How practice owners can protect themselves – Shared Debt Recovery Scheme

17 January 2020 | Clinic Owners and Practice Managers | 5 minutes read

How practice owners can protect themselves – Shared Debt Recovery Scheme

Guest Blog & Commentary by Paul Soloviev

The Shared Debt Recovery Scheme came into effect on July 1, 2019 which prompted health professionals and medical clinics to review their internal Medicare billing procedures as well as their relationships with other stakeholders – namely other health service providers.

The changes have not only adversely affected primary practitioners who bill incorrectly, but also secondary parties involved in unresolved debts.

Lawyers and indemnity insurers are making daily posts inviting new clients to buy insurance policies because of the shared debt recovery scheme.  Do you need their insurance?

(I am not criticising the insurance companies – they run a perfectly reasonable marketing campaign.)

What ALL articles about Shared debt recovery scheme have in common:

  1. They all keep repeating the same limited informationpublished by the Department about the shared debt recovery scheme.
  2. None of the articles explainwhat really may or may not happen using any real-life scenarios. Shared debt recovery scheme – unexplained.

The following three criteria must apply for the Department to make a shared debt determination:

  1. There is a recoverable amount (a debt) as a result of the making of a false or misleading statement
  2. There is a relationship between the primary (practitioner) and secondary (organisation) debtor
  3. 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

 

What is the definition of ‘control’?

Points 1 and 2 are, hopefully, self-explanatory. Let us dissect point 3: 

a. ‘The secondary debtor could have controlled or influenced the making of the false or misleading statement.’

Retort: I searched extensively to find the definition of ‘control’ for the purposes of the scheme. There was none.

For the medical practice to ‘control’ the billings, the practice must be aware of every minuscule detail of the medical consultation conducted by the practitioner AND somehow suggested the billing. Let us visualise this for a moment. The practice Manager or someone from the admin team goes through the consultation with the doctor and tells the doctor what service was provided and what needs to be billed. Firstly, practice administrators are not supposed to have access to such information. Secondly, practice staff members have no medical knowledge to give such advice.

In my opinion, in order to prove ‘control’, the Department will have to prove that a registered medical practitioner employed by the Practice or a practice owner – doctor, attended to each incorrectly billed service and influenced the decision of the doctor. Of course, the Department may apply quasi-legal principles (also known as ‘Kangaroo Court’). However, what is the chance that any of their decisions will stand in a proper Court of Law? If your practice has a Medical Director who receives benefit from higher billings through the ownership or an incentive scheme, please, tell him/her to document any interactions with the doctors and billing advice given. Or, even better, develop an education portal like this one https://greatpractice.com.au/. Publish all the correct procedures and broadcast each post to your doctors. (ask me how via LinkedIn messaging if you are interested)

The plausible scenario is that the admin team were making the billings without the doctor’s knowledge. Solution: Please, provide each doctor with the printout of the daily billings at the end of the shift as a standard procedure and worry not about this scenario.

b. ‘obtained a direct or indirect financial benefit from the making of the false or misleading statement’.

There is no doubt that practices receive a financial benefit from any billings – correct or incorrect ones. The question is – can the Department punish an innocent party? Is that fair that a practice that had no control over doctor’s action be punished financially?

c. “and/or there are other factors that make it fair and reasonable for a shared debt determination to be made”

Does anyone else sense an arbitrary approach with this one? What factors? Who decides what factors are fair and reasonable and what factors are not? Does it sound a bit Kafkaesque? With this passage, The Department says: “We may punish you for something that we are not going to tell you.”

There was a spike of legal action against the Department in recent years by doctors that were subjected to audits. Many were successful because Courts found Medicare rulings inconsistent with the accepted legal principles.

I suggest that the practices review their procedures and document any decisions. Avoid giving any advice on billings to your doctors except when you closely quote the Medicare literature. Document any advice.

 

Disclaimer: This information is an opinion and commentary provided by one of Alecto’s partners.  This information should not be interpreted as legal opinion and therefore should not be the basis of decision making without requesting legal advice on your circumstances.  Alecto Consulting Pty Ltd does not carry any responsibility for opinions and statements in any of its website blogs or other information.
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