Medicare compliance: making sure your practice stands up to scrutiny

Dr Michael Wright, MBBS, MSc, PhD, FRACGP, GAICD, General Practitioner and Chief Medical Officer, Avant

Wednesday, 12 October 2022

stethoscope and calculator

Medicare compliance is again on the government’s agenda, with the introduction in August of the Health Legislation Amendment (Medicare Compliance and Other Measures) Bill 2022.

Under current Medicare legislation, individual providers are responsible for claims made under their provider number. The legislation also makes officers of corporate practices responsible if they ‘knowingly, recklessly or negligently caused or permitted practitioners to engage in inappropriate practice’. Practices may also be liable for sharing any debt payable to Medicare under the Shared Debt Recovery Scheme.

The latest proposed amendments are designed to strengthen the compliance powers of the Professional Services Review (PSR) and increase its flexibility in dealing with inappropriate practice by corporations.

To make sure you and your practice team are not caught out by some of the most common avoidable mistakes and administrative errors, here are our six top tips for managing Medicare and avoiding compliance issues.

1. Understand the item number

Individual providers are responsible for claims to Medicare made under their provider number. They need to be confident the correct item numbers are applied and that their consultation with the patient covers the elements required to charge that item number.

You can assist practitioners to get on top of the requirements of commonly used item numbers by using checklists or using summary versions in your practice management system.

However, descriptors do change so you need a process to check and update any summary versions.

It is also a good idea for practitioners to go back to the full item descriptor to make sure they understand the requirements and check with the government email advice service askMBS if they are unsure.

2. Ensure appropriate billing for all appointments - including telehealth

It is important that practices make sure they utilise the appropriate item number when billing for all appointments including telehealth

A patient must be present to bill a Medicare consultation. This includes both face to face and telehealth. You should process billing after a consultation. Medicare does not allow patients to sign a form before the consultation is conducted. You will usually only know the correct item number to charge after the consultation is complete

If you are concerned about patients leaving without paying, you could ask patients for credit card details at the time of the appointment and process any payment after the consultation. However, you still need to ensure you have the patient’s financial consent for the appropriate fee.

3. Encourage good record keeping

The legal and professional requirement to keep appropriate medical records is reinforced by Medicare legislation. It says that when practitioners make a Medicare claim for a service, they must maintain an adequate and contemporaneous medical record of the service.

Records need to identify the patient and provide enough detail to explain why the service was needed, the clinical input provided and why the particular item number was billed. Very brief notes such as ‘script written’ with no record of the presenting complaint or patient history or examination are likely to be questioned.

If the item number has a minimum time component, practitioners need to record the time spent. This can be done either in the progress notes or in the medical record keeping system. However, it is not enough to select the item number for that consultation length. The notes also need to justify spending that amount of time with the patient, so they must reflect the clinical content of the service to support the time element.

‘Urgent’ after hours item numbers often catch providers out. If your practitioners use these numbers, it is important they check the requirements of the item number. Records need to reflect the clinical judgement that the patient did need urgent medical assessment after hours.

4. Ensure practitioners can check billings made under their provider number

Practitioners are accountable for all services billed under their provider number and they are expected to make decisions about which item numbers to claim.

It can be helpful and efficient if practice administrative staff submit claims for practitioners. However, make sure the process allows practitioners to check and approve any claims to be billed under their number.

Remember that under the Shared Debt Recovery Scheme, the practice may also be liable for part of any debt payable to Medicare after a compliance audit. 

Practitioners can also be audited after they have left the practice, so we advise them to keep a copy of all reports of claims submitted under their provider number for two years in case any are questioned in future.

5. Be confident the service is appropriate

Medicare has heavily scrutinised item numbers relating to care plans in recent years. PSR committees have expressed concerns about practitioners’ unusually high use of care plans, chronic disease management plans and team care arrangements. In some cases a committee has found insufficient evidence of clinical input. In other cases, concerns were raised that plans seemed overly reliant on templates with insufficient evidence they were individualised for the patient.

If you are developing care plans for patients, your practice should have a clearly documented process for creating plans and ensuring patient consent. A nurse can assist to prepare a care plan under a GP’s direction. The decision to create a care plan and the content it contains are the GP’s clinical decision.

Never ‘trawl’ patient lists or approach patients to attend appointments for the purpose of preparing care plans.

6. Keep up to date and monitor practice billings

It is important for your practice team to keep in touch with professional peers to help ensure the services the team provides meet Medicare’s requirement of being clinically relevant.

Medicare reviews check for statistical outliers and anomalies, which is why your practice should keep up to date with professional standards. Have a practice policy of letting your practitioners know if their practice does not align with your expectations or if you think they have made a mistake.

Having a systematic approach and regularly auditing billings can help identify potential issues within the practice, such as flagging when one doctor consistently bills for significantly longer consultations than others.

References and further reading


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This publication is not comprehensive and does not constitute legal or medical advice. You should seek legal or other professional advice before relying on any content, and practise proper clinical decision making with regard to the individual circumstances. Persons implementing any recommendations contained in this publication must exercise their own independent skill or judgement or seek appropriate professional advice relevant to their own particular practice. Compliance with any recommendations will not in any way guarantee discharge of the duty of care owed to patients and others coming into contact with the health professional or practice. Avant is not responsible to you or anyone else for any loss suffered in connection with the use of this information. Information is only current at the date initially published.

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