Medicare servicing: why you need to bill correctly

While some doctors view Medicare billing as an ancillary administrative task, a failure to render Medicare item numbers correctly can be extremely costly and sometimes impact a practitioner’s ability to practise going forward. Some recent examples are as follows:

• A GP was found to have rendered certain MBS items in excess of 99% of their peers. The practitioner agreed to repay $120,000 and was disqualified from billing certain MBS items for 12 months.
• A Radiologist agreed to repay $309,000 and acknowledged having engaged in inappropriate practice in connection with failing to meet MBS requirements and rendering services that were not clinically necessary.
• An ophthalmologist was found to have rendered a higher volume of total services than 98% of their peers. The practitioner agreed to repay $38,400 and was disqualified from providing three MBS items for nine months. 

What is the Professional Services Review?

The PSR is an independent Commonwealth statutory agency that is set up to protect the integrity of Medicare and related health benefits programs. It is established under the Health Insurance Act 1973 (Cth) and operates independently from the Department of Health and Aged Care and Medicare. 

The PSR reviews the conduct of practitioners to determine whether they have engaged in ‘inappropriate practice’. Inappropriate practice is defined as rendering or initiating services that would be ‘unacceptable to the general body’ of peers from that specialty. Inappropriate practice also includes a breach of the 80/20 rule (rendering or initiating more than 80 services on 20 days in a 12 month period) and the 30/20 rule (rendering or imitating 30 or more relevant phone services on 20 or more days in a 12 month period).

How is a PSR investigation initiated?

PSR investigations are generally triggered by either a report of fraud or corruption or requests for review by the Chief Executive of Medicare pursuant to the Medicare Practitioner Review Program (PRP). 

The PRP conducts audits of data to identify practitioners whose Medicare data differs from their peers, or who have breached the 80/20 rule or the 30/20 rule. If a practitioner is flagged through this process, the PRP conducts a review, which often involves meeting with the practitioner. If there has been a breach of the 80/20 or 30/20 rules, or if the differences in data cannot be adequately explained and concerns remain, the Chief Executive of Medicare will request the Director of the PSR conduct a review.  

PSR Investigation

The Director of the PSR must undertake a review if it appears there is a possibility the practitioner has engaged in inappropriate practice during the review period. If a decision is made to undertake a review, the Director may review any or all of the services provided during the 12 month review period, not just those flagged by the PRP as of concern. The Director will often request a sample of clinical records be provided and the Director often meets with the practitioner to discuss any concerns identified from review of the records. If the Director has persisting concerns, this will be outlined in a report, to which the practitioner has an opportunity to respond to. 

The Director’s options at the end of a review are to:

• Take no further action;
• Enter into an agreement with the practitioner (to repay money, a disqualification from billing for a certain period, reprimand and/or counselling); or
• Refer the practitioner to a Peer Review Committee. 

If the Director considers the conduct needs further investigation, or the practitioner and Director cannot reach an agreement as to the outcome, a committee of the practitioner’s peers is established to review the documents and conduct a hearing. 

Any outcome, by way of agreement or a finding of the Committee, must be ratified by the Determining Authority. 

Key take-outs for practitioners

• It is crucial for practitioners to understand the requirements of the MBS item numbers they render.
• Practitioners should keep detailed clinical records that clearly outline the patient history, diagnosis, treatment and follow-up instructions. The notes should clearly show the clinical necessity for treatment and that the requirements of the MBS item number rendered have been met. 
• Practitioners should regularly engage in training and consult with colleagues to ensure that the way they are practising would be considered to be acceptable by their peers.
• Upon receipt of correspondence from the Medicare PRP or the PSR, the practitioner should contact their medical defence organisation to seek legal advice.