Doctors are abusing the $28 billion Medicare system, at times putting patients at risk, billing dead people and falsifying patient records, all to boost profits.
A joint investigation by ABC's 7.30 program, The Sydney Morning Herald and The Age has uncovered flaws in Medicare's systems that make it easy to rort and almost impossible to detect fraud, incorrect payments and errors.
The leakage is estimated to represent nearly 30 per cent of Medicare's annual budget, or about $8 billion a year.
The fraud and waste has been allowed to occur for decades despite repeated warnings to successive governments from experts, including Medicare expert Margaret Faux.
"I think most Australians believe that doctors are honest people," Dr Faux said.
"And I'd like to think that most of them are. But the reality is anywhere where you've got a huge pot of money that is super easy to access, you are going to get bad actors building business models just taking the money unlawfully. And it's a huge problem in the Medicare system."
Dr Faux's estimate of $8 billion annual leaking from Medicare has been corroborated by Tony Webber, a GP and former head of Medicare watchdog, the Professional Services Review (PSR). He has confirmed that while running the regulator for six years until late 2011, he estimated the misuse of Medicare was costing Australians up to $3 billion a year.
'Never designed to both reimburse the doctor and an overseas shareholder'
Dr Webber told the Herald, The Age and 7.30 that he saw egregious misconduct from within his profession, including the questionable ordering of pathology tests which were inappropriate for the clinical condition and had a huge impact on the health budget.
"And many of these private radiotherapy clinics are run by corporations, where their shareholders are overseas," he said.
"Medicare was never designed to both reimburse the doctor and an overseas shareholder."
When Dr Webber raised his concerns with health ministers from both sides of politics, or the federal health department, he was shut down.
"The administration of Medicare is a very political creature to work with, and it can be very difficult for change to occur," he said.
"Unfortunately, because one side of politics who chose to change it, he's hit on the head by the other side of politics, because Medicare's such a sacred cow."
The inappropriate billing occurs in all areas of the health sector including GPs, surgeons, pathologists, anaesthetists, radiologists and dentists who use the child dental benefit scheme.
Some of the more disturbing practices driven by Medicare rorting include a doctor caught in February charging dead people in aged care homes, a doctor prescribing drug addicts with oxycodone without due care and radiologists over servicing terminally ill cancer patients to access government payments.
'Whether it's deliberate or unintentional, it has to stop'
Hundreds of millions of Medicare claims are made each year — many of them are under $100 — but the high volume, low dollar transactions make it easy for fraud to fly under the radar.
Dr Faux, the country's leading expert on Medicare who recently completed a PhD into Medicare claiming and compliance, believes wrongful claims are being applied to millions of billings.
Her business, Synapse Medical Services, is paid by doctors, hospitals and corporate medical practices to process their Medicare bills.
Dr Faux said she constantly finds problems in client billing practices and even her own personal Medicare records, which include services she never had and services that were recorded as having taken longer than they did to attract a higher Medicare fee.
"The bottom line is we don't know exactly how much is fraud, deliberate abuse and how much is errors, but it actually doesn't matter anymore. Whether it's deliberate or unintentional, it has to stop," she said.
Documents obtained by the Herald, The Age and 7.30 show an online telehealth company appears to have illegally bulk-billed patients while also charging $38 or $50 a visit.
The fresh revelations about the rorting of Medicare have been aired at a time when medical bills are rising and health spending comes under pressure due to a deteriorating economy and federal budget outlook.
"Ambulances ramping, public hospitals cannot cope, general practices in tatters, it's all part of the same problem," Dr Faux said.
A series of questions were sent to the Department of Health and Aged Care, including Dr Faux's estimate that up to 30 per cent of Medicare claims were leaking from the system from fraud, errors and overservicing.
The department said it has a strong compliance program to ensure the integrity of Medicare, involving assessment of external tip-offs, analysis of claiming patterns and trends and advanced analytics. It said it takes any allegations of non-compliance seriously.
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