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Tony Abbott’s Medicare “deforms” or How to Trick Senators 1.01

The Federal Government’s co-payments Plan B will add another layer of co-payment complexity to the Medicare system that neither doctors nor patients fully understand now. That raises a whole range of issues around unintended consequences, particularly for patients but also for our system, which has prompted this appeal to the Senate to learn from what’s happened in the past and look to different solutions in the future.

***

Margaret Faux writes:

Senators, section 20A needs your help, urgently!

Section 20A of the Health Insurance Act 1973 (the Act) is Medicare’s heartbeat. One of the key machinery provisions of the Act, it describes Medicare’sbulk billing arrangements, and it is fibrillating on the verge of collapse.

Section 20A has been amended, repealed, re-introduced and tinkered with on 16 occasions since it was first introduced. Some of the changes have been incidental but one was not, and it has had long term consequences which have contributed to the continuing upward spiralling of inpatient medical fees. The intention was that it would have the reverse effect.

Tony Abbott’s latest stunt will see the same upward spiralling of GP fees, because when you look beyond the smoke and mirrors of the most recent co-payment iteration, it is nothing more than a cunning manoeuvre to divert attention from the main game. The new proposal cannot be introduced by regulation alone, and it’s the sneaky little legislative change that is required, that will break Medicare’s back. It happened in 2000 and it is happening again.

Bulk billing 1.01

Unlike much of Medicare’s legislative scheme which is mind bogglingly complex, section 20A describes a simple two step bulk billing process (the legal term being an assignment of benefit). My changes in brackets and bolded:

S20A Assignment of Medicare benefit

(1)  Where a medicare benefit is payable to (a patient) …. (the doctor and the patient) may enter into an agreement, in accordance with the approved form, under which:

(a)  (the patient) assigns his or her right to the payment of the medicare benefit to (the doctor); and

(b)  (the doctor) accepts the assignment in full payment of the medical expenses incurred in respect of the professional service by the (patient).

Bulk billing has always been optional by virtue of the inclusion of the word ‘may’ in section 20A, however in choosing to bulk bill, the doctor forgoes his or her right to collect any additional fees from the patient, because he or she must accept the bulk bill amount ‘in full payment’ for the service provided.

Doctors have been found guilty of criminal fraud for breaches of this section in circumstances where they have charged their patients additional fees or ‘co-payments’ when bulk billing, including when the co-payments have been called something else such as booking fees or counselling fees. The current legal position therefore is that irrespective of the name allocated to any ‘co-payment’, it is illegal to charge it when bulk billing for a single professional service. The only exception involves the administration of certain vaccinations, which provision is neatly tucked away in the regulations.

The High Court has upheld this interpretation on numerous occasions and, with the exception of two brief periods in the history of s20A,bulk billing has always operated in this way. Seems pretty straight forward.

Last week in his joint press release with Health Minister Peter Dutton, Prime Minister Tony Abbott announced that under the new proposal an optional co-payment of $5 will be permitted when bulk billing. To enable this, an amendment to s20A of the Act will be required. So what’s the big deal about that?

Well we’ve been down a very similar path before when s20A was amended by the introduction of subsection (2A), which was necessary to facilitate the introduction of no-gap schemes, and unfortunately, it didn’t quite go as planned.

No-gap billing 1.01

No-gap schemes are a sort of hybrid bulk billing system for inpatient services. The fee paid to the doctor has two components; the first is a 75% Medicare rebate, the second is a top up by the private health fund, after which one total amount is paid to the doctor.

When introduced, the stated purpose of these schemes was to limit the out of pocket expenses faced by patients when they go to hospital. The idea was that there would be…well…no-gap, except when there was a gap, called a known-gap, which would be permitted under a sort of sub-branch of the new no-gap schemes.

When these schemes were debated in the House of Representatives on 10 April 2000, MPs variously espoused the complete protection and safeguarding of consumers, expressed concern that there appeared to be insufficient detail as to how patients would be informed about fees, celebrated the fact that medical fees had finally been conquered and patients would thereafter be empowered to shop around for doctors, and one particularly excited and optimistic MP even suggested that these schemes would somehow help us all to better understand how health insurance operates.

It was only the Member for Lowe John Murphy who was alive to the fact that changing s20A might have unforeseen consequences. He said:

I believe that the amendments made to the Health Insurance Act 1973 to allow automatic assignment of a contributor’s Medicare benefit to a registered organisation to facilitate simplified billing and payment arrangements to be built into the gap cover scheme will mean yet one more way in which bulk-billing will be undermined—something that the Liberal Party has always wished to accomplish. Bulk-billing is something that those who sit on this side of the House will defend to the death.

Bulk billing was indeed undermined but the seemingly innocuous change to s20A was largely over-shadowed by the greater objectives of streamlining and simplifying inpatient billing processes. The necessary change to s20A appeared to be nothing more than a simple mechanical tweaking of the Act to facilitate the operation of the new schemes. And it was true that the schemes could not operate without this tweak. When the go live date came around, the schemes were sold to consumers and health professionals as ‘simplified billing’ arrangements. It’s perhaps the greatest misnomer in the entire Medicare mire.

