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Attachment D

Final ReportJune 2015

Fraud prevention and compliance – Increased billing assurance for the Medicare Benefits SchedulePN2012:2231

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ContentsExecutive Summary.....................................................................................................................3

Recommendations.......................................................................................................................7

Part 1: Background......................................................................................................................81.1 Introduction...............................................................................................................................81.2 Objectives..................................................................................................................................91.3 Scope......................................................................................................................................... 91.4 Key deliverables, outcomes and performance indicators .......................................................101.5 Assumptions, risks and constraints .........................................................................................111.6 Governance ............................................................................................................................ 12

Part 2: Methodologies ..............................................................................................................142.1 Sub-project 1: Data and systems ............................................................................................142.2 Sub-project 2: Develop capability and trial systems ...............................................................152.3 Sub-project 3: Education and communication .......................................................................172.4 Sub-project 4: Practice-based practitioner reviews ................................................................20

Part 3: Findings .........................................................................................................................223.1 Sub-project 1: Data and systems ............................................................................................223.2 Sub-project 2: Develop capability and trial systems ...............................................................243.3 Sub-project 3: Education and communication ........................................................................293.4 Sub-project 4: Practice-based reviews ....................................................................................30

Part 4: Discussion ......................................................................................................................344.1 Regulation – Medicare compliance framework ......................................................................344.2 Intelligence – Information and systems ..................................................................................464.3 Education – Communication and training ..............................................................................504.4 Conclusion .............................................................................................................................. 54

Glossary ....................................................................................................................................57

Appendices ...............................................................................................................................60Appendix 1: Survey ..........................................................................................................................60Appendix 2: Toolkit Self Evaluation .................................................................................................67Appendix 3: Education Letters .........................................................................................................71Appendix 4: Savings .........................................................................................................................75

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Executive SummaryThe 2012-13 Budget measure, ‘Fraud prevention and compliance – Increased billing assurance for the Medicare Benefits Schedule’ (the Large Practices Project), was implemented by the Department of Human Services (the department) over a three-year period from 1 July 2012 to30 June 2015. The Budget measure was proposed in recognition of the Medicare compliance challenges associated with the changing nature of health practice, from small owner-operated medical practices to larger business enterprises. The Budget measure provided $7.6 million and aimed to achieve savings of $20.7 million.

While the department was responsible for delivery of the Large Practices Project (the project), there was extensive consultation and collaboration with other stakeholders, including the Department of Health, health sector peak bodies and practice staff.

Objectives

The objectives of the project were to understand and address compliance challenges for large health practices in billing accurately under Medicare. For the purpose of the project, a large practice was defined as a practice where four or more health practitioners at the same location rendered services that were claimed under Medicare.

Methodology

The project comprised four sub-projects:

Sub-project 1: Data and systems

- To conduct data analysis and identify gaps.

- To design, build and test a prototype database for large practices.

Sub-project 2: Develop capability and trial systems

- To conduct research by survey of practitioners and practice managers on factors influencing Medicare billing accuracy.

- Through stakeholder consultation and co-design, to develop and trial a new systems-based approach to billing assurance in practices (the Medicare Billing Assurance Toolkit).

Sub-project 3: Education and communication

- To review and update existing Medicare billing education resources

- To design a new webpage to educate practitioners about their responsibilities when billing under Medicare.

- To send letters to practitioners to provide compliance education and encourage behaviour change.

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Sub-project 4: Practice-based practitioner reviews

- To identify possible inappropriate practice by reviewing all practitioners at a single location where there were concerns of possible over-servicing, and following interview, to address remaining concerns through behaviour change or referral to the Director of Professional Services Review.

Findings

The department collects Medicare data about claims by individual patients for services rendered by individual practitioners. Unlike the Pharmaceutical Benefits Scheme (PBS), the department has limited visibility of financial, business and geographical associations between practitioners and/or business owners in relation to payment of Medicare benefits. Despite these limitations, the department identified approximately 12,000 large practices in Australia, of which 65 per cent have four to seven health practitioners.

Survey responses from 786 practice managers and practitioners confirmed that business models of general practice are changing and highlighted that:

practice managers or their staff have more responsibility for Medicare billing than expected;

while the level of Medicare knowledge is the most significant factor influencing accurate billing, the majority of practitioners learn about billing accurately under Medicare through informal means, including on-the-job; and

practice or business protocols affect accurate Medicare billing.

Findings did not support the initial assumption that a large practice, by virtue of its size, was more at risk of non-compliant Medicare billing. Accuracy in Medicare billing was influenced by a range of attitudinal and behavioural variables characteristic of individual practices, irrespective of their size. Therefore a large practice where accuracy was paramount and billing assurance valued could be very compliant. However, if the opposite attitudes and behaviours existed, then an increased number of practitioners at a practice may increase the overall risk of non-compliant billing from that site.

A total of 40 large practices across Australia volunteered to participate in the trial of the Medicare Billing Assurance Toolkit (the Toolkit). Feedback from the post-trial questionnaire showed that 61 per cent of trial participants found the Toolkit helped to reduce the risk of incorrect billing in their practice; and 57 per cent of trial participants made changes to their systems, protocols or procedures as a result of using the Toolkit.

During the project, practitioners and practice managers confirmed an eagerness for education to help them to bill accurately under Medicare. There were over 19,000 views of the online education resources developed or enhanced under the project. These include the ‘Billing accurately under Medicare’ webpage, ‘Billing accurately under Medicare’ vodcast, and the ‘Responsibilities for billing accuracy’ eLearning topic. The purpose-designed education letter with individual practitioner’s Medicare data that was sent to a targeted audience was more effective than the general education letter sent to all practitioners.

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Large practices in metropolitan areas accounted for the majority of practices (88 per cent) where Medicare claims data indicated possible over-servicing by four or more general practitioners in the practice. Practice-based Practitioner Review Program (PRP) interventions were conducted at 30 large practices. Of the 207 health practitioners interviewed, 189 (ninety one per cent) addressed the department’s concerns at interview or after a period of review. The department requested the Director of Professional Services Review to review the provision of services of 18 practitioners (nine per cent).

In summary, three strategic risks for Medicare compliance were identified:

Regulation risks due to possible policy, legal and system gaps in the current Medicare regulatory framework in relation to practices as business entities with responsibilities and accountabilities for Medicare compliance.

Intelligence risks due to gaps in practice level data available to the department that may enable the detection, analysis and appropriate treatment of non-compliance by health practices.

Knowledge risks due to gaps in the knowledge of practice staff and health practitioners about Medicare billing that hinder their ability to comply with Medicare requirements.

Savings Achieved

The department achieved up to $71.5 million in savings over the three years of the project. Of the total savings, 96 per cent ($68.4 million) was attributed to behaviour change following the practice-based PRP interventions.

There was a significant increase in behavioural change savings per PRP interview conducted under the project, compared to the 2010 PRP savings assumption on which the Budget measure was based. For each practitioner interviewed under the project there was an average estimated saving of $185,000 per practitioner, compared to a saving of $76,000 per practitioner in 2010.

In addition, a peer group effect was measured for the first time. Analysis showed an estimated average saving of $75,000 from behaviour change of each practitioner who was not interviewed under the PRP, but who was located in a large practice where other practitioners underwent a PRP interview. Subsequent analysis showed that a practice-based approach (conducting PRP interventions on multiple practitioners in one practice within a short timeframe) achieves behaviour change savings of approximately $27,000 more per practitioner attributed to peer influence, compared to peer influence when only one practitioner at the practice is interviewed under the PRP.

No savings were identified as a consequence of sending the general education letter ‘Billing accurately under Medicare’ to over 104,000 health practitioners in 2013. Savings of approximately$2.5 million were associated with behaviour change following mail-out of a targeted education letter in May 2014 to 262 general practitioners.

The savings approach used to identify behaviour change for the practice-based PRP sub-project was reviewed by PricewaterhouseCoopers in June 2015, as part of a broader review of the savings methodologies in use in the Debt, Appeals and Health Compliance Division.

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Conclusion

Health practices across Australia are adopting multi-practitioner and multi-disciplinary business models. Practice managers and business owners appear to be taking a greater role in Medicare billing. However the department’s compliance focus has traditionally been directed at individual practitioners due to the nature of Medicare data and legislation. A practice-based approach would enhance the department’s capability to detect and address possible inappropriate practice and to achieve behaviour change. While individual practitioners still need to be aware of their responsibilities and accountabilities when rendering services under Medicare, more education is needed for practice managers and owners. The Medicare Billing Assurance Toolkit is a fine example of how the department can, through research and close collaboration with the profession, develop tools to assist health practices minimise their risks and bill correctly under Medicare. Ten recommendations are provided in relation to a practice-based approach to Medicare compliance.

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RecommendationsThe following recommendations support the enhancement of the department’s capability for a practice-based approach to Medicare compliance as part of its overall strategy to ensure the integrity of the Medicare programme. The recommendations align with the three strategic risks to Medicare compliance identified by the project – regulation, intelligence and knowledge.

Regulation – Medicare Compliance Framework

1. That the department liaises with the Department of Health to consider amendments to the Health Insurance Act 1973 to make accountable those persons (such as practice managers and business owners) who influence Medicare billing by, or undertake Medicare billing for, health practitioners who render services at the practice, regardless of any business arrangement by which the practitioner may be engaged.

2. That the department conducts practice-based compliance interventions where there are concerns of systemic or multi-practitioner non-compliance.

3. That the department develops a set of documented compliance standards for Medicare billing that can be adopted at the practice level.

4. That the department seeks to routinely measure behaviour change and any savings associated with both practice-based and practitioner-based compliance activities.

Intelligence – Information and Systems5. That the department seeks authority to enable collection, use and storage of practice-level

data and business data for Medicare compliance purposes.

6. That the department develops an on-going capability to identify changes within the health industry that may increase practice-level risks to the Medicare programme.

Education – Communication and Training7. That the department in consultation with health peak bodies develops a model

for Medicare billing education that addresses root causes of billing errors.

8. That the department liaises with medical colleges and associations of health practitioners to recognise the department’s on-line education modules and other Medicare education activities for Continuing Professional Development (CPD) purposes.

9. That the department seeks to have Medicare compliance education included at key stages of a health professional’s pre- and post-graduate education and career.

10. That the department develops a new strategy for the department’s Business Development Officer (BDO) network to provide practices with personalised support and education (including on-site if necessary) to enable practice staff to bill accurately under Medicare.

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Part 1: Background1.1 INTRODUCTION

Models of health practice have been changing from small owner-operated practices to larger, integrated business enterprises. Concerns about the use of Medicare by corporate practices were noted by the Senate Community Affairs Reference Committee ‘Review of the Professional Services Review (PSR) Scheme, October 2011’.1 The Department of Human Services (the department) became concerned that some health practitioners in large practices may be pressured to provide or refer services that are not medically necessary, or that incorrect billing may occur more readily in larger practices and thus pose a risk to the Medicare programme.

In response to these concerns the Australian Government made provision in the 2012-2013 Budget for the Fraud prevention and compliance – Increased Billing Assurance for the Medicare Benefits Schedule Budget measure (later to be known as the Large Practices Project).

A total of $7.6 million was provided for the department to develop and trial a new compliance approach for Medicare billing. The department would work with a select group of large and multi- disciplinary health practices to develop and test improved billing assurance processes. The department would also undertake additional practitioner reviews, and develop new information materials to educate larger practices about appropriate Medicare Benefits Schedule (MBS) billing. The Budget measure was expected to provide net savings of $13.1 million over three years.2

For the purposes of the Large Practices Project (the project), a large practices is defined as a practice with four or more health practitioners at the same location who provide services that are claimed under Medicare.

The following report describes the activities undertaken as part of the Large Practices Project and the findings from those activities. The discussion examines the implications of new knowledge gained from the project and provides recommendations to enhance the department’s capacity for a practice-based approach to Medicare compliance in the future.

1 Commonwealth of Australia, 2011, Review of the Professional Services Review (PSR) Scheme, Senate Community Affairs References Committee, p 44, available at h t tp ://www.ap h . g ov.a u /Par li am e n ta r y _ Bu s in e ss /Commi t t e es / S e n at e /Comm uni ty _ A ffai rs /Com ple t ed_ i n q ui r i e s /201 0 - 1 3/ p rofs e rv re v/r e p or t /in d e x 2 Australian Government, 2012, Budget Paper No. 2, Part 2: Expense Measures - Human Services, available ath t tp :// b u d ge t. g ov.a u /2012-13/ c o n t en t/b p 2/htm l / bp 2 _e x pe n s e- 1 3. h tm

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1.2 OBJECTIVES

The objective of the project was to understand and address the compliance challenges for large health practices in billing accurately under Medicare. It would also test and evaluate new compliance approaches and treatments and document identified risks or opportunities arising from having an evidence based and contemporary knowledge of the health sector.

The objectives for the project included:

1. Data and systems: Identify ways to improve data capture and compilation, particularly around different practice models.

2. Develop capability and trial systems: Design and trial a new systems-based compliance approach aimed at achieving voluntary improvements to billing controls used in health practices.

3. Education and communication: Design and apply an education programme for healthpractitioners in large practices, focusing on improving their Medicare billing knowledge and clarifying their responsibilities.

4. Practice-based practitioner reviews: Undertake a practice-based Practitioner ReviewProgram (PRP) to identify and treat possible billing inaccuracies.

1.3 SCOPE

1.3.1 Within scope

Activities within scope of the project included:

Capture and maintenance of information on large practices within the capabilities of existing departmental systems.

Development and voluntary trial of a systems-based approach to accurate Medicare billingin large practices.

Development and delivery of education and communications products that reinforced to health practitioners that billing accuracy was their responsibility.

Conduct of practice-based compliance activities under the department’s PractitionerReview Program (PRP).

Calculation of savings made as a result of compliance activity, in accordance with an approved savings methodology for the project.

Evaluation of findings and development of evidence-based recommendations.

1.3.2 Out of scope

Activities out of scope of the project included:

PRP interviews conducted on practitioners at a practice where less than four practitioners were located who billed under Medicare.

Implementation of recommendations for amendments to legislation, policy and majoradministrative system changes.

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Programmes administered by the department other than the Medicare programme. Medicare compliance audits. Actions to address issues raised by stakeholders that were outside the scope of the project. Development of savings methodology relating to the trial.

1.4 KEY DELIVERABLES, OUTCOMES AND PERFORMANCE INDICATORS

1.4.1 Expected outcomes

Expected outcomes of the project were:

Improved Medicare program integrity. Informed and engaged stakeholders. A new compliance approach focussed on practices, not just practitioners.

