The right way to make us Medicare-compliant

13 minute read

Yes, the PSR needs reforming. Here's how to make it transparent and fair.

In the 10 days leading up to the federal Budget, there was a flurry of “exclusives” identifying Medicare “rorts”, “fraud” and “haemorrhaging”.

So important was this topic that the relevant media entities devoted a total of almost 30 combined articles as well as radio and TV segments (here, here) to it.

It was fascinating to watch this counter-narrative emerge just as there was traction around the inadequacy of the Medicare system, not just the quantum of the rebates, but the way in which Medicare incentivises and rewards high volume, low quality care – not just in general practice, but in all fee-for-service health care provisioning.

The blitz on Medicare rorts, which seemingly came from nowhere, very effectively shut down the previously significant bandwidth achieved by great communications from the Royal Australian College of General Practitioners and the Australian Medical Association (AMA; here, here, here). It was a beautifully executed “look – over there” manoeuvre. It was called out as such quite early on by those who understand these things far better than I, but at first, I didn’t believe them – it seemed too cynical.

The Age published a flurry of stories, supported by The Sydney Morning Herald and by the ABC. They started on 17 October (three articles and one editorial), and continued with one or two articles every single day until the Budget was delivered on 25 October. Then silence – except for one final article two days after the budget, about a possible review of the Professional Services Review (PSR). No more “rorting doctors” stories once the Budget was done and dusted.

When you consider that an investigation outlining the same issues with the same source was published six months earlier in The Guardian and ignored, it seems even more peculiar that it blew up in the week before the Budget.

It may be that the news cycle just moved on. It may be that the editors felt it had been milked as much as it could be. Or it could be that this whole thing was to give cover to the federal government which, as a Labor government, cannot be seen to be defunding Medicare, but must rather “strengthen” it.

What a great buzzword “strengthen” is. It means absolutely nothing. In the context of Medicare, it gives the government freedom to increase or decrease whatever they want, all the while using language that is designed to placate and mollify.

The Budget was a profound (but utterly expected) disappointment. Medicare rebates will continue to fall further and further in real terms. It seems fairly clear that the government has made a policy decision to not fully insure people for care in the Medicare system but is leaving the implementation and explanation of that policy to doctors. The Strengthening Medicare Taskforce may have some impact, but the great risk now is that it be used to legitimise the Orwellian Newspeak of “strengthening” no matter what that means.

The “greedy doctors defrauding the system” narrative means that government gets a clear pass to say “no more funding until the greedy, dishonest doctors are brought to heel”. In truth, the messaging has been a little more genteel that that, but it’s present in an undercurrent. The Medicare rorts story gained traction for many reasons, at least one of which is the complete lack of transparency of the system to both doctors and the general public.

Nobody knows what actually happens, so how can we trust it?

Let me be clear, there are doctors who commit fraud. There are members of every health profession – including doctors of all specialties, pharmacists, allied health practitioners, nurse practitioners, and midwives, to name just a few – funded by Medicare who commit fraud, and practice managers, practice owners, receptionists and patients who commit Medicare fraud. It isn’t a problem confined to doctors. It isn’t even a problem confined to Medicare. Insurance fraud is a thing, health insurance fraud is a thing, and Australia is not unique (and here).

None of that excuses fraud, but it does make me curious about why the narrative these past few weeks has been all about doctors.

Does this make me and others like me apologists for fraudsters? Absolutely not. But have I, like every other GP in town, been stuck in the space between eye rolling, cringing and fury? Yes, without doubt.

It is ironic then, that I find myself in agreement with the final article from The Age, the coup de grâce, that PSR requires a review, but perhaps for different reasons than the editors of The Age might promulgate.

Regulators know that shame is a powerful force. Many doctors fear public shaming more than they fear financial penalties. We are taught that our reputation is everything. I have seen this force in play both in my work for Medicare and in my work for the Medical Board of Queensland, where appealable cases were not appealed because it would result in “going public”.

This has fed a system of quiet settlements, of deals and of silence, which has in turn resulted in a system that nobody trusts, not doctors, not the public, and probably not government.