There are just under 6000 Medicare services, most of which are claimable to each of the 36 registered health funds in Australia, all of whom have no-gap schemes but not known gap schemes, all with unique rules and requirements, some capping their known gap amounts, others not, all with different fee schedules and payment arrangements and some even pay different rates in different states. Only those at the claiming coal face (where the tax payer dollars are spent) really understand just how complex medical claiming is, how easy it is to make unintentional errors and how difficult it is to correct them. No-one knows that in practice, the known gap is usually known to no-one except the patient. And this is not because of any deliberate misuse of the system by anyone, it occurs because the system itself is flawed. And that innocuous little tweak to s20A took the patient right out of the transaction, which in effect created an open book of cheques pre-signed by the patient (though the patient is oblivious to this) just waiting to be cashed.

While doctors do their level best to stay off Medicare’s radar, out of court and comply with the rules, if the rules are labyrinthine and the machinery of billing is left to secretaries, administrators and third parties, then there are bound to be unintentional slip-ups.

In attempts to apply quality control measures to the huge volumes of claims hitting their systems, some health funds are now using data matching processes to try to capture inconsistencies between the hospital claim (this is for the accommodation and theatre fees) and the medical claim. The two claims are supposed to match. But this is also fraught because there is no way of knowing which of the two claims is incorrect when a mismatch is identified. Hospital account departments make errors too. In fact this week a client asked me what she should do because she had become aware that the hospital had claimed incorrectly in her name. She said:

The hospital has sent a hospital accommodation bill to the patient stating that the mirena was inserted for contraceptive reasons but it was actually for another reason for which the relevant MBS item number is different than the one they submitted which was incorrect. When I submit my claim which item number should I use?

Confused and worried doctors are as common as confused patients in the world of medical billing. Patients have often been told one thing by their health fund, another by Medicare, another by the hospital, yet another by the doctor and often we tell them something different again.But spare a thought for doctors, they struggle too. Yesterday, on a fairly typical day in the office, a phone call came through from a brand new surgeon just starting in private practice enquiring about medical billing. I asked him if he had given consideration to the claiming method/s he wanted to use – bulk billing, no-gap, known-gap, full gaps? He replied:

‘Sorry, I don’t know what any of those are; I’m just new to all of this.’

It’s a standard response, no surprises there.

Patients are mostly in the dark when it comes to medical fees and would not know if Medibank Private’s known-gap scheme has a cap or not (it does) and will have no hope of understanding when the proposed $5 co-payments can or can’t be charged, and it will be impossible to protect them from incorrect charges being raised (even if they are raised unintentionally). Consider these real examples of a trip to the GP which were put to me by GPs during a webinar presentation just a few weeks back.

‘What if a patient has a consultation, a mirena inserted, and a wound dressed? Do I have to bulk bill them all or can I split them and charge fees for some and not others? What are the rules?’

‘What about a complex skin cancer removal, a consultation and a vasectomy?’

‘What if the patient comes in and has a consult, is sent off for an x-ray and then comes back later that day with the x-ray results and we find a fracture, but it was caused by a metastasis (cancer invading the bone)?’ – This means that what started off as a suspected simple broken bone has now become a cancer diagnosis and the doctor will likely spend a very long time planning the treatment and management of the patient –‘Is it two item 23s or one item 23 and one item 36 or just bundle it all up into one item 44 or how do we bill for that?’

The rules that apply to each of these scenarios are neither simple nor consistent nor even readily accessible by perusing the Medicare Benefits Schedule. Given doctors are already unsure about how to correctly bill for these services, what hope will patients have? Rumour has it that the Government will try to explain the new scheme by way of an advertising campaign. But so unique is each patient encounter that no national advertising campaign is ever going to make this clear – not for patients, or doctors. It would be a bit like trying to explain the tax system in a 30 second grab on prime time television.

There are two end user groups of the Medicare system, doctors and patients, neither of whom fully understands how it works, and adding another layer of co-payment complexity, facilitated by a seemingly minor change to the legislation, will only serve to compound the difficulties they already grapple with. And just as there were insufficient safeguards to protect consumers when s20A (2A) was inserted to facilitate no-gap schemes, there are not only insufficient safeguards under the Government’s co-payment proposal, there are none.

Instead of shifting responsibility for the health of Medicare to the end users, a responsible government will first look within Medicare for answers. There is known waste, inefficiency and incorrect claiming amounting to over $1 billion per year, that neither increasing the Medicare levy nor introducing co-payments will fix. And if addressing internal inefficiencies to save costs is good enough for the ABC why is it not also good enough for Medicare?

So Senators, your predecessors made what they thought was an innocuous change to s20A for the purposes of simplified billing. Don’t fall for today’s ruse of establishing a ‘price signal’. Do what every responsible householder would do – see if you can make what you have work better for you first, before deciding you will have to pay more for the same service.

Margaret Faux is a lawyer, the founder and managing director of one of the largest medical billing companies in Australia and a registered nurse. She has been involved in Medicare claiming for 30 years and is a research scholar at the University of Technology Sydney examining the interface between Medicare and medical practitioners. 

The illustration is by Bradfield Dumpleton, a freelance illustrator and independent arts educator with a passion for creative communication and who specialises in cartoon art for community health and educational organisations.  For more info: bradfielddumpleton.com

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