Federal Health Minister Mark Butler says he is open to an independent investigation of the Health Department regarding claims raised on the ABC's 7.30 program that up to $8 billion is leaking from Medicare every year due to error, overservicing, and fraud.
"That may be where we end up," Mr Butler told 7.30. "I'm taking these issues seriously."
Mr Butler has first requested the Health Department review the allegations made on the ABC by Dr Margaret Faux and the department's own compliance systems.
An auditor-general's report from 2020-21 into Medicare compliance identified problems with the department's systems for detecting fraud or misuse within the scheme.
It found the department's approach to health provider compliance was only "partially effective".
'Rorting' the system
A joint investigation by 7.30, The Sydney Morning Herald and The Age has exposed flaws in Medicare's systems that make it susceptible to fraud and overservicing.
The estimated $8 billion leakage represents about 30 per cent of Medicare's annual budget.
Dr Faux, a Medicare expert, believes wrongful claims are being applied to millions of Medicare billings across the health sector.
She says the waste has been allowed to occur for decades despite repeated warnings to successive governments.
The Australian Medical Association (AMA) has been critical of Dr Faux's findings, calling the $8 billion figure "grossly inflated".
"We do not tolerate fraud and examples of fraud should be tackled and stamped out," it said in a statement.
A 'comprehensive report'
Mr Butler said he wanted to see "a comprehensive report" and some analysis of Dr Faux's work.
But Dr Faux is not the only one to report large-scale misuse of the system.
Speaking to 7.30, former Medicare regulator Dr Tony Webber accepted Dr Faux's findings.
In 2012, he estimated abuse of the system was costing Medicare up to $3 billion a year.
Mr Butler said cases of demonstrated fraud are "only a tiny minority amongst the tens and tens of thousands of honest, hardworking health professionals".
"But where it happens, it's picked up and it's prosecuted," he said.
One example cited on 7.30 involved a dentist who was reprimanded for exposing children to unnecessary radiation to claim extra benefits under the Child Dental Benefits Scheme.
The dentist had to repay $650,000 and was offered counselling.
Mr Butler says such a penalty was "disproportionate" for someone who "so egregiously missclaimed taxpayer funds".
"I've asked in particular to see whether the penalties that are put in place for the most egregious examples of misconduct are proportionate," he told 7.30.
"I think that's something that all taxpayers would want to understand."
Budget pressures
The revelations come as the Albanese government is preparing to deliver its first budget.
"Pretty much every Australian understands right now just how precious every single dollar going into the system is," Mr Butler said.
"Doctors and health professionals understand that perhaps more than most."
Mr Butler said he acknowledged the gravity of the issue and pledged to take his response to the Medicare misuse allegations one step at a time.
Watch 7.30, Mondays to Thursdays 7.30pm on ABC iview and ABC TV
