By Broede Carmody and Henrietta Cook
The Victorian government was warned more than two years ago that doctors were allegedly rorting the state’s billion-dollar compensation scheme for injured workers but did not address the whistleblower’s complaint.
The disclosure comes after The Age revealed the state’s corruption watchdog is combing through WorkCover bills, in addition to Transport Accident Commission invoices, as part of its investigation into a handful of surgeons at the Royal Melbourne Hospital.
WorkSafe said it takes allegations of dishonest conduct seriously. Credit: Glenn Hunt
In April 2022, an independent medical examiner emailed a WorkCover manager to raise concerns about doctors manipulating claims to boost their income.
“Some doctors seek approval for a procedure that they must know is not employment related,” the examiner wrote in the letter to WorkSafe, which oversees the WorkCover scheme, obtained by this masthead.
“This provides a significant fee for a procedure that might otherwise have to have been done in the public health system. Even worse, some doctors fraudulently use an inordinate number of item numbers to boost their fee.”
Frustrated by the situation, the whistleblower emailed his concerns about financial abuse of the scheme to the parliamentary office of then-premier Daniel Andrews a month later.
The former surgeon maintains that apart from an acknowledgement that the correspondence had been received, he never received a proper response from Andrews’ office – even after sending a follow-up email.
This was almost a year before the state government bemoaned the cost blowouts plaguing the scheme and described WorkCover as “fundamentally broken”.
The independent medical examiner cited in his attached correspondence a case in which a surgeon performed an operation on a WorkCover patient at Peninsula Private Hospital in 2019 and billed the public insurer for more than 15 item numbers despite, the examiner insists, the operation being for a “relatively minor” injury.
“I have several such examples,” the examiner wrote.
“I reported this to WorkSafe and received a visit when I handed over several examples. Nothing was done about it. The same surgeon continues gross overuse of item numbers.”
The Age has seen the operation report in question – with patient details redacted – where 16 items, along with a consultation fee, are listed.
A follow-up surgery report from the following year, also seen by The Age, shows another nine WorkCover items listed for the same patient.
Medical fraud and compliance expert Dr Margaret Faux said that after reviewing the item numbers, she believed the records unequivocally demonstrated egregious billing behaviour.
“If those 17 items had been submitted through Medicare’s system, most would have been rejected outright, and doctors know that.”
A medical expert who did not want to be identified said there appeared to be a few suspicious item numbers on the operation report.
A spokeswoman for Peninsula Private Hospital said the service was not aware of the allegations as it does not see or have any control over doctors’ billing.
“Surgeons are not employed by the hospital, which means billing is done independently by the doctor’s practice directly to the relevant health fund,” the spokeswoman said.
She said the hospital expected doctors to disclose whether they had been put on notice.
“We have not been made aware of this case.”
The independent medical examiner raised the allegations of fraudulent billing with WorkSafe after six Victorian employees complained to the scheme about his conduct. The complaints came after the examiner rejected their claims on the grounds that the workers’ injuries were not employment-related.
A WorkSafe spokeswoman could not comment on the 2022 allegations, citing confidentiality, but did stress that those who suspect someone is dishonestly obtaining payments from WorkSafe should call the agency’s fraud and non-compliance hotline on 1300 741 234.
“WorkSafe takes allegations of dishonest conduct seriously and uses every power at its disposal to detect and address fraudulent behaviour, including investigating and taking legal action where there is sufficient evidence to do so.”
The Age sent detailed questions to the Allan government on Sunday, including whether the allegations were ever forwarded to the then WorkSafe minister. The Age gave the premier’s office more than 24 hours to respond to those questions.
An Allan government spokesperson declined to comment on Monday, citing a wider Independent Broad-based Anti-corruption Commission investigation.
“All Victorians expect our hospitals to uphold the highest standards of integrity and patient care,” the spokesperson said. “Anyone with concerns should come forward to the department’s integrity unit, or directly contact the Independent Broad-based Anti-corruption Commission.”
Andrews was also contacted for comment.
The Age does not suggest that WorkCover never investigated the specific allegations, only that it appears the then premier’s parliamentary office never acted on the whistleblower complaint.
It wouldn’t be the first time a whistleblower complaint has fallen through state government cracks.
In 2022, then-deputy premier Jacinta Allan was sent detailed evidence that CFMEU officials were threatening extreme violence and unlawfully black-banning non-union-preferred companies from state and federally funded projects. This was two years before this masthead Age published its Building Bad investigation.
Allan, at the time also Victoria’s infrastructure minister, took a year to respond and – even then – insisted industrial relations were a federal issue and suggested a call to state bureaucrats if there were any other concerns.
In 2023-24, there were 27 prosecutions under the Workplace Injury Rehabilitation and Compensation Act, according to WorkSafe’s most recent annual report. More than $1 million worth of restitution payments were imposed during this timeframe, along with $27,500 worth of fines.
Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.