Bring out your dead (and bill them to Medicare)

5 minute read

The system is milked by the unscrupulous while innocent doctors are hounded. We need reform before rebates can rise.

Many years ago, a geriatrician asked me whether he could bill for signing a patient’s death certificate.

I dutifully explained the correct legal position, which was that he could not if that was all he did, but according to Medicare, if he had attended to determine whether life was extinct, he could bill the appropriate attendance item. His pithy reply came: “Well, they asked me to come and see if she was dead, and she was, so can I claim it?”

Medicare’s longstanding description of what you can and cannot bill around the moment of death has always been unhelpful and confusing. But let’s be clear: it is not possible to provide a clinically relevant service to a patient (which the law defines as a service that is necessary for the treatment of the patient) if the patient is dead.

Additionally, a longstanding and sound health policy position prevents billing for removing organs for transplant into another human (irrespective of whether the donor has just died or is alive) because the clinically relevant service is provided to the recipient, not the donor.

Every now and then we see Medicare claims rejected because the date of service is after the patients’ date of death. The cause is usually that the doctor has two patients with the same name and the wrong one was accidentally billed. Once or twice, I have also seen the date of death incorrectly recorded at Medicare, but these scenarios are rare. More often, billing for dead patients is straight-out fraud.

Quite recently, a GP successfully appealed a decision that had landed him in jail for billing dead patients. He had served nine months of a four-year prison term before an appeal set him free. And if you read the PSR monthly case outcomes, you will see frequent reports of both GPs and specialists billing for services they did not provide, and sometimes billing dead people. The recently departed PSR director also confirmed that the agency deals with doctors who bill the dead, calling it out as fraud.

So, why aren’t more of these fraudsters in jail, and what can be done to fix it?

Well firstly, fraud is a criminal offence attracting the highest evidentiary burden – beyond a reasonable doubt (BRD) – and it has to be proven for each individual claim, rather than being applied across a doctor’s whole universe of claims (the PSR’s usual MO). So, it usually makes no financial sense to run criminal proceedings for $39 claims, especially when the doctor will often mount a successful defence of ignorance.

It is these precise problems – small transaction values and fraud being a crime attracting BRD – that caused us to end up with the PSR in the first place. It was thought that using extrapolation, and building rules like the 80/20 rule, would overcome the problem of having to prove the veracity of each individual claim. At least the government would be able to claw back money that should never have been paid, even if it couldn’t put criminals in jail.

But the PSR only reviews about 100 practitioners per year, representing about 0.08% of all AHPRA-registered medical practitioners. Barely a sliver. And while a few who are caught are criminals, others have just made genuine mistakes thanks to incomprehensible rules.

No surprises, therefore, that my research found the majority of non-compliant billing goes unchecked. For example, in my doctoral thesis I have listed 25 common types of non-compliance, and I know where each of those 25 things are happening, but I am almost certain the government does not.

So, what we have is a failed policing system where some very good clinicians are having their lives destroyed for unintentionally breaching an unknown rule, while doctors who are more cunning with their billing, and sometimes also clinically dangerous, fly under the radar. I see both all the time, and the area of cosmetic surgery has been particularly disturbing.

Every single record I reviewed in the course of the recent cosmetic surgery investigations included evidence of non-complaint Medicare claims. Medicare does not reimburse cosmetic treatments and procedures because they are not clinically relevant – the patient does not need them. Yet I saw everything from anaesthetics, abdominoplasties, GP and specialist consultations, fictitious skin procedures, fake referrals, and dodgy pathology and diagnostic imaging claims.

None of it will ever be picked up by the department without a tip-off, and if you extrapolate it across the multi-billion-dollar cosmetic industry, it will likely add up to a considerable proportion of the approximately $7 billion that I estimate is currently leaking from Medicare.

Imagine if we could rein in the cosmetic cowboys and others who wilfully plunder the public purse, and redistribute that money to increase GP rebates.

Well, with some swift regulatory reform, digitisation, and the coding of non-admitted patient encounters, many of these problems can be solved, or significantly reduced. With just a little bit of extra data added to each claim, we can stop incorrect claims for things like cosmetic surgery and consults on dead people before they are paid, saving everyone time and money.

What we must not do is increase Medicare rebates until the system has been brought under control. Perhaps with fresh faces and the right skill mix on the new government’s promised Strengthening Medicare Taskforce, we can make this happen.

Dr 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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