Medicare FAQs

Medicare FAQs

Not sure what to do when you are contacted by Medicare or the Department of Health? Our medico-legal experts have created a guide for doctors including FAQs and a suite of resources.

05 / 11 / 2019


Letters from Medicare/Department of Health

  • Read the letter carefully and determine what the letter is asking you to do.

    Once you have done this, you should complete an incident notification form, which can be found on the Avant website under the tab ‘Tell us about an incident’. You should email the completed form with all the correspondence you received from Medicare/Department of Health to We can then assist you to understand what the next steps will be.

    Letters from Medicare/Department of Health come in different formats requesting a variety of responses.

    If the letter notifies you that your practice with a particular item number is different to that of your peers (for example, you may use it more often), you do not necessarily need to do anything other than be aware and think about what you do and why. You should have clinical reasons and medical records to substantiate every item number that you bill.

    Some letters do require you to “review and act now”. It may identify that you have been billing outside the norm and ask you for an explanation. The letter may come with a schedule (list) of your billings that you are required to review. You might then consider making a ‘voluntary acknowledgment of incorrect payments’ if any claims do not meet the criteria in the checklist.

    Alternatively you may receive a letter informing you that you need to attend an interview as part of the Practitioner Review Program. This letter will inform of you of the time, date and venue of your interview and will identify the concerns that you will be required address in the interview.

    You should contact Avant if you are asked to “review and act now” or attend an interview.

  • The Department of Health often uses data analytics to identify and target compliance activities. It compares practitioners to one another to identify outliers. However, before it gathers more information about you, the Department is rarely aware of the specific characteristics of your practice.

    The vast majority of doctors bill correctly. If you have received a letter from the Department of Health it does not automatically mean that you have billed incorrectly or that you will have to pay money back.

  • The Department of Health conducts a number of compliance activities and specific letters will be sent in accordance with those. Some of those activities include:

    • 1. Targeted campaigns - where possible non-compliance is identified. You may inadvertently not comply with the descriptors of MBS item numbers. The department systematically reviews claims made for MBS and associated incentive items. It will decide to send letters to doctors it suspects may be using particular item numbers incorrectly and/or if the patient/consultation is not in accordance with the eligibility criteria. A high number of billings of a particular item number, compared to your peers, may also trigger a letter from the Department of Health.
    • 2. Professional review if there is the potential of inappropriate practice. The Department reviews the items that you charge for and the degree of variance from others in your specialty. The Department may decide to include you in the Practitioner Review Program if it is concerned that the reason for the variance is because of a lack of clinical indication.
    • 3. Suspected fraudulent activity.

    Remember, you may be doing everything right but because of the circumstances of your practice or the clinical areas that you focus on, you may sit outside of the normal range for a particular item number.

  • The Department of Health has sophisticated methods to detect when doctors may have claimed a benefit incorrectly. Some of these include:

    • • comparing the claiming behaviours and patterns of doctors to identify inconsistencies between peers
    • • identifying remarkably high patterns of item usage and or unusual item combinations
    • • detecting patterns learned from previous cases of incorrect claiming
    • • investigating tip offs.

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Medicare audits

  • An audit is an evidence-based assessment that determines whether all the elements required for a particular benefit have been met. The Department of Health conducts audits for the Medicare Benefits Schedule (MBS), Pharmaceutical Benefits Scheme (PBS), Child Dental Benefits Schedule and Incentives Program.

    Audits do not review the clinical appropriateness of your treatment decisions.

  • Generally, you will be sent a letter that will explain the audit. You should send all of the correspondence to Avant so we can assist you. Please send it to

    It is likely that you will be notified of a concern and asked to produce documentation that supports your charging of a particular MBS item number. This is known as a ‘Notice to Produce’.

    The Notice to Produce will explain the department’s concern, details of the benefit or service that needs to be substantiated and the type of information that will help substantiate those services. That information will likely be in your medical records.

