Between $1.5 billion to $3 billion is being lost to Medicare fraud and non-compliance every year, according to an independent review that warns the overly-complex system is out of date and risks bleeding more taxpayer money.
The federal government on Tuesday released the long-awaited review into Medicare fraud and non-compliance, led by health economist Pradeep Philip.
"On a conservative definition of non-compliance and fraud it is entirely feasible the value of non-compliance could exist in the range of $1.5 billion to $3 billion," Dr Philip wrote in his report.
"Legislation, governance, systems, processes, and tools are currently not fit for purpose and, without significant attention, will result in significant levels of fraud," he said.
His review was prompted by a joint investigation by the ABC's 7.30 program and Nine newspapers last year, which alleged flaws in Medicare's systems made it easy for some medical professionals to rort, and, almost impossible to detect fraud.
One expert, Margaret Faux, said she believed wrongful claims were being applied to millions of billings, estimating $8 billion a year — or about 30 per cent of the annual Medicare budget — was being lost to fraud and waste.
Those claims were hotly contested by a number of groups at the time, including the Australian Medical Association (AMA) and the Royal Australian College of General Practitioners (RACGP).
The Philip review found a major chunk of the money being lost was attributable to non-compliance errors rather than premeditated fraud.
Health Minister Mark Butler said the review showed the "overwhelming majority" of health professionals were well-meaning and protective of Medicare.
"Australians know that the overwhelming majority of our doctors and health professionals are honest, hardworking and comply with Medicare rules," he said.
"But they also understand that, at a time of great pressure on household and government budgets, every dollar in Medicare is precious and must be spent directly on patient care."
The government said the loss of billions of dollars a year was "consistently and repeatedly" highlighted to former Coalition governments in five separate reviews between 2016 and 2021.
"They failed to act to protect Medicare," Mr Butler said.
Coalition health spokeswoman Anne Ruston rejected that.
"In government, the Coalition increased funding and implemented significant reforms to improve Medicare compliance arrangements, including through measures that sought to recover $2 billion worth of non-compliant Medicare claims a year," she said.
'It needs to stop'
Dr Philip wrote in his report there was "real potential" that fraud and non-compliance could rise to the $8 billion level estimated by Dr Faux if new controls, systems and education were not put in place.
Speaking to the ABC on Tuesday, Dr Faux stood by her estimate.
"I do this for a living, I'm at the coalface," she said.
"I see what's going on in the system and I have seen a huge surge over the last couple of years in straight-up fraud in corporate medical practices."
But Dr Faux said the ultimate figure was not the most pressing issue.
"The numbers are huge and whether it's deliberate or unintentional doesn't matter. It needs to stop," she said.
The Philip review made 23 recommendations, including for improved governance, that legislation relating to Medicare be updated so it is effective and fit for current health needs, and that better systems be created to detect and disrupt fraud and non compliance.
Dr Faux agreed regulatory reform was needed to stop Medicare wastage, as well as improved education for patients and providers.
She also encouraged the government to look at the whole system, not just the GP network, and suggested a royal commission was required.
AMA president Steve Robson said the Philip report vindicated the majority of medical professionals who had been doing the right thing.
"The AMA has said all along it doesn't tolerate fraud. We are ready to work with government, as we have consistently done in the past, to improve the governance of Medicare payment systems and associated compliance arrangements."
Professor Robson agreed the overall system has become too complex.
"This leads to mistakes in billing by doctors trying to map best-practice patient care to an out-of-date system, exacerbated by a lack of education and definitive advice about how to correctly bill some Medicare funded services."
