The Shared Debt Recovery Scheme is part of an increased focus to improve debt recovery from Medicare compliance activities. The scheme was introduced because Medicare billing was often delegated to non-practitioners, leading to incorrect billing practices in some instances. It’s important for doctors to have oversight and control over the use of their Medicare provider number and practices to fully understand Medicare Benefits Schedule (MBS) billing requirements.

Liability of practice owners

Under the scheme, practice owners can be liable for a proportion of Medicare debts owed by doctors who are contracted or engaged to work within the practice. To protect the practice and doctor, employment contracts should clearly state how income from Medicare is split between the two parties.

Medicare has the power to apportion debts arising from false or misleading statements (e.g. claim for benefit) between the individual doctor and a secondary debtor, such as a practice.

Medicare can make a shared debt determination where it is reasonably believed the:

  1. practice could have controlled or influenced the circumstances that led to the making of the false or misleading statement
  2. practice directly or indirectly obtained a financial benefit from the making of the false or misleading statement
  3. circumstances of the case make it fair and reasonable for the determination to be made.


When a doctor is first contacted about an audit, they will be asked if they would like to be considered for a shared debt determination. The doctor will be asked to produce documents in relation to the services claimed and information about relevant employment, contractual or financial arrangements. If a possible secondary debtor is identified, they will also be asked to provide information.

A shared debt determination and your practice

After a compliance audit, a shared debts determination will be decided by the Department of Health’s audit officer. They will decide whether a debt is owed and if it should be shared between two parties.

The default split is 65% for the doctor (the primary debtor) and 35% for the practice (the secondary debtor). However, the parties can make submissions if they believe the proportion should be different.

Either party can apply for a review of the decision, which will be undertaken by a review officer, working on behalf of the Chief Executive Medicare.

How can Avant assist your practice?

Avant Practice Medical Indemnity Insurance cover can provide your practice with medico-legal advice when responding to Medicare compliance audits as well as legal representation and defence costs in the case of a shared debt determination. We cover up to $150,000 for Medicare compliance audits subject to the full terms, conditions, and exclusions of the policy.

If your practice is contacted in relation to the possibility of shared debt recovery, contact Avant.

Find out more about practice medical indemnity insurance

Schedule a call with one of our team at your convenience

Avant Practice Medical Indemnity. What it covers.^

Covers the practice up to $150,000 for the legal fees associated with an inquiry including; alleged dishonest, fraudulent, or criminal conduct associated with healthcare service in relation to the Medicare Benefits Scheme.

Covers the practice up to $20+ million for compensation amounts the practice may become liable to pay, and the associated legal defence costs for matters including;

  • telehealth
  • breaches of privacy
  • defamation
  • failure to follow up.

+Sub-limits apply. A maximum of $20 million will be paid in a single policy period.

Covers the practice up to $500,000 in responding to matters brought by a state health complaint entity or criminal or coronial investigations. Avant's medico-legal experts will assist you and your employees with everything from drafting a formal response and preparing for a hearing, to defending the practice or its non-medical practitioner employees.

Reasons a practice may face an investigation or inquiry include:

  • coronial inquiry
  • refusal to treat a patient
  • allegation of discrimination
  • communication issue.

We’ll cover the practice for up to $150,000 for legal fees associated with a dispute with an employee (including an employment contract). Our Medico-legal Advisory Service can also provide personalised advice to prevent a dispute from escalating.

Common reasons why practices contact Avant for advice or defence include:

  • disputes with employees
  • disputes between employees
  • employees' use of social media
  • employment contracts.

Employees will not be covered when acting in their capacity as a medical practitioner.

The Avant Practice Medical Indemnity policy provides cover for the practice and employees for incidents arising from the management and administration of vaccines, provided the practice normally administers vaccinations as part of your healthcare services e.g. GP practice.

The cover is for situations that may result in a claim against the practice entity including:

  • patient adverse reaction to a vaccine, provided the employee has the appropriate training and qualifications to administer it
  • administering the vaccine away from the practice, such as a practice nurse attending a nursing home or a separate clinic
  • complaints made to a tribunal or registration board against the practice in relation to healthcare services provided.

Avant Cyber Insurance has been designed to help protect your practice against many of the common losses caused by a cyber incident. This is an additional benefit for your practice when you hold an Avant Practice Medical Indemnity Policy. Cover is complimentary for all eligible practices with no additional premium payable.

Covers the practice for legal defence costs and compensation amounts if the practice is found responsible for the loss or damage of property, including injury, as a result of negligence.


Resources

Managing Medicare and practising within the guidelines is an essential aspect of delivering patient care for practices. Here are some useful resources on Medicare best practice, that will help minimise the chances of being the subject of an audit.

Practical tips to mitigate risks

Practices should document a clear policy on the Medicare billing process in agreement with all doctors and the practice team. The policy should outline that individual doctors are responsible for ensuring the accuracy of their billings.

Recording Medicare item numbers

The doctor whose provider number is being used to charge Medicare, is responsible for instructing which item number is billed. Practice employees should not change the item number themselves.

All communication regarding Medicare billings should be documented via the appointment book, email or an internal messaging facility and any changes should be recorded by the doctor.

Documentation

In order to bill correctly, both individual providers and practices with administrative responsibility for Medicare billings, should ensure medical records:

  1. have separate entries for each attendance by the patient for a service and the date the service was provided
  2. include adequate clinical information to explain the type of service provided
  3. are sufficiently comprehensible that another doctor could rely on it for ongoing care
  4. are written at the time the service was provided or as soon as practicable afterwards.


Interpreting item numbers

If you notice a level of variance in the way particular item numbers are being applied, practice managers could encourage a discussion of these item numbers at practice meetings. This will help doctors stay consistent with the standards of practice amongst their peers.

Any concerns practice management have regarding the billing of Medicare item numbers, should be discussed with the doctor (or other provider) and the discussion documented.

If doctors need assistance interpreting MBS items and rules, practice managers could also suggest contacting the Department of Health’s advice service at: askMBS@health.gov.au

Submitting bulk billing claims

Prior to submitting Medicare claims, a report should be provided to each doctor listing the claims for submission. Each doctor should provide their signed and dated authority and copies be retained by the practice and individual doctors.

If a claim is rejected, it should be returned to the relevant doctor. Practice employees can resubmit the claims once the doctor has given authority to do so.

Useful links

  1. Avant resources - Medicare: what you need to know
  2. Department of Health and Aged Care – Shared Debt Recovery Scheme

Disclaimers

^Cover is subject to the full terms, conditions and exclusions of the policy.

Persons implementing any recommendations contained on this page must exercise their own independent skill or judgment or seek appropriate professional advice relevant to their own particular practice.

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