    If your documentation does not confirm that all elements required for a particular item number have been met, then you may be required to pay back funds to Medicare.

  • Make sure you are clear about what the Department of Health is asking you to do. If you remain unsure you should contact the Department to discuss. If the list of files you are asked to review is extremely long it may be possible to start with a random selection of files to determine if there is a trend or an obvious reason for the Department’s concern that you can respond to without the need to review all the files on the schedule.

    You should send all of the correspondence to Avant so we can assist you. Please send it to

  • In the first instance, you should contact Avant for advice. If you have any correspondence from the Department of Health you should send it to Avant so we can assist you. Please send it to

    You will need to notify the Department of Health as soon as possible if you notice any errors in what you have claimed from the MBS or other benefit schemes. You can do this by filling out a voluntary acknowledgment of incorrect payments form.

    After you have completed this form, the Department of Health will contact you to confirm the amount that you will need to repay.

  • If you have any correspondence from the Department of Health you should send it to Avant so we can assist you. Please send it to

    Do not ignore it. Being proactive by informing the Department of Health will place you in the best position to manage the situation.

  • A voluntary acknowledgment is when you let the Department of Health know that you have claimed a benefit incorrectly. You can do this by completing a voluntary acknowledgment of incorrect payments form and submitting it to the Department.

    If you have claimed a benefit incorrectly you will need to repay the money to the Department. Depending on the amount you owe, an administrative penalty may also apply. In some cases, a voluntary acknowledgement can help reduce that administrative penalty.

    For more information on voluntary acknowledgments visit the Department of Health website.

  • The type of information that the Department of Health will require will depend on the type of claim that needs to be substantiated. You do not have to provide the entire file of a patient and you can censor information or provide excerpts. The Department of Health has prepared the Health Professional Guidelines to help you understand what documents can be used to substantiate the services being audited.

    Any personal information about your patients collected during an audit is kept securely by the Department of Health.

    The Australian Privacy Principles in the Privacy Act 1988 allows you to give this type of information to the Department of Health for the purposes of an audit.

  • No. You are not required to notify your patients.

  • You will know of the outcome of the audit before you owe money to the Department of Health. If you disagree with the outcome you can submit an application to review the decision.

  • If you do not provide the documents relating to the claims being audited you may be subject to a civil penalty, which is similar to a fine.

  • You can find more information about Medicare audits on the Department of Health website.

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Practitioner Review Program (PRP)

  • The Practitioner Review Program (PRP) monitors Medicare data to identify and examine variations that may indicate you have engaged in inappropriate practice. The variations examined are those that demonstrate you are practising in a way that is statistically and significantly different from your peers.

  • The Department of Health considers Medicare data, which are made up of the claims you make to Medicare and PBS prescribing data.

  • Simply, it means any aspect of your conduct in connection with you providing or initiating services that would be unacceptable to your peers.

    The meaning of inappropriate practice is found in legislation: Health Insurance Act 1973, section 82.

    Generally, it relates to:

    • • a doctor providing or initiating Medicare services or prescribing or dispensing PBS medicines in a way that would be considered unacceptable to the general body of the doctor’s peers
    • • the 80/20 rule. This means that a doctor has rendered or initiated 80 or more professional attendance services on each of 20 or more days in a 12-month period. For more information on this rule, please visit the Department of Health website.

  • The Director of the Professional Services Review will consider whether:

    • • the service you provided met the requirements of the MBS or PBS item descriptor, including the clinical and medical relevance of the service
    • • you kept adequate and contemporaneous records for the Medicare or PBS services that you provided or initiated. These requirements can be found in the Health Insurance (Professional Services Review) Regulations, and include:
      • - the record includes the patient’s name
      • - the record contains a separate entry for each attendance by the patient for a service
      • - each separate entry includes the date on which the service was rendered or initiated, provides sufficient clinical information to explain the service, and is completed at the time or as soon as practicable after the service was provided or initiated
      • - the record is sufficiently comprehensible to enable another practitioner to effectively undertake the patient’s ongoing care in reliance on the record
    • • your services contravened the 80/20 rule.

