Why the shared debt recovery scheme is creating headaches

The scheme is shrouded in legal ambiguity and untested regulations, and that is a major concern

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Some years ago, a cardiologist working out of an east coast hospital, happened upon a recommendation, a warning even, issued to medical practitioners.

The communication, from the Australian Medical Association (AMA), painted an unpalatable scenario that practitioners could encounter, were they not vigilant.

So the cardiologist did as advised, and checked the MBS item numbers being claimed, by the hospital, in his name. After all, better to be safe than sorry.

What he uncovered left him “distraught”, recalled Dr Richard Kidd, then Queensland president of the AMA.

Unbeknown to the specialist, the hospital, under the auspices of the department of internal revenue generation, had been lodging claims that bore next to no resemblance to the work he had carried out.

“The cardiologist discovered they had been claiming things he had never done in his life, things that were worth $10,000 a pop,” Dr Kidd, now chairman of AMA council of general practice, said. 

“No-one from the hospital had checked, no one had said: ‘Are you OK with this item number?’ They just did it.

“We helped him put the record straight with Medicare, but even though hospital staff were making those claims, and generating money for the hospital, it was the cardiologist who wore the brunt of it and had to pay it back.”

That story, Dr Kidd said, and others like it, were exactly the reason the AMA had long been “agitating” to make the system more equitable.

The association had its wish granted on July 1 with implementation of the shared debt recovery scheme, whereby practice owners can now be liable for a “default” 35% of monies owned to Medicare, in the event of incorrect or inappropriate billing.

Yet it’s a scheme that has not been without detractors. As with many government-built structural changes, critics say the devil will be in the detail. If only the detail was known.

The Department of Health introduced the shared debt scheme to reflect the reality that GPs often have no sight of Medicare billings. While clearly responsible for patient consultations, and the treatment administered, the scheme recognises that what is ultimately lodged with Medicare can differ – sometimes wildly, as the cardiologist discovered – from the work carried out.

One observer told The Medical Republic that billings could sometimes resemble the telling of a tale; it becomes more fanciful with each re-telling until it is unrecognisible from the original.

Part of the issue can be traced to the changing nature of billing systems within practices. It’s a change that hasn’t happened by chance.

As the number of solo GP and owner-operated practices has declined, so the number owned and controlled by large, non-medical corporates has risen.

And corporations, such is their nature, often have centralised processes. 

In other words, in the setting of many of today’s medical practices, billings are not in the hands of individual practitioners.

This ownership landscape, health officials say, “has changed the nature and structure of health practice”.

“The shared debt recovery scheme was introduced because Medicare billing may be delegated to non-practitioners, administered through centralised billings areas and can be influenced by organisational process and policies,” a department of health spokesperson said in a statement to The Medical Republic. 

“These organisations may be in a position to control or influence how claims are made and may receive a direct or indirect financial benefit whether claims are correctly or indirectly made. In some instances this has led to incorrect billing practices.”

Out of this logic, the shared debt idea was born, with the department insisting neither the individual GP nor “any other party” is entitled to benefits for providing “false or misleading statements”.

“It is appropriate both parties are held responsible for repayment of the debt,” the spokesperson said.

Holding the correct people to account is hardly a radical idea. As RACGP President Dr Harry Nespolon, said: “If you are doing the wrong thing as an owner or a GP you should be pinged. If you’re not, you shouldn’t.”

Rarely, however, in situations like this, is anything quite so cut and dried. Legal ambiguity, and untested regulations make sure of that.

According to Dr Nespolon, it is unclear exactly where responsibility starts and stops for practice owners, with too many aspects of the scheme open to interpretation.

Among the fears, he said, is that owners would be continually dragged into disputes and told they “should have known” there was consistent billing errors from one of their GPs.

“Practice owners should not have to be in the position where they have to act in a regulatory capacity.” –

  IPN’s Dr Ged Foley

Coupled with that perception, real or otherwise, are concerns that owners are being forced, in effect, to act as auditors, compelled to scrutinise the working practices of their doctors.

“In my view, unfairly, the legislation is trying to turn medical practices into mini PSRs (Professional Services Review) or mini Medicares,” Dr Nespolon explained, adding that his practice now requires doctors to sign off all MBS claims before they are lodged with Medicare.

But even that is fraught with uncertainty. If, for example, a doctor has claimed a host of level C consultations, which is later ruled as somehow inappropriate, where does responsibility now lie? 

