Target test case to get tough on Medicare rorts

The Health Department is working with police on a test case to seize the assets of Medicare rort­ers.

New legislation has clarified the obligations of health providers and given investigators more power to ensure Medicare is used appropriately. Picture: AAP

The Health Department is working with police on a test case to seize the assets of Medicare rort­ers and demonstrate to the sector that is not a “soft enforcer”.

Getting tough on doctors and other health providers suspected of misusing Medicare could save taxpayers tens of millions of dollars a year and improve healthcare practices.

New legislation has clarified the obligations of health providers and given investigators more power to ensure Medicare is used appropriately. From July, the department can demand repayment by employers and other third ­parties, not just doctors whose Medicare provider number was used for dubious billing.

The Australian has previously revealed the department was considering the use of the Proceeds of Crime Act (POCA) to bolster its Medicare compliance efforts.

Documents obtained under freedom-of-information laws show the department has already started working with the Australian Federal Police on a test case to potentially seize houses, cars and other assets under the POCA.

“The department is currently working with the AFP with respect to an investigation where POCA may be employed for the first time,” the departmental briefing notes state.

No further information was given on the likely first target. That aspect of the briefing notes was released only on appeal after the department initially sought to keep it secret out of concern publicity “could prejudice the conduct of a current investigation”.

Last financial year, the department raised $49 million in debts against providers — $20m more than the year before — and also ran a series of behavioural economics trials it estimated had saved three times that amount.

In October, Luca Silverii, the former owner and practice manager of Melbourne medical clinic Allmed, was jailed for six years over a $3.4m Medicare fraud. The County Court heard the 36-year-old illegally billed 75,232 Medicare items never provided.

Silverii was ordered to repay the money but it is unclear whether that has occurred.

The department was looking for a test case before his case was finalised, and is understood to have several in scope.

Most doctors under investi­gation by the department are not prosecuted and voluntarily repay at least some money. In November, the Professional Services Review, acting on referrals from the department, reached agreements with unnamed doctors to repay amounts as high as $610,000, $530,000 and $450,000.

Yet with the department long struggling to recover even half the money deemed owing to Medicare, through whatever means, consultants Ernst and Young have warned of the need to ­address its perception as a “soft enforcer”.

The department last year asked Ernst and Young to assess its debt collection performance, following changes within government and inconsistency between criminal and civil approaches.

While the consultants welcomed the new legislation, they suggested “appropriate legal escalation in relation to noncompliance and high value debts could provide immediate and material impact on (debt) recovery”.

Aspects of the Ernst and Young report were redacted under FOI because the department did not want to “give insight into the payment parameters of the department, which could result in providers taking advantage of how their debt is managed”.