I worked within the Medicare compliance program for five years at the beginning of this century – a long time ago now, but enough to recognise that there are some intentional policy settings at play, and there is an acceptance that current modus operandi around PSR leaves an undercurrent of threat and achieves “deterrence”.

The injustice and stupidity of this is that it results in underbilling, leaving more and more practices on an unsteady financial footing, and contributing (through both financial non-viability and anxiety about compliance measures) to doctors exiting the general practice workforce. It likely contributes to furthering the gender pay gap, as female doctors have more longer and complex consultations than males (here, here), so more “opportunity” to downcode to try and stay off the compliance radar.

Medicare and the Health Minister could do a lot to reassure the public and the majority of honest health practitioners out there that fraud is fraud, and talk a bit more about fraud, what those cases are and how they are handled. Fraud is a criminal offence, and it is prosecuted where it can be proven to the requisite criminal standard of proof.

The PSR does not deal with the fraud cases – those cases where fraud can be proven (to the criminal standard of proof) never see PSR. They are referred to the “major non-compliance (fraud) division”, direct from Medicare. If PSR finds evidence of fraud, they also refer matters to that same pathway. When the requisite threshold is met, these cases are referred to the Office of the Commonwealth Director of Public Prosecutions for criminal prosecution.

And yet the recent spate of press articles conflated fraud with inappropriate practice. They are not the same thing.

PSR deals with “inappropriate practice”, which is dealt with in an administrative scheme without the protections or consequences of a criminal charge. The Health Insurance Act 1973 defines inappropriate practice as “conduct by a practitioner in connection with rendering or initiating services that a practitioner’s peers could reasonably conclude was unacceptable to the general body of their profession”.

That definition makes it sound like it is in fact the quality of service that is under review. However, the Act also states that the object of the PSR system is to protect the integrity of the Medicare Benefits Schedule, the Dental Benefits Scheme and the Pharmaceutical Benefits Scheme, and “protect patients and the community in general from the risks associated with inappropriate practice; and protect the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice.”

Almost universally, what the Medicare compliance system, including PSR, detects and acts on is questionable billing. The moniker of “inappropriate practice” has (either intentionally or otherwise) given a veneer of clinical dignity to activities that really are reviewing billing practices and seeking to recover money. Finding and referring clinical safety concerns is not, in spite of the wording of the Act, the original intent of the system.

An examination of published recent cases supports this contention, where findings of Committees are necessarily couched around item number descriptors, clinical notes and an assessment of clinical necessity. And the low number of Australian Health Practitioner Regulation Agency (AHPRA) referrals confirms that clinical concerns are not the usual finding.

When I was working for Medicare, and meeting with doctors who were undergoing review, the term “inappropriate practice” was a cause of much distress because they felt it accused them of being “bad doctors”, of practising inappropriate medicine. It should be called “inappropriate billing practices” – to make it clear that the PSR is not a clinical standards or quality mechanism and refers concerns about clinical safety to AHPRA.

These referrals are infrequent – even though the Health Insurance Act requires the Director to refer practitioners when a significant threat to the life or health of any other person is identified, or if the person under review has failed to comply with professional standards.

In 2021–2022, out of 77 “completed cases” the Director referred a total of 22 practitioners to other entities with the following referrals to AHPRA, medical boards or other bodies:

  • 13 referrals under s 106.XA due to concerns over patient safety;
  • 22 referrals under s 106XB due to concerns relating to non-compliance with professional standards; and
  • two referrals under s 89A due to suspected fraud.

No reasons for these referrals are published in the annual reports so it is impossible to know why some cases cross a threshold for referral and others do not. It is telling that fewer than one-third of the cases finalised met that threshold. So, in more than two-thirds of the cases, the inappropriate practice was inappropriate billing practice, not inappropriate professional standards. And only two were referred for fraud.

There were more than 642 000 health practitioners working in their registered professions in Australia in 2020, which includes 105 300 medical practitioners, 350 000 nurses and midwives, 21 500 dental practitioners, and 166 000 allied health professionals. Not all of them bill Medicare, but even so, with 22 referrals for professional standards and two for fraud out of 642 000 practitioners, PSR does not meaningfully protect the public from poor clinical practice.

