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18 Feb 2019


A person once said: “I only became paranoid when everyone started plotting against me.” For those of us with public hospital Private Practice Agreements (PPAs), it is important to be wary, as the environment changes. A patient might have every appearance of a similar public patient in the next bed, but once the public hospital case presentation elects to be managed privately, you are the treating practitioner with all the resultant liabilities and risks. 

In the public hospital system, both salaried specialists and the system are increasingly relying on CMBS funding to support clinical activity and patently inadequate hospital budgets. Australia’s hospital funding arrangements have always assumed there will be some private patients being treated in public hospitals. Agreements between the Commonwealth and the States have typically included specific provisions as to how some patients in public hospitals will choose to be admitted and receive treatment as private patients. 

Within each hospital there is always a degree of unique evolved behaviour and standards of record keeping (the local ‘culture’), and a salaried specialist can accept a ‘sign here’ approach to their PPA. Consequentially, there is scope, albeit unintended, for incorrect information to be supplied to Medicare for which the specialist personally could be said to have claimed a Medicare rebate for a medical service they did not provide (thus breaching s128A of the Health Insurance Act (Cth) 1973). Simple examples where mistakes might arise include: 

  • incorrect billing of Medicare, erroneously using the specialist’s provider number, for patients seen by a different specialist (this might occur purely for the sake of administrative convenience where all private patients in a Unit are billed using the one provider number); 
  • billing of Medicare, using the specialist’s provider number, for patients on the booking list, but who did not attend on the day (an administration procedural problem);
  • in out-patient settings, registrars performing the ordering of investigations and/or conducting consultations for procedures; or
  • reliance on midwives to order and follow-up investigations (fundamental to managing obstetrics clinical workloads).

Each of these is not necessarily a compliant medical service eligible for Medicare billing. (Note that when all indirect, downstream, hospital procedures/activity is considered, compliance is likely demonstrated). 

In light of such risks, I am aware of a late 2018 well-sourced rumour that the Medicare Benefits Practitioner Review Unit was about to embark on a retrospective (to 2009!) audit of public hospital specialists. I am also aware of a recent, significant, but remarkably unheralded, change to the Health Insurance Regulations (Cth) 2018 (HIR) relevant to PPAs. So, feeling paranoid is appearing to be a rational response. 

Happily, I can assure you that the rumour of a broad scope specialist audit is just that because of the intervention of our President, Dr Tony Bartone. The Department of Health has given Dr Bartone solid assurance that there is to be no audit and there is no intention to target specialists as rumoured. But what about the implications of this new HIR? 

With respect to a patient being treated under your PPA, the new HIR 100, makes mandatory that the hospital record include the approval of the referral by the referring practitioner, and the said referral must be signed by the referring practitioner. The AMA is now contemplating the implications of these new HIR requirements, a few of which your AMACPHD thinks have: 

  • the potential to slow admissions and reduce the number of patients being seen in order to meet administrative compliance;
  • an impact on Unit funding through such a slowdown of admissions;
  • the potential to test whether there is actual capability (hospital governance systems) to ensure compliance occurs; and
  • the potential to cause a new liability exposure arising for salaried specialists with existing PPAs, and if so, how that should be best managed (including whether PPA terms account for the HIR and/or ensure appropriate indemnity exists).

With all of this in mind, you would think the protection of specialists from liability and supporting the existing efficient arrangements without impractical ‘tweaks’ would be the sensible approach. Given ‘sensible’ is not a highly pursued operative word in the context, specialists need to be constantly alert to the changes in the environment, and constantly vigilant. A useful start to being informed is the AMA & ASMOF National Guide on Rights of Private Practice in Public Hospitals 2016.  It relevantly advises:

  • specialists themselves should retain oversight of billing of patients in relation to PPAs;
  • specialists should know by way of written agreement before the arrangement begins exactly what its terms and conditions are;
  • health services should clarify the legal position to participating specialists and indemnify them, clearly and in writing, for any risk incurred;
  • appropriate administrative support should be provided to participating doctors;
  • issues of indemnity, legal and professional risk must constantly be identified and addressed in a professional and timely manner by hospital administrators; and
  • health service should ensure the PPAs they offer are compliant.

A copy of the AMA & ASMOF Guide can be found at the following link:

Your AMACPHD look forward to ensuring the voice of public hospital doctors is heard in this 2019 federal election year. As you read this journal, you will be alerted to the Pre-Budget Submission 2019-20 and look-out for AMA announcing its federal election policy priorities.

Published: 18 Feb 2019