1.4.2 Key deliverables

Key deliverables for the project were:

A knowledge base to include:o Information regarding Medicare eligible health practitioner details, including practice

structures, business ownership, affiliations and employment hours.o A prototype IT system with supporting business processes, with the functionality to

maintain the above information.o Profiles of health sector business types and associated billing and servicing behaviours.

Completion of a voluntary trial of a systems-based Medicare billing assurance approach within large practice structures.

Education delivered to health practitioners. Practice-centred compliance activities - including application of the practice based

PRP reviews. Savings associated with education and practice based PRP review activities. A report providing evidenced based recommendations to address any identified risks and

gaps in the Medicare compliance framework. This may include proposals to implement policy, systems and/or legislation.

1.4.3 Financial management

The budget allocation for the project was $7.6 million over three years. The Large Practices Project was classified by the Chief Financial Officer Division as financially simplified, with funding allocated directly to relevant divisions in the department.

In accordance with the department’s financially simplified project methodology, financial management of the project was not required to be reported.

1.4.4 Key Performance Indicators

The project’s Key Performance Indicators (KPIs) were to:

1. Achieve the targeted savings of $20.7 million.

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2. Progress to timelines.

1.5 ASSUMPTIONS, RISKS AND CONSTRAINTS

1.5.1 Assumptions

Project assumptions:

The funding allocation would be sufficient. Staff with the required skills would be available and able to be retained on the project. Timeframes allocated would be adequate to complete the work. Internal and external stakeholders would be satisfied with the timeliness and nature of

consultations. There would be no significant shifts in government Medicare policy that would affect the

project during its lifecycle. Concerns of large practices about participation would be addressed. Data extracted would be accurate and would support the deliverables of the project. The department would have the capacity, capability and access to data to effectively

model compliance behaviour of large practices. Savings would result from behaviour change occurring after practice-based PRP and

education interventions. Evidence gathered during delivery of the sub-projects would inform the recommendations.

1.5.2 Risks and constraints

The following risks to the project were identified, that:

The project would not meet key milestones and would not be completed on time and within budget.

The Minister and Executive would not be informed in a timely manner of sensitive projectissues.

The project would not deliver on planned administered savings. The project would not deliver evidence-based recommendations.

Constraints identified at the beginning of the project included:

An operational budget of $7.6 million allocated over the three financial years from 2012-13 to 2014-15.

A timeline for project delivery of three financial years (1 July 2012 – 30 June 2015). Legal constraints in regard to the powers, provisions and administrative procedures

of relevant legislation, for example Health Insurance Act 1973. Information currently held by the department may not be sufficient for delivery of the

project

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1.6 GOVERNANCE

1.6.1 Project management

The department’s Project Management Framework was applied throughout the project’s lifecycle, with oversight and advice provided by the department’s Portfolio Programme Office.

A project team with an Executive Level 2 manager was established for each of the four sub- projects. Sub-project managers reported to the Project Manager, who reported to the Senior Executive Service Band 1 Senior Responsible Official (SRO). The SRO reported to the General Manager, Debt Appeals and Health Compliance Division. Roles and responsibilities of each staff member were defined in relevant project documents.

A Health Compliance Project Board (the Board) was established to provide governance and direction at the Senior Executive Service Band 2 level for the management of two 2012-2013 Health Compliance Budget measures, including the Large Practices Project. The Board membership comprised:

General Manager, Debt, Appeals and Health Compliance Division, Department of Human Services (Chair)

General Manager, Health Programmes Division, Department of Human Services (DeputyChair)

First Assistant Secretary, Acute Care Division, Department of Health First Assistant Secretary, Medical Benefits Division, Department of Health

The Board provided the project with overall strategic direction and governance; reviewed and approved all key project documentation including Project Plans and performance reports; monitored and evaluated progress of the project; approved any significant variations to the scope, cost, time, quality, or stakeholder engagement requirements of the projects; and resolved issues as required.

Board meetings were held quarterly from August 2012, with papers distributed out of session when required. All meetings and out-of-session distributions have been conducted in accordance with the Health Compliance Project Board Operation.

The Large Practices Project Working Group (the Working Group) was established to support delivery of the project, and was accountable to the Project Manager. The Working Group ensured consultation with key internal and external stakeholders; worked through issues and provided advice to the Project Manager; and provided support with the day-to-day performance of activities of project. The Working Group operated under operational terms of reference and met bi-monthly.

1.6.2 Project reporting

In accordance with the department’s Project Management Framework, a project plan, stakeholder engagement and communication plan, risk management plan, sub-project plans and deliverables schedule were developed and approved by the Board. Project status reports were provided to the

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department’s Executive Committee monthly. Change controls in respect of each project stage were documented and approved by the SRO and the Board.

The SRO received weekly written reports from the project manager and sub-project managers. The key elements of these reports were communicated to the Board through monthly status reports and formal quarterly reports. Updates on the status of the project were provided to the department’s Compliance Working Group that had representation from health sector peak bodies.

In addition to formal reporting, internal and external departmental stakeholders were kept informed through the Working Group and through direct communication from the project manager.

Any changes to project objectives, protocols or methodology were sent to the Board for approval. In this way, key stakeholders from both departments were progressively informed and involved in issues affecting the project methodology, findings and conclusions.

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Part 2: Methodologies2.1 SUB-PROJECT 1: DATA AND SYSTEMS

2.1.1. Data Analysis

The aims of the data analysis activity were to:

identify large practices for use in the Practice-based Practitioner Reviews sub-project. develop a statistical data model on the national ‘footprint’ of large practices.

It was intended that a knowledge base on large practices be created to include:

Medicare eligible health practitioners. practice ownership (where identifiable). practice Australian Business Number (ABN) where known. practice size (number of practitioners). practice banking details. Medicare claiming software used by the practice. practitioners at risk of breaching the 80/20 rule. possible links between practices (same practitioners identified as working at

different practices or same ownership of a number of linked practices).

An examination of the collection, analysis and matching of data from internal departmental sources was the first step in establishing a large practices knowledge base. These sources included the Medicare Provider Directory System (MPDS) and the Medicare Mainframe database. Internal information available on these sites was cross-checked with external sources such as other organisations’ websites (for example, the Australian Securities and Investments Commission website) for coverage and accuracy.

2.1.2 Privacy Impact Assessment

Under the department’s operational privacy policy, a Privacy Impact Assessment (PIA) is required for all new projects involving significant changes to the way the department collects, discloses, stores or uses personal information. The PIA was completed in 2013 by HWL Ebsworth, an external legal firm.

The PIA recommended that data from sources other than those specifically created for Medicare compliance purposes could not be used to compile data on practice billing behaviours for the project. This assessment affected how already existing internal data collections could be used by the project. For example, one set of data excluded from use was that available as a by-product of the Practice Incentives Programme (PIP). HWL Ebsworth considered that the privacy statement signed by those participating in the PIP was not broad enough to allow use of PIP data for purposes other than administering the PIP; use of PIP data for the project’s knowledge base may breach the Privacy Act 1988.

The introduction of new Australian Privacy Principles (APPs) from 14 March 2014 further restricted use of internal data. From that date, data drawn for the project that was derived from the MPDS,

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the Medicare Mainframe database, and publically available information could not be used without risk of breaching these new privacy provisions.

As a result, what could be achieved under the ‘Data and Systems’ sub-project objectives was limited. However, data was extracted from several approved sources, including the Enterprise Data Warehouse (EDW) and the Medicare Provider File View (MPFV) files. This data was structured to support the practice-based practitioner reviews and to provide regularly updated statistical information relating to large practices.

2.1.3 Prototype Practice Database

The purpose of the practice database prototype was to model and test characteristics of a system that could provide a range of profiling data on practices billing under Medicare to inform business and technical requirements for possible future system development.

Identified products from the prototype included:

a demonstration of how information on large practices (and individual practitioners at those practices) could support large practice compliance reviews.

metadata and the collection of sample data on large practices, their business structures,connections and associated billing profiles for the purpose of modelling an alternative strategic compliance management approach based upon practices as well as practitioners.

improved understanding of the options, architecture, business and technical requirements and costs for development of an IT system that would support practice level information.

reduced risks associated with building an operational and full production IT practice level compliance system, through a better understanding of business requirements.

2.2 SUB-PROJECT 2: DEVELOP CAPABILITY AND TRIAL SYSTEMS

The purpose of the Develop Capability and Trial Systems sub-project was to develop and test a new systems-based compliance approach intended to reduce the risk of inaccurate billing under Medicare. The systems-based compliance approach was developed in three stages – development and implementation of the Medicare Billing Accuracy Survey; co-designed development of the Medicare Billing Assurance Toolkit; and a voluntary trial of the Toolkit.

2.2.1 Medicare Billing Accuracy Survey 2013

The Medicare Billing Accuracy Survey (the survey) was developed in consultation with key health peak bodies in May 2013. The survey aimed to:

determine whether there was a correlation between practice size and type of business structure and instances of incorrect Medicare billing behaviour.

identify and quantify common issues in order to inform the development of relevant compliance options.

The survey design was submitted for review and approval by the Australian Bureau of Statistics’ Statistical Clearing House. instinct and reason, an external research organisation, was engaged by

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the department to carry out the survey and health peak bodies assisted by promoting the survey to their members.

instinct and reason identified a statistically valid sample of participants working in large practices. The sample included general practitioners, specialists, allied health practitioners and practice managers. A further sample from the whole population of practitioners and practice managers was selected for the purpose of generating comparative data. Samples provided for a broad geographic coverage across states and territories and within metropolitan, rural and remote locations, as well as for participant s with a range of years of experience in practice. instinct and reason collated the responses and analysed the data. To enable instinct and reason to perform a detailed analysis of responses, the sample selection for the survey used a data weighting methodology. This methodology drew upon information from the department’s database of all practitioners and practices billing under Medicare so that the relative proportions of different characteristics in the whole population could be reflected in the survey.

2.2.2 Stakeholder consultation and co-design

A one-day co-design workshop was held in June 2013 with representatives from key health peak bodies to address the most common causes of Medicare billing errors identified from the survey. Participants included representatives from the Australian Medical Association (AMA), Royal Australian College of General Practitioners (RACGP), Rural Doctors Association of Australia (RDAA), Australian Association of Practice Managers (AAPM), Allied Health Professions Australia (AHPA) and Optometry Australia (OA).

Consensus was that a toolkit should be developed, containing information that informs all health professionals about correct billing. The toolkit would provide a systems-based Medicare compliance approach to inform about policies, procedures, systems and day-to-day activities for use by health professionals and staff in their practice.

2.2.3 Medicare Billing Assurance Toolkit and Trial

The Medicare Billing Assurance Toolkit (the Toolkit) was developed over the following six months in consultation with those who had participated in the workshop. The objectives of the Toolkit were to:

increase awareness of practices about the need to manage risks to Medicare billing accuracy.

assist practices to identify any gaps in their practice procedures and systems that may increase the risk of incorrect billing under Medicare.

develop effective and easy to use tools, suggestions and information to assist practices to achieve Medicare billing accuracy.

In January 2014 an invitation was released on the department’s website for volunteer practices to test the effectiveness and ease of use of the Toolkit. Key health peak bodies also provided assistance in recruiting a number of their members to participate in the Toolkit trial.

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Forty (40) practices were inducted into the trial commencing in February 2014, with the last cohort completing the eight week trial in June 2014. Participating practices were supported by two of the department’s Business Development Officers (BDOs). The BDOs provided on-site support to 38 practices, and telephone support to two practices in Western Australia and Northern Territory. One BDO covered New South Wales, Queensland, Northern Territory and ACT regions and the other BDO covered Victoria, South Australia and Western Australia. No practice from Tasmania participated in the trial. Support included an introduction to the Toolkit and then ongoing contact throughout the eight week trial period.

The Toolkit trial evaluation framework comprised of the following:

Entry evaluation questionnaires and pre-participation questionnaires to be completed by all participating practices at the start of the eight week trial period;

Exit evaluation questionnaires and post-participation questionnaires to be completed by all participating practices at the end of the eight week trial period; and

Exit interviews which were offered to participating practices on an optional basis at the end of the eight week trial period.

Trial participants were asked to complete the evaluation materials which included both quantitative and qualitative elements to measure changes in their attitudes towards Medicare billing accuracy as a result of participating in the trial.

The entry and exit evaluation questionnaires were designed to measure changes in practice staff attitudes towards Medicare billing accuracy as a result of participating in the trial. The pre- participation and post-participation questionnaires were designed to capture participant feedback regarding their expectations and experiences in taking part in the trial.

To encourage full and frank responses by practices, and to provide assurance that the department would not use any information provided by practices for compliance purposes, practice names were removed from the completed forms by the department’s BDOs prior to forwarding their responses to the project team for evaluation.

2.3 SUB-PROJECT 3: EDUCATION AND COMMUNICATION

The education initiative for the project included the following activities:

The quality and content of the department’s Medicare billing education resources were reviewed.

A new webpage about Medicare billing accuracy was developed.

A vodcast was developed and linked to the webpage.

Education letters were developed and sent to health practitioners.

2.3.1 Review of Medicare billing education resources

The review examined the range and type of departmental information available to practitioners to ensure that it was up-to-date and relevant. This check sought to ensure that all information on

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Medicare billing procedures was consistent. In this way, all health practitioners would have access to a range of education resources that reinforced their individual legal responsibilities and accountabilities and ensured that they were aware of the consequences of non-compliance.

2.3.2 Webpage: Billing accurately under Medicare

In view of the increased use of online resources by practices, the ‘Billing accurately under Medicare’ webpage and associated electronic resources were designed as a single site for health practitioners to electronically access information about legal responsibilities and requirements for billing services under Medicare. New content was to address any gaps identified from the review of Medicare billing education resources.

The website was also listed in the letters sent to practitioners. An editorial article about the webpage was provided to the health sector peak bodies for use in their publications. An article was also published in the department’s ‘News for Health Professionals’ and ‘Practice Incentives Payment News Update’.

2.3.3 Letters to practitioners

General education letter

A general education letter, ‘Billing accurately under Medicare’, was designed to reinforce the need for practices and practitioners to monitor billing under Medicare more closely. The aim of the letter was to help educate all health practitioners about their legal responsibilities and accountabilities when services are billed under Medicare in their name or under their provider number.

The key messages in the letter were aligned to the ‘Billing accurately under Medicare’ webpage, with the link to the webpage included in the letter. The letter was sent to 104,106 ‘active’ health practitioners. An active health practitioner is one who has rendered more than $50 of MBS services in the previous six months.

