Making sense of Medicare’s debt recovery scheme

Published
16 Jan 2019

16 Jan 2019

Medicare has been given stronger debt recovery powers to deal with non-compliance and over-payment by doctors and practices.

Changes to existing legislation came into effect in July with the full support of the AMA.

Medicolegal firm Avant is also in favour of the move, calling it a “fairer” system that encourages both doctors and employers to work more collaboratively and share responsibility for billing.

But it pays to keep on top of the paperwork.

In October, many practitioners were financially penalised after Medicare rejected all provider number applications that did not include the new ABN requirements.

“It is in the interests of both individual providers and those who employ or otherwise engage them to co-operate and ensure all documents related to claims for Medicare benefits are complete and accurate,” notes Avant’s special counsel Michael Wade in a recent blog.

“Although the reforms potentially improve the fairness of compliance outcomes, they will not excuse complacency.”

Here are some other legislative changes you need to know about:

  1. Doctors with a compliance debt raised against them have 90 days to enter into a repayment plan.
  2. Those who fail to enter into a repayment agreement can have their future bulk-billed payments reduced or offset by up to 20% to repay that debt.
  3. Garnishee arrangements can apply to those who don’t bulk-bill because Medicare now has the power to withhold part of a doctor’s income.
  4. Medicare can also investigate the financial affairs of doctors with a debt.
  5. Administrative penalties can be applied to a debt of more than $2500 if a health professional fails to provide substantiating documents within the required timeframe.
  6. The introduction of the Shared Debt Recovery Scheme means both practitioner and employer can be held responsible for the repayment of the debt. Previously, individual doctors were liable for a Medicare debt – except in cases where fraud was involved.
  7. The changed rules apply to both new and existing debts.