2023 | Volume 24 | Issue 2

There is a problem with item number misuse


Author: Dr Mark Allison, FRACS

Recently there has been considerable publicity in the media concerning alleged rorting of Medicare by doctors. This was said to be based Dr Margaret Faux’s PhD thesis, which I suspect had not been read by the journalists involved. This 400 odd page long document dealt with the complexity and inconsistencies within Medicare, among other things. Overall, it is sympathetic to the profession.

Unlike some, I found that the claim that up to $8 billion was wrongly claimed from Medicare every year not entirely implausible, based on my own experiences. However, nowhere in her thesis does Faux claim this. More than 10 years of medico-legal assessments has led me to believe that the problem of item number misuse is far from uncommon. Only occasionally was I asked specifically to look at charging, and in most of those cases the item number misuse was blatant and clearly fraudulent. One classic was a bill for $48,500 for the unwarranted revascularisation of a ring finger avulsion in a manual worker. Adding to this figure, among other things, was not only for four microvascular grafts (an unlikely number), but also the micro-anastomosis of each end. I could relate a multitude of other entertaining examples.

One got a fair idea of what was being charged, in general, because those who unbundle tend to spell out exactly how they are doing it. Do they think that by listing the items in a report will justify the unbundling and will hoodwink the non-medical people in the insurance offices? Alas, it mostly does. This medico-legal work did not involve Medicare of course, but I have seen enough evidence to have good reason to believe that the situation is of little different in non-insurance medicine.

As Professor Owen Ung pointed out, the Medicare schedule of rebates has fallen behind the cost of running a practice, and there is an increasing gap between Medicare rebates and the Australian Medical Association (AMA) fees. 

The health funds largely follow Medicare and are nowhere near the AMA fees. This, combined with the pressure to leave the patient without a gap, has led, I believe, to an increase in unbundling. This is often to the extent that the doctor is making more than they would, charging the full AMA fee using the correct item numbers. That may be a temptation, it is not an excuse. If a doctor believes their services are worth more, charge more, they should explain it to the patient. The College hierarchy often and rightly rail against patients being left with large gaps, especially those in vulnerable situations. This behaviour is not however illegal. The College is almost completely silent on the question of item number misuse which, in some cases, is criminal.

Both Professor Frydenberg and Professor Ung cite the complexity of the Medicare schedule leading to administrative errors as a cause of incorrect use of item numbers. Is the Medicare schedule really so complex that inadvertent errors are being made often enough to cause a significant problem, especially in surgical practice? It is disingenuous to believe that people, who have managed to get into and through medical school and beyond, cannot work out what item number to charge for most procedures. Furthermore, if these were just administrative errors it should cut both ways—with both under and over charging. I’ll wager there is not much under charging going on.

As to the recent changes in Medicare being inadequately communicated—that is recent, but the problem is long-standing. In any event, one of the main reasons for the review was the very problem of unbundling.

This is a problem that the profession must own and deal with before it is dealt with for us. It is however, not only our problem, the insurance companies and Medicare must also act. They likely have the statistics to do so.

I wish Dr Pradeep Phillips the best of luck with his review. I suspect he will be looking for patterns and outliers, but these may not appear if unbundling and other misuses of item numbers are as frequent as I, and many others, believe it is.

Read our article on Surgeons question Medicare rort claims here: bit.ly/3nzHOBG