Prior to the project, savings estimations for the education and communication sub-project were based on the assumption that approximately 40,000 health practitioners were working in large practices. Savings estimations also assumed from previous experience with letters that that the knowledge gained through the general education letter on correct claiming would lead to five per cent of health practitioners reducing future billing by 2.5 per cent. That is 2,000 of the targeted health practitioners (40,000 multiplied by five per cent) each reduce their billing by an average of$3,850 per year with 50 per cent recidivism rate applied after the first year (2.5 per cent of$154,000, the average income of each health practitioner) would result in estimated savings of$11.5 million over three years.

However Medicare systems could not accurately identify all practitioners who were working in a large practice. As sufficient funding was available, the general education letter was not confined to just 40,000 practitioners, but was sent to all active health practitioners, thereby including any who currently worked, or who in the future may intend to work, at large practices.

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The mail-out was conducted in two stages. On 25 March 2013 the general education letter was sent to an initial 18 per cent (19,018) of active practitioners. Behaviour change of this group would be compared with a control group of the same sample size, who did not receive the letter, as a savings measurement strategy. The letter was then sent to the remaining 82 per cent (85,088) of active practitioners by 30 June 2013.

Procedures, including a help line, were established for dealing with enquiries, returned letters and receipt of voluntary acknowledgements.

Targeted education letter

Due to early indications after the general education letter mail-out that expected savings may not result, the project provided an opportunity to design a targeted education letter and compare its effectiveness to that of the general education letter.

Psychologists working in the department designed the targeted letter for maximal impact to encourage behavioural change. Health sector peak bodies were also consulted on the content of the letter. Each targeted letter was personally addressed to the practitioner and included an extract of their Medicare billing records which were of concern. The letter also drew stronger attention to the consequences for practitioners of making incorrect claims under Medicare.

The target group was identified from the Medicare claims data of all active general practitioners who had claimed professional attendance items in the period 1 Feb 2013 to 31 January 2014. Professional attendances include items from Groups A1, A2, A5, A6, A7, A9, A11, A13, A14, A15, A16, A17, A18, A19, A20, A21, A22 or A23 listed in the MBS. All general practitioners who had rendered 60 or more professional attendances on 15 days or more within the 12 month period (approaching the 80/20 rule) were identified and this data was overlaid with the large practice data.

Practitioners were not included if they were not in a large practice; or were the subject of a current audit or PRP review; or had been referred to PSR, had a PSR Determination or had a PRP review in the previous 12 months. This approach was to ensure any behaviour change was due to the letter intervention and no other compliance activity.

Importantly, although the practitioners worked in a large practice, it was not one where four or more general practitioners had breached or were approaching the 80/20 rule. This meant that the targeted letter provided compliance coverage to those who may have been over-servicing, but who did not meet the criteria to be interviewed under the PRP of the practice-based reviews sub- project.

Those included in the group to receive the targeted letter were divided into an impact group and a control group. In May 2014 the targeted education letter was sent to the impact group of 262 general practitioners.

A savings methodology was developed that considered changes to billing behaviour for the 12 weeks following despatch of the letter, taking account of any baseline change in behaviour demonstrated by the control group.

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2.4 SUB-PROJECT 4: PRACTICE-BASED PRACTITIONER REVIEWS

The Practice-based Practitioner Reviews sub-project aimed to:

establish a new compliance approach to build an evidence-based body of knowledge on large practices’ compliance under Medicare.

examine whether a whole of practice PRP intervention was a more effective compliancestrategy than the historical approach which focused PRP interventions on individual practitioners, irrespective of the size of the practice to which they belonged.

2.4.1 Practice-based reviews as a new compliance approach

This ‘new compliance approach’ involved Practitioner Review Program (PRP) interviews of multiple practitioners at a single large practice within a short timeframe.

The criteria for selecting a practice for review in this sub-project were that:

there were four or more health practitioners in the practice. four or more of these practitioners had approached or breached 80 or more

professional attendances on 20 or more days in a 12 month period (the 80/20 rule).

While servicing at such levels may be due to the nature of the practice, it may also indicate over- servicing and possible inappropriate practice.

For the purposes of the project, the threshold indicating ‘approaching the 80/20 rule’ was 60 or more professional attendances on 15 or more days in a 12 month period. There were five levels of daily servicing categorised from highest (breach) to lowest eligibility criteria for review:

Category A - 80 or more professional attendances on 20 or more days in a 12 month period Category B - 80 or more professional attendances on 15 or more days in a 12 month period Category C - 75 or more professional attendances on 15 or more days in a 12 month period Category D - 70 or more professional attendances on 10 or more days in a 12 month period

plus 80 or more professional attendances on 5 or more days in a 12 month period (but not included in categories A, B, C)

Category E - 60 or more professional attendances on 15 or more days in a 12 month period

Data from the Data and Systems sub-project identified all large practices that had four or more health practitioners who had approached or breached the 80/20 rule. Reports were run quarterly. Practices identified by these reports were prioritised through the process of weighting which considered:

the total number of general practitioners (greater than four) who had either breached or were approaching the 80/20 rule; and

practitioner’s levels of service activity at a location as a proportion of their total activity,categorised as Principal site (P), Secondary (S) or Low (L).

Medicare claiming profiles of all practitioners at an identified practice were reviewed, including allied health practitioners, consultant physicians and specialists. A total of 30 large practices were

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selected as locations for a practice-based review and 207 health practitioners were identified as eligible for a PRP interview.

Where concerns were identified, practitioners were interviewed under the PRP, and where necessary, the Director of Professional Services Review (PSR) was requested to review their provision of services.

Quantitative and qualitative results from the whole of practice PRP interventions were to be compared with results from PRP interventions on individual practitioners, to assist in informing a comparative analysis of these two approaches, and to determine if possible, which PRP approach may be a more effective compliance strategy.

A pilot of the practice-based PRP approach was conducted in January 2013 to assess the suitability of the business rules and new compliance approach. Improvements identified from the pilot were incorporated into the approach used for the remainder of the practice-based PRPs.

All PRP interviews for the project were completed by May 2014.

2.4.2 Practice-based PRP savings measurement

Expected savings from practice-based PRP reviews were based on savings assumptions from analysis conducted in 2010, which estimated that behaviour change following a single practitioner interview under the PRP resulted in savings of $76,384 per practitioner.

The assumptions also recognised that no comparator existed to validate that a practice-based PRP achieves an equivalent or greater result compared to a single practitioner interview. Therefore a conservative factor of 40 per cent of $76,384 was applied resulting in an adjusted savings estimate of $45,830 per practitioner.

Anticipated savings of administered expenditure of $9.2 million from practice-based PRP interventions were based on completing 200 PRP interviews, each delivering $45,830 savings. However it was also assumed that the department would revisit the methodology for calculating PRP savings.

A new more statistically robust methodology was developed to measure indirect savings resulting from practice-based PRP interventions. The savings methodology incorporated a trends analysis to quantify the average deviation from the trend line, that is, the savings per practitioner for the 12 month period directly following a PRP intervention. In addition, the methodology included MBS referred services as well as MBS rendered services and PBS prescribing.

The new savings methodology also measured savings from behaviour change of practitioners who were not subject to a PRP interview, but who worked at the same practice as peers who were interviewed. In addition, a possible range for each average calculation (MBS referred, MBS rendered and PBS prescribing), was calculated to provide a 95 per cent confidence interval for the components of the final figure.

Repayment of incorrectly claimed Medicare benefits by Voluntary Acknowledgment, or debts raised as a result of a PSR Determination would count towards the total direct savings from practice-based PRP interventions.

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Part 3: Findings3.1 SUB-PROJECT 1: DATA AND SYSTEMS

3.1.1 Data Analysis

A data model was created to identify a range of data relevant to large practices. Data tables to be produced from this model included:

the number of different types of practitioners in Australia (i.e. dentists, optometrists, pathologists, general practitioners etc.).

information about medical practitioners breaching or approaching breaching the 80/20rule.

practices where there were four or more practitioners with active provider

numbers. Quarterly statistical reports were also produced and included the:

number of practices by practice size, as determined by the number and type of practitioners active in each practice

percentage of practices in metropolitan, regional and remote locations, by state practices where practitioners were breaching or approaching breaching the 80/20

rule, also by state number of large multi-disciplinary practices using the derived major speciality number of large single discipline practices using the derived major speciality number of large single discipline (medical and GP only) practices using the derived

major speciality.

The data demonstrated that the number of large health practices with four or more health practitioners increased over the three years of the project. Figure 1 illustrates the trend in growth of large practices over four years from 2011 to 2014.

Figure 1: Growth in Number of Large Practices 2013-15

Current Medicare claiming systems have no ability to track and reliably attribute expenditure by practice or by location, only by practitioner.

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While some location information has been provided by practitioners, because it is not a mandatory requirement, it has not always been updated. As a result, location information for practitioners collected for Medicare billing can only be used to create a generalised picture and cannot be used to support a practice-based information model or regulatory framework.

Neither sub-project aims of producing practice profiles nor of developing a suitable Statistical Data Model were able to be fully realised by the project. This was because of the legislative limitations of practitioner data captured and because the department was not able within the constraints of current systems to collect or use all the information identified as necessary to produce these outputs.

It also was not possible to capture and analyse employment, contracting and affiliation details of health practitioners, again because the current legislation does not mandate practitioners to supply this information to the department under the Medicare programme.

3.1.2 Prototype Practice Database

Within constraints imposed by data availability and cost, a pre-existing IT prototype was able to be adapted to demonstrate how a future system might be built to provide a range of information to support Medicare compliance activities. These included data profiles on practices and information on practice billing behaviour.

Initially it was hoped to develop a prototype using real data that could associate a wide range of data and generate information on large medical practices. In particular, the prototype would make provision for identification of individual medical practices (name, physical address location). It also would include information on the individual practitioners that work at those practices, as well as ownership (where available) and possible connections between medical practices and other health services such as diagnostic imaging and pathology.

Using simulated data, the prototype demonstrated the ability to search for an organisation by practice name, address, or other minor identification details, and then identify practitioners registered at the practice. This capability does not exist in current Medicare compliance systems.

It was anticipated that the prototype would provide a working model to inform the requirements, constraints, resource implications and design options for a future system. The functionality of the prototype was successfully tested and adapted at intervals during the project using different simulated data.

The prototype demonstrated that a full production system would have a greater level of functionality and relevance for Medicare compliance purposes than the department’s Provider Directory System (PDS).

Through the development of the prototype and use of simulated data, it was possible to develop an understanding of what a more complete practice-based business intelligence system would look like and what information it could produce. This understanding extended to:

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what additional information would need to be collected from practitioners and practices to enable a user to access information easily on individual practice or practitioner characteristics, including being able to identify billing patterns.

how information could be structured to enable a high level of system functionality. ways in which individual practitioners and practices could be identified, or grouped

together when practitioners worked in a number of different practices, or when the same practice operated out of different locations and employed different practitioners at those locations.

Although contained within the endorsed business requirements for the creation of the prototype, a number of criteria were not included in the delivered solution because of an inability to connect to, or display certain data, specifically:

connections between medical practices and other health services such as radiology and pathology.

connections with provider data or practice claims from systems such as PDS or EnterpriseData Warehouse (EDW).

connections to the Practice Incentives Programme (PIP) system which would provide practice owners’ or directors’ names.

banking details of practices or practitioners. Australian Business Number (ABN) or Australian Company Number (ACN) identifiers.

Nonetheless, the prototype demonstrated that the implementation of a comprehensive database of practice information linked to specific provider registration information is possible and would greatly assist in the identification and risk management of those large practices billing under Medicare.

3.2 SUB-PROJECT 2: DEVELOP CAPABILITY AND TRIAL SYSTEMS

3.2.1 Medicare Billing Accuracy Survey

In May 2013, 786 health practitioners and practice managers responded to the department’s Medicare Billing Accuracy Survey (the survey).

The occupation of survey respondents included:

36 per cent practice managers 29 per cent allied health professionals 14 per cent general practitioners 9 per cent specialists 7 per cent practice nurses 5 per cent others

As the sample was skewed by the higher proportion of respondents who were practice managers and allied health practitioners, the overall survey results were adjusted using statistical weighting of the data to compensate for this bias.

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The survey explored influences on Medicare billing, differences in practice size, sources of Medicare billing information, responsibilities of staff, and use of technology in practices.

Results indicated that the top factor affecting accuracy in Medicare billing in large practices was the level of knowledge of the MBS. Around 75 per cent of respondents indicated that this was a major determinant of accuracy in billing under Medicare. The following provides further details of the survey results.

Influences on Medicare Billing Accuracy

In addition to the level of knowledge of the MBS, respondents indicated a further three factors which significantly affected their Medicare billing, with over half respondents advising influencing factors included:

MBS online usability – 53 per cent. practice or business protocols – 53 per cent. practice software settings, set up or defaults at 50 per cent.

Differences in practice size

Some differences in the constitution of practices by size were reported by the survey:

Those in large GP practices (compared to those in small GP practices) are more likely to agree that conditions of employment and remuneration for employed and contracted staff, as well as time pressures placed on health practitioners, affect accurate MBS billing.

The majority of health practitioners work in a large practice (approximately 70 per cent).However, 18 per cent of survey respondents from large practices indicated that they are contractors rather than employees, while only 8 per cent of survey respondents from small practices indicated that they are contractors.

Smaller practices of allied health workers were less likely to operate with a designatedpractice manager.

Large practices are significantly more likely to be accredited against relevant industry standards than small practices. For GPs 89 per cent indicated RACGP standards, 10 per cent indicated other standards and the reminder indicated ‘don’t know’.

Large practices more commonly saw over 10,000 patients annually and small practicesmore often saw less than 5,000 patients annually.

Practitioners in small practices were more likely to see between 5 and 19 patients a day while those from large practices were more likely to see 20 to 29 patients a day, with general practitioners at large practices more likely to see between 30 and 39 patients a day.

More staff in small practices worked at multiple practices; tended not to be affiliated to the practice in which they mainly worked; were more often the owner of the practice; and reported that they were likely to work more than 50 hours a week.

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Sources of Medicare billing information

The survey showed differences between large and small practices in respect of where they obtained information on Medicare billing, with large practice staff more likely to:

learn about billing under Medicare on the job use practice-based meetings and MBS Online more frequently to obtain information and rely on internal emails for communication of any changes to MBS item numbers or billing

procedures.The majority of practitioners and practice staff learn how to bill under the MBS through informal channels:

54 per cent of health professionals (both practitioners and practice staff) learn about the MBS while on the job rather than via structured training.

