DoH report finds ‘no evidence’ for $8 billion Medicare leak figure

A report commissioned by the Federal Department of Health and Aged Care has found no evidence to justify a widely cited claim of $8 billion of Medicare funding being lost annually through fraud and waste.
 
The estimate, as well as sweeping claims about rorting, was first made on October 17 in articles published in Nine Newspapers, and a subsequent report on ABC’s 7.30 program.
 
The allegations particularly focused on general practice, although other specialties were also implicated in the coverage.
 
Shortly afterwards, Federal Health and Aged Care Minister Mark Butler said the figure sounded ‘way out of whack’ with previous understanding of the Medicare system and told media he had commissioned a departmental report to assess the claim.
 
On Saturday, Minister Butler issued a statement that cast serious doubt on the credibility of the estimate, which was largely based on the PhD thesis of Dr Margaret Faux.
 
He said the ‘overwhelming bulk’ Australian doctors are ‘honest, hardworking and comply with Medicare rules’.
 
‘My department has provided a report on the existing compliance efforts, along with a rundown of the various estimates on the scale of the problem from the ANAO [Australian National Audit Office] and others,’ Minister Butler stated.
 
‘The report found no evidence of the $8 billion in Medicare fraud and inappropriate billing estimated by Dr Faux.’ 
 
He also announced the appointment of health economist Dr Pradeep Philip to run an independent review into Medicare’s integrity and compliance mechanisms.
 
RACGP President Adjunct Professor Karen Price said the announcement vindicates the college’s position on the coverage.


‘I am delighted, but completely unsurprised, by the Department of Health’s own finding that there was absolutely zero evidence for the $8 billion Medicare fraud and waste claim that has been the basis for so many misleading headlines and articles over the past few weeks,’ she told newsGP.
 
‘It is exactly what we have been saying since those accusations were first made.
 
‘That these claims, which were effectively a slur on the honesty of our entire profession, could have been given such airtime without proper proof felt like a kick in the guts when the profession is already teetering.’
 
Professor Price also referenced a wider issue that was not touched upon in the coverage – that of GPs’ work not being billed at all.


A poll run last month found 97% of newsGP’s own readers reported losing a proportion of their income due to underbilling, with almost half saying they lose more than 20% of their earnings this way.
 
‘Managing Centrelink and NDIS paperwork, looking after people who have forgotten repeat scripts, and co-ordinating care, are just a few of the ways we look after our patients without any recognition from Medicare,’ Professor Price said.
 
‘We would also welcome some recognition of this, and a little more balance to the astonishingly one-sided and damaging recent coverage.’
 
The work by Dr Philip – referenced as the Philip Review – will build on a 2020 ANAO report that estimated Medicare non-compliance at between $366 million and $2.2 billion a year, according to Minister Butler’s office.
 
It will also include an ‘evidence-based estimate’ with methodology on the likely value of fraudulent, Medicare non-compliance, while Minister Butler said he has asked Dr Philip to identify fixes to protect the integrity of the system. 
 
‘All governments must apply strict compliance standards to any publicly funded system – including Medicare – to ensure that the small minority that do the wrong thing are picked up quickly and dealt with,’ he said.
 
Dr Philip is a former Secretary of the Department of Health and Human Services in Victoria and is now a Lead Partner at Deloitte Access Economics.
 
Professor Price said she supports the Government’s decision to set up an independent review.
 
‘As I have said all along, we would welcome a review into the integrity of a fiendishly complex Medicare system, which we know is putting off many of the next generation of doctors from becoming GPs,’ she said.
 
‘The RACGP, along with all professional medical organisations, wholeheartedly supports any work to simplify the system, make compliance easier, and clamp down on genuine misuse.’
 
An interim report is due to be published by 31 January next year, with the final report to be submitted by 28 February, according to the DoH. 
 
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