Practices facing tough penalties for MBS abuse

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A recent headline in the Australian Doctor may set some alarm bells ringing “Corporates face tough new laws for MBS abuse”.

Legislation just passed by the Federal Government means that, from July next year, where a practitioner has been found guilty of inappropriate billing, the practice not just the practitioner will have to refund the money to Medicare.

This may mean that where practitioners have been pressured by the practice to provide clinical services that are found by Medicare to result in an excessive number of services or provision of services to patients that are not clinically relevant, as determined by the medical profession’s peers, then those billings will have to be paid back to Medicare.


We agree with Medicare’s approach in principle. However, in the absence of any open and transparent peer-reviewed clinical standards, it remains uncertain how a practice and its practitioners will know whether or not they are crossing the line in terms of excessive, properly documented or clinically relevant services.

For example, at what point does an owner/practice manager stop promoting, say, an obesity or Pap smear clinic?

Some issues to consider:

  • What is the peer reviewed protocol and standard applying to a treatment or regimen? At what point does providing it become excessive?
  • How does the practice determine that the treatment has been correctly documented?
  • Do practices now have a responsibility to examine each practitioner’s medical records to ensure compliance?
  • Do financial incentives create pressure on practitioners?
  • Should practices now update their practice agreements with their practitioner providers so as to disclaim any undue pressure, and re-word the incentives contained in the agreements?
  • Should practices upgrade their indemnity insurance policies to cover the possibility of MBS audits?
  • Should practices change their Practice policy and procedure so that only the billing practitioner and not staff initiate billing patients to prevent unauthorised up-coding or errors?
  • Should practices avoid proactive healthcare screening and preventative health programs for patients as they may be too aggressive? What is the benchmark or speed limit that practices need to follow?

In our experience, Medicare’s efforts to reclaim money can apply retrospectively – going back several years. This can become a big problem especially if a practice has already paid staff and/or incurred practice expenses such as rent from the billings.

It begs the question; have the risks of practice ownership gone a step too far?

‘There have been long-running concerns about the way doctors are ordered to pay back the full value of inappropriate claims even after they have given a large slice of their billing to contractors.’

Source: Australian Doctor, 11th July 2018

If there existed open, transparent, Government-approved and recognised, clinically peer-reviewed standards, then interpreting the MBS would not be as complex, difficult and potentially financially fraught as it currently is. All people want is financial certainty so they can plan.

The issue will remain one of concern for practitioners and practices until the medical and health profession collectively addresses it.

You can do something about this, by understanding the risks and responsibilities and challenges under the present MBS system.

Please complete our MBS complexity survey and read the High Court application which will help you better comply with the law.

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