22 per cent learnt it from another practitioner or the practice manager. Only 9 per cent indicating that they learnt it at university.

Those in larger practices tend to rely more heavily on the practice managers and staff to check on the accuracy of the MBS billing. Practitioners in larger practices were more likely to indicate that they “don’t know if checks are madei”.

Also, 77 per cent of survey respondents advised that the practice manager/owner was responsible for communicating information about the MBS to the practice:

84 per cent of large practices relied on practice managers/owners to communicate Medicare information compared to 60 per cent of small practices.

25 per cent of small practices relied on practitioners/clinical directors or practice staff instead.

Increased responsibility of practice staff

One of the most significant developments in health practice identified through the survey, has been the rise in the involvement of non-clinical practice staff in the Medicare billing decisions of the practice, with an increase in delegation of the billing procedures and review functions from health providers to practice staff. The survey found that:

53 per cent of MBS item numbers are finalised by the treating practitioner, whereas practice staff finalise 41 per cent of MBS item numbers.

practice staff have the ability to change the MBS item numbers initially chosen by thetreating practitioner:

o with 88 per cent of all respondents advising staff do so “to correct an error,” ando only 30 per cent do so “as directed.”o 8 per cent of all respondents advised that independent decisions by practice

staff are the main reason for changing the MBS item number. there is a high likelihood of gaps in the billing assurance process in a practice where

there is a separation of clinical and billing staff:

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o only 77 per cent of doctors are informed when the MBS item number they had originally chosen was later changed by reception/practice staff.

o 25 per cent of doctors do not check if the MBS item numbers they initially chose were the ones ultimately billed to Medicare.

When asked why they do not check their MBS billingo 51 per cent advised that they were confident that the system works well,

followed by the response that someone else in the practice has responsibility for it.

o 11 per cent advised that they did not have the time to do so.o 2 per cent advised that they are not given the opportunity to check.o Of those respondents who advised that someone else was responsible for checking,

65 per cent advised that practice staff were responsible. Thus it appears that rather than practitioners are not given the opportunity to check, it is that they “trust the system”.

There seems to be a minimal communication between the doctors and practice staff on one hand, and the practice owners on the other hand:

o only 13 per cent of practitioners and 9 per cent of practice managers tell thepractice owner when they find out that a claim was made by someone that used the practitioner’s Medicare provider number without the practitioner’s knowledge/permission. This means that practice owners may not be aware of inappropriate Medicare billing activities that occur in the practice.

A further finding from the survey was that, in relation to the level of control and oversight over Medicare claims made under their name or provider number, a significant number of medical practitioners either do not want to be in control; or are not aware that they do not control; or believe that they have more control than is actually the case. This is illustrated by two anecdotes from individual practitioners, as follows:

“I don’t want to worry about it – I just want to do medicine”.

“That’s what the practice staff are for – to look after the time consuming bits while the doctors do what they do best, which is to treat sick people better”.

Use of technology

The increased use and reliance of both practitioners and practice staff on information technology products, such as practice software and online applications, has meant that more and more of the decisions previously made by individuals are now automated and pre-populated by computers.

Respondents to the survey whose practices use computerised systems indicated that consultation room computers automatically populate:

the practitioner that the referral and/or request will be sent to (63 per cent). tests and/or procedures that the patient requires (46 per cent).

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In particular, results showed that the computer systems in large practices are almost twice as likely to automatically populate the tests/procedures, with data showing 26 per cent for small practices and 50 per cent for large practices.

Only 38 per cent of practices strongly agreed they have the appropriate tools and resources to deal with Medicare billing assurance issues.

3.2.2 Stakeholder Consultation and Co-design

Establishing frequent and extensive stakeholder consultation and co-design of project deliverables provided the department with an opportunity to:

understand the issues and factors affecting Medicare billing decisions in large practices.

identify health industry better practices for large practice management.

identify gaps in guidelines and regulations.

co-design with key stakeholders better practice and quality improvement approaches to

o improve Medicare billing accuracy,

o allow transparency in large practice Medicare billing processes, and

o re-enforce practice owners’ and practice managers’ responsibilities.

In particular, consultations with health sector peak bodies contributed significantly to the design of the Toolkit and contributed to achieving a high level of cooperation from practices and practitioners during implementation.

Collaboration with the health sector has resulted in improved understanding by the department of the operation of health practices and the health sector peak bodies. This understanding may be expected to inform future contact with the sector.

3.2.3 Medicare Billing Assurance Toolkit and Trial

The Toolkit trial evaluation revealed that:

61 per cent of participants found the Toolkit to be helpful in reducing incorrect billing in their practices. This finding supports the hypothesis that availability of reliable reference material and accessible educational opportunities are factors in ensuring compliant behaviour, in part because they empower people to be able to bill correctly.

57 percent of practices stated they made changes to their systems, protocols or procedures as a result of the Toolkit and

74 percent of participating practices advised that the Toolkit trial met their expectations.

Further benefits for the practices trialling the Toolkit included reducing potential effects of billinginaccurately on the practice’s reputation, opportunities to reduce the administrative burden and having confidence in the accuracy of financial returns to the practice that, if incorrect, could trigger Medicare audits or potential for legal action to recover overpayments.

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Based on the results of the Toolkit trial, the majority of practitioners and practice managers recognise the importance of correct knowledge of the MBS supported by a robust Medicare billing assurance system in the practice setting to ensure Medicare billing accuracy.

There was support from the trial participants and key health peak bodies that the Toolkit is a suitable resource for all practices regardless of practice size or speciality, as it provided a benchmark billing assurance model that practices can tailor to suit their particular requirements.

In response to positive feedback from the Toolkit trial, the department brought forward the release of the Toolkit for general use as an ongoing resource for practices. The Toolkit was launched by the Minister for Human Services on 10 June 2015 and is now available online through the department’s website as a Medicare compliance education resource.

The Toolkit has been accessed by 1,256 unique webpage visits in the first two weeks since its 10 June 2015 online publication.

3.3 SUB-PROJECT 3: EDUCATION AND COMMUNICATION

3.3.1 Review of Medicare Billing Education Resources

As a result of the review, changes were made to the department’s existing information resources. New material relating to billing accurately under Medicare was developed and added to Power Point slides used in request for education presentations. A new eLearning topic ‘Responsibilities for Billing Accuracy’ was included in the two existing Medicare eLearning programs, 'Medicare for New Health Professionals Module: Billing and Claiming’, and ‘Medicare for Dentists; Module: Medicare Billing and Claiming’.

In addition, the ‘Relative Value Guide for Anaesthesia’ billing requirements fact sheet was altered to include a statement regarding billing accuracy.

3.3.2 Electronic resources for billing accurately under Medicare

The ‘Billing accurately under Medicare’ webpage included examples of billing scenarios, references to the relevant legislation and strategies to reduce billing inaccuracies. A vodcast was made using the department’s medical advisers as presenters. The eLearning topic was included in the two existing Medicare eLearning programs, ‘Medicare for New Health Professionals; Module: Billing and Claiming’ and ‘Medicare for Dentists; Module: Medicare Billing and Claiming’. Examples of billing scenarios, references to the relevant legislation and strategies to reduce billing inaccuracies were added to the webpage.

The webpage address was referenced in the education letter and published online on 25 March 2013, coinciding with the first general letter mail out.

There were 19,316 views of these electronic education resources recorded between July 2013 and October 2014.

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3.3.3 Letters to practitioners

General education letter

The first letter to 104,106 active practitioners attracted 101 responses (0.1 per cent) from practitioners and staff in practices ringing in to the department helpline. On answering the enquiries, departmental officers were able to use the opportunity to provide education on what was meant by the 80/20 rule, which had been misinterpreted by several practices and practitioners.

No savings from behaviour change resulted from receipt of the general education letter.

Targeted education letter

Although targeted letters were addressed to individual health practitioners, enquiries were made to the department from practice managers as well as practitioners. This contact allowed the department to engage with individuals who work alongside practitioners and who may contribute to the Medicare billing process.

The targeted letter mail-out to 262 practitioners attracted 61 responses (24 per cent) from practitioners and staff, mostly to attest to the compliant nature of their billing processes, or to enquire:

Why did they receive the letter? – 29 per cent. Did Medicare have concerns with their billing practices? – 26 per cent. Clarification about use of a specific item number – 10 per cent.

Savings from behaviour change secondary to receipt of the targeted letter were estimated at $2.5 million.

3.4 SUB-PROJECT 4: PRACTICE-BASED REVIEWS

3.4.1 Characteristics of the practices

Quarterly reports showed on average that 60 large practices had four or more health practitioners in the practice approaching or breaching the 80/20 rule. The majority (88 per cent) of these practices were located in metropolitan areas.

A total of 30 large practices were the site of a practice-based review and 207 health practitioners at those locations were interviewed under the Practitioner Review Program (PRP).

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Information obtained at the PRP interviews identified the following characteristics of the large practices:

Demographic observations

73 per cent of practices were influenced by the international culture of their patient demographic or practitioner training.

63 per cent of practices had a young family population. 63 per cent of practices had a low socio-economic patient demographic.

Business structures and operational procedures

87 per cent of practices accepted walk in patients. 83 per cent were open after hours. 70 per cent advised the practice had a co-located pathology or diagnostic imaging centre. 70 per cent had nurses assisting in the practice.

Reasons influencing health practitioners

87 per cent of practices were affected by availability of practitioners at times and therefore worked longer hours where required.

Influences on health practitioners’ understanding of Medicare

60 per cent of practices confirmed practitioners make their own billing and referral decisions and understand correct billing through the MBS.

3.4.2 Characteristics of the health practitioners interviewed

Specialty:

200 (97 per cent) were general practitioners. 5 (2 per cent) were specialists - 2 surgeons, 1 paediatrician, 1 psychiatrist, 1 obstetrician. 2 (1 per cent) were dentists.

Concerns:

144 (70 per cent) had concerns of daily servicing:o 30 (15 per cent) rendered 70 or more professional attendances on 10 or more days

in a 12 month period (Category A, B, C or D).o 114 (55 per cent) rendered 60 to 69 professional attendances on 15 or more days in

a 12 month period (Category E). 63 (30 per cent) concerns other than daily servicing. Many had multiple concerns, with 494 concerns identified in total:

o 144 (70 per cent) – daily servicingo 138 (67 per cent) – rendered serviceso 66 (32 per cent) – initiated services – pathologyo 50 (24 per cent) – item associationo 45 (22 per cent) – prescribing under PBS

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o 36 (17 per cent) – initiated services – diagnostic imagingo 13 (6 per cent) – itemisationo 2 (1 per cent) – dental services

Outcomes:

188 (91 per cent) addressed the department’s concerns:o 70 (37 per cent) at initial interviewo 118 (63 per cent) after their six month review period

19 (9 per cent) were referred to the Director of Professional Services Review:o 12 (63 per cent) from initial interviewo 7 (37 per cent) after their six month review period

The claiming profiles of 400 additional health practitioners at the 30 practices were analysed but they did not undergo a PRP intervention because:

no concerns were identified; or 12 months’ data required for peer comparison was unavailable (it was not until

1 January 2013 that the Health Insurance Act 1973 provided for review of allied health practitioners under the Professional Services Review scheme); or

there was concurrent PRP activity in progress.

3.4.3 Requests to the Director of Professional Services Review

Practitioners were referred to the Director of PSR from 16 of the 30 large practices (54 per cent) involved in the practice-based reviews.

Of the 16 practices with practitioners who were referred to the Director of PSR:

Practice location

13 practices (81 percent) were located in major cities. 2 practice located in inner regional areas. 1 practice located in outer regional areas.

Practice size

2 practices (12 per cent) had less than 10 staff. 7 practices (44 per cent) had between 10 – 20 staff. 7 practices (44 per cent) had over 20 staff.

Of the 207 practitioners interviewed under the PRP, a total of 19 practitioners (9 per cent) had requests made to the Director of PSR to review their provision of services. Of those, 18 were general practitioners and one was a general surgeon.

Daily servicing was the primary concern for 16 practitioners referred to the Director of PSR. Levels of servicing were:

2 practitioners as category A (breached 80/20 rule). 1 as category B.

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3 as category C. 2 as category D. 8 (50 per cent) as category E.

Three practitioners were referred for a primary concern other than daily serving. These included concerns of rendered services, initiation of pathology services, initiation of diagnostic imaging services and item association.

At project closure:

7 practitioners were determined to have engaged in inappropriate practiceo consequent repayment orders totalled $539,464.

9 practitioners required no further action. 3 practitioners are under still under review.

3.4.4 Practice-based review savings

The revised savings methodology developed for the project demonstrated a significantly higher ‘per interview’ average estimated savings value ($185,100) than those on which the savings assumptions were initially based ($45,830).

The practice-based practitioner review approach provided a unique opportunity to measure the peer group effect of multiple reviews at a single location within a short timeframe. Results indicate behaviour change with average estimated savings of $75,300 for each practitioner working at the site of a practice-based review but who were not subject to a PRP interview.

Average estimated savings identified for the 12 month period following the practice-based reviews are approximately $68.4 million comprising of:

$38.3 million ($185,100 x 207 health practitioners interviewed) $30.1 million ($75,300 x 400 health practitioners not interviewed, but located in the

same large practice).

In addition, a total of $539,464 in direct savings was achieved from repayment orders as a result of the PSR determinations in relation to the seven practitioners who were found to have engaged in inappropriate practice.

Total estimated savings for the project from practice-based PRPs are therefore $69.0 million.

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Part 4: Discussion

4.1 Regulation – Medicare Compliance Framework

4.1.1 Does practice size matter?Another key insight from the Large Practices Project is that the question should not be whether larger or smaller practices are more or less compliant, but rather the question should be whether a practice is capable of dealing with the specific Medicare compliance challenges that it faces. Such challenges are due to a number of factors such as geographical location, socio-economic and demographic profiles of its patient population, level of Medicare knowledge of its practitioners and practice staff, practice size and business operations, and indeed, the compliance culture as demonstrated by management, staff and practitioners in the practice.

Each practice regardless of its size faces its own compliance challenges. For example, anecdotal feedback from smaller practices (which tend to be specialist practices) indicates that they do not have a problem in choosing the right MBS item number because they only have a handful of MBS item numbers to deal with. This is unlike a busy inner city large GP clinic which has two hundred MBS item numbers to contend with. Conversely, larger practices overwhelmingly tend to have staffing resources who handle all the billing and claiming functions, including reviewing and adjusting claims, simply because their business operations dictate that the scale and volume requires extra staff.

