Claims we’re being ripped off by specialists

Evidence continues to mount that our private health system is not fit for purpose and must be reviewed from head to tail to find out what’s wrong and fix it.  

If the Federal Government needed any more reason to act, news that private health insurers are investigating some specialist doctors for defrauding patients should be more than sufficient. 

Private health insurance holders continue to face a never-ending cycle of premium increases, product limitations, and soaring out-of-pocket costs. Now, there are allegations that they could be ripped off through fraudulent and illegal billing practices.  

This follows claims from a whistleblower that some specialist doctors have been systematically defrauding patients, health funds, and Medicare for personal financial gain. 

In a document tendered by the whistleblower they state: 

Health insurers have been notified of allegations against nearly 50 doctors in Victoria. The specialists are mostly anaesthetists and surgeons, as well as an obstetrician and gastroenterologist. They have been accused of charging patients extra fees of up to $5,000 while agreeing to participate in “no-gap-fee” arrangements with health insurers in which they bulk-bill and pocket rebates from Medicare. 

The private health insurance system is failing its customers, especially older people, who have little choice but to stick with it, pay higher costs, because the alternative of relying on the public system could be even worse.  

You can read our research into what older people think about private health insurance here. Our recommendation that government review private health care system is available here.  

The doctors have also been accused of telling Medicare they were “bulk billing” patients (not charging the patients a fee) when they did charge fees labelled “booking fees” or “administrative fees”. 

A survey carried out this year by a large health fund found 31% of 4,172 respondents who received medical treatment under a “no-gap-fee” arrangement were charged a fee, and 23% of respondents who received treatment under a “known gap fee” arrangement paid more than $500 out-of-pocket (the upper limit of what a specialist should charge under the agreement with the insurer). The health fund is still working through the cases to determine the extent of overbilling. 

Health insurers are urging people who have had surgery in private hospitals to check if they have been billed incorrectly under “no-gap-fee" arrangements. 

CEO of Private Healthcare Australia, Dr Rachel David, said, “These allegations are deeply disturbing because of the trust patients put in their specialist doctors. 

“When you seek the help of a surgeon and an anaesthetist you are typically at your most vulnerable. You do not expect them to be financially exploiting you at the same time. 

“We know many consumers do not understand their medical bills, which means most people wouldn’t know if they were getting charged inappropriate fees or not,” she said. 

The allegations suggest specialists are billing consumers unknown amounts of money under the counter and not reporting that income to other payers, including Medicare and insurers, so it can be publicly recorded. 

“Unfortunately, this means we cannot trust our Medicare statistics, our APRA (Australian Prudential Regulation Authority) data, and the Government’s Medical Cost Finder website, which reports how many doctors charge out-of-pocket fees for procedures, as well as what the average out-of-pocket cost is for those procedures,” Dr David said. 

“Medicare needs to urgently investigate these allegations to ensure taxpayers are not footing the bill for industrial scale fraud in our private health system.” 

Call your health fund to examine your bills and ask questions about whether you should be paying out-of-pocket fees or not. They can help you ask the right questions.  

And if your Medicare records show you were bulk billed when you were charged a fee, report it to Medicare.

You can report suspected fraud or corruption by: 

• Completing the government’s health provider fraud tip-off form 

• Calling the government’s  fraud hotline  on 1800 829 403 

• Emailing: ReportFraudorCorruption@health.gov.au