Medical Billing: Accounting Laws to Look Out For

The Department of Health has responsibility for monitoring compliance of practitioners who provide services under Medicare and the Pharmaceutical Benefits Scheme. It undertakes a variety of compliance activities such as random audit activities, and also investigates suspected fraud and other criminal activity.

Under the Health Insurance Act 1973 you are legally responsible for services billed to Medicare under your Medicare provider number or in your name. You’re responsible for incorrect claims (regardless of who does the billing or receives the benefit) and should a benefit be paid incorrectly, you will be responsible for repayment of the full amount. This highlights the importance of checking the services you provided against the services you have billed.

Let’s say that you claim item ABC at $120. If you’re in a practice where 50% of the Medicare billings are allocated to practice expenses, $60 of your claim will be paid to the practice. Upon investigation, it’s found that your claim should have been XYZ and that it’s only worth $80. Even though the practice received half the benefit, you (the health professional making the claim) are responsible for paying back the incorrect amount in full.

The Department of Human Services will only pay for services which are generally accepted by the relevant profession, as medically necessary for the appropriate treatment of a patient. Your provider number can’t be used to claim services provided by other health professionals and when you bill under Medicare, you must fulfil the requirements of the MBS.

Visit MBS Online for the rules and item descriptors.

The consequences of incorrect claiming

The Department of Human Services has sophisticated ways of detecting inappropriate or incorrect claiming. The consequences of non-compliance include full repayment of the incorrect Medicare benefit paid, as well as additional administrative penalties. If a medical practitioner was investigated and believed to have committed fraud, criminal prosecution is inevitable.  

Take the recent jailing of Tisha Thi Thi Phan, owner of I Design Optical Stores.

Phan, who had stores in Macquarie Fields and Minto, submitted almost 30,000 claims for more than 49,000 optometry services that were not actually provided to patients. She used the Medicare provider numbers of six optometrists who worked for the business to lodge services falsely for more than 5,000 patients. As a result, she was jailed on November 23 for obtaining financial advantage by deception. She will serve up to five years in prison.

In March, Dr Pralay Mazumdar, a specialist psychiatrist from Victoria, was sentenced to six months imprisonment, suspended for nine months, and fined $5,000 for making false representations to patients. In May, Dr Humphry Gomes, a former GP, was jailed for at least 18 months after claiming incorrect bulk-billing rebates for 1,520 services between 2011 and 2013.

Professional Services Review

To help protect patients and the community from the risks associated with inappropriate practice, and to protect the Commonwealth from having to meet the cost of medical/health services provided as a result of inappropriate practice, the Australian Government created the Professional Services Review (PSR) in 1994. PSR is responsible for reviewing and examining inapropriate practice by practitioners when they provide Medicare services or prescribe Government subsidised medicines under the PBS.

Not every person investigated by PSR is intentionally making false claims. Many practitioners simply don’t understand all item requirements. If you’re unsure of item requirements or concerned about making incorrect claims, talk to us at MEDIQ Financial. You can also make use of PSR support tools, which include:

  • eLearning products
  • Quick reference guides
  • Handbooks and other resources
  • Provider enquiry line

Recognising your responsibility

For medical practitioners, reimbursement is a component of every encounter with a patient. From their first day of internship, medical practitioners have simultaneous and inextricably-linked clinical and administrative responsibilities which form the basis on which the licence to practice medicine exists.

Most patients do not understand the clinical descriptions of services itemised on their medical bills. They are not in a position to question the accuracy of procedural services performed on them and will typically have no knowledge or understanding of ICD and billing codes which may operate in their jurisdictions.

This places medical practitioners in a rare position of privilege when compared with other professionals and service providers with whom consumers may exercise more discernment and question anomalies on their bills.

Patients have little option other than to trust medical practitioners. They expect their practitioners to not only render clinically appropriate services and treatments, but also know how to correctly itemise those services on the relevant bills and claims for reimbursement.

With this in mind, medical practitioners need to find ways to navigate the complex legal and administrative infrastructure in which they work. It’s no easy feat, but there are smart strategies available.

Partner with the experts

Complex accounting is made easy when you seek help from a third party. Our dedicated team of experts can help you get the most out of your professional services, offering specialist accounting and bookkeeping services tailored to both you and the medical professional.

MEDIQ Financial can take care of all of your general bookkeeping and accounting needs, as well as your industry-specific needs, such as Medicare and client billing. This enables you more time to concentrate on delivering high-quality care instead of worrying about incorrect billing. Get your free consultation today for a stress-free approach to medical billing.