Survey respondents from large practices were more likely to indicate that they initially learned how to use the MBS through informal or on-the-job experience compared to respondents from smaller practices (60 per cent from large practices compared to 43 per cent from small practices). Large practices also have much higher staff turnover both at the practitioner and practice staff level, compared to small practices.

This means that large practices face a higher risk of incorrect Medicare billing, due to discontinuity of corporate knowledge that occurs when, for example, the practice manager who has been around for the last thirty years retires tomorrow - the level of Medicare billing knowledge within the practice would probably be diminished as the practice manager was the “go-to” person for MBS billing questions since the practitioners learnt how to bill under Medicare “on-the-job”.

The results of the Build knowledge review sub-project also indicate that size is not the only (or even the dominant) factor that influences a practice’s level of compliance. For example, in analysing a practice’s unusually high levels of billing for an MBS item number regarding serology tests, it was discovered that the practice was located in an area with a high migrant population from South East Asia that had a high incidence of Hepatitis A and B, hence the practice ordered hepatitis serology tests on all new patients as a baseline activity.

Another example is the geographical location of the practice impacting not only the type of patients but the flow of patients. A few practices included in the review were located near hospitals and were being used by patients as an alternative to the emergency department of the hospital (which invariably was often busy and overflowing).

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Lastly, staffing levels and the working hours of practitioners significantly influenced the overall billing levels for the practice at a given point in time. In a number of practices reviewed, there were insufficient doctors to see all the patients waiting in the reception area and doctors felt that they had to “see everyone – you could not just send them home because it’s 5PM already” or the practice “had a ‘see all patients and no closing time’ policy, which meant doctors had to stay back until the last patient was seen – even if it was 1AM in the morning”.

4.1.2 Practices and their compliance culture

Why is organisational culture within the practice setting important in relation to Medicare compliance? Simply put, the fundamental premise of the project is that the increasing trend towards large practices is driving the emergence of certain types of compliance cultures, some of which negatively influence the Medicare billing decisions of individual practitioners. The role that practice culture plays in a practitioner’s Medicare compliance performance was reaffirmed by practices participating in the Toolkit trial, with 75 per cent strongly agreeing and 25 per cent slightly agreeing that their practice has a positive compliance structure.

These results can be explained as a reflection of the nature of the Trial as a voluntary exercise, which means that practices which are proactively compliant are the ones most likely to participate in new regulatory activities, such as the Toolkit trial. Nevertheless, it shows a strong relationship between a positive compliance culture and proactive compliance actions in a practice setting, and is strong evidence of the importance of promoting a positive compliance culture in the practice.

However, it is important to first address the meaning of “culture” in a health practice setting. At its most basic form, it is captured in the phrase “the way we do things in the practice”. This means that an organisation’s culture is made up of the values, beliefs, underlying assumptions, attitudes and behaviours shared within the organisation; and sets the standard for the behaviour of staff.

In one way, it is easier to define culture by its indicators in a practice. For example, a practice that has a positive compliance culture has communicated the importance of compliance to all practice staff; has a clear set of Medicare billing compliance values and responsibilities; and has a workplace that encourages participation and the reporting of Medicare billing compliance concerns. It could also be argued that membership and active engagement in a professional organisation by the practice manager is a good indicator of the practice’s compliance culture. For example, 53 per cent of survey respondents indicated that their practice is accredited against the RACGP General Practice accreditation standards while 20 per cent of survey respondents indicated that their practice is accredited against other standards.

For the purposes of the project, a more relevant indicator of the practice’s compliance culture could be the practice’s level of Medicare billing accuracy. On one hand, this seems like a straightforward principle - a practice which has a positive compliance culture would more likely have a better Medicare billing performance, as well as good staff morale, low staff turnover and better clinical outcomes.

In some circumstances, there may be a tension between appropriateness and accuracy in relation to Medicare claims. A treatment may have accurately met the MBS item number requirements,

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but it may not have been appropriate due to it being clinically unnecessary. It is in these highly complex and difficult-to-detect grey areas of Medicare where previous high profile allegations of “rorting” by practices have occurred, and it is a significant concern for the integrity of the Medicare programme because it appears to demonstrate that a “poor” compliance culture may support a profit-maximising approach.

For practices that know, or believe they know, the areas where Medicare regulator is “not looking”, the risk of being detected and caught is low relative to the potential financial benefits to be gained. Besides, as the practitioner primarily bears legal responsibility for the consequences of incorrect claiming under Medicare, this creates a moral hazard scenario whereby practices may encourage or facilitate non-compliant behaviour and enjoy the benefits with little to no adverse consequence, as the legal responsibility for Medicare compliance lies with the practitioner.

This is not to say that practices which are profitable are engaged in fraudulent behaviour, or that a practice has to choose between compliance and profitability. A number of practice managers who participated in the Toolkit trial believed that compliance is good for the bottom line - in their opinion, it is worth their while to be compliant because non-compliance is inefficient and wasteful. For example, incorrect claims need to be resubmitted, staff need to go back and review back claims and practitioners get involved in PRP interviews, and it adversely impacts on the business’ reputation.

If Medicare billing accuracy only highlights one aspect of a practice’s culture, is there another aspect that can assist in forming a more complete picture of the practice’s overall compliance culture? The answer is yes, and it is the practice’s attitude towards compliance.

As discussed earlier in this report, the dominant regulatory response throughout the Australian Government is the “responsive regulation” model which is illustrated by the compliance pyramid. It is a good demonstration of the range of different compliance attitudes across practices - some are proactively compliant, and some are determinedly non-compliant.

A different manifestation of attitude towards Medicare compliance was identified in the survey results, whereby the survey respondents were grouped into three segments based on their efforts to be accurate in their Medicare billing (also referred to as their “care factor” in getting their Medicare billing right):

The low effort segment (36 per cent) – comprised of Survey respondents with a profile that suggests they are ‘unfamiliar’ with Medicare billing requirements

The medium effort segment (39 per cent) – comprised of Survey respondents who seem tocare about being accurate but have less control in the process

The high effort segment (25 per cent) – comprised of Survey respondents who seem to be responsible for Medicare billing and show care in getting it right

The survey found that for general practitioners, their lack of review of the Medicare claims made under their name or provider number was the strongest negative variable that affected their efforts to be accurate with Medicare. Interestingly, across the three segments there was a mix of the types of health professions; length of experience; method of learning how to use the MBS (on-

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the-job versus formal training); and practice size, which meant that there was no strong representation of a particular health profession or practice size in each segment.

By considering the practice’s billing behaviour (indicated by its Medicare billing accuracy) with its compliance attitude in a quadrant format, the following four types of compliance cultures in practice settings are proposed for consideration as they may assist in identifying the Medicare billing risk profiles and corresponding risk treatments for different types of practices:

Figure 2: Four types of compliance cultures

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Table 1: Four types of compliance cultures (based on project findings)Note: while the below table describes the practice’s approach in relation to Medicare compliance, the profiles are also strong reflections of the practice’s broader compliance culture

Complianceculture type

“Advocates” “Misinformed” “Opportunistic” “Fraudulent”

Profile Proactively Well-intentioned but Play the game / work the Intentionally non-description compliant not always accurate system compliant

How the practice They care about They care about They know how to be They don’t care andoperates compliance, they compliance but they compliant – but it’s based on don’t know (or don’t

know how to be may not always know what they can get away with want to know) how tocompliant and they how to be compliant be complianttake the initiative tocontinually improve

their complianceperformance

Example Practices that Practices with high Practices with high levels of Practices that claim forvolunteered to levels of rejected MBS over-servicing services that were

participate in the trial claims or under- never renderedcoded/

Up-coded MBS claims

Recommended Make it easy for Education Increased Medicare sanctions/penalties,compliance them to comply – for Compliance Audit (IMCA) criminal prosecutiontreatment example, clarify the process

adjustments processor automate Practitioner Reviewprocedures Programme (PRP)

Current gap in Inconsistent Lack of Medicare Lack of monitoring Lack ofDHS approach advice from education activities monitoring

Medicare resources for Lack of visibility of activitiesprogramme specific health practices from a The currentservices, e.g. professions and Medicare compliance legislation limits“Ask MBS” non-clinical perspective the application of

Difficulty faced by practices in finding the right

practice staff(e.g. practice managers)

Lack of legislation to enable DHS to monitor and take action at the

certain compliance actions onlyinformation, practice level where an

e.g. navigating the DHS website

Little or no appetite/action in using current compliance powers even though the department has the power to do so, e.g.

employment relationship exists between the practitioner and the practice owner

IMCA The current legislation

limits the application ofcertain complianceactions only where anemployment relationshipexists between thepractitioner and thepractice owner

While Figure 2 is only one way to illustrate the different types of compliance culture at the practice level, it nevertheless allows the department to avoid a “one size fits all” approach in carrying out practice-based compliance activities. It also provides pathways for the department to target practice types depending on the type of intervention or education approach best suited to their practice culture, not necessarily practice size. Lastly, it highlights areas of opportunity for the department to address based on the requirements of different practice cultures – for example, if

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practices are identified as falling under the “Advocate” profile, then the department can obtain maximum results by focusing its resources on helping the practices help themselves (for example, through improving the self-help or automated functions for Medicare services provided by the department).

4.1.3 What risk does a practice setting pose to the integrity of Medicare?

Survey respondents (health practitioners and practice managers) were asked to rank nine preselected factors according to how they affect the accuracy of MBS billing. “Practice or business protocols” were ranked third. The survey results also indicated that those in larger practices tend to rely more heavily on the practice managers and staff to check on the accuracy of the MBS billing; as a result, practitioners in larger practices were more likely to indicate that they “don’t know if checks are made.

However, the survey’s scope does not provide an objective measure on the level of inaccurate MBS billing; only indicators of attitudes and behaviours and thereby potential risk factors. Nevertheless, the survey provides sufficient information to indicate that there are differences between small and large practices, with larger practices having greater support but also greater disconnect between the treating practitioner and the MBS items actually billed.

It has been recognised that an individual’s degree of compliance is influenced and determined to a large extent by the organisational or social environment where they carry out their activities. This means that in a health practice setting, an individual practitioner’s willingness and ability to comply with Medicare billing requirements may significantly depend on their practice’s willingness and ability to enable the individual to do so.

Simply put, the individual practitioner’s Medicare compliance behaviour is influenced by how much support is provided by the practice. If the individual practitioner were the sole owner- operator of the medical practice then there is possibly no disconnect; their individual willingness and ability is the practice’s willingness and ability. However, most health practitioners are employed in large practice settings, and only a small proportion has ownership levels in the practice.3

It could be argued that individual practitioners who do not have an ownership stake in the practice may have diminished levels of influence in the practice’s Medicare billing process, because the practice staff report to the practice owners, not to the individual practitioners. There could also be a tension regarding the compliance direction that practitioners would like to take versus the direction the practice owners decide to take. This means that the key indicator of Medicare compliance in a practice setting is control over the Medicare billing process. It is possible that in an increasing number of medical practices in Australia, individual practitioners have little control but maximum legal risk and responsibility in relation to Medicare compliance.

3 Britt H, Miller GC, Charles J & Henderson J et al, 2010, General Practice Activity in Australia 2000-2001 to 2009-2010: 10 Year Data Tables, Bettering the Evaluation and Care of Health (BEACH), General Practice Series No. 28, Australian Institute of Health and Welfare.

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4.1.4 Modernising the regulatory approach

The current Medicare compliance approach under the Health Insurance Act 1973 (Cth) (the HIA) is focused on individual practitioners. A practitioner is legally responsible for claims made to Medicare for services rendered or initiated in their name or under their provider number.

Under the HIA, there is limited scope available for the department to pursue compliance actions at the practice level. For example, in relation to inappropriate practice, the relevant sections under the HIA which impose liability on a person other than a practitioner apply only if that other person is the employer of the practitioner, or is an officer of a body corporate that employs the practitioner. If the practice is a medical practice – criminal or civil penalties may be applied to a person who is not the practitioner if the person is an officer of the body corporate that employs the breaching practitioner, however for civil penalties their liability is generally limited to failure to produce documents.This creates an environment whereby practice owners are able to minimise their exposure tocompliance liability by using alternative means of engaging practitioners to work in the practice. For example, by engaging practitioners as independent contractors instead of employees, business owners are able to “exert influence on contracted individual practitioners whilst remaining at arm’s length from any compliance intervention.”4 The department’s current compliance focus on individual practitioners leaves a gap in preventing and responding to the risks caused by practice- level factors.

Numerous amendments over the years, particularly sections to allow other health professionals aside from medical practitioners to access the MBS, have been made to the HIA in response to the changing needs of the Australian public and policy priorities of successive governments. For health practitioners other than medical practitioners, the HIA has an expanded coverage in apportioning responsibility for Medicare compliance to practice owners. Hence the HIA requires the practice owner of certain health practices (such as optometry practices) to provide the assurances such as undertakings which confirm their recognition of their legal responsibility for Medicare compliance. This is contrasted with the owners of medical practices who are not required to provide undertakings or similar assurances. For practices other than medical practices, the practice owner may also be responsible in the event of a Medicare compliance breach within the practice, even if the practitioner responsible for the breach is not in an employment relationship with the practice owner. Therefore there is significant benefit in reviewing the Medicare legislation to ensure that it is up to date with the changing landscape of the health industry.

Legislative changes are likely to be required to mandate the registration of practices with the department and the updating of practice information on a regular basis in order to build an up-to- date database in the department’s production environment. Registration forms for practices would need to be introduced and existing forms for practitioners modified to ensure relevant details are captured, recorded and updated on an ongoing basis. This should include practice

4 Department of Health and Ageing, 2007, Review of the Professional Services Review Scheme: Report of the Steering Committee, section 4.1, p 41

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opening hours and provider’s personal contact details. The use of the Health Professional Online Services (HPOS) system also could be enhanced to allow practices to register online with the department. There may be opportunities in capturing practice data to also decrease red tape and increase accuracy of practitioner data held by the department. In particular, the department already receives practitioner data from AHPRA; AHPRA will now only register practitioners by email, and so with supportive legislation, the department could store and use current email addresses to communicate with practitioners.

Recommendation: That the department liaises with the Department of Health to consider amendments to the Health Insurance Act 1973 to make accountable those persons (such as practice managers and business owners) who influence Medicare billing by, or undertake Medicare billing for, health practitioners who render services at the practice, regardless of any business arrangement by which the practitioner may be engaged.

