The Australian Government has released a long-awaited review into Medicare fraud and non-compliance, revealing that between up to $3 billion is lost every year. 

The independent review, which was led by health economist Pradeep Philip, warned that the overly complex system is out