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05 May 2016

Main points


  • Medicare crackdown to save $66 million
  • Axing, amending MBS items delivers $56 million

The Federal Government expects to save more than $120 million by cracking down on Medicare waste and fraud and axing obsolete service items.

As the Government intensifies its hunt for savings, Health Minister Sussan Ley has announced she will toughen Medicare compliance activities and expects to save $66.2 million over the next four years by using advanced data analysis techniques to “better detect fraud, abuse, waste and errors in Medicare claims”.

The Health Department said it will audit an extra 500 providers each year, and will use sophisticated software to identify irregular payments and behaviours.

It said similar methods used by private insurers had in some instances achieved a 10-fold increase in the number of non-compliant activities detected.

The Government expects to achieve a further $56 million in savings by removing and amending listings on the Medicare Benefits Schedule.

In the first instalment of savings delivered by the MBS Review Taskforce led by Professor Bruce Robinson, the Budget has revealed the Government expects to save $5.1 million over the next four years by deleting 24 items and restricting access to two others.

These include gall bladder x-rays, larynx biopsies, the injection of hormones to manage habitual miscarriage and the use of x-rays to diagnose deep vein thrombosis.

In addition to these changes, the Government estimates it will save $51.4 million by axing a further 60 items identified by the Medical Services Advisory Committee and replacing them with around 30 new items.

These items include skin patch tests used by dermatologists, hip arthroscopy changes, fat grafting in spinal surgery and skin flap items for small excisions.

While the AMA supports work to modernise the MBS and remove obsolete or dangerous items, it is wary that it is being used by the Government as primarily a cost-cutting exercise.

Professor Robinson told an AMA-hosted forum earlier this year that his task was “not to save money. The Government may make savings, but I hope that the money is reinvested in health”.

AMA President Professor Brian Owler acknowledged the review was like to deliver some savings, but warned the medical profession’s goodwill and support for the process was contingent on any savings made being “held within health, to provide better services to patients”.

Against the $122 million of Medicare savings identified in the Budget, the Government announced it would spend $33.8 million over four years on tests for Indigenous people whose eyesight is threatened by diabetic retinopathy. 

In addition, the Government has allocated $3 million over the next four years to provide for magnetic resonance imaging for breast cancer patients where conventional techniques fail to show the source of the tumour.


Adrian Rollins 


Published: 05 May 2016