The HSU’s Billions Down The Drain report also criticises the PSR, but not for the usual reasons.
A controversial new report from the Health Services Union has labelled the Professional Services Review “outdated, ineffective and unfit for purpose”, arguing that it does not do enough to identify and investigate cases of potentially fraudulent or non-compliant billing.
The report, titled Billions Down The Drain, estimated the amount of Medicare funding lost to non-compliance as being between $1.5 billion and $10 billion each year.
This does not gel with previous estimates from both the Australian National Audit Office and independent Deloitte economist Dr Pradeep Philip, both of which put the figure closer to $3 billion.
HSU NSW secretary Gerard Hayes defended the estimate, telling The Medical Republic that the union stood by its research.
“If we recovered even the most conservative estimate lost to fraudulent and non-compliant Medicare billing, we could fund thousands more allied health workers such as mental health professionals and paramedics,” he said.
“This is a serious issue worth tackling.”
“It is unfortunate that the doctors’ lobby has not considered or engaged with the substance of our critique.”
The report also alleged that too many practitioners “treat Medicare as an unlimited funding source” and that the Medicare compliance system is “built to miss fraud and non-compliance”.
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The union report took particular aim at the PSR, an institution notorious among GPs for findings of inappropriate practice in nearly every case that goes to committee stage.
RACGP president Dr Michael Wright refuted the idea of widespread Medicare fraud among GPs.
“What we’ve seen is that GPs are more likely to under-bill Medicare,” he told The Medical Republic.
“[And that is] because of the complexity of Medicare, but also because they’re concerned about having some compliance activities against them.”
According to the HSU, the PSR’s risk detection is “weak and ineffective” and “fraud and non-compliant behaviour are entrenched in certain specialties”.
It also pointed out that GPs were referred to the PSR at a far higher rate than their non-GP specialist peers; in 2024, GPs made up roughly 60% of PSR repayments.
“The 80/20 rule, designed to flag high patient volumes, is enforced more stringently on GPs than on specialists,” the report said.
“This is particularly concerning given that non-GP attendances account for nearly 70% of all MBS claims, yet do not face the same level of scrutiny.
“This discrepancy suggests that the PSR either assumes non-GP billers are less likely to engage in fraudulent or non-compliant billing, or, as our internal analysis confirms, it simply does not investigate them adequately.”
The report took specific issue with the absence of real-time oversight, which it said could be fixed by AI tools that identify unusual billing combinations, flag emerging fraud tactics and block claims outside of a provider’s scope of practice.
Dr Wright said the RACGP would approach any use of AI in regulation with caution.
“I suppose we need to start from the point of, ‘what is it that we are we trying to do here?’” he said.
“And I think, particularly with the PSR, that is looking at major levels of non-compliance.
“I don’t think that’s the kind of thing that you need AI to do.”
Following Dr Philip’s government-commissioned review into Medicare fraud, the government put through several reforms to the PSR, adding two associate directors, expanding proactive education initiatives and removing the AMA’s veto power on PSR appointments.
The AMA never actually used its veto power, but protested its removal nonetheless.
“While the AMA’s latest attempt to control the PSR failed, the amendments have produced no discernible impact on fraud and non-compliance levels,” the HSU report said.
“This raises the question of whether the government’s soft approach was a calculated effort to placate the AMA while sidestepping substantive reform, effectively kicking the issue down the road.”
The report went on to criticise the AMA further, alleging that they have “positioned themselves as defenders of public healthcare while simultaneously resisting oversight and regulation”.
“Other medical representative bodies are no better, a recent RACGP report even suggested that decreasing regulation was a workforce retention strategy, essentially arguing that making it easier to rort the system keeps medical practitioners happy,” the HSU report said.
Dr Wright urged GPs to ignore the report.
“[The report] implies that the Medicare descriptors are really clear, and that the online information makes compliance really easy,” he said.
“And we know, working in clinical practice, that sometimes there are grey areas.
“The fact that we’ve got an AskMBS service is an indication that sometimes things aren’t as clear as they might be, and that it’s easy to make an inadvertent mistake.
“We do need to have clear rules and guidance about how we do the right thing, but the vast majority of us are just trying to look after our patients and provide high quality care.
“I think we just need to focus on keeping on doing that.”
