Shared debt recovery scheme - frequently asked questions

Page last updated: 31 May 2019

1. What is a false or misleading statement?

When a practitioner issues an itemised invoice or receipt or makes a bulk bill claim, the practitioner is stating that they have rendered a professional service that meets all of the elements of the MBS item descriptor and other legislative requirements. Where a claim has been submitted and the requirements of the item descriptor and/or legislation have not been met, a false or misleading statement has been made.

A false or misleading statement does not require dishonesty or an intention to defraud on the part of the person making the claim. It can arise from unintentional errors in claiming and is determined by a factual assessment of whether the correct amount was paid to the practitioner, including whether the professional service rendered met all of the elements of the MBS item descriptor.

2. Who could be considered a secondary debtor under the Scheme?

The secondary debtor will, in most circumstances, be the person (or organisation) who employs or engages the health practitioner whose provider number was used to make the Medicare claims for which a debt is owed. However, the secondary debtor could also be an entity that has another type of arrangement or agreement with the primary debtor relating to the provision of professional (Medicare) services. This would include entities that receive an indirect financial benefit from the making of a false or misleading statement.

The Scheme will only apply if there is a relationship between the primary and secondary debtor in relation to the services for which a debt is owed to the Commonwealth.

3. Would supervisors be considered ‘secondary debtors’ under the Scheme?

Unless the supervisor is the employer of the audited health professional, it is unlikely that they would be considered a secondary debtor. However, if the supervisor receives a financial benefit or has an arrangement in respect of professional services with the health professional, they may be considered a secondary debtor.

4. Would administrative staff such as receptionists be included in the Scheme?

No, the scheme is not intended to make practice receptionists or administrative staff liable for debts from services billed on behalf of a health practitioner. However, the practice may be liable as a secondary debtor.

It should be noted that where a person is found to have billed Medicare services against a health practitioner’s provider number without the practitioner’s knowledge, they may be held responsible for the entirety of any Medicare debt and criminal prosecution may be pursued.

5. If an organisation does not receive benefits directly from Medicare (i.e. if the Medicare benefits are paid directly to the practitioner), will they still be proportionally responsible for debts raised against health practitioners?

Yes, the organisation may be held responsible for a percentage of the debt. However, the Department will take in to consideration information received from both parties in attributing the debt.

6. Under what circumstances would an organisation be required to repay a proportion of a Medicare debt, if the organisation did not directly receive Medicare benefits?

This could occur on the basis that:

  • There is a relationship between the practitioner and organisation and the organisation has been identified as the ‘secondary debtor’ and
  • The organisation could have controlled or influenced the making of the false or misleading statement; obtained a direct or indirect financial benefit from the making of the false or misleading statement, and/or there are other factors that make it fair and reasonable for a shared debt determination to be made.
Organisations submitting claims, directly or indirectly receiving Medicare benefits or undertaking administrative duties related to Medicare claiming, also have an obligation to ensure that claims which are submitted are not false or misleading.

7. In the case of practitioners who are employees or salaried staff, who will be responsible for the repayment of a debt when an organisation has received 100% of the Medicare benefit?

Unless the practitioner can show that another party is solely responsible, for example if another person has falsified claims, the practitioner will be required to pay a proportion of the debt. This applies even if the practitioner receives a salary or is employed or is contracted on a ‘100% donation model’ basis.

It is important that practitioners whose provider numbers are used to claim Medicare benefits retain responsibility for ensuring claims being made do not constitute a false or misleading statement. The Department encourages practitioners to ensure they regularly review claims made on their behalf and have oversight of billing for services they provide.

8. What can organisations do about health practitioners who incorrectly bill Medicare?

In the first instance, organisations submitting claims, directly or indirectly receiving Medicare benefits or undertaking administrative duties related to Medicare claiming have an obligation to ensure that claims which are submitted are not, based on the information they have available, false or misleading.

