This relates to the recent ABC and Fairfax “bombshell story of Medicare fraud”. For those that need some catching up, the background is that ABC and Fairfax media (Nine Entertainment) have reported, without really interrogating the evidence, that there is $8 billion in Medicare overservicing, errors and fraud.
For more information on what underpins the story you can see my article here or go to an article in the Medical Republic by the CEO of HotDoc, Ben Hurst. The current government estimate of error and fraud is $366 million to $2.2 billion and there will be an updated government report and estimate at the end of February 2023.
What is driving this story? Well, it’s an excellent story, mainly because we have a villain which is the doctors. and a victim which is the public. However, if you dig around then the villains and victims get harder to find.
At the centre of this story is the coding of medical services in a publicly funded, fee for service medical system. A requirement of Bulk Billing (where the patient has no out of pocket costs for the service) is that the doctors are accountable to code their own work. How a doctor codes their billing will have an impact on the doctor’s income, and this of course creates some very serious risks! So how are these risks managed? Currently we have a regulator that monitors billing anomalies based on statistical variations from the norm, random audits, and a review process. The outcomes of these reviews can be that the billing error is accepted as an honest mistake and the doctor pays the money back. If the regulator determines misconduct, then a significant fine is imposed. There is also the risk that a doctor can lose their Medicare Provider Number and this can effectively end their career.
Most doctors are at least wary, and some are scared of the regulator, and this results in widespread underbilling of Medicare. For example, I worked with a doctor in a disadvantaged community, and regularly saw patients for longer than 20 minutes (a Long Consult), however he insisted on always using the lower paying item of less than 20 minutes (a Standard Consult). The reason for not appropriately using the correct and better remunerated Medicare item is that he didn’t want to draw any attention to himself from the regulator. This is not an isolated anecdote, and a recent survey of GPs, had 47% saying “they either avoided certain services or claiming patient rebates, despite providing services, due to fear of Medicare compliance ramifications”.
At the other end there are doctors that don’t know what they are doing and therefore bill inappropriately. There are doctors that push the edges but stay on the right side of the rules. There are no doubt doctors who occasionally overbill the odd patient from time to time and know that getting caught is unlikely. Then there are doctors who have knowingly committed significant fraud, and this includes the really crazy criminal stuff, like billing dead people, which is safe to assume is extremely rare.
So, the situation we have is a mixed bag, which consists of lots of correct billing, some under billing and some over billing, and a bit of fraud (and I am really talking about general practice and don’t claim to be an expert on what happens in the hospital sector).
The media have identified that doctors doing their own coding of Medicare is open to abuse (which is true). Now if we run with the idea that doctors can’t be trusted to code their own billings, and we need better compliance with the rules, then what are the alternatives?
The first one that comes to mind is that doctors could employ coders to do their coding for them, and to be a Medicare coder there could be mandatory training from Medicare required. However, it is still likely that these coders will make some errors due to poor knowledge, sub optimal training or just a culture among coders to go as close to the limits of the rules as possible and accidentally step across a few lines. They could do a better job than doctors and increase compliance, but the cost of coders will inevitably be passed on to the public. For example, in the USA there can be up to one medical coder employed for every doctor, so this has the potential to be expensive for not much gain.
The next scenario is that the government codes all the billing. Government coders are likely to be incentivised to under code as much as possible. This could result in doctors spending less time with patients and allocating more time and effort to dispute payments with the government. The public are very unlikely to consent to government coders reading their medical records and again it will require allot of government employed coders!!
Another scenario is that the doctor bills the patient, and the patient selects their own Medicare codes and claims the rebate from Medicare. Many doctors would be happy with this, but patients will find Medicare confusing and won’t enjoy dealing with government bureaucracy over small claims. Some people (especially the more vulnerable) won’t bother to claim a rebate due to it being just too hard. And yes, some patients will try to overclaim and no doubt some will succeed.
So, we are back to considering doctors coding their own billing. Sure, it’s not great, but I think it stands up as the best option amongst a range of not very good options.
Having doctors code their own Medicare billing removes allot of red tape and costs out of the system. Added to this is that over billing of Medicare is reasonably contained (as per the governments estimate), and then we have a compliance system that encourages under billing of Medicare, on balance you have to conclude that the public benefits.
Unfortunately, this story doesn’t have a clear villain and victim.