By Henrietta Cook and Broede Carmody
Surgeons at one of Victoria’s largest public hospitals are being investigated by the state’s corruption watchdog over explosive allegations they billed the Transport Accident Commission for medical procedures that were never carried out on patients.
It’s alleged a handful of surgeons at the Royal Melbourne Hospital also fraudulently claimed lucrative “assistant surgeon” fees for operations they had minimal or no involvement in.
Royal Melbourne Hospital.Credit: Joe Armao
The claims have triggered an Independent Broad-based Anti-corruption Commission probe and an internal hospital investigation by law firm K&L Gates.
“We all make enough money, we don’t need to be skimming the cream from the top,” said one hospital source with knowledge of the allegations, who requested anonymity to discuss confidential matters.
This source said they witnessed a surgeon, whom The Age has chosen not to name, walking into an operating room, robing up in surgical gowns and gloves, chatting to staff for a few minutes and then walking out.
“I later noticed he had put his name down as the assistant on the operation report, which was sent to the TAC,” they said.
“He has walked in just to milk that assistant fee. When they come in at the end and don’t really contribute it’s either unethical, immoral or illegal.”
The government-owned TAC – which is funded by Victorian motorists to pay for the treatment of road accident victims – reimburses hospitals, surgeons and anaesthetists for each TAC patient they treat.
Surgeons and anaesthetists bill the TAC for this work in addition to receiving an hourly rate from their hospital, an arrangement that insiders say creates a perverse financial incentive for some surgeons to harvest TAC patients.
The scale of the alleged financial fraud being investigated by IBAC is not known. However, one hospital source said surgeons could be paid up to $6500 by the TAC for a major surgery, while an assisting fee would be around 20 per cent of this, or $1300. “You are talking about hundreds of thousands of dollars, maybe even more,” they said of the alleged overbilling.
A spokesperson for IBAC, which investigates allegations of serious or systemic corruption in the public sector including state-run hospitals, said: “As a matter of practice, IBAC does not comment on whether it has a complaint or investigation before it.”
Law firm K&L Gates interviewed surgeons in 2021 as part of an internal investigation commissioned by the hospital following an anonymous complaint.
Staff were told the investigation identified discrepancies between the hospital’s software records and what surgeons had billed the TAC.
It’s alleged that surgeons doctored operation reports and invoices sent to the TAC by including item numbers for procedures that weren’t carried out on TAC patients. This allowed surgeons to attract additional money.
These item numbers were later deleted from patient operation records on the hospital’s software.
It’s understood that this software is now being forensically analysed to identify potential culprits.
Documents obtained by this masthead, which were redacted to remove a patient’s identity, suggest that the TAC continued to be fraudulently billed by Royal Melbourne Hospital surgeons up until March this year.
The documents show that one surgeon billed the TAC for one hour’s work as an “assistant surgeon”.
But a screenshot of a text message between his colleagues claimed this surgeon didn’t show up until the final minutes of the operation to handle some equipment.
Surgeons have questioned why the alleged culprits have been allowed to continue working while under investigation.
The Royal Melbourne Hospital did not respond to a lengthy list of questions. But a hospital spokeswoman said the health service upheld strict governance and was proud to deliver exceptional care.
“We respect the role of regulators in healthcare and cannot provide further comment,” she said.
Royal Australasian College of Surgeons president Associate Professor Kerin Fielding said the college took allegations of this kind very seriously.
“Our fellows understand that patient care is at the core of what we do, and our reputation is key to that,” she said.
“More generally, we strongly refute any suggestion that unethical practices of any kind are commonplace or widespread for RACS members.”
A spokesperson for the TAC said it was not appropriate to comment on specific matters, but that the commission took concerns about non-compliant billing seriously.
The commission’s most recent annual report stated that 14 prosecutions were finalised last financial year in relation to “fraudulent activities”, resulting in $484,124 in restitution payments awarded to the public insurer.
By the end of June, 16 matters remained before the courts, with the TAC alleging fraudulent behaviour to the tune of $936,172.
Thirty warning letters were sent over the same period in cases that did not meet the prosecution threshold.
It’s not known whether any of these prosecutions or warning letters involved surgeons from the Royal Melbourne Hospital.
“During the financial year, we focused our efforts on provider billing to ensure that invoices supplied by service providers (and their subsequent payments) were an accurate reflection of the services they had provided,” the TAC’s 2023-24 annual report reads.
Victorian public agencies, including public hospitals, must notify IBAC of suspected corrupt conduct. The anti-corruption watchdog must also be notified of potential whistleblower complaints that relate to allegations of improper conduct.
It’s not the first time a major Melbourne hospital has been embroiled in allegations of surgeons inappropriately billing the TAC.
Back in 2008, this masthead revealed that Melbourne-based trauma surgeon Thomas Kossman was accused of “double-dipping” and charging the TAC for surgeries he had not performed. He agreed to reimburse the commission for an amount in the tens of thousands of dollars.
But in a twist, he pocketed considerably more from the commission than what he paid after billing for work he had not previously submitted. The surgeon was also cleared by a WorkSafe investigation that combed through more than 1900 invoices.
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