Philip described Medicare’s legislation,governance and systems as not fit for purpose and called on state governments to investigate the opaque billing arrangements of public hospitals amid claims by medical specialists that they have little or no visibility of what is billed in their name. “This is a matter for further investigation and discussion with states and territories beyond this review’s timeframe,” he said.
He also found that only a small proportion of Medicare’s payments were scrutinised or analysed,which raises questions about the looseness of the system. “The lack of continuous monitoring and analysis of the 500 million transactions a year is a growing area of vulnerability,” he warned.
In simple terms,the former head of the Victorian health department and now lead partner at Deloitte Access Economics declared an overwhelming lack of scrutiny had left “the gate wide open to fraud”.
Philip tried to put a dollar figure on non-compliance,estimating it at between $1.5 billion and $3 billion a year,but acknowledged that a lack of available data,limited desktop analysis,short time frame and “conservative” definitions of non-compliance and fraud meant a definitive analysis was impossible.
In other words,it was a guesstimate but one he said would quickly balloon by many billions of dollars if effective controls,systems and education weren’t urgently put in place.
Philip’s report was triggered bya series of reports byThe Sydney Morning Herald,The Age and the ABC’s7.30 which uncovered flaws in Medicare’s systems that make it easy to rort and almost impossible to detect fraud,overservicing and errors.