Medicare Audit Anxiety is hurting patient care; High Court Challenge – Thank you Julian Burnside QC – complete this historic survey


Medical error is the third biggest cause of death, and the following is yet another systemic example.

pic5Source: Medical error the third biggest cause of death

According to a research report published by the British Medical Journal Medicare billing practitioners receive very little if any billing education in Australia. The current system is legally and administratively complex. Medicare and the relevant professional bodies do not provide any support.

The research concluded …

‘Australian doctors may not have expected legal and administrative literacy. Rather than reliance on ad hoc training, development of an Australian medical billing curriculum should be encouraged to improve compliance, expedite judicial processes and reduce waste. In the absence of adequate education, disciplinary bodies in all countries must consider pleas of ignorance by doctors under investigation, where appropriate, for incorrect medical billing’

Source: Who teaches medical billing? A national cross-sectional survey of Australian medical education stakeholders 2016

A doctor once told me the that current Medicare audit system runs like an insurance company that sends you to a cheaper repairer who does less work on you, and you get sicker.

On the subject of Medicare audits, a Federal Court challenge has just been lodged by trainee GP Dr. Anchita Karmakar on the 29th June 2018. This case,  to be heard by the Court shortly, possibly gives providers and practices affected by audits, their last and final say on this important matter. We need your help!


It appears that from Medicare’s standpoint, patients are discouraged from visiting practitioners who sub specialise or have a speciality interest in their care and they are not permitted to know why. The patient does not themselves directly pay the doctor, therefore the doctor has no say in the matter, it appears.

Having made recent national medical headlines PSR faces High Court challenge we are proud to have been invited to assist on a pro bono basis in this very important public interest matter that affects every Australian’s access to healthcare. For some patients, it may help explain why their doctor may be reluctant to see them in certain circumstances. 


Trainee GP Dr. Anchita Karmakar has launched on 29th June 2018 what may be considered a historic High Court challenge against none other than the Federal Health Minister. The allegation is that the current Medicare system and audit activity is systemically harming patient care.

Here is Dr Karmakar’s application  and affadavit

Our recent national survey that we need healthcare providers to complete appears to indicates this is overwhelmingly the case.

The following surveys will be used in evidence at the High Court public interest application. This is a unique opportunity for patients to have their say, and for healthcare professionals to have an anonymous and confidential say by completing these surveys and sharing it with their colleagues.

For patients to complete:

1.Your health rights to know

For doctors, providers and practice staff  to complete:

  1. Medicare Item Complexity
  2. To Bill or not to Bill- Doctor’s right to earn a living

We will publish the results in the coming months.

The Evidence


With assistance from Julian Burnside QC, Dr. Karmakar has outlined the issues in a recent article  ‘David and Goliath: Medical Billing investigations and the silencing of doctors. We too are pleased to have been of assistance both in identifying the problem and the solution.

We believe that all patients and providers really want is ‘a fair go’ when it comes to using the healthcare system. The system needs to be more open, transparent and accountable. It needs to be sustainable and socially responsible. Yet in the absence of open, transparent, accountable and commonly agreed peer reviewed clinical standards, patients may continue to suffer by having necessary medical services denied them, without explanation.

We have a name for this: ‘”Medicare Audit Anxiety”. Doctors and allied health workers continue to be investigated for a range of services from doing supposedly too many Pap smears, care plans or drug and alcohol item numbers with no commonly agreed clinical standards in place.

How does the healthcare profession set global standards?

No global health case standards currently exist, according to leading world expert Professor Bill Runciman. Preventable medical errors are the third biggest killer of human life after heart attacks and cancer. Hence medical errors are inevitable, as there is no open and transparent system that exists to protect patients, providers and by extension even the taxpayer.


The International Auditing and Assurance Standards Board IAASB.

For more on this, listen to an audio discussion: Introduction to healthcare standards by David Dahm

It explains how the accounting profession has set standards – so it is possible for the medical profession to do it too. Bringing about these changes will save lives.

Our view is that medical practitioners may not know when they are “breaking the rules” until it is too late and there is no training program they can undertake to learn the clinically relevant issues (and not just the administrative rules) when navigating their way around Medicare or the healthcare system. The existing rules appear solely based on a closed door system and many “peer reviewed” positions appear to lack the impartial intellectual rigour, openness, and transparency one would expect.

How do audits occur?

It appears that as a medical practitioner, being great at what you do, working hard and sub-specialising can put you at risk of a Medicare audit.

Medicare audits can arise from tip-offs from a disgruntled patient, a competitor or a Canberra-based Medicare employee who regards you as being outside the normal distribution curve for doctors who treat patients for a certain type of illness.

