12th Greek Australian Legal and Medical Conference
Samos, Greece 2009

MEDICARE AUSTRALIA AND THE NATIONAL COMPLIANCE PROGRAM

Pamela Michael

In recent years, Australian medical professionals have come under increasing public scrutiny not only in relation to their treatment of patients but also in relation the amount of their financial reward.

There is a myriad of legislation that regulates how medical practitioners are to practice medicine. The edict of the various regulatory authorities, from the NSW Medical Board, the Health Care Complaints Commission, and Medicare Australia is that the regulation is required for public protection and practice remediation, and it is not about the punishment of delinquent practitioners, cost-recovery or detection of fraud.

Medicare Australia (Medicare) has the primary responsibility of monitoring the quality of Medicare services, and for dealing with fraudulent claims for Medicare benefits in accordance with the provisions of the Health Insurance Act (Cth) 1973 (the Act). Statistical analysis by Medicare is not generally sufficient to gauge the quality of an individual practitioner’s provision of professional services. The Professional Services Review (the PSR) Scheme is regulatory in nature and is where a medical practitioner is referred when Medicare’s concerns in relation to their statistical practice profile remain unaddressed.

Medicare is responsible for the administration of the Medicare Benefit Scheme (MBS) and the Pharmaceutical Benefits Scheme (PBS). Each year Medicare processes about 500 million transactions and pays more than $30 billion in benefits to providers and the Australian public. The Commonwealth Government has moved to further protect the integrity of the MBS and PBS by enhancing the compliance program which monitors the practice profiles of practitioners operating under the Schemes.

MBS Compliance Program

Under the Increased MBS Compliance Audits initiative, the Government is increasing audits on MBS services to ensure that medical practitioners are fulfilling the requirements of relevant MBS item descriptors. The initiative also sees the expansion of the audits to include allied health professionals and improved coverage of specialists.

Consequently, from 1 January 2009 an additional 2,000 audits each year are to be carried out on those who provide MBS services.

Proposed legislative changes may also see Medicare’s powers increase to enable it to compel the production of records substantiating MBS claims, and introduce new administrative penalties for individuals who are found to be incorrectly claiming.

The MBS Compliance Audits will focus on practice profiles of providers who have unusual trends or patterns in claiming, high or unusual claims, complaints and tip-offs in addition to targeting MBS items with a high risk of mis-itemisation, incorrect claiming or unusual or unexplained growth. Over the next 12 months specific attention will be paid to MBS items at risk of up-coding where a medical practitioner may bill for a more complex and more expensive MBS item than the service provided including, but not limited to, skin lesions, excisions, flap repairs, time based items including attendance items, deep and superficial wounds, general practitioner consultations routinely claimed with practice nurse items, care plans being management plans and health checks.

Medicare engages with professional auditors to undertake detection activities for non-compliance and subsequent data analysis. As a consequence, Medicare is more adept at identifying anomalous claiming behaviour and patterns of practitioners practice profiles however, it is purely statistical and without regard to the particular clinical setting. Medicare will interview a practitioner where their practice profile is identified as being at a statistical variance to their peers and whilst it may reflect the nature of the practice, it may also indicate “inappropriate practice”. It is not until this point that a clinician is involved and review of the particular clinical circumstances occurs that any anomalies and alleged non-compliance might be explained.

The Practitioner Review Program

The program consists of a combination of an interview with a Medicare Medical Adviser to discuss Medicare’s concerns, a period of time to enable the practitioner to review his/her practice, and a review by Medicare’s Delegate to determine if a request should be made to the Director of PSR.

Medicare presently does not have the power to review a practitioner’s medical records and it relies upon the statistical data and factual information given during the interview. Having regard to the proposed legislative changes this will no doubt impact upon the way in which future interviews are conducted.

Prior to the changes introduced at Medicare, a practitioner was provided with a written, detailed report following the interview setting out Medicare ’s concerns however, a letter advising whether or not Medicare’s concerns have been addressed is sent in lieu of a report. Where Medicare’s concerns remain unaddressed the practitioner is invited to provide written submissions explaining his/her position in relation to those concerns prior to a request being made for review by the Director of PSR.

