21 September 2021

Medicare: how it started, how it’s going

Comment KnowCents Medicare

In 1975 when Medibank (later Medicare) was first introduced, the regulatory landscape was pretty simple.

Forty-five years later, it has morphed into a twisted and snarled morass of incoherent laws and other legal instruments, so complex and mercurial it would be beyond the comprehension of anyone.

The original Medicare scheme was built on strong constitutional foundations. It comprised little more than an important new Act of Parliament, the Health Insurance Act 1973 (Cwth), plus a few additional elements that doctors were required to navigate, such as various contracts, worker’s compensation arrangements, and a new policing system called the Medical Services Committees of Inquiry. A lot has changed, mostly in the past 20 years.

The way laws intersect, overlap, and sometimes disagree, interests legal academics. My Medicare PhD was positioned largely through a legal lens because I had found myself referencing these laws daily as part of my job. One day, after going through all the historical data and in order to clear my mind, I drew the original medical billing compliance framework on a whiteboard. It was pretty straightforward.

Further along my doctoral journey, I stood in front of the same whiteboard, but this time I drew the connections between every law and each legal instrument that I am required to reference and use every day at work, and I ended up with this … sobering.

I have conservatively estimated that this regulatory gordian knot, of important medical billing laws and critical rules that doctors are expected to know, or be familiar with, would extrapolate out to well over 20,000 pages.

By comparison, a key business law, the Corporations Act 2001 (Cwth), with a relatively modest 3,000-plus pages, has been declared so prolix and incomprehensible by the legal profession, that it is currently undergoing a 10-year law reform process.

But it doesn’t stop there: in 2020 alone, 255 statutory instruments were added to the Federal Register of Legislation with the words “Health Insurance” in the title, and only 53 of those were covid-19 related. Therefore 202 statutory instruments relating to “Health Insurance” were enacted in one year alone, all of which impacted medical billing compliance in some way.

So, of course compliance is impossible.

Even if you can find the law that applies to particular conduct, it is often incomprehensible. And a system this shambolic is very vulnerable to misuse, both deliberate and unintentional. There are regulatory gaps everywhere.

Attempts to address compliance problems have been clumsy and unsuccessful. This is largely because, in the same way that having a bit of a crack at cardiac surgery is unlikely to go well without having a deep understanding of human anatomy and physiology, having a crack at reforming health system law will also go badly without understanding the operation of the system in its entirety.

I will never forget the day when a furious hospital client yelled at me, demanding to know what on earth we thought we were doing changing an MBS item number allocated by a surgeon. We administered the accommodation coding and billing for that client not the medical billing – who knew those things were even interrelated? So, when the subsequent root cause analysis investigation revealed we had made an innocent error caused by mismatched ACHI (Australian Classification of Health Interventions) and MBS codes, I began to understand just how far the ripples travel, when changes are made to a part of our health system by people who do not understand, or have to administer, the operation of the whole.

The one common thread in this labyrinth is the ubiquitous MBS, our list of trusty item numbers. It is everywhere, in every nook and cranny of the health system. The MBS is the start point of every clinical encounter in this country, and the first code allocated to kick off a patient journey. Everything is connected to it, whether directly or indirectly – the AMA codes, Workcover billing rules, ACHI codes, the National Health Reform Agreement, everything.

So, as our bedrock dataset, central to the operation of the entire health system, the MBS needs to be gracefully integrated into Australia’s overarching digital health strategy.

Having focused on the current distress and confused tangle that is our current national universal healthcare system, Medicare, in forthcoming articles I will outline how we could disentangle it and achieve comparative order and clarity.

