Audit of compliance actions raises questions over efficacy of targeted letters

An audit of Department of Health (DoH) compliance efforts by the Australian National Audit Office (ANAO) has recommended changes to permit value for money assessments, and found the outcomes of compliance activities are not always systematically monitored and assessed.
 
The report notes changes to the compliance model in recent years have not been well documented and there is no strategy that guides how compliance activities are conducted. The DoH formulae used to calculate savings from compliance activities have not been applied consistently, the audit found.  
 
The DoH agreed with the audit’s recommendations.
 
Almost $23 million was repaid as a result of 12 targeted compliance letters from the DoH to more than 2000 providers in 2018–19, according to the audit.
 
The DoH reported $123 million in estimated savings through ‘changes in claiming behaviour of providers,’ the audit states, and recovered $49 million in claims that should not have been paid.
 
Meanwhile, health compliance within the DoH costs around $106 million a year.
 
Targeted letters – intended for ‘minor non-compliance’ – accounted for the lion’s share of compliance activities (76%), followed by audits (13%) and the Practitioner Review Program (10%), with investigations accounting for only 0.1%.
 
Despite their widespread use, targeted letters only resulted in the return of 26% of all monies returned under the compliance efforts that year.
 
Almost half of all providers sent a targeted letter did not respond, with contacting non-responders largely deemed ‘out of scope’.
 
According to the audit report, the DoH advised the ANAO there is no legal basis to compel providers such as GPs to respond to a targeted letter, and follow-up is not routinely conducted for those who do not respond.
 
This is due to the assumption that ‘most providers will self-remedy incorrect or inappropriate billing after receiving a letter’.
 
‘Non-responders are only followed up if they are identified as having continued concerning behaviour or worsening behaviour through the case escalation process,’ the report states.
 
Of those who did respond to targeted letters in 2018–19, 71% acknowledged non-compliance and returned funds through the voluntary acknowledgement process, with the largest single repayment coming in at $264,266.
 
In a submission to the audit, the RACGP noted many GPs felt ‘unfairly targeted’ by compliance activities when many had ‘legitimate reasons for billing or prescribing a certain way’.
 
The college noted department efforts appear focused on finding GPs who are Medicare billing outliers and recouping costs, rather than working to educate and prevent issues.
 
‘Measures aimed at preserving the integrity of Medicare and use of health resources by preventing wrongful and fraudulent claiming are supported by the RACGP,’ the submission states.
 
‘However, the RACGP is concerned that the Department’s compliance functions are not currently working as intended.
 
‘Member feedback indicates that increased compliance activities and the fear of being audited is distracting GPs from their primary focus of delivering high-quality patient-centred care.
 
‘This creates a significant disconnect between the processes/requirements GPs need to adhere to (as set out in legislation) and their commitment to ensuring the delivery high-quality patient-centred care.’
 
The RACGP submission also highlighted a lack of clarity regarding Medicare claiming criteria, and said there is a need for improved education of healthcare providers.
 
‘Increased compliance activities should be balanced with corresponding educational activities,’ the submission states. ‘Where reasonable, health professionals must be given an opportunity to adapt their billing practices prior to being subject to an audit.’
 
The full submission is available on the RACGP website.
 
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