The Director of Professional Services Review and Professional Services Review Committee (PSRC)

The PSR Scheme gives the PSR, a body independent of Medicare, authority to investigate whether a practitioner has engaged in inappropriate practice in connection with the rendering or, initiation of services under the MBS or the PBS.

The object of the PSR Scheme is to ensure access through Medicare to cost-effective medical services, medicines and health care. The PSR does so by reviewing the benefits paid by the Commonwealth for services that are alleged to have been provided in connection with or as a result of inappropriate practice and moreover, protecting the public from the associated risks with the inappropriate practice engaged in by medical practitioners. The Scheme was implemented for the primary purpose of protecting the public as opposed to cost-recovery, detection of fraud, or punishment of a medical practitioner.

The test for “inappropriate practice” as defined under the Act is wide and non-specific. Generally, inappropriate practice means conduct in providing services that a committee of a medical practitioner’s peers would consider to be unacceptable.

The Director of PSR reviews a practitioner’s provision of services and, once completed may decide not to take any further action, negotiate and enter into an agreement (ratified by the Determining Authority and deemed final with acknowledgment of inappropriate practice usually resulting in a reprimand, repayment of monies for MBS services and/or disqualification from identified MBS item services for a period of time), or establish a PSRC and refer the practitioner’s conduct for determination. (Refer Figure 1)

The PSRC will decide if a practitioner’s medical records meet the prescribed standard and the services rendered were clinically relevant. In determining whether a practitioner has engaged in inappropriate practice, regard is given to whether the practitioner has kept adequate and contemporaneous patient records.

Each year the PSR is required to report to Parliament on its activities for the past year. The report provides a review of the issues which came to the PSR’s attention, and provides a useful review mechanism for medical practitioners and other health practitioner to review their current practices to ensure compliance with the requirements of the MBS and PBS.

In the latest annual report Dr Webber, the Director of PSR, notes that the number of cases referred to PSR has increased significantly since the period 2006 – 2007, and whilst there is a changing mix of the types of medical specialities subject to review, general practitioners continue to comprise the majority of referrals to PSR.

The PSR reviewed the behaviour of 50 practitioners in 2007 – 2008 as compared to 27 practitioners in 2006 – 2007. This increase during the reporting period coincided with Medicare Australia’s preliminary revision of its investigative processes. (Refer Table 1)

Inevitably, the further changes Medicare Australia introduced on 1 January 2009 suggest that the increase in the number of referrals is set to continue. Indeed, as at March 2009 the PSR had received 119 requests from Medicare Australia to review medical practitioners for the 2008-2009 year.

The Director reported an increase in the number of ‘repeat offenders’ before the PSR. The PSR reviewed 19 medical practitioners who had previously been referred to the PSR whereas, in previous years, there had been just one or two re-referrals. Consequently, Dr Webber reported that the PSR will re-examine the adequacy of sanctions the Determining Authority imposes to deter future inappropriate behaviour.

Dr Webber, during the course of his clinical reviews of medical practitioners noted, inter alia, the following particular areas of concern:

Dr Webber in his report reiterates the need for medical practitioners to exercise care and diligence when recording clinical findings in medical records. With the increasing use of computerised records, it is reported that ‘cut and paste’ methods adopted by practitioners for convenience, which result in the same clinical examination results being recorded for different patient consultations irrespective of a particular patient’s clinical presentation, will not be considered by the Director as credible evidence of appropriate clinical practice.

Determining Authority

Following a PSRC hearing, a Draft Report is provided to the practitioner for a written submission in relation to the PSRC’s preliminary findings before finalisation and provision of the Report to the Determining Authority.

The Determining Authority will invite further submissions from a practitioner in relation to the sanctions it must impose being one or more of a reprimand, counselling, repayment of Medicare benefits and/or complete and/or partial disqualification for up to 3 years from the MBS and/or PBS.

It is difficult to ascertain the timeframe for completion of Medicare’s investigation process in each case, but it can be a protracted and lengthy process once the Director decides to undertake a review of the provision of services in accordance with the Act.

In our experience the most important determinant is the quality of a practitioner’s medical records which effectively need to be sufficiently detailed and moreover, contain the necessary clinical evidence to enable a practitioner to justify the professional service claimed. That said, whilst there are many safeguards and opportunities for a practitioner to make written submissions to Medicare during the investigation process it is advisable that you have professional support at the time Medicare’s Medical Adviser seeks the initial interview especially given the provision of a subsequent written report will no longer occur.