We have had doctors report many examples of this; such as allegedly ordering too many Pap smears, prescribing opioids and ordering CT scans. Or spending too much time with geriatric patients, where too many long item C instead of shorter 20-minute consultations have been claimed, or care plans claimed where the practice employs nurses.

The consequences can be devastating.  

Practitioners have been told that ‘If you do not pay us back we will escalate matters further’.  Medicare may require a subsequent auditor ‘friendly chat’ which may feel to the doctor like a form of entrapment, with those rights normally offered to citizens not properly explained to them. What support is forthcoming from insurance companies and or professional bodies may be legislatively hamstrung and conflicted. Usually, by this stage, it is too late anyway, since no appropriate legal representation is allowed in these meetings, which do not follow normal fair hearing rules.

The debilitating consequences


The bottom line is that Government audits using no fewer than 25 patient medical records as evidence can statistically ‘deem’ and claim back from the doctor  without interviewing a patient and the doctor is labelled a ‘rorter’ without any peer reviewed open and transparent clinical standards.


This is like being prosecuted for speeding and not knowing 60 was the speed limit. Then the police stating because you live down this road so over the last 5 years based on your history (the last 25 times we caught you not obeying the law that does not exist or is clear) you must have been speeding. Accordingly, we will issue you speeding ticket everyday over the last 5 years for all those times we did not catch you. By the way, we never told you were breaking the rules the first time you did and you can never find out for sure what they are.

Many of their peers are aware of what goes on but are too afraid to speak up and instead turn a blind eye.

Medicare can claim back over many years many hundreds and thousands of dollars from the practitioner based on what is statistically a very low sample of patients, without interviewing a single of the practitioner’s patients.


This is akin to your boss demanding after five years of hard work, that you pay back 100% of your salary plus any expenses because they now believe your work was dodgy, despite the fact you were paid for the work and have since spent the earnings.

One also needs to ask why there is no timely Medicare feedback given within the first few months of Medicare being aware of an alleged problem, before making these large claims against practitioners. It seems extremely unfair.

Providers appear to have no legal standing to fairly defend themselves. Many complain of being bullied into paying the money. With the PSR boasting, they win 100% of their cases, they do not want the ‘shameful’ trouble and cost of facing a PSR investigation. It is hard for others to judge the real situation when these cases are not published.

Why do practitioners lack any rights to defend themselves? This affects all of us.

When doctors lose their rights to advocate for the care they believe they should provide their patients, those patients lose their rights to access high quality care.


Our investigations reveal that bulk billing doctors (providers who do not charge their patients a fee and accept the Government’s payment) are particularly affected. In effect, these practitioners agree unknowingly to work for free by agreeing to bulk billing a patient consult. The 2004 High Court Peverill case highlighted this point.  As a consequence of this, they lose their normal contractual rights to defend themselves in the event of a Medicare audit.

See Health Insurance Commission v Peverill [1994] HCA 8. (1994) 179 CLR 226

From this case…

“Peverill makes it clear that medical practitioners who bulk-bill their patients exchange a proprietary right to a payment which they have earned by providing medical services for a mere expectation of an uncertain gratuity from the Commonwealth. Moreover, bulk-billing medical practitioners have no control over the monetary amount involved in the gratuitous benefit they are hoping to receive from Consolidated Revenue.[82]

In other words, “the fundamental principle that underlies the bulk-billing system is that the payment of a Medicare benefit as between the Commonwealth and the patient is a gratuitous payment.[67] Therefore, the assignment of this gratuitous payment by the patient does not bring the private medical practitioner into a contractual relationship with the Commonwealth.”


Thus, a doctor cannot sue the Commonwealth for payment or anything else as they do not have the same contractual rights to protect themselves.

How can you help?


Put simply, if you as medical practitioners elect to do nothing then you are guilty of being complicit. This is about your patients and the people who care for your loved ones in their time of need.

But you can play an important part by simply spreading the word now. Start discussing the issues with your family and friends.

The following two surveys will be used in evidence at the High Court public interest application. This is a unique opportunity for healthcare professionals i.e. doctors, allied health, practice staff and others to have an anonymous and confidential say by completing and sharing this survey with their colleagues now.

  1. Medicare Item Complexity
  2. To Bill or not to Bill- Doctor’s right to earn a living

We will publish the results of these surveys in the coming months. This is a national debate we need to have.

I would like to thank Dr. Anchita Karmakar for inviting me to appear as an expert witness before the Court on the subject of how the Professional Service Review operates. Thanks also to Julian Burnside QC who assisted pro bono in validating our long-held concerns.

For a complete background, listen to these audio blogs;

  2. Here are Dr. Karmakar’s application and affadavit


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