4.1.5 Healthcare regulation in other countries with similar healthcare systems

While the challenges faced by Australia are similar to those faced by other international jurisdictions, a key difference lies in the ability (or inability) of the Australian Government - through the department - to regulate the business entity level of medical practices. Whereas the department has limited regulatory “levers” targeted at business owners, particularly medical practices, other jurisdictions have more significant regulatory powers which they can apply on a much broader range.

For example, the New York Office of the Medicaid Inspector General compels Medicaid providers at the practice level to institute and report on their own compliance plans as part of a self- certification model, while the UK National Health Service requires practices to be licensed by the independent regulator Monitor in order to provide health services in the community.

In both these examples, the compliance powers available to the regulator are directly attached to the certification (New York) or licence (UK) regime, and primarily apply at the practice level. For example, suspension or revocation of the licence for non-compliance with the terms of the licence is the ultimate sanction applicable to licensed UK providers. They also separate the treatment of billing/funding breaches at the practice level to any clinical breaches which may have been committed by individual practitioners, which are dealt with through professional registration bodies.

In the United States, Medicare and Medicaid authorities at both federal and state levels publish official Compliance Programs (either voluntary or mandatory programs) which list components of what they consider will comprise an effective compliance program.

For example, the Federal Department of Health and Human Services Office of Inspector General’s Compliance Program for Individual and Small Group Physician Practices lists seven components of an effective voluntary compliance program:

1. Conducting internal monitoring and auditing.

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2. Implementing compliance and practice standards.3. Designating a compliance officer or contact.4. Conducting appropriate training and education.5. Responding appropriately to detected offences and developing corrective action.6. Developing open lines of communication.7. Enforcing disciplinary standards through well-publicised guidelines.

4.1.6 Alternative to legislative compliance: co-regulation

Ayres and Braithwaite argued in their research that the challenge for the public sector is to identify which industry has the requisite structure and historical performance for self-regulation.5

Using industry associations to carry out “self-regulation” can dramatically expand the regulatory coverage compared to the government carrying out the inspections and may provide a more economical alternative to government regulation. Self-regulation may be more efficient as well as more effective, as the outcomes may be more acceptable to industry members, unlike regulatory activities conducted by government who are viewed as “outsiders”.

Co-regulation, rather than “self-regulation”, could reflect a new compliance relationship between the department and health industry. The concept is already well-established for example, the Australian Government relies on health professional boards and medical colleges to regulate the professional activities of health practitioners.

There may be a range of benefits in recognising practices as regulatory co-partners, along with individual health practitioners, in relation to Medicare compliance. The concept of co-regulation offers vast flexibility from the Medicare regulator point of view, in that it can be both a stick and a carrot. For example, accreditation to a new Medicare billing assurance standard could be voluntary for all practices, and it could be mandatory as an intervention tool for practices that have been found to be non-compliant.

For example, a “light touch” approach might just involve each practice completing a one page form containing basic practice information, which the department only minimally reviews before issuing a practice identification number. Alternatively, the department can follow the comprehensive accreditation models (such as that used in child care and disability employment services) to require each practice to undergo an accreditation audit against the new Medicare billing assurance standard before they are issued a practice number, which must be quoted every time the practice submits a Medicare claim on behalf of its practitioners.

4.1.7 Standards-based approach

The need for a standards-based approach to regulation that provides profession-wide and accessible guidelines for Medicare billing was confirmed by the Toolkit Trial as well as the Medicare Billing Accuracy Survey. At the time the project commenced, there was no

5 Ayres I & Braithwaite J,1992, Responsive Regulation: Transcending the Deregulation Debate, Oxford University Press, USA.

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comprehensive and profession-wide list of procedures or standards for Medicare billing available for practices to use to help mitigate non-compliance.

The survey confirmed that business models of general practice are changing and existing Medicare legislation does not adequately ensure compliance by practices. In particular, practice staff, other than practitioners, who may be involved in the billing cycle are not subject to regulation. Approximately 41 per cent of practitioners surveyed reported that Medicare billing under their names and provider numbers was done by non-practitioner staff.

Other survey responses also indicated gaps in the regulatory framework for Medicare billing. In particular, practitioners and practice managers reported their need for an authoritative profession-wide and consistent guide on procedures and standards for Medicare billing for practices to use to help mitigate Medicare non-compliance. This finding was supported by the feedback from distribution of the Toolkit. Some inconsistencies in material available through the Department of Health online site MBS Online were reported and also supported the view that a definitive guide on Medicare billing assurance Standards was needed.

In current circumstances, the legislative powers and responsibilities for billing accurately under Medicare lie with practitioners. Without legislative provisions, it is only possible to encourage non-practitioner staff to adhere to requirements when they are billing under Medicare. The lack of legislative backing for involvement of non-practitioner staff indicates a gap in current legislative provisions that support compliance in Medicare claiming that is likely to widen with an ongoing trend to larger practices. It is also likely that practitioner perception of their responsibility for incorrect Medicare claims under their names or provider numbers is reduced where non- practitioner staff are determining MBS item numbers.

It is important, therefore, that non-practitioner staff in practices become engaged as a major stakeholder in Medicare compliance and are assisted in their role of billing assurance.

Development of a new and definitive set of Medicare billing assurance Standards could provide the authoritative reference needed to mitigate against misinterpretation of billing requirements under Medicare. These standards would have ready application across the range of materials used to inform practitioners about their responsibilities under Medicare. An agreed set of Standards may provide clarity, consistency and logical linkages between the legislation and education material. The Standards could be updated as needed to provide an ongoing authoritative reference that is clear and accessible. For example, results from the Survey show that ‘practice software settings’ was ranked as the fourth most significant factor impacting Medicare billing, however there are no guidelines regarding how practice management software should be configured and controlled to ensure billing accuracy.

A new Medicare billing assurance Standard

There is significant scope in enhancing the capacity of practices to proactively identify, prevent and manage the risks of incorrect billing in the practice setting. While there are practices (both large and small) that may already have systems and strategies in place regarding their Medicare

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billing procedure, these have been created in response to business needs specific to the practice and therefore there is a wide variation in the scope, scale and possibly the effectiveness of these disparate systems across practice types and practice sizes.

The project identified an opportunity to build upon the current self-regulation model already used in the clinical setting. By including a new framework whereby practices could self-certify/self- accredit their competence against a Medicare billing assurance system comprising of agreed benchmarks and standards the department can ensure a robust risk management approach within the practice context.

In relation to Medicare billing procedures, practices generally have formal (written) procedures to manage their Medicare billing and review activities. However, their development and adoption in the practice have been organically driven by the specific business environment (such as geographical location, population demographics and available skills of staff and practitioners) faced by each practice rather than by reference to any formal, industry-approved standard. That is to say, while practices may have Medicare billing assurance procedures, there is no consistency in the content and quality of these procedures – and practices do not have a benchmark to compare their procedures with the rest of the industry.

The results of the trial indicated that there was a significant variation in the Medicare billing assurance ‘systems’ in each practice. Systems include the procedures, protocols and “rules of thumb” – both documented and undocumented – which comprise the Medicare billing activities and decision making process in a practice. It appears that the volume and scale of practice’s operations has a direct influence on the level of sophistication of the risk management system they have in place.

There is a well-established system of accreditation for general practices in Australia. According to the survey conducted by the department in 2013, the majority of practices (over 70 per cent) are accredited to one or more standards, with 53 per cent of Survey respondents indicating that their practice is accredited to the RACGP Standards. The Australian Government has used accreditation to the RACGP Standards as a pre-condition for practices to access certain funding, for example Practice Incentive Payments (PIP) initiatives.

However, the RACGP accreditation for practices does not have any segment regarding Medicare billing in the practice. In addition, there was a gap in guidance or education materials from the department regarding what it considers to be acceptable Medicare compliance procedures.

Feedback from the trial indicated that the majority of practices viewed the Toolkit as a useful resource. Practices highlighted that the Toolkit was high quality, easy to use and had the correct tone (i.e. it had a positive language). A number of practices added that it was different in tone and approach from other Medicare publications, which they appreciated. They also observed that the Toolkit was well-structured and in particular, the self-assessment checklist for practices to evaluate their current Medicare billing assurance approach was very useful.

The survey and the Toolkit trial results indicate that there is scope to use the Toolkit as the basis of a possible new Medicare billing assurance standard which is uses a systems-based approach to

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improving the Medicare billing accuracy of practices irrespective of practice size or practice type by focusing on strategies that minimise the risk of incorrect billing under Medicare.

Following on from the significant potential of the Toolkit as an education tool, a number of practices suggested that:

the Toolkit should be converted to a mandatory training module (complete with an online exam) that all new providers must undertake before being issued with a Medicare provider number.

a practice that uses the Toolkit should be issued with a certificate which they can use asevidence of their practice’s commitment to continuous improvement as part of their practice accreditation (or re-accreditation) requirements.

practitioners and professionally registered practice staff who work in practices that use the Toolkit should be able to get CPD or other formal recognition points in order to encourage a high take-up.

Ten strategies which could be used to underpin a new Medicare billing assurance standard were included in the Toolkit. The ten strategies under the standard advise the practice to:

Have designated staff whose role includes Medicare billing responsibilities. Have documented Medicare billing procedures in the practice. Update and fully utilise your practice software. Have effective administrative record keeping in place. Notify the department in a timely manner when incorrect billing under Medicare has

occurred. Encourage good communication between practitioners and other practice staff. Promote knowledge of Medicare billing assurance to all practice staff. Have senior management commit to Medicare billing assurance. Identify and remove workplace arrangements that may lead to incorrect billing

under Medicare. Check that your practice’s requesting and referral procedures are compliant.

Recommendation: That the department develops a set of documented compliance standards for Medicare billing that can be adopted at the practice level.

4.1.8. Practice-based compliance approaches

The practice-based PRP approach was shown to be significantly more effective in modifying practitioner billing behaviour than expected. For each of the 207 practitioners reviewed under the project, there was an average saving of $185,000, compared to an estimate, based upon 2010 data, of $76,000 for each review conducted. Indeed, the peer group effect observed and measured for the first time showed a saving of around $75,000 for each peer in a practice where fellow practitioners were reviewed under the project. The 400 members of the ‘peer group’ accounted for 44 per cent of the $68 million practice-based review savings.

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The savings figure for practice-based practitioner reviews undertaken for the project was calculated using an updated and more rigorous analysis method than that used to estimate PRP savings in previous years. As a result, it was found that savings from this activity are far higher than originally thought. Introducing the new method for calculating savings from PRPs provides both increased accuracy and a broader picture of the effects within practices of practitioner reviews.

Adopting a practice-based approach may also assist the department in its role as the Medicare regulator to become more efficient. For example, under the Build knowledge review sub-project 207 practitioners from 30 large practices were interviewed. The use of practice profiling based on identified groupings of practitioners with similar concerns meant that the medical advisers were able to also review other practitioners in the same practice who may also have compliance concerns but may not have been included under normal business-as-usual compliance processes carried out on individual practitioners.

Another example of the possible efficiency gains by adopting a practice-based approach was observed in the Trial sub-project, where the engagement of just two BDOs to roll out the Toolkit trial across 40 practices (which had a combined total of 511 practitioners) meant that there was a high “multiplier effect” inherent in a practice-based educative compliance approach. Instead of individually educating 511 practitioners, BDOs only had to train the practice manager who in turn would then pass down the training and knowledge to the practitioners and practice staff within the practice. However, it is acknowledged that in order for the multiplier effect to be fully effective, it will need to rely on the practice manager and the practice having a positive compliance culture, where training and information is actively and freely promoted within the practice.

Recommendation: That the department conducts practice-based compliance interventions where there are concerns of systemic or multi-practitioner non-compliance.

Recommendation: That the department seeks to routinely measure behaviour change and any savings associated with both practice-based and practitioner-based compliance activities.

4.2 Intelligence – Information and SystemsProject findings confirm that practices are trending towards larger structures and that their business and operational models are changing. The number of large practices employing multi- disciplinary health practitioners has increased over a short period and continues to climb.

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Departmental data identified 11,038 large practices in January 2013, increasing to 13,070 in June 2015, of which 35 per cent had more than 7 practitioners billing under Medicare.

Results from the Survey found that it is common in around 40 per cent of large health practices for the practice owner or a non-clinical practice staff member to be involved in the process of billing under Medicare. The involvement of non-practitioner staff may occur at the booking stage of a consultation; be the result of business system attribution; occur through the billing process; or occur at the payment checking process. Consequently, while practitioners have the legal responsibility for use of their Medicare provider numbers, they may have limited influence over the final MBS item numbers used in some instances. The survey also indicated that ‘practice and business protocols’ were the second highest factor influencing Medicare billing accuracy, and as such health practitioners may not have full oversight or control of the Medicare billing process within their workplace.

It is common for health practitioners to provide a percentage of their gross Medicare billings to the business entities at which they work. Employee/employer arrangements can vary. The business structure, the legal arrangements, financial arrangements, the type of health services provided, and the individual contractual arrangements may all impact on the nature of the practice and influence on practitioner behaviour. A result of these business arrangements is that individual health practitioners may become more remote from the day-to-day practicalities of Medicare billing, whilst large business entities accumulate the majority of benefits paid.

The increasing prevalence of non-practitioner staff in Medicare billing decisions, the influence of practice protocols on billing outcomes, and the movement of Medicare payments to the business entity, may create a significant risk to the Medicare programme. This is because the department has no visibility of these processes and is unable to track who may have the power to influence a practitioner and where Medicare payments ultimately end up. As the department identifies Medicare payments at the practitioner level, practices remain invisible to the Medicare regulatory process.

In order to have visibility of influences on Medicare billing at the practice level, and to enable the identification and monitoring of compliance risks that may result, the department requires Medicare transaction data to be accumulated at both the practitioner and practice level. Under current legislative and policy provisions, billing under Medicare is done via individual practitioner provider numbers and their names. Information on practices is not always accurate, available or complete.

The Data and Systems sub-project found that significant ‘black spots’ existed in the visibility of practice structures, location and ownership. This affects the department’s ability to identify, manage and report practice-based compliance risks. Examples of these intelligence shortcomings experienced through the project include:

the inability of current Medicare data systems to provide an integrated picture of Medicare billing behaviours by location, volume and source.

the ambiguity inherent in a ‘practice based reporting’ model which is built through linking individual practitioner information to geo-coded practice addresses.

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the complexity of identifying an individual practitioner’s relationship with a specific practice in an operational environment where a practitioner may have multiple provider numbers and may work in a number of different practice locations con-currently.

the risk of miss-identification of compliant or non-compliant behaviour due to data qualityissues.

