Dr Margaret Faux estimates up to 30 per cent a year is leaking from the Medicare system.

Dr Margaret Faux estimates up to 30 per cent a year is leaking from the Medicare system.Credit:Janie Barrett

“I’ve asked Dr Philip to measure and report on the true extent of non-compliance in Medicare and identify fixes to protect the integrity of the system,for all who use it,” Butler said.

Philip’s interim report,to be completed by the end of January,will consider whether regulation,enforcement and compliance settings are adequately balanced against policy and service priorities.

“This is to be informed by an assessment of the levels of potential non-compliance and the department’s current compliance framework and approach,” the terms of reference said.

Butler said in a statement the independent review would provide an evidence-based estimate of the likely value of non-compliance in Medicare.

“Australians know that the overwhelming bulk of Australia’s doctors and health professionals are honest,hardworking and comply with Medicare rules. But they also understand that,after nine years of cuts and neglect,every dollar in Medicare is precious and must be spent directly on patient care.”

The terms of reference include finding ways to reduce the risk of fraudulent billing or over-servicing before payments are made.

Under the current system,which is based on an honour system where professionals are assumed to bill correctly,payments are made to health practitioners without proof of service and only chased if there is evidence of inappropriate billing.

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