It will take a village, but what a relief it would be for patients, providers, payers, and administrators if it looked more like this:

Margaret Faux is a health system administrator, lawyer and registered nurse with a PhD in Medicare compliance, and is the CEO of AIMAC, which offers courses and explainers on legally correct Medicare billing

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13 Comments on "Medicare: how it started, how it’s going"

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GEORGE QUITTNER
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GEORGE QUITTNER
26 days 15 hours ago

I started an ITEM NUMBER REVOLT in about 1985. Gathered a few hundred supporters. For over a year I only described my service in “PLAIN ENGLISH” Refused to use item numbers. Medicare hated me and tormented my patients. Cured me of tilting at windmills.

John Davis
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John Davis
29 days 6 hours ago

Georgian knots need Alexandrian solutions: forget Medicare, private bill and let thousands of patients descend on Centrelink.

Margaret Faux
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29 days 5 hours ago

Duly noted John. The evidence suggests many of your colleagues are doing precisely that, and I completely understand why.

Michael Kozminsky
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Michael Kozminsky
29 days 6 hours ago

I believe Medical started March 1974 no t1975, when I was a first year resident

Margaret Faux
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29 days 5 hours ago

Nope. 1 July 1975 was the official start date of Medibank.

Jonathan Levy
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Jonathan Levy
29 days 13 hours ago

“So, of course compliance is impossible.”
At its very heart, compliance is about doctors behaving honestly and applying common sense to where gaps may appear in the Schedule descriptors and explanatory notes.
Problems exist but compliance is certainly NOT impossible.
BTW, subscriptions to AIMAC’s education range from $1200 pa to $2100 pa.
Vested interest much?

Margaret Faux
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29 days 10 hours ago
The evidence does not support this view unfortunately Jonathan. Your colleagues who participated in various phases of my PhD do not agree. Am I going to wait and do nothing hoping the government will one day take the action that the evidence demands? No, I definitely am not. I am very proud of our AIMAC courses, but it might surprise you to know Jonathan that I have actually recommended in my thesis (again, based on the evidence) that a national curriculum be developed and administered independently by relevant government authorities. So AIMAC, and other similar providers would become redundant. But… Read more »
David Dahm
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29 days 16 hours ago
I have at the the 2011 PSR Federal Senate Inquiry been lobbying for public rulings, like the tax office issue. At the time the Senator Eric Abetz had come up to me agree with this approach. The reality is there is no appetite for rulings. They tried with with Administrative Position Statements (APS). At the time it they rarely targeted the audit areas. The AMA showed little appetite for a professional led by the Colleges approach. I would be surprised if there would be any engagement, unless doctors truly felt there was a crisis. For mostColleges it is in the… Read more »
Margaret Faux
Guest
29 days 10 hours ago
Hi David Great to see you engaging on this topic which I know has been a passion of yours for a very long time. My thesis discusses the senate enquiry, which of course was captured in the required literature review. And the written rulings concept was derived from that suggestion – it’s all explained in my thesis. But it is only one of 27 recommendations and on its own, will only address part of our problems. If I had to pick one recommendation to implement, that would not be the one. As you know, I do not agree with your… Read more »
David Dahm
Guest
29 days 5 hours ago
Hi Margaret, as you will see, I have written beyond the tax ruling solution out of frustration. It is far broader, comprehensive and encompasses the legal only solution. Logic prevails it is important to define appropriate healthcare standards by clinical peers before designing a billing system. This would constitutionally simplify and address your concerns with Bolam, et al. principle and RACGP v Commonwealth,1980 decision. I am not sure if covered this part in your thesis. Medical billing is a secondary level issue. First build the car before pricing it. One needs to have peer reviewed commonly agreed healthcare standards first.… Read more »
Margaret Faux
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Margaret Faux
29 days 3 hours ago
Sorry to tell you this David but there are already international standards. I didn’t know about them either until I was far into this journey. There is a whole profession of international experts whose sole job is to write the clinical terminologies that are standardizing the global language of health. It’s been going on for two decades and is well advanced. Their work is incredible. It is delivering consistent meaning to the words we use in the health sector. My work in other countries is where I learn so much about this and how the whole world is aligning to… Read more »
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