Health Insurance Amendment (Compliance) Bill 2009

It is suggested that there has been little change to Medicare’s compliance program for the MBS scheme in the past decade notwithstanding, that the MBS Scheme has undergone significant growth and expansion with an increase in expenditure, the number of services claimed and number of practitioners who provide Medicare services.

Under the proposed legislative changes Medicare’s powers are to increase to enable it to compel the production of records substantiating MBS claims, and introduce new financial penalties for individuals who are found to be incorrectly claiming.

The Compliance Audit process where Medicare identifies a potential threat to the integrity of the Medicare scheme and notification to the individual practitioner about the concern will remain. Medicare will continue to provide the practitioner with the details of the service(s) and explain the concern being audited. The practitioner will continue to provide information to substantiate the service(s).

Should the practitioner refuse to respond or co-operate with Medicare voluntarily, the Bill will give Medicare the power to require the practitioner and/or other persons to produce documents or information to substantiate a Medicare benefit amount paid in respect of a professional service. In addition, the Bill provides for the Medicare benefit amount paid in respect of a service to be recovered from practitioners who cannot substantiate a Medicare benefit amount in respect of a service. Other persons who fail to comply with a requirement to produce documents may be subject to a civil penalty.

Notice to Produce

The amendments to the Act will provide Medicare with authority to give a notice to produce documents to person to substantiate a Medicare benefit paid for a service rendered and that person will be required to comply. As a consequence, there will be a disclosure of information from a patient medical record to Medicare.

This raises certain privacy issues including the collection of the information, use of the information, reporting requirements, review mechanisms and patient notification. These are currently being addressed by a Privacy Impact Assessment which details the privacy issues and concerns relating to this Bill.

Administrative Financial Penalty

Currently under the Act, Medicare benefits can be recovered from a practitioner if an incorrect payment was made either, by the practitioner or, another person, due to a false or misleading statement made by, or on behalf of, the practitioner. This will remain unchanged.

Where debts of more than $2,500 or higher (as set out in the Regulations) it is proposed under the Bill that an administrative penalty will apply, payable by the practitioner, where the practitioner receives a debt notice under the existing provisions of the Act, fails to comply in respect of some of the services rendered in the notice, produces documents but, the documents fail to substantiate a Medicare benefit for one or more services specified in the notice or, another person complies with a notice to produce documents but, the documents do not substantiate a Medicare benefit for one or more of the services specified in the notice.

Where more than one service is identified in a notice to produce documents under the proposed new legislation, or a debt notice under existing provisions of the Act, the administrative penalty will be calculated for the Medicare benefit amount in respect of each unsubstantiated professional service.

The base penalty amount of the administrative penalty is 20% of the recoverable amount for the professional service.

In the event that a practitioner voluntarily admits that an incorrect amount has been paid in respect of a professional service prior to being contacted by Medicare there is a 100% reduction in the penalty.

It is recommended that you contact your medical defence organisation who may in many instances be able to refer you for legal advice to assist you through the various stages of Medicare’s investigations and review process.

The Director of PSR also urges medical practitioners who are the subject of an investigation by Medicare to seek early advice from their medical defence organisation, as timely resolution of Medicare’s concerns may prevent an ultimate referral to the PSR.

table

Figure 1

 

2005 – 2006

2006 – 2007

2007 – 2008

Requests received from Medicare Australia

7

27

50

Requests by Medicare Australia to review a practitioner for a second or subsequent time

1

4

19

No further action

0

1

7

Requests withdrawn or lapsed

0

1

0

Referrals form the Director to new committees

2

6

15

Committees in Progress

1

4

11

Committee Reports finalised

6

13

7

Reports finding inappropriate practice

6

8

7

Reports finding no inappropriate practice

0

5

0

Referrals to medical boards

0

7

4

Referrals to MPRCs

1

0

6

Referrals to other bodies

0

0

1

Negotiated agreements ratified

8

6

27

Final determinations made

5

10

6

Cases on hand, as at 30 June 2008

5

18

19

Table 1 PSR Workload statistics over a 3 year period