The IT prototype demonstrated that the implementation of a comprehensive database of practice information linked to specific provider registration information would greatly assist in the identification and monitoring of practice-level Medicare programme risks.

The Privacy Impact Assessment (PIA) identified limitations on the use of existing departmental data collected for other programmes for the purposes of analysing billing behaviour at a practice level. These issues would be minimised if the department had clear legal authority to collect, use and store practice and linked business data. Authority may come in the form of legislated powers through an amendment to the Health Insurance Act 1973, or to the Human Services (Medicare) Act 1973, or as an exemption to the Privacy Act 1988.

Recommendation: That the department seeks authority to enable collection, use and storage of practice-level data and business data for Medicare compliance purposes.

Any decision to expand on the capacity of the prototype, including its introduction into the production environment would require effort in the following areas:

Redevelopment of practitioner data capture facilities. Expansion of tables used to store practitioner registration date and to also include practice

details. Separate data collection activity to capture practice data.

Legislative changes would be required to mandate the registration of practices and updating of practice information on a regular basis, in order to build and maintain a practice-level information system.

Registration processes for practices would need to be introduced and existing forms for individual health practitioners, modified to ensure relevant details, such as practice opening hours and business details are captured, recorded and updated on an ongoing basis. The use of the Health Professional Online Services (HPOS) system could be enhanced to allow practices to register online with Medicare. For the register to contain accurate and useful information, the details to be captured for the practice would include but not be limited to:

Practice name Address Contact person Contact numbers (phone, fax, email, web address etc.) Director/s Owner/s

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ABN/CAN Bank account for receipt of Medicare payments Opening hours Other associated practice information

To support activities of the project, the following statistical compilations were developed:

Large Practices Project (core) data model: Outlines the data elements relevant to large practice structures, affiliations, operations, ownership and systems software.

Large Practices Project data tables: Specific data tables (and supporting data andinformation) to support the conduct of the Build knowledge – review sub-project and overall Large Practices Project.

The Large Practice-based Review Report: Produced quarterly for use by the Build knowledge - review sub-project. It outlines all large practices that have four or more general practitioners approaching or breaching the 80/20 Rule.

Practice profiles: Created as required after the Large Practice-based Review Report hasbeen run. Contains summary information of the practice and details of active health practitioners at that practice.

Statistical Data Model: Produced quarterly and includes relevant statistics on large practices, such as practice size, location (ie. metro, regional and remote), and the number of large practices nationally and in each State/Territory. These statistics are published on the department’s website (Large Practices Project webpage).

The development of the prototype has provided an understanding of the level of practice information required to support Medicare compliance. It has also enabled the department to consider the scope of any future data collection program and how the various data elements interact and provide direction and clarity to the compliance process.

Recommendation: That the department develops an on-going capability to identify changes within the health industry that may increase practice-level risks to the Medicare programme.

The development of the prototype has provided a clearer understanding of what additional data would be required, and how that data would assist with understanding the drivers behind practice/practitioner behaviour. The development of the prototype has also highlighted the need for more formal, direct relationships between the department and other business regulatory agencies such as the Australian Tax Office, Australian Securities and Investment Commission, Australian Business Register, Australian Securities Exchange and financial institutions. Similarly there could be merit in sharing compliance intelligence and obtaining data from private health industry stakeholders. This capability may be realised if the privacy constraints discussed earlier are resolved. It is also noted that the department is considering ways to enhance data sharing as part of a broader enhancement of health compliance.

The Data and Systems sub-project has also identified needs in the following areas:

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Introduction of a practice register to enable the registration and collection of practice data; Introduction of a single provider number for practitioners; Legislative amendment to introduce responsibility for practices owners; Investigation of the business relationship between referring practices and those providing

pathology or diagnostic imaging services.

4.3 Education – Communication and Training

4.3.1 Relevance of Medicare compliance as an education topic

Health practitioners have a role to ensure the responsible use of health resources and sustainability of the health system. The Health Practitioner Regulation National Law 2009 (National Law) deters health practitioners from encouraging indiscriminate or unnecessary use of regulated health services6. In addition, each National Board publishes codes and guidelines to provide guidance to health practitioners in the application of the registration standards. The Medical Board of Australia considers that good medical practice involves working within the healthcare system and that doctors have a responsibility to contribute to the effectiveness and efficiency of the healthcare system, such as through wise use of healthcare resources.7

The Braithwaite8 model of government compliance and regulation suggests that the majority of people in a regulatory environment want to comply. The model suggests that if non-compliance is high, the best response from regulatory organisations is first to improve information circulation and education, thereby giving people the information, strategies, techniques and tools they need to comply. The majority of practitioners during this project reported that improved education in billing practices would be beneficial and indicated a willingness to participate in any efforts to improve such education.

Practices can assist their practitioners by taking billing assurance measures, such as pro-actively checking that their staff undertake Medicare education activities. Not only will practitioners be better able to fulfil their professional registration obligations, but there may be less stress and increased job satisfaction if practitioners know that the practice respects their preference to comply, and minimises the risk through billing assurance.

The Australian Health Practitioner Regulation Agency (AHPRA) requires that all registered health practitioners undertake Continuing Professional Development (CPD). Practitioners must attain a specified number of credits/points/hours each year on learning activities to satisfy the CPD requirements of each National Board.

Industry stakeholders and practices have commented that there is a lack of incentives for health professionals to voluntarily use the department’s education products, especially as no CPD credits are awarded, and no “proof of completion” certificates are provided. Given the importance that

6 Health Practitioner Regulation National Law Act 2009 s1337 Medical Board of Australia, 2014, Good Medical Practice: A Code of Conduct for Doctors in Australia, available ath tt p : // w w w . ahpra . go v . a u 8 Ayres I & Braithwaite J,1992, Responsive Regulation: Transcending the Deregulation Debate, Oxford University Press, USA.

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4.4.2 Access to education about Medicare billing

the law and professional codes place on correct use of healthcare resources, it would seem prudent to encourage education on the use of Medicare through CPD activities. This would require medical colleges and associations of health practitioners to approve and attribute CPD points to Medicare education activities. The department could liaise with the profession to accredit existing education resources or presentations, and work together to develop other suitable resources.

Recommendation: That the department liaises with medical colleges and associations of health practitioners to recognise the department’s on-line education modules and other Medicare education activities for Continuing Professional Development (CPD) purposes.

4.3.2 Content and timing of Medicare education

The survey identified that the number one factor influencing the accuracy of Medicare billing decisions is the level of education about correct Medicare billing, particularly in a large practice setting where there may be several persons involved in a Medicare billing decision - from the health practitioner in the consultation room, to the receptionists who finalises the claim at the front counter, to the non-clinical practice staff who conduct the review and adjustments of Medicare claims initially submitted by the practitioners.

However, the majority of Medicare billing knowledge of both practitioners and non-clinical practice staff is acquired through informal means, such as on-the-job learning, rather than through formal learning channels such as university or professional courses. Anecdotal evidence from a number of stakeholders indicated that the typical experience of a general practitioner on their first day at work is being shown to a consulting room and told to “just start seeing patients”. Simply put, it is assumed that the practitioner already possesses the required level of knowledge to bill Medicare correctly, without any proof required when the practitioner starts billing under Medicare.

A senior person in the practice may have inadvertently been billing incorrectly or have adopted other at-risk behaviours over the years, and may perpetuate the non-compliance when they teach their new staff. A practitioner or practice manager who has knowledge of the correct use of Medicare will be better equipped to challenge poor billing practices and to introduce measures to lower the risk of non-compliance.

The required level of knowledge about Medicare changes during a practitioner’s career. For example, a medical student may need to know only the history and function of the Australian healthcare system; a junior doctor should know the requirements around prescribing and initiation of services; a more senior doctor may need to know the requirements for billing as a surgical assistant; and a practitioner with a private practice requires an extensive knowledge about multiple MBS items, practice payments and administrative procedures. At all stages there should be a relevant knowledge of why Medicare should be used correctly and what the consequences may be if requirements are not followed.

The preferred mode of education may also change throughout a practitioner’s career. Face-to-face delivery of education may be suitable as a student, or while attending a conference, but those who are time-poor or in rural locations may prefer to access online resources.

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There appears to be a need for industry and government to explore ways to ensure that Medicare education and training on how to bill accurately are provided to health professionals at key points throughout a career, and in a manner that would be most acceptable and effective. Examples might be to include a topic in the medical graduate school curriculum, and then require demonstration of Medicare knowledge as a pre-requisite to obtaining a Medicare provider number. International Medical Graduates who register for the first time to practice in Australia could have a requirement to demonstrate a functional knowledge of Medicare prior to registration.

Recommendation: That the department seeks to have Medicare compliance education included at key stages of a health professional’s pre- and post-graduate education and career.

Information from the survey, visits to practices and from health peak bodies indicated that most information about Medicare billing was acquired by health practitioners and practice staff from colleagues while on the job. Information pertaining to new or changed Medicare Item numbers and billing is commonly accessed by practitioners through MBS Online, although this was also reported to be hard to search and navigate, time consuming and provided insufficient clarity.

Managers of practices that participated in the trial provided key insights into their level of influence in the Medicare billing decisions in the practice. Indeed, stakeholders and practice managers who have been involved in the trial indicated that practice managers perform the roleof reviewer, adjudicator and educator for health practitioners on issues relating to Medicare billingcompliance.

There are currently no bachelor-level qualifications offered in Australian universities for practice managers; the highest qualification is currently offered at the advanced diploma level (for example, the University of New England offers a Diploma of Professional Practice Management). There is also currently no professional and regulatory requirement to hold this qualification in order to work as a practice manager in Australia.

Feedback from industry stakeholders also indicated that there are certain levels of aggregate knowledge and maturity among the different health practitioner cohorts that bill under Medicare. Medical practitioners have been billing under the MBS for the longest period of time (since the mid-1970s), and so they collectively have a greater functional knowledge of Medicare than the other health practitioners who have only recently begun to access the MBS, such as nurse practitioners and allied health providers.

Hence there is a disparity in the available resources and information avenues between the different professions. For example, medical practitioners arguably have a more extensive casework and training resources available which other health professions that also bill under Medicare may currently not possess and would benefit it they had access to such resources.

This indicates that there may be opportunities for the department to expand its current educational offerings to include e-modules and other Medicare education products for targeted groups such as optometrists, nurse practitioners, and practice managers.

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Recommendation: That the department, in consultation with health peak bodies, develops a model for Medicare billing education that addresses root causes of billing errors.

4.3.3 Practice-based Medicare education

In designing the strategy for implementation of the Trial, Business Development Officers (BDOs) were identified as key assets in the department’s Medicare compliance approach. Currently, BDOs are engaged by the department to deliver Medicare stakeholder activities on behalf of the department to a broad range of providers, practices, peak bodies and other community groups. However prior to the Trial they had little involvement in Medicare compliance activities. The Trial required the BDOs to engage, to recruit, induct and support participating practices over an eight week period. Feedback from both BDOs and participating practices indicated that utilising the existing positive relationships that BDOs have formed with practices provided a ready base of goodwill on which the trial was able to build.

Use of BDOs to support practices also indicated potential cost savings that could be involved in relation to influencing groups of practitioners. Medicare education has traditionally been delivered to practitioners by the department’s medical advisers. However the number, location and availability of medical advisers is limited, and salaries are relatively expensive compared to the salary of an APS4 BDO.

By linking BDOs with practice managers for practice-based education, benefits many be enhanced, especially in relation to the number of practitioners reached in one episode for the resources required. During the Toolkit trial, each BDO visit had a ‘train the trainer’ approach. The BDO trained the practice manager, who in turn fed the information back to the rest of practitioners and practice staff. This meant that just two BDOs used to visit 40 practices potentially influenced over 500 practitioners. The BDO induction training visits also generated an additional value-add, as practices took the opportunity to ask the BDOs questions about other Medicare billing issues.

If such an approach was to become routinely used, care would need to be taken to ensure that the compliance information they present is accurate and consistent, while providing access to BDO support for the primary role of business development.

Under the Toolkit trial, the content and design of the Toolkit was deliberately made to be friendly, with references to “compliance”, “punishment”, “sanctions”, “penalties” and other such terms replaced by more neutral terms, or avoided altogether. By using BDOs rather than compliance officers to liaise with practices, the Toolkit was accepted as a positive, rather than punitive tool. Practice managers in particular indicated that they had greater confidence in providing honest feedback regarding areas of Medicare compliance that they had issues with, because the BDOs were considered to be independent from Medicare compliance staff.

The survey also demonstrated the benefits of conducting a ‘temperature check’ on the state of Medicare billing in Australia, which enabled a review, and in some instances, rejection, of previously-held assumptions regarding Medicare billing behaviour and practice cultures. Hence, there is merit in integrating the survey as part of a continuous environmental scanning exercise

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to

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supplement the department’s existing Medicare intelligence framework and to contribute to the Governments overall knowledge of the health system. The information collected by BDOs as they provide practice-based support in the field could inform environmental scanning and also strengthen development of relevant Medicare education.

Practices who participated in the trial were very positive of the use of BDOs to provide face-to- face induction training and support throughout the Trial. A number of practices mentioned that they have never been visited by a BDO before, and they appreciated having a dedicated person who they can contact for Medicare questions.

Recommendation: That the department develops a new strategy for the department’s Business Development Officer (BDO) network to provide practices with personalised support and education (including on-site if necessary) to enable practice staff to bill accurately under Medicare.

ConclusionChanges in Medicare billing practices within the health industry appear to have been applying significant upward pressures on overall health spending.

Traditionally, departmental activities include various methods to support practitioners in making accurate claims under Medicare and to address practitioners at apparent risk of non-compliance. To assure government that health compliance policies and interventions are having the desired effect, the department recognised that it needed to maintain a good understanding of how the large practice sector is evolving within the health services industry. This includes the department having access to detailed information about how the large practices sector operates and how effectively departmental interventions are supporting billing accuracy.

At the start of this project, it was unclear whether or not large practices were more liable to bill incorrectly under Medicare or apply pressure to the healthcare system through inappropriate practice, for example, by over-servicing or making excessive referrals. The project found that practice size alone did not determine the accuracy of Medicare billing. Instead, the accuracy of Medicare billing in large practices was found to be influenced by a range of attitudinal and behavioural variables. It appears that the department needs to adopt alternative approaches to compliance, supported by associated changes in legislation and policy, to detect and manage risks posed by the changing nature of health practice from smaller practices to larger, multi-disciplinary, integrated businesses.

