Hospitals called out for named referral rort

Buried in the National Health Reform Agreement mid-term review is some hope for GPs sick of being asked to re-send referrals.

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A day of reckoning is on the way for public hospitals that have been “double dipping” – i.e. requesting named referrals and billing the MBS for services already paid for under the National Health Reform Agreement.  

The long-awaited final report from the NHRA mid-term review was handed to a national meeting of health ministers at the end of October but wasn’t released publicly until last week.  

Technically speaking, the agreement does not directly touch general practice – it’s between the Commonwealth, state and territory governments and dictates who pays for what when it comes to public hospitals.  

In reality, general practice does feel the impact of the NRHA. One of the more visible effects of the agreement when it comes to primary care is in the requests for named referrals to public hospital outpatient clinics.  

Section G19 of the agreement allows eligible patients presenting at a public hospital outpatient department to be treated free of charge as a public patient unless the patient has been specifically referred to a named medical specialist who is exercising a right of private practice and that patient chooses to be treated as a private patient.  

Section G17, meanwhile, prohibits public hospitals from controlling referral pathways in such a way that patients are denied access to free public hospital services.  

When a hospital sends a request for a referral to be named to a specific doctor, that patient’s care can be invoiced to the MBS, meaning the hospital saves a bit of its own money.  

Patients are often bulk billed in this arrangement, so the only person that really ends up worse off is the GP dealing with a flood of requests for named referrals. 

As per G17, the hospitals can’t actually enforce named referrals as a requirement for care – GPs are free to refuse these requests. 

With that context in mind, the NHRA review report’s section on Medicare Principles makes for interesting reading. 

“Although the NHRA allows patients to opt to be treated as private patients in a public hospital, concerns have arisen in consultation at what is considered a lack of transparency in informed decision-making,” the review said.  

Some providers, it added, have established procedures and business models that funnel public hospital patients toward private – i.e. MBS – funding options.  

The review cited “some evidence” to suggest health services have not taken enough action to ensure their private billing activities comply with the NHRA’s standards for patient consent.  

“These funding arrangements reflect complex interactions with rights of private practice and ultimately have implications for attraction and retention of a medical workforce,” it said. 

“While states and territories are not mandated to offer all potential public hospital services at every location, instances like the replacement of emergency care or non-admitted services with privately provided services can impact the capacity of patients to access treatment free of charge as public patients and do not always result in financial outcomes that benefit the jurisdiction as a whole or the patient.”  

To that end, the report also investigated specific instances where hospitals received duplicate payments via the NHRA and MBS annually since 2018.  

These payments are estimated to account for up to $400 million annually, but the reviewers were unable to reach an exact figure due to variations on how different jurisdictions report on outpatient services.  

In the end, the report recommended implementing processes to ensure accountability when electing private patients, including that patients go through rigorous informed financial consent processes and an explicit requirement for recording private patient election for outpatient services.  

It also recommended standards for recording public hospital funding from all sources to create a clearer picture of how money is flowing through the system.  

Dr Emil Djakic, a member of the RACGP’s expert committee on funding and health system reform, told The Medical Republic that the practice of hospitals double-dipping had long been a concern for the college.  

“A public patient going along to a public clinic should have the expectation that their services are going to be delivered under the existing national health and hospital funding agreement with no out-of-pocket costs for them,” he said.  

“The fact that we’re clearly seeing an attempt to create a grade of publicly funded services which are being billed to the MBS, outside of that agreement, is of concern.” 

While most patients remain unaware of the practice, Dr Djakic said, it raises the ire of GPs. 

“As a GP the one thing I hate doing is doing something twice,” he said.  

The 44 other recommendations made in the report range from formulating a recovery plan for the ongoing impacts of covid-19 to developing bundled payments focussed on maternity to auditing existing health related agreements.  

Another GP-centric recommendation looked at widening section 19(2) exemptions, which allows doctors to accept other funding alongside bulk billing.  

This has specific promise for doctors working in rural areas with “thin and failing” markets.  

All in all, Dr Djakic said the college considered the review a missed opportunity for valuing general practice.  

“This is an experience that general practice suffers a lot from both states and [national] governments,” he said.  

“They tend to talk in great detail about the bits of the system, they directly administer … but the 40,000 GPS and 20-30,000 nurses involved in general practice across the country are invisible.” 

Speaking after National Cabinet on Wednesday last week, Prime Minister Anthony Albanese endorsed some aspects of the review report, mostly around funding. 

It’s unclear whether all recommendations were accepted.