The PSR scheme has a “prodrome”: the Medicare Practitioner Review Program. That program reviews thousands of practitioners every year, and around 100 meet the threshold for a “request” to PSR.

In 2021–2022, Medicare made 108 such requests to the Director of the PSR. Despite some claims to the contrary, there is not a 100% “conviction” rate at the PSR. A review of annual reports demonstrates that the Director dismisses a certain number of requests from Medicare, and Committees do return findings of no inappropriate practice (although this latter is a rare outcome, hardly surprising given that the Director can decide to dismiss without referral to a committee). In the 2021–2022 reporting period, seven out of 77 matters that were finalised did not result in any adverse findings. In the 2020–2021 period, that number was six out of 105.

Certainly, some of the practitioners that I had contact with during my time working for Medicare were practising an exceptionally poor standard of medicine, and this no doubt applies to some of the practitioners who appear before the PSR. Billing practices as currently used by Medicare compliance programs are a poor proxy for quality of care, and hence the ongoing use of the term “inappropriate practice” should simply stop. It is usually inappropriate billing.

Prescribing patterns are more closely linked to quality of practice, and yet these form a minority of PSR findings.

The figure of $8 billion in “rorts” is nonsense – it has been examined and repudiated repeatedly over the past 2 weeks. However, for every dollar lost to excessive claiming, inappropriate billing and fraud, there is a dollar that could have been used to fund better care. It is in the interests of every Australian, doctors included, to have a system for managing Medicare risks that everyone trusts.

Some of my suggestions for a system that would be trustworthy include:

  • Remove the AMA ability to veto appointment of the PSR Director (S83 ss2 of the Health Insurance Act 1973). This smacks of cronyism and has no place in a meritocracy. By all means, have professional bodies represented on the selection panel, but AMA approval of the Director appointment is anachronistic.
  • Be very clear about the purpose of the scheme. No strange language. If it really is about billing, then just call it that.
  • Give much greater publicity to what the Medicare Practitioner Review does behind the scenes. If these data are currently published, they are not easy to find. Some potential content of regular PRP reports could be:
    • Exactly how many practitioners and of which disciplines do they review?
    • How many are initiated, interviewed and dismissed?
    • How many are interviewed, then remediate and receive a “warning”?
    • How many enter into repayment schemes without involving PSR?
    • How many are referred directly to the “major non-compliance (fraud) division” without ever going to PSR?
    • How many are referred directly by Medicare to professional regulators without ever going to PSR?
  • Adopt and promulgate the “Responsive Regulation” model championed by the Australian Taxation Office, and which earned international recognition. Recognise that the majority do the right thing, and intervene early if they stray, not waiting until there is $1 million damage. (I suspect this is the current intent, but it is clumsily executed and generally not perceived as supportive.)
  • Stop giving advice that is not binding on subsequent disciplinary measures. If a practitioner asks Medicare for advice, and follows it, that should be an absolute defence.
  • Engage the Learned Colleges and consumers in co-design of interventions that would actually improve quality of care, even if that might mean an increase in costs. For example, if a GP is managing a patient who clearly has hypertension and diabetes, but no Chronic Disease Management plan, how about a “nudge” on that?
  • Overall, make efforts for transparency and accountability at every opportunity.

The PSR scheme that was designed decades ago needs an overhaul, and as a profession, we need to walk towards that problem, to welcome modern regulation and to do everything we can to eliminate tactics and approaches from regulators that reduce quality of care. A robust system would protect those of us who do the right thing, and a transparent, fair system would take a lot of the stress out of an honest day’s work. That’s going to take time, and it cannot be an excuse for continued expectations that doctors carry the burden of implementing unannounced government policy to inadequately insure fee-for-service practice.

Dr Jillann Farmer is a Brisbane-based GP, former Senior Medical Advisor for Medicare Australia, and former Medical Director of the United Nations.

This article was originally published at MJA Insight+.

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