By Adele Ferguson and Chris Gillett
Systemic rorting of Medicare is artificially inflating official statistics that claim almost nine out of 10 patients are bulk billed by their doctor and don’t pay any out-of-pocket costs.
A joint investigation into Medicare by The Sydney Morning Herald, The Age and the ABC’s 7.30 program has found errors and illegal practices by health practitioners are distorting the national figures.
Some experts are convinced that the bulk-billing rate is far lower: about four to six in every 10 visits to GPs.
Leaked documents show one of the country’s largest telehealth companies, Phenix Health, has bulk billed some patients at the same time as charging them a fee, a practise that is illegal under the Health Insurance Act.
The legal method for doctors who do not bulk bill is to charge the patient, who then receives a rebate from Medicare.
Dr Margaret Faux, a lawyer who did her PhD in Medicare claiming and compliance, said operators charging fees and then bulk billing the same service has distorted Medicare statistics. She says about four in 10 patients – rather than nine in 10 – are not paying out-of-pocket to see a GP.
In August, The Australian quoted data released by a lobby group representing some of the country’s biggest GP operators, the Primary Care Business Council, that estimated the Medicare bulk-billing rate was about 61 per cent, or six in 10 patients.
Questions over the accuracy of the data has triggered a departmental review by Health Minister Mark Butler.
However, Faux urged the government to make the review independent and broader. She estimated that up to $8 billion a year is being lost from Medicare due to fraud and non-compliance, which represents nearly 30 per cent of the $28 billion current annual cost of Medicare.
The revelations come as GPs lobby the government to boost bulk-billing rebates, claiming bulk billing is in crisis and they can no longer afford to offer it unless the Medicare rebate is increased.
Margaret Faux estimates incorrect payments and errors represent nearly 30 per cent of Medicare’s annual budget.Credit: Janie Barrett
The federal government recently set up a Strengthening Medicare Taskforce together with a $750-million Strengthening Medicare fund.
But Faux said because illegal bulk billing is so rampant, increasing rebates is fraught with problems.
“Even for GPs who have always billed correctly, increased rebates will have an inflationary impact, and that is supported by the evidence,” she said.
“The government has no authority to control doctors’ fees, and GPs are saying the only thing that will help them right now is more money. So if rebates go up, GPs will increase their fees in line with the new rebates. So if you currently pay $90 to see your GP you may soon find yourself paying $100.”
Faux, whose business Synapse Medical Services is paid by doctors, hospitals and corporate medical practices to process their Medicare bills, recently terminated Phenix as a client.
When asked about Phenix after patients contacted the Herald, The Age and 7.30 with concerns, Faux said the Synapse billing service had processed more than 30,000 Medicare bulk-billing claims from Phenix over a two-year period to August this year.
This totalled more than $2 million in rebates. Faux terminated the contract after becoming aware of potential illegality.
The Phenix website states it is a mixed billing practice that “requires out-of-pocket fees of $35 on all bookings for patients with a valid Medicare card, which will be billed based on a time-based Medicare Benefits Scheme item rate”.
On its booking form, patients are required to “consent to bill”. The website also said private bookings were available for a fee of $48.
Some cases included charges to Medicare that overstate the length of the consultation, which attracts a higher rebate.
Records show that Phenix had charged some patients a $38 fee for a consultation with a nurse practitioner, and then bulk billed, which is illegal. In one case, the consultation lasted less than two minutes yet the Medicare records show Medicare was also bulk billed for a consultation duration of at least 20 minutes, which pays $35.70 for a nurse practitioner. The correct amount is $18.85.
In one case, a patient paid a $50 online fee to have a consultation with a GP about quitting smoking. The consultation, which took place while the doctor was driving, went for a few minutes. Phenix then bulk billed to Medicare for a GP consultation for smoking cessation lasting at least 20 minutes, which pays $76.95. The correct Medicare billing should have been $39.75 for less than 20 minutes.
The Medicare records show the “cost to the claimant” was zero, despite the patients being out of pocket for fees, which is distorting the official figures.
“Non-compliant billing, like what Phenix was doing, is illegal,” Faux said.
Phenix was sent a series of questions. It responded with a statement saying “the allegations in your email were inaccurate and damaging”.
“Phenix is aware of the complex rules surrounding the use of Medicare item numbers for billing, and it always strives to ensure that its billing practices comply within those rules.”
Phenix said it has only two doctors with Medicare provider numbers and they only use the provider numbers under collaborative agreements with nurse practitioners. “The remainder of our GPs privately bill,” the statement said.
However, Faux said Phenix, which boasts on its website that it is Australia’s “highest quality virtual super clinic”, had 29 GPs and 20 nurse practitioners actively bulk billing on the Synapse system when it was a client, up until August this year.
Charging a fee at the same time as bulk billing a patient distorts the official Medicare statistics, which state that 88.3 per cent of GP services are bulk billed, but it enabled the former Coalition government to promote it as a sign of the success of Medicare.
In March, weeks out from the May federal election, then-health minister Greg Hunt issued a press release trumpeting the government’s track record in bulk billing. Hunt said medical care was “more affordable than ever” because the number of Australians receiving essential care with no out-of-pocket cost was “continuing to rise”.
Other cases of activity distorting the national Medicare bulk-billing figures include a regional public hospital in South Australia which was operating a private GP clinic inside its emergency department with a sign posted on the walls reading, “if you see a doctor today you must pay a $35 gap”.
An insider said the clinic was bulk billing patients as well as taking the fee. This was illegal on two levels: first, it was charging a fee and bulk billing; but also because a public emergency department cannot take money from patients.
The Department of Health and Aged Care was approached for comment.
The Morning Edition newsletter is our guide to the day’s most important and interesting stories, analysis and insights. Sign up here