for the health minister Greg Hunt said bulk billing rates are at a record high – 88.8% for the 2020-2021 financial year. This is 6.7% higher than the same period in 2012-13 and means that nearly nine in 10 visits to the GP are free of charge.
But Faux, who is chief executive of the Australian Institute of Medical Administration and Compliance, said government data shows patients are being bulk-billed even when they have not been, skewing the data.
She said based on medical records she reviews daily and research for her thesis on the issue, “the actual level of legally correct bulk-billing for going to a doctor would be about 30%”.
“There is massive illegal bulk-billing going on and I see it in every education seminar for doctors that I do,” Faux said.
She said at a recent seminar on Medicare billing at least three questions asked by health practitioners “indicated very clearly that the practitioners were both bulk-billing and in addition charging a separate gap fee”.
“One practitioner said that with the consent of the patient they are allowed to bulk-bill and charge an extra fee. I had to make it very clear to this person it is not open to them or anyone to reach an agreement with their patient to break the law and defraud the commonwealth government.
“The government itself turns a blind eye to it. The government has lost complete control of Medicare.”
The use of the word “gap” is confusing to patients and at the heart of why many practitioners believe they are allowed to bill in the way they do, Faux said.
She said in reality there should only be two billing options: bulk-billing, which means no other money can be taken from the patient, or the patient is charged a fee.
But she said what often happens is people get told there is a private fee – such as $50 – and many walk out thinking that was the gap.
“And they will never submit their claim to Medicare to get their rebate, which would be roughly $40,” she said, referencing the example of a $50 fee.
“What should have happened was the patient paid a $50 private fee and got a $40 rebate from Medicare, leaving them out of pocket $10,” Faux said.
She said the practice will then bulk-bill the claim and receive a rebate from government. And on the patient’s Medicare record it says the patient has been bulk-billed.
“That appointment drops into the government’s bulk-billed statistics showing that the patient did not pay that day,” Faux said. “It completely distorts the statistics.”
She said everyone should log in to Medicare and view their records, and look at the “cost to claimant” column. If a cost in that column says $0, but you paid for the service and were left out of pocket, something wrong had likely occurred, Faux said.
“Ask yourself: ‘Did I pay money that day?’ Every single one of us, myself included, will likely have an example on their record where it says $0 but a gap was paid.
“We all know we’re paying for health everywhere. But we’re being told we’re not.”
Australians spending billions on care and medicine, report finds
Her research comes as the Grattan Institute on Sunday published a report that found Australia still relies heavily on patients contributing to the cost of their care.
In 2019-20, Australians spent a total of nearly $7bn on out-of-hospital medical services and on medications listed on the Pharmaceutical Benefits Scheme, placing a burden in particular on patients with chronic diseases requiring regular medical appointments and medications.
Specialist fees are a major cause of high out-of-pocket payments, the report led by health economist Prof Stephen Duckett found. But because fees are unregulated, private specialists often charge way above the Medicare schedule fee.
“In 2019, half a million Australians spent on average about $450 on specialist services alone,” the report said.
The Grattan report recommended the federal government fund bulk-billed specialist services in private clinics, as well as a national secondary consultations scheme so that GPs could get advice about patients directly from specialists to reduce the number of specialist referrals.
The federal government should also eliminate out-of-pocket payments for diagnostic services by tendering for those services, the report also recommended.
Faux said while out-of-pocket payments are a major concern, many of the solutions proposed in this Grattan report were not evidence based. She said key to reforming fees was first tackling the complex and opaque Medicare Benefits Schedule.
“Medicare’s problems are deeply structural, and we now have evidence around what needs to be done across three domains – regulation, education and digitisation,” Faux said.
“Many of the proposals in this report concerning solutions to medical fee problems, while well intentioned, are not evidence-based and are therefore unlikely to succeed.”
