22 May 2019

Debt scheme threatens to divide doctors and owners

Government MBS Medicolegal

With just over a month to go until a new shared debt recovery scheme, in which doctors found to owe a debt to Medicare for inappropriate claiming will have an opportunity to share that debt with their practice, it is apparent that there is much disquiet among owners.

Key concerns expressed by practice owners directly to Dr Harry Rothenfluh (PhD), head of the health department’s compliance unit, at last weekend’s RACGP practice owners conference in Sydney, were:

  • Although the scheme has been set up to make the claim against a practice optional, it would end up as an almost default position that practices would be included, because no doctors, or their lawyers, would likely ever not consider using the shared debt provision.
  • That such a situation inevitably would pitch employees against their owners, and not just when Medicare auditors had moved on a doctor for repayment. One practice owner pointed out the new regime would necessitate  owners review their employment contracts and put in place new procedures which would likely cause some degree of alienation by existing doctor employees.
  • That in almost all cases where a doctor makes a claim back against their employee, the relationship between both parties would be broken forever. This would cause further staff discomfort as it would be likely that either the employee left, or the employer did not resume an employees’ contract. “ The scope for disruption of the relationship between the practice and doctor employee is just huge”, one owner said.
  • That a 35% default for a practice was too high, given the cost structures of servicing a practice, and
  • That the legislation had been worded in a manner that actually put the onus more on the practice owner than the doctor, and that although the default amounts had been set at 65% for the primary debt holder , the doctor, and 35% for the owner, this created further uncertainty for any owners who wanted to dispute a shared debt claim.

Dr Rothenfluh attempted to water down concerns among owners by pointing out that the department has substantively changed their approach to audit so that most doctors who are falling outside norms on claiming are sent targeted letters and given assistance to change, before an audit is considered.

He said under this new approach, the amount of doctors who were actually audited was less than 0.5%.

The department had recognised that  its previous regime had become too disruptive with the net spread to wide for audits, but in this new system, those that were determined to owe a debt, were far fewer and the evidence, by the time a debt was determined, was always robust.

The blue part of the pyramid is where Medicare auditors have changed from considering audit, to sending targeted letters and working with providers to sort issues out before an audit level of scrutiny is required

Notably the 0.5% figure does not include audits initiated as a part of the PSR process. When questioned why PSR audits fell outside the opportunity for sharing debt, Dr Rothenfluh said his department had only been tasked with only looking at “inappropriate practice”. He pointed out that the PSR was a stand-alone agency looking at a different aspect of compliance.

Dr Rothenfluh told practice owners that shared debt scheme was introduced in response to very real cases where a practice or other persons in the claiming process were meaningfully involved, and that the scheme was aimed entirely at introducing a fairer approach to organisational billing practices and recognising that there has been an increase in the role of practices, corporate entities and hospitals in the billing of MBS services on behalf of their doctors.

He said the legislation enforced the view that both parties should take responsibility for ensuring claiming practices were appropriate.

The shift in the focus of audit practices and the reduction in the number of actual audits pointed out by Dr Rothenfluh did not seem to have much of a calming impact on the mostly practice owner/manager audience, howeeer.

Many pointed out to Dr Rothenfluh that regardless of the number of audits, the spectre of action and the likelihood that any claim made by a doctor would now almost certainly come back on a practice as well, would mean significantly more red tape for practice owners in order to protect themselves, and likely lead to some deterioration in the employer-employee relationship.

COVID-19 live update
Something to say?

Leave a Reply

1 Comment on "Debt scheme threatens to divide doctors and owners"

Please log in in to leave a comment

Sort by:   newest | oldest | most voted
Lou Lewis
Lou Lewis
1 year 10 months ago
Jeremy, Apparently this new system re debt recovery is being touted as a ‘reform ‘ ,the reason being that doctors who have inappropriately billed Medicare will be responsible for 65% of the debt and the practice owners will be responsible for the other 35%. This certainly does sound like a ‘strange’ Reform !! If you deliberately defraud medicare you are 100% responsible to repay the money: fair enough. But if someone else in the practice defrauds medicare without your knowledge you are ‘only’ responsible for 65% of the repayments !!!! How the hell is this seen as a great reform… Read more »