Where an organisation becomes aware of incorrect billing due to an administrative error in the course of normal business they can make a claims adjustment with the Department of Human Services. Where the concern relates to more serious or systematic billing concerns they can alert the Department of Health on the Provider Benefits Integrity Hotline 1800 314 808.

9. If a health practitioner enters into an arrangement to repay a Medicare debt or completes a voluntary acknowledgement, is the organisation responsible for any repayment of debt?

The Shared Debt Recovery Scheme operates only in relation to the Department’s post-payment Medicare compliance audits. If, during the course of an audit, a health practitioner submits a voluntary acknowledgement, the organisation may still be required to repay a percentage of the debt where the decision-maker considers it fair and reasonable. This may be the case where the organisation is identified as the secondary debtor; and

  • could have controlled or influenced the making of the false or misleading statement;
  • obtained a direct or indirect financial benefit from the making of the false or misleading statement, and/or there are other factors that make it fair and reasonable for a shared debt determination to be made.
10. Does the organisation participate or have any say in the audit process? At what point in time will the organisation be advised that the doctor is under audit?

The Department will contact the organisation as soon as it is satisfied that there is a relationship between the practitioner and the organisation in relation to the services being audited.

Both the organisation and the practitioner will be provided an opportunity to supply documents, and make submissions prior to a shared debt determination being made.

A notice of intention to share the debt will be issued to both parties and submissions on the proposed outcome will be invited. These submissions will be considered by the decision-maker prior to making a decision.

After a decision, both parties will have the opportunity to apply for a review of the decision.

11. Can a health practitioner or organisation agree to take responsibility for all debts raised absolving the other party of responsibility?

During the course of an audit a practitioner or organisation may advise the Department that they wish to acknowledge a debt and repay the amount owing. The decision-maker may decide in these circumstances not to make a shared debt determination because it would not be fair and reasonable to do so. However, this decision would be based on the evidence before the decision-maker and not solely on the basis that the practitioner or organisation offered to repay the debt. The decision maker would consider the responsibility the practitioners have to ensure that claims made under their provider number are correct and whether the secondary debtor:

  • could have controlled or influenced the making of the false or misleading statement;
  • obtained a direct or indirect financial benefit from the making of the false or misleading statement, and/or there are other factors that make it fair and reasonable for a shared debt determination to be made.
12. Will the Scheme apply retrospectively?

The Scheme will only apply to audits commenced from 1 July 2019 in relation to services provided from 1 July 2018 onwards.

If you are the subject of a Medicare audit you will receive a letter containing a request for documents. The letter will clearly identify if the Shared Debt Recovery Scheme could apply in relation to that audit.

13. Will the debts be recoverable from businesses that go into liquidation or an individual who declares bankruptcy?

The Department will take all appropriate and available action to recover debts owed to the Commonwealth.

14. Can a contractual arrangement between a Medicare provider and an organisation indemnify either party from owing a debt under the Scheme?

There is no provision in the Health Insurance Act that enables either party to be indemnified from the Scheme. When making a decision to share the debt, the Department will consider:

  • whether the relationship of the secondary debtor with the primary debtor was such that the secondary debtor could have controlled or influenced the circumstances that led to the making of the false or misleading statement to which the debt relates;
  • whether the secondary debtor directly or indirectly obtained a financial benefit from the making of the false or misleading statement;
  • whether any other factors in all the circumstances of the case make it fair and reasonable for the determination to be made.
In considering these factors, the Department is not bound to any terms or conditions in a contract between the primary and secondary debtor including those that would seek to indemnify either party.

The Department encourages parties to seek legal advice in relation to employment or other contractual arrangements which seek to indemnify either party from a compliance debt.

In addition, it is important that practitioners whose provider numbers are used to claim Medicare benefits retain responsibility for ensuring that claims being made in their name could not constitute a false or misleading statement. The Department encourages practitioners to ensure they regularly review claims made on their behalf and have oversight of billing for services they provide.

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