  • There are five stages of the Practitioner Review Program:

    • 1. Initial contact – The Department of Health will contact you and let you know about its concerns. It will then write to you listing the concerns, the relevant Medicare servicing data and an invitation to attend an interview.

      When you have received written notification you should contact Avant for advice. Please send all correspondence that you have received from the Department of Health to us at

    • 2. Interview - This is an opportunity to talk more about your practice and the anomalies with your billings. Before this stage, the Department of Health does not know specifics about your practice or the patients you treat. The data it has are simply statistical. There is no set format to this interview. The Medical Adviser from the Department will often come to a location that is convenient to you, such as your practice, or sometimes this can be conducted over the phone. You can bring a support person to this interview.

    • 3. Post interview - The Department of Health will consider what you have told it and then advise you of the outcome. It is possible that if you address all its concerns in the interview that no further action will be taken. If not, you will be reviewed (see stage 4) or be referred to a delegate of the Chief Executive Medicare (see stage 5).

      The Department will send you details of the outcome in a letter. You should send this letter to your Claims Manager at Avant.

    • 4. Review - The Department of Health could decide to review your billings and practices for another period of time, usually six months. After this review period, all concerns may be addressed and no further action will be taken. Alternatively, some concerns may remain or new concerns could be identified. If this is the case the matter will be referred to the Chief Executive Medicare who will consider making a request to the Director of Professional Services Review for consideration of an inappropriate practice finding.

      The Department will send you details of the outcome of the review in a letter. You should send this letter to your Claims Manager at Avant.

    • 5. Delegate assessment - Delegates (health professional advisers and senior staff) of the Department of Health will review all the information they have at this stage. If they no longer have concerns they will close your matter.

      If concerns still exist, a letter will be sent to you by the delegates inviting you to make a written submission to provide further information. You should send this letter to your Claims Manager at Avant and they will able to assist you. If the delegates are satisfied after reviewing the further information, they will close your matter.

      If the delegates are not satisfied, they will make a request to the Director of the Professional Services Review to review your provision of services during a specified period. While this is the last step of the Practitioner Review Program (PRP), it is the first step of the Professional Services Review (PSR). The PSR is an independent authority and any further contact about your matter will be directly between you and the PSR.

  • The possible outcomes of the PRP are:

    • 1. No further action will be taken if the Medical Advisers (doctors employed by Department of Health) no longer have concerns after meeting with you or after you provide them with extra information.
    • 2. A review of your Medicare data will take place after six months if concerns still exist.
    • 3. Referral to the Professional Services Review if you progress through all stages of the PRP and concerns still exist.

  • You can find more information about the Practitioner Review Program on the Department of Health website.

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Professional Services Review (PSR)

  • If you have been referred to the PSR we recommend you:

    • 1. Contact your medical defence organisation immediately to seek assistance. If you are an Avant member, contact your Claims Manager or send an email with the PSR correspondence to
    • 2. Familiarise yourself with the documents that the Chief Executive Medicare has sent you, including concerns and statistics about your practice. You should also familiarise yourself with the item descriptors that match the Department’s concerns. These item descriptions can be found at MBS online.

    Consider informing people close to you that you have been referred to the PSR. This is your choice but can be beneficial to your wellbeing.

    For more information about the process please visit the PSR website.

  • The process begins at the last stage of the Practitioner Review Program (read above). If delegates (health professional advisers and senior staff) of the Department of Health request the Director of the Professional Services Review to review your provision of services, the Director will consider the information and material. If it appears that you engaged in inappropriate practice the Director will conduct a review.

    To do this the Director will acquire a random sample of the services that you billed and will ask for the corresponding medical records. The Director will review these and prepare a report. Before completing the report, the Director may meet with you to discuss the billings and records.

    When you receive this report you will have the opportunity to make submissions. We can assist you with this part of the process.

