Report claims Medicare ‘leaking’ billions as GPs say many are undercharging

A report into Medicare fraud has recommended a shake-up of the system as GPs claim many are undercharging and delivering healthcare savings.

The federal government has released an independent review into the possibility of widescale rorting and fraud in Medicare.

The review found an estimated $1.3 billion to $3 billion ‘leakage’ from the system, with a significant part of that figure attributed to non-compliance errors rather than to premeditated fraud. But it concluded that without concerted action, that figure could increase.

Federal health minister Mark Butler released the report this week and said the government was committed to strengthening Medicare.

Honest and hardworking

“Australians know that the overwhelming majority of our doctors and health professionals are honest, hardworking and comply with Medicare rules,” Mr Butler said.

“But they also understand that, at a time of great pressure on household and government budgets, every dollar in Medicare is precious and must be spent directly on patient care.”

In his executive statement, report co-author and head of Deloitte Access Economics Dr Pradeep Philip said the system lacked clarity and that business practices, technology and models of healthcare delivery had clouded compliance. 

“Legislation, governance, systems, processes and tools are currently not fit for purpose and, without significant attention, will result in significant levels of fraud,” Dr Philip said.

He said there needed to be an improvement in business practices, out-of-date and unaccredited software, due diligence, legislation, governance and the trend to transfer billing to administrative staff and corporations instead of being the responsibility of practitioners. 

He also recommended improving how fraud and non-compliance were investigated to improve detection. 

However, Dr Philip said despite the recommendations for an overhaul, he supported Australia’s medical practitioners.

“The overwhelming majority of practitioners are well meaning and protective of the Australian health system, particularly of the care they provide to their patients,” he said.

“A large part of the success and efficacy of Australia’s health system, to date, is due to this level of altruistic behaviour by health professionals.”

Dr Philip said stakeholders should not concentrate on the astonishing billion-dollar figures as the main source of debate and instead get down to the nitty-gritty of fixing the system.

“The main lesson to learn from this review is that we must focus on the structural issues and controls in the system, to build trust in Medicare and materially reduce non-compliance and fraud,” he said.

“Critical to addressing this is a recognition that the legislative basis for Medicare is fast becoming out of date, unable to reflect the changing health needs and modes of health service delivery in Australia.”

GPs claim many are undercharging

General practitioners hit back with a report by the Australian Journal of General Practice (AJGP) that claims GPs saved Medicare $351.7 million by undercharging.

The report was in response to 2022 media claims that doctors were defrauding Medicare up to $8 billion a year. 

The AJGP says the $8 billion figure was not supported by any quantitative data and the method used to calculate that figure has not been published.

The report stated that while there was some overcharging, it was dwarfed by the scale of the savings.

“General practice is in crisis. Allegations of fraud have been damaging to a workforce that is struggling to attract medical graduates to general practice,” said lead author Dr Christopher Harrison.

“While some GPs may undercharge Medicare for altruistic reasons and others because they still consider complexity of care when determining the Medicare item charged, we believe that a major reason GPs undercharge, even for long consultations, is the fear of being audited.

“We hope that these results will help inform the current discussion around how to strengthen Medicare and primary care in particular.”

Are you happy with Medicare? What would you do to improve the system? Why not share your opinion in the comments section below?

Also read: Digital Medicare card now available through myGov app

Jan Fisher
Jan Fisher
Accomplished journalist, feature writer and sub-editor with impressive knowledge of the retirement landscape, including retirement income, issues that affect Australians planning and living in retirement, and answering YLC members' Age Pension and Centrelink questions. She has also developed a passion for travel and lifestyle writing and is fast becoming a supermarket savings 'guru'.
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