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Reforms to Medicare compliance – firmer but fairer?

09 July 2018 | Michael Wade, LLB, BCom, Special Counsel – Medicare, Avant Law, QLD

Law reforms introduced from 1 July 2018 have given Medicare stronger debt recovery powers. The legislation also provides for fairer approaches to compliance, by apportioning responsibility for overpayments between both doctors and their employers or contractors, including public hospitals.

Minister for Health, Greg Hunt said the legislation aims to deal with the “very, very small number of outliers” who don’t comply, at the same time acknowledging “the outstanding degree of integrity” among the medical workforce when the Act was being reviewed by Parliament.

Recovering overpayment debts

Doctors with a debt to the Commonwealth arising from Medicare compliance activities will be encouraged to enter into a repayment plan within 90 days. Where this doesn’t occur and the debt is not contested, Medicare has two new options for recovery:

  • Offset: Medicare can retain up to 20% of the benefits from bulk-billed claims that would otherwise be paid to the provider and apply those funds towards the debt.
  • Garnishee: To avoid a disincentive to bulk-bill, Medicare will have the power to withhold part of the income of a doctor from non-bulk billed sources, including their salary, from a state health service.

Medicare also has a new power to require the production of documents and information related to the financial affairs of doctors with a debt.

Compliance – a shared responsibility

From 1 July 2018, the Professional Services Review Committees are empowered to make findings of inappropriate practice against persons or officers of body corporates who employ “or otherwise engage” doctors. This includes practice owners and officers of corporate practices. The consequences of a finding for a person found guilty of inappropriate practice in that way includes the repayment of the whole or part of the Medicare benefits paid for a service, notwithstanding the service was rendered by an ‘associated person’ (such as the providing doctor) and the benefit was paid to an ‘associated person’. 

These amendments potentially correct the existing unfairness that leaves an individual provider fully exposed to a finding and being ordered to repay benefits, regardless of the culpability of their employer or contractor.

Also, from 1 July 2019, a Shared Debt Recovery Scheme will apply to the recovery of debts arising from making a false or misleading statement, e.g. a claim for benefit. The Scheme will allow Medicare to make a determination about the proportional responsibility of the primary debtor (the providing practitioner) and a secondary debtor. The secondary debtor may be a person or body corporate such as a hospital, corporation or practice.

Medicare can make a shared debt determination where it is reasonably believed to be appropriate to do so, having regard to:

  • Whether the relationship of the secondary debtor with the primary debtor was such that the secondary debtor could have controlled or influenced the circumstances that led to the making of the false or misleading statement.
  • Whether the secondary debtor directly or indirectly obtained a financial benefit from the making of the false or misleading statement.
  • Any other factors in all of the circumstances of the case make it fair and reasonable for the determination to be made.

What should you do?

It is in the interests of both individual providers and those who employ or otherwise engage them to cooperate, to ensure all documents related to claims for Medicare benefits are complete and accurate.

Although the reforms potentially improve the fairness of compliance outcomes, they will not excuse complacency.

The reforms do not diminish the provider’s primary responsibility for the services they provide. Providers should continue to ensure that they are knowledgeable about item descriptors and explanatory notes for Medicare Benefits Schedule services they provide. Providers should always determine what items are billed in their name and take every care to ensure documents submitted to Medicare under their provider number are accurate and not misleading.

Practices, hospitals and others with administrative responsibility for the submission of documents to Medicare should ensure documents are not false or misleading. The accuracy of submissions to Medicare should be checked with the provider of the service, if possible.

Those with a responsibility for the direction of more junior providers such as supervisors, practice principals and senior administrators should take care to ensure their directions to junior providers are appropriate.

If you have concerns about an incorrect Medicare claim or are unsure about your billing responsibilities, contact Avant’s Medico-legal Advisory Service via email at nca@avant.org.au or call 1800 128 268 for medico-legal advice, 24/7 in emergencies.

Resources

The Department of Health website has many useful guides in its ‘For Health Professionals’ section about claiming from Medicare.

Avant’s article ‘To bill or not to bill?’ also looks at common questions around Medicare claims for private patients in public hospitals and our feature ‘Somebody’s watching: Increased scrutiny’ in the latest issue of Connect magazine discusses the increase in Medicare compliance investigations in more detail.

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