November 16, 2024 | Age, The/The Sunday Age (Melbourne, Australia) | Melissa Cunningham | CRIME AND JUSTICE REPORTER | Page 6
Dozens of anaesthetists and surgeons have been accused of systematic fraud, double-dipping and pocketing off-the-book fees in a damning whistleblower complaint that has sparked probes by a federal regulator and private health insurers.
The complaint centres on allegations that a group of doctors based on the Mornington Peninsula have been charging patients hidden out-of-pocket costs up to $5000, disguised as booking or administrative fees, for personal financial gain.
At the same time, the specialists were purporting to participate in no-gap-fee schemes with health insurers.
Health insurers are now investigating the allegations and urging tens of thousands of Australians who have had surgery in private hospitals to check if they have been correctly billed under no-gap-fee arrangements.
The allegations have also triggered a probe by the federal government’s Benefits Integrity Division, which investigates claims of health and Medicare fraud.
The federal regulator probe is investigating allegations the specialist doctors “bulk-billed” their services and pocketed rebates from Medicare – while also charging individual patients for services such as consultations.
Bulk-billing and charging a separate gap fee for the same service is illegal. Separately, under no-gap-fee arrangements, specialists such as anaesthetists and surgeons receive higher rebates from private health insurance funds if they sign a contract agreeing not to charge a gap fee.
The whistleblower alleges the specialists signed these agreements and were breaching those contracts.
She alleges that during her employment at a Mornington Peninsula medical clinic, which spanned a decade,
about 90 per cent of patients were stung with out-of-pocket costs – despite the no-gap-fee arrangements.
These hidden fees spanned from $500 to charges of up to $5000, she alleged. “I am shocked that I have been part of a scam and was absolutely distressed … I do not wish to be branded a criminal or have a criminal record and be out of work,” the whistleblower, who is not identified, wrote in the confidential document seen by The Age.
“I brought this concern up to my superior, who told me not to worry because they have been doing this for more than 10 years and everyone including the specialist surgeons we look after are doing it. ‘It can’t be wrong if anyone is doing it!’ ”
“She told me that the patients are happy because we are splitting the cost of the service and claiming the NO GAP portion directly from the health fund and Medicare.”
The complaint alleges the out-of-pocket fees were kept off the books and not documented in the patients’ insurance paperwork.
“I am concerned about the practice … This is illegal and immoral,” the whistleblower wrote. “I am now convinced that NO GAP means NO GAP and not ‘pretend NO GAP’, with out-of-pocket costs hidden as booking fees or administrative fees.”
Private Healthcare Australia confirmed health insurers were notified of the allegations against nearly 50 doctors in one part of Victoria.
The allegations are primarily against a group of anaesthetists and surgeons, but also involve an obstetrician and a gastroenterologist. However, it has also stoked fears about more widespread medical fraud.
PHA chief executive Dr Rachel David urged consumers to examine their medical bills and see if they had been charged a fee while being bulk-billed or treated under a “no gap fee” arrangement with their health insurer because they may be able to take action against the providers.
“These allegations are deeply disturbing because of the trust patients put in their specialist doctors,” David said.
“When you seek the help of a surgeon and an anaesthetist, you are typically at your most vulnerable. You do not expect them to be exploiting you financially at the same time.”
David said the allegations suggest the specialist doctors were “shadow billing” – a practice whereby
consumers are billed unknown amounts of money. This income is not reported by clinicians to other payers,
including Medicare and insurers, so it can be publicly recorded.
Last year it was estimated Medicare fraud and non-compliance by doctors were costing taxpayers up to $3 billion a year. An independent report into non-compliance also warned that Australians risked losing billions more to rorts in an overly complex and opaque system that needed urgent reform.
“Medicare needs to urgently investigate these allegations to ensure taxpayers are not footing the bill for wide-scale fraud in our private health system,” David said.
PHA said one survey by a major health fund recently found about 31 per cent of its more than 4000 members had potentially been ripped off after paying a fee despite no-gap arrangements. The health fund is still working through the cases to determine the extent of overbilling.
The whistleblower complaint also alleges that a culture of pocketing additional fees is rife among locum specialists, sparking alarm among medical experts who want greater regulation and transparency around medical billing.
Associate Professor Joanna Sutherland, who chairs the safety and quality committee of the Australian and New Zealand College of Anaesthetists, said the medical billing system lacked transparency and was skewed towards clinicians making a profit.
“If these allegations are found to be true, in my view, that’s outrageous, unethical and it would be
unacceptable,” Sutherland said.
Sutherland said the lack of transparency in Australia’s health billing system meant it was impossible to determine how widespread the practice of inappropriate billing was. “Consumers are ripe for exploitation,” she said.
Medical fraud and compliance expert Dr Margaret Faux said the complaint contained allegations of
“misleading, deceptive and unconscionable conduct”, and she feared consumers were being financially exploited during a national cost-of-living crisis.
“There’s a whole lot of potential illegal conduct detailed in this letter,” Faux said.
“There’s evidence of potential fraud. There’s also likely breaches of contract between the doctors and health insurers, there are also almost certainly breaches of the health practitioner national law, but the consumer law breaches are potentially very serious.”
Faux said the conduct detailed in the whistleblower complaint could only have been written by somebody who had personal experience and knowledge in the area.
“In my experience, this conduct is widespread,” Faux said.
Australian Society of Anaesthetists president Dr Mark Sinclair said he had no knowledge of the allegations until contacted by The Age.
He said the specialist doctors’ group stood by its position that the overwhelming majority of services performed by anaesthetists were billed appropriately. “Anaesthetists are free to bill a patient however they wish, while of course observing the best possible informed financial consent practices,” he said.
The ASA has a position statement on informed financial consent, and Sinclair said it regularly worked with Medicare compliance officials to ensure anaesthesia claims were correct.
“Where concerns have been identified in the past, these were communicated to the ASA and investigated by both bodies,” he said.
Royal Australasian College of Surgeons president Associate Professor Kerin Fielding said while she was unable to comment on the specifics of any individual case, the college takes allegations of this kind “very seriously”.
“Our fellows understand that patient care is at the core of what we do, and our reputation is key to that,” Fielding said.
“More generally, we strongly refute any suggestion that unethical practices of any kind are commonplace or widespread for RACS members.”
The college has also published a position paper on surgeons’ fees, including principles around informed financial consent, stating any charges “should be reasonable, justifiable and proportionate with no hidden booking or administration fees”.
David and Faux said the allegations called into question the accuracy of publicly reported statistics, including data from Medicare and the Australian Prudential Regulation Authority.
“We need the regulators to step up here and if there is criminal conduct, such as fraud, we need the
Australian Federal Police to be involved,” Faux said.
Anaesthetists and surgeons are frequently listed among the highest-paid jobs in Australia. In the last financial year, surgeons pocketed the highest national income, averaging earnings of more than $460,000 a year, followed by anaesthetists, who came in second with average earnings of $431,193.
ANZCA’s Sutherland, who worked as an anaesthetist for more than two decades, said that while she never witnessed the practice of unethical billing, rumours of it had swirled for years.
Sutherland, who was also a member of the Medicare Benefits Schedule Review Taskforce that discovered a litany of questionable billing practices during a probe in 2020, wants a crackdown on billing in Australia.
“The way it’s set up, there’s an asymmetry of knowledge so that the clinicians, the doctors, understand the system and they can work it to their advantage,” she said.
A spokesman for the federal Department of Health and Aged Care said it was unable to share details of its compliance investigations, including probes still underway.