    At this stage, the Director has a few options. These include:

    • • that no further action is required
    • • to enter an agreement with you in which you must acknowledge you engaged in inappropriate practice and likely repay money relating to the services. The Director can also disqualify you from billing to Medicare for a specified period
    • • refer you to a committee of your peers for a hearing to decide if you engaged in inappropriate practice. For more information on the Review by a Committee please visit this website.

  • If the Director of the PSR is concerned that you have not complied with professional standards or that you have caused risk to somebody’s health, a referral can be made to AHPRA or another regulatory body.

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Shared Debt Recovery Scheme

  • The Shared Debt Recovery Scheme is a way the Department of Health can share a debt that it is owed following a compliance audit. This means that rather than the doctor being responsible for all the debt that is owed to the Department of Health, the debt can be shared between the doctor (the ‘primary debtor’) and another person or organisation (the ‘secondary debtor’) in certain circumstances.

  • The primary debtor will always be the doctor whose provider number is used to claim from Medicare.

    The secondary debtor will most likely employ or engage the primary debtor. However, it could be any relationship between the two that relates to claiming from the Medicare Benefits Scheme.

  • You will receive a letter from Medicare identifying concerns with your practice.

    At this stage the letter may invite you to provide further information regarding a possible secondary debtor. The Department will review that information and determine if it will notify the secondary debtor.

    You, as the primary debtor, and the secondary debtors will each have an opportunity to make submissions on whether the debt should be shared and, if so, the percentage that each debtor should owe.

    The Department may then make a share debt determination.

  • A secondary debtor will not exist in all cases. For this to happen there must be a relationship between you and the secondary debtor (ie, employment, engagement or another arrangement related to the charging of Medicare).

    Issues the Department will consider include:

    • • if the secondary debtor controlled or influenced the making of the false or misleading claim. For example, the practice that employs you predetermines item numbers that are charged for certain services before a consultation
    • • if the secondary debtor received a financial benefit as a result of the false or misleading claim. For example, the practice may have received a percentage of the billings you charged.

  • The Shared Debt Recovery Scheme applies to Medicare compliance audits that occur after you have received payments from Medicare for the care provided.

    The Shared Debt Recovery Scheme will not apply:

    • • to claims adjustments that occur routinely as part of health practice, where you alert the Department to an error to correct the claims record
    • • if you make a voluntary acknowledgement of incorrect payments such as after receiving a letter asking you to review your billings or following a targeted campaign (where Medicare has sent you a letter highlighting an anomaly in your practice)
    • • to debts resulting from inappropriate practice following referral to the Professional Services Review
    • • to debts resulting from a false or misleading statement that can be shown to have been made by someone other than the practitioner
    • • to debts arising where one party has, without the knowledge of the other, engaged in criminal conduct (fraud) in relation to Medicare claims or billing.

  • Under the regulations, the default position is that the primary debtor will pay 65% of the debt and the secondary debtor will pay 35% of the debt.

    However, the Department of Health can consider any arrangements that were in place between the parties and what influence or control the secondary debtor may have had over the billing of services when determining the final proportion and amount owed by each party.

  • If you are the subject of a Medicare audit you will receive a letter containing a request for documents. The letter will clearly identify if the Shared Debt Recovery Scheme could apply in relation to that audit.

  • No. The Shared Debt Recovery Scheme is not intended to make receptionists or administrative staff responsible for debts from services billed on behalf of a doctor. However, the practice may be liable as a secondary debtor.

    Any person found to have billed Medicare services against your provider number without your knowledge may be held responsible for the entirety of any Medicare debt and criminal prosecution may be pursued.

  • The Department of Health is not bound to any terms in a contract between parties. It will make the debt determination using the criteria above. The Department has legislative authority to recover the debt. If there is a contract in place between the two debtors, the department may still apply the Shared Debt Recovery Scheme.

  • The Scheme began on 1 July 2019. It only applies to audits that started from that date but can still apply to billings from 1 July 2018.

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