Previously, the GP carried 100% of the blame. It is felt that under the shared debt scheme, owners could now be liable for 35% of the debt – the government’s “default” amount for owners – for failing to detect what Medicare believes were unusual billing patterns.

Dr Nespolon argued it was not up to practice owners to police what its individual GPs are doing. 

“I am not sure as an owner that I  should be held responsible for GP’s marginal decisions. I have moved doctors on who have billed too liberally, shall we say, but there is a broad range of what is regarded as normal practice. Who makes that decision? Who says what is right and wrong in these marginal cases?

“You could argue that I am old enough and experienced enough to know, and I understand that. But what if you’re a young practice owner?

“Taking the argument further, the item numbers are not particularly clear. I don’t think it’s my job to somehow compare one practitioner against another. I agree there is a role for owners to have responsibility for calling out extremely irregular billing. The question is, where is that line? 

“A lot of people may not practise like you, but if you reprimand every doctor who doesn’t practise like you, you’ll soon become a solo GP. There are variations in billing in every practice, and there shouldn’t be this feeling that just because one doctor is billing more than another doctor that they are doing something wrong.”

If the relationship with the GP was contractual, rather than direct employment, that becomes even more legally problematic, Dr Nespolon added.

“I can’t tell my contractors what to do. I don’t have command and control, they are not employees,” he told The Medical Republic. “So already, as an owner, I am at a disadvantage.”

It’s a view shared by Dr John Deery, chairman of the Australian GP Alliance which represents practice owners. He argued that conflicts will emerge as GPs will inevitably look to offload a portion of the debt to practice owners, regardless of the measures owners have taken to mitigate their risk.

“You can change contracts to state individual GPs are responsible for their billings, get doctors to sign off what they are claiming, and you can meet with GPs if you are concerned about their billing practices,” Dr Deery said. 

“These are all steps you can take as an owner to mitigate risk. But legal teams will always try it on and the practice owner will always get chased.”

Proponents believe the unequitable nature of the current system already creates conflict. Being asked to repay 100% of overbilling debts, even when blame does not rest solely with the provider number, has, to say the least, not sat well with GPs.

In addition, it is claimed GPs are “encouraged” to inflate their billings by business owners fixated with profits.

Dr Kidd, from the ANA, acknowledged that owners fear being held accountable as a matter of course. But such fears were unfounded, he said, arguing the framework was in place to ensure fairness.

“The reality is that in general practice over the past decade or more, vulnerable GPs have been put under increasing pressure by practices to claim inappropriately or, like the cardiologist in the hospital, practices have been claiming on behalf of the GP,” he said.

“To get some balance, under the shared debt scheme, it must be demonstrated there was something in how the contract was written or evidence that the GP was being exploited, that Medicare claims were being done without the GP’s knowledge, or that the GP was not permitted to see what billings were being done in their name.”

Practice owner Healius, formerly Primary Health Care, declined to comment because of its “heavy workload”. But another multi-location owner of medical centres, IPN, stressed that practice staff and practice processes “should not drive billings”.

Only individual practitioners should have responsibility for Medicare claims, chief executive Dr Ged Foley said, with MBS items numbers across its sites “used completely at the discretion of individual clinicians”.

“One of Medicare’s projects has been to get some consistent information. Let me tell you, you don’t.” –

  RACGP President Dr Harry Nespolon

Reflecting the concerns of others, Dr Foley criticised the share debt scheme for its potential to create divisions and cause confusion. “In the event of a Medicare audit, there may be an expectation that the owner will automatically be responsible for part of the debt,” he said in a statement to The Medical Republic. 

“Our understanding of the guidelines is that, when billings are under the direct control of the clinician, practice owners will not be required to contribute to the repayment of the debt. Nevertheless, this legislation and how it’s applied, has the potential to severely damage the relationship between practitioners and practice owners.”

He added there were no plans to overhaul IPN’s billing processes.

Dr Foley warned fellow practice owners to review agreements with their contracted doctors to avoid potential conflict.

“Practice owners should not have to be in the position where they have to act in a regulatory capacity, as this would have a significant impact on clinical autonomy and patient confidentiality,” he said.

For its part, the Department of Health predictably played down the threat of unrest, claiming many practitioners and practices “already work together to ensure correct billing and have systems in place to deal with incorrect claiming”.

Furthermore, where there were “clearly defined responsibilities” and “appropriate corporate compliance frameworks” that recognise the doctor as primarily responsible for correct billings, “any potential conflict will be minimised”, it said.

Despite the remarks, and IPN’s confidence in its processes, Dr Nespolon said many owners were “sweating” over being implicated, and held responsible for bad GP practices, whether the GP had billing control or not.

“What you can see happening is a ruling that the doctor has been involved in poor billing. But the determination may also say ‘the practice should have been able to see what was going on and is therefore responsible’,” he suggested.

“If you have five practitioners, four of whom are billings $200,000 and one $500,000, shouldn’t you know that as a practice owner? Perhaps I am not a good owner, but I have no idea how much my GPs bill.

“To me, it is a true contractor relationship and they can do whatever they like. But this is where it could get difficult. It depends how it’s interpreted.”

Whatever the vagaries of the system and legal ambiguities, taking the heat exclusively off GPs will offer at least some respite for such a beleaguered workforce. 

Morale wasn’t helped when the Professional Service Review (PSR) stepped up its efforts to clean up dodgy Medicare claims in 2017-18, raising debts of almost $21 million, double that of the previous year. 

While GPs alone were not targeted, they felt the pressure as much as anyone.

Asked whether the PSR has become “better” at detecting irregularities, Charlotte Hespe, Associate Professor and Head of General Practice and Primary Care at the University of Notre Dame, said: “It depends what you think is “better”. 

The PSR has certainly done a targeted job, and are “going for it” shall we say, but a lot of GPs now won’t claim certain item numbers even though they do the work, because they don’t want to run the risk of being picked up.”

Senior radiologist Tom Macdougall, joint owner of two practices in New South Wales, described Medicare’s item numbers as among “the vaguest things in the world”.

“You do something because you think it fits the rules, so you phone Medicare and ask: ‘Is this OK?’ and they say: ‘Yes, it might be’.

“You phone the next day for clarification and they say it might not be OK. It’s contradictory advice. But they never take responsibility, it’s never their fault. It’s always your fault.”

“You do something because you think it fits the rules, so you phone Medicare and ask: ‘Is this OK?’ and they say: ‘Yes, it might be’.” –

  Radiologist Dr Tom Macdougall

Dr Nespolon recognised that items numbers were a perennial problem. 

“If you’ve got a problem with billing you keep ringing Medicare until you get the right answer. That is truly what happens. One of Medicare’s projects has been to get some consistent information. Let me tell you, you don’t.”

An increase in referrals of practitioners who billed large volumes of urgent after-hours consultations was partly behind the PSR increase last year. It is also these after-hours billings which are thought to have accelerated the introduction of the shared debt scheme.

“Doctors were the ones found responsible, but they weren’t doing the billing,” Dr Deery, from the Australian GP Alliance, said.

Yet despite the PSR’s performance, the body will, oddly, have zero oversight of the shared debt provision. 

It will, instead, be applied only when the Department of Health conducts a post-payment Medicare compliance audit and unearths “false and misleading statements”.

Quite why the PSR has been excluded from the process is unclear, with medico-legal advisers surprised at the move.

Asked about the structure, the Department of Health said: “The existing compliance roles of the Department of Health and the Professional Services Review are distinct and have not been changed by the introduction of the scheme.

“Cases are referred to the PSR by the CEO of Medicare where there are concerns about potential inappropriate practice. Practitioners are subject to an audit or referral to the PSR, but not both for the same services.”

In other words, it seems where “inappropriate practice” is suspected and the PSR gets involved, no shared debt provision is permitted. In suspected cases of “false and misleading” practice, detected through an audit, it is.

Fundamentally, a finding of inappropriate practice refers to the practitioner’s actions alone, whereas false and misleading behaviour – under which a shared debt finding can be made – can be the fault of the GP and the practice.

For the time being, GPs and practice owners must sit back and watch it unfold.

 Only when the first cases are heard will a clearer picture emerge.

But it shouldn’t be this way, argued Dr Nespolon. “We’re going to see how this works, but unfortunately it’s going to be reactive rather than pro-active. It shouldn’t be ‘it exists’. That’s not good enough, in my view.

“They needed to provide example cases and how they are going to interpret the scheme. Owners, and GPs, deserve prtotection.”