Results from the Medicare Billing Accuracy Survey indicated that the top factors that affect accuracy in Medicare billing in large practices are the level of knowledge of Medicare billing requirements; practice or business protocols; usability of MBS Online; and practice software settings.

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The Toolkit trial evaluation revealed that a majority of trial participants found the whole-of- practice strategies contained in the Toolkit to be helpful in reducing incorrect billing in their practices. This finding also supported the hypothesis that availability of reliable reference material and accessible educational opportunities are factors in ensuring compliant behaviour, in part because they empower people to be able to bill correctly.

Findings of the project have a number of implications for ongoing Medicare compliance and support activities. Many benefits derive from the department having access to more extensive and accurate knowledge and insights into the operation of a changing health sector, other benefits relate to increased awareness of better practice approaches and initiation of new, effective ways to inform and educate practices and practitioners about requirements for billing under Medicare. Benefits extend to the way new interventions have been co-designed with representatives of the health sector and the potential to introduce a more accurate method for calculation of savings from trialling of interventions, in particular from the practice-based Practitioner Review Program.

The project has drawn attention to a set of strategic risks that may impact the future of Medicare compliance. It has provided an example of how an extended Medicare information system could detect, identify and measure a range of variables on the operation of existing and emerging practice models. The project has identified significant information gaps and clarified requirements for an effective future IT system, while demonstrating the benefit in conducting regular surveys to assess changes in the health sector and to gather information on contemporary attitudes to billing compliance.

Reviewing the content and delivery of current educational material for Medicare billing compliance training, in light of feedback from the Medicare Billing Accuracy Survey and the Toolkit trial, will help to ensure that future educational material is accessible, relevant and standardised.

The potential for legislative changes and development of a set of compliance Standards for billing under Medicare have also been highlighted. By preparing a clear and accessible set of standards, including setting out the responsibilities of individuals and businesses in upholding those standards, it may be possible to establish a set of references that would be used by the department and stakeholders as an authoritative guide in billing under Medicare.

The longer term implications of the project will require the department to take an approach to compliance that addresses risks that arise at the practice level, not just those from generated by individual health practitioners. Such an approach needs to take account of the scope of current Medicare policy and legislation, limitations of existing departmental information systems and constraints of the privacy legislation relating to collection, storage and use of health data.

By updating the methodology and savings assessment approach used for the PRP and targeted education letter initiatives, more contemporary and accurate estimates of savings are now possible and have enabled the department to better demonstrate the cost effectiveness of these compliance activities. A review and confirmation of the savings approach by an external authority would ensure that future calculations are fully defensible and credible.

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Findings from the Large Practices Project have identified three strategic areas of Medicare programme risk:

Regulation risks relating to Medicare’s current regulation and compliance policy framework.

Intelligence risks relating to the department’s access to information on Medicare billing behaviours.

Knowledge risks relating to availability and access made of information on correctMedicare billing by practice staff.

Adoption of a whole-of-practice Medicare compliance strategy, which complements the current Medicare compliance strategies that predominantly target individual health practitioners, is essential if the department is to manage these strategic risks. A whole-of-practice compliance framework will require enhancements to Medicare regulation, intelligence gathering and health professional education.

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Glossary and AcronymsTerm Definition80/20 rule The 80/20 rule is a deeming provision to address consistent high volumes of

rendered services by general practitioners and other medical practitioners. The Health Insurance (Professional Services Review) Regulations 1999 specify that a general practitioner or ‘other medical practitioner’ is deemed to have practised inappropriately if he or she has rendered 80 or more professional attendances on each of 20 or more days in a 12 month period

AAPM Australian Association of Practice ManagersABN Australian Business NumberABR Australian Business RegisterABS Australian Bureau of StatisticsACN Australian Company NumberAdministered savings Savings of Medicare benefits expenditure.

Note: the Department of Human Services administers Medicare and the payment of Medicare benefits on behalf of the Department of HealthAHPA Allied Health Professions Australia

AMA Australian Medical AssociationANAO Australian National Audit OfficeApproaching 80/20 General practitioners and ‘other medical practitioners’ who are approaching

the 80/20 level of servicing.For the purposes of the project, the threshold indicating ‘approaching the 80/20 rule’ was 60 or more professional attendances on 15 or more days in a 12 month period.There were five levels of daily servicing categorised from highest (breach) to lowest eligibility criteria for review: Category A – breaching - 80 or more professional attendances on 20

or more days in a 12 month period Category B – approaching - 80 or more professional attendances on 15

or more days in a 12 month period Category C – approaching - 75 or more professional attendances on 15

or more days in a 12 month period Category D – approaching - 70 or more professional attendances on 10 or

more days in a 12 month period plus 80 or more professional attendances on 5 or more days in the same 12 month period (but not included in categories A, B, C)

Category E – approaching - 60 or more professional attendances on 15 or more days in a 12 month period

ASIC Australian Securities and Investments CommissionATO Australian Tax OfficeBDO Business Development OfficerBIR Business Information RequestCompliance Working Group(CWG)

Compliance Working Group was a group of stakeholders and departmentalsenior staff who provided general advice on compliance to the department’s Executive. Health sector peak bodies were amongst the bodies represented on this Group

CPD Continuing Professional DevelopmentDHS/the department Department of Human ServicesDoF Department of FinanceDoH Department of HealthEDW Enterprise Data WarehouseGeocoding Process of finding associated geographical coordinatesHealth Sector Peak bodies Health Peak Bodies included representatives from:

Australian Medical AssociationRoyal Australian College of General Practitioners

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Term DefinitionRural Doctors Association of AustraliaAustralian Association of Practice Managers Committee of Presidents of Medical Colleges Allied Health Professionals Australia Optometry Australia

HIA Health Insurance Act 1973HPOS Health Professional Online Services systemICT Information and Communication TechnologyInappropriate Billing Project Inappropriate Billing Project, also known as The Fraud prevention and

compliance – Improve billing practices within public hospital 2012-13 Budget measure

Inappropriate practice Inappropriate practice is defined under section 82 of the Health Insurance Act1973 as conduct in connection with rendering or initiating services that a committee of the practitioner’s peers (chosen by the Director of Professional Services Review) could reasonably conclude was unacceptable to the general body of their profession

IT Information TechnologyKPI Key Performance IndicatorLarge practices For the purpose of this project, a large practice is a practice with four or more

health practitioners claiming benefits against the Medicare Benefit Schedule.MBS Medicare Benefits ScheduleMBS Online Lists the Medicare services subsidised by the Australian government.MBS Referred Services Services referred to another health practitioner by a General Practitioner or by

a Specialist with reference to a General Practitioner as required by legislationMBS Rendered Services Services provided directly by the practitioner.Medicare Provider Numbers A provider number uniquely identifies the medical practitioner and

the location from which a service is rendered.Metadata Data created when online tasks are undertaken and other forms of electronic

communication are made.MPDS Medicare Provider Directory SystemMM Medicare MainframeMPFV Medicare Provider File ViewMulti-disciplinary practice A business in which members of more than one health profession or

occupation provide a combination of services for clients.OA Optometry AustraliaOver-Servicing Rendered or referred services that are not medically necessaryP3M3 Portfolio, Program and Project Management Maturity ModelPBS Pharmaceutical Benefits SchemePBS Prescribing The prescription to a patient of a medicine included on the PBS Schedule list at

a Government-subsidised price.PDS Provider Directory SystemPIA Privacy Impact AssessmentPIP Practice Incentives ProgrammePM Project ManagerPM Logbook Project Manager LogbookPPO Portfolio Programme OfficeProfessional Attendances A professional attendance under section 7 of the Health Insurance

(Professional Services Review) Regulations 1999 means a service of a kind mentioned in group A1, A2, A5, A6, A7, A9, A11, A13, A14, A15, A16, A17, A18,A19, A20, A21, A22 or A23 of Part 2 of the general medical services table. The Medicare items for professional attendances are listed under these groups in the Medicare Benefits Schedule.

Project Management Framework The department’s mandated approach to project management.PRP Practitioner Review ProgramRACGP Royal Australian College of General Practitioners

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Term DefinitionRDAA Rural Doctors Association of AustraliaSegmentation In the context of the Medicare Billing Accuracy Survey 2013, ‘segmentation’

was used to describe three apparently separate trends in the data to describe approaches taken towards accuracy with MBS. These were (1) low effort ’unfamiliar’ segment’ (2) medium effort ‘care but less control’ segment and (3) high effort ‘responsible and care’ segment.

Single Discipline Practice A business in which members of one health profession provide services forclients.

SRO Senior Responsible Official, the officer accountable for the success of theproject

Survey Medicare Billing Accuracy Survey 2013 (the Survey) conducted by an externalconsultancy company, instinct and reason, to:1. Determine whether there was a correlation between practice size and typeof business structure and instances of incorrect Medicare billing behaviour.2. Identify and quantify common issues in order to inform the development of relevant compliance options.

The Board The Health Compliance Project BoardThe Working Group The Large Practices Project Working GroupToolkit A systems based approach to billing assurance in practices titled ‘the Medicare

Billing Assurance Toolkit’Trial The Medicare Billing Assurance Toolkit Trial 2014 was performed under the

Trial sub-project where a total of 40 large practices across Australia, including practitioners and practice managers, participated in the trial of the Toolkit from February 2014 to June 2014

Voluntary Acknowledgment (VA) Acknowledgements made to the department by medical practitionersregarding overpayments they may have received because of an incorrect claim under Medicare.

Related Links

Text LinkAustralian Health Practitioner Regulation Agency,Continuing Professional Development

http s : / / w ww .ahpra.g o v .au/Educatio n / C onti n uin g - Pro f e ss io n a l - D e v e lo p me nt. a s px

Australian Privacy Principles http: / / w w w .oaic.g o v .au/pri v a cy/pri v ac y - act/a u s tr a lia n - pri v ac y - princip l e s

‘Billing accurately under Medicare’ webpage http: / / w w w .hu m a ns e r v ic e s . g o v .au/h e alt h - pro fe s s io n al s / s ubje c t s /bil l in g - accuratel y - und e r- me dica r e

Fraud prevention and compliance – Increased billing assurance for the Medicare Benefits Schedule Budget Measure.Australian Government, 2012, Budget Paper No. 2, Part 2: Expense Measures - Human Services

http: / / w w w .budg e t.g o v .au/ 2 01 2 - 13/ c ontent/bp2/html/bp2 _e x p e n s e - 13.htm

Health Insurance Act 1973 http: / / w w w .c o m law.g o v .au / D e tails/ C 2 015 C 002 0 7 Medicare Billing Assurance Toolkit http: / / w w w .hu m a ns e r v ic e s . g o v .au/h e alt h -

pro fe s s ionals/s e r v i ce s / me dicare - bil l in g - as s uranc e - toolkit/

Practice Incentives Programme http: / / w w w .hu m a ns e r v ic e s . g o v .au/h e alt h - pro fe s s io n al s /s e r v i c e s /pra c ti c e- in c e nti v e s - progra m me /

Practitioner Review Program http: / / w w w .hu m a ns e r v ic e s . g o v .au/h e alt h - pro fe s s io n al s /s e r v i c e s /practit i on e r - r e v i e w - program/

Professional Services Review http: / / w w w .p s r . go v .au/ Senate Community Affairs Reference Committee‘Review of the Professional Services Review (PSR) Scheme, October 2011’

h t tp ://www.ap h . g ov.a u /Par li am e n ta r y _ Bu s in e ss /Commi t t e es / S en a t e /Comm uni ty _ A ffai rs /Co m ple t e d_ i n q ui r i e s /201 0 - 13/ p rofs e rv re v/r e p or t /in d e x

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Appendix 1: Medicare Billing Accuracy Survey

Executive Summary

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Appendix 2: Medicare Billing Assurance Toolkit

Pre-participation questionnaire

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Post-participation questionnaire

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Appendix 3: Billing Accurately Under Medicare Letters

Billing Accurately under Medicare Letter (General Letter)

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Billing Accurately Under Medicare (Targeted Letter)

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Appendix 4 – Savings

The Budget measure aimed to achieve savings of $20.7 million.

The department achieved up to $71.5 million in savings over the three years of the project.

Table 4.1 – Large Practices Project Savings – as at 30 June 2015

Large Practices Project Total

$m

Targeted savings 20.70

Savings achieved:

1. Behaviour change – practice-based PRPinterventions

68.44

2. Debts raised – practice-based PRP interventions 0.54

3. Behaviour change - Education savings 2.50

Total savings achieved: 71.48

Difference (favourable) 50.78

1. Of the total savings, 96 per cent ($68.4 million) was attributed to behaviour change following the practice-based Practitioner Review Program (PRP) interventions.

Targeted savings from practice-based PRP reviews were based on savings assumptions from analysis conducted in 2010, which considered that behaviour change following a single practitioner interview under the PRP resulted in savings of $76,384 per practitioner.

Average savings identified for practice-based reviews are compared at table 4.2 with these savings assumptions and also with revised savings, calculated in 2015, following a single practitioner interview under the PRP.

2. A total of $539,464 savings was achieved from repayment orders as a result of the Professional Services Review determinations in relation to seven practitioners interviewed under the PRP who were found to have engaged in inappropriate practice.

3. Savings of approximately $2.5 million were associated with behaviour change following mail- out of a targeted education letter to 262 general practitioners.

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Table 4.2 – Practitioner Review Program - comparison of savings achieved

Factor 2010 2015 2015

Direct average savings: Interviewed Practitioner Behavioural Change

Single practitioner PRP

(savings assumptions)

Practice – based review PRP

Single practitioner PRP (revised savings

estimation)

Medicare rendered services $56,279 $113,377($86,464, $140,291)

Medicare referred services Not identified $47,067($35,896, $58,239)

PBS prescribing $20,105 $24,639($16,673, $32,606)

$124,957($99,799, $150,115)

$95,038($73,119, $116,957)

$28,409($17,468, $39,351)

Total direct average saving per practitioner interviewed

$76,384 $185,083 $248,404

Indirect average savings:Peer Group Behavioural ChangeMedicare rendered services Not identified $48,979

($24,754, $73,205)Medicare referred services Not identified $18,876

($15,231, $22,520)PBS prescribing Not identified $7,438

($161, $14,716)

$25,339($12,574, $38,105)

$18,170($11,413, $24,927)

$5,339($416, $10,261)

Total indirect average saving Not identified $75,293 $48,848

The figures used for calculating savings for the project are average values. Sampling variation suggests that the true savings impact would be in the ranges indicated by the lower and upper limits in table 4.2 (in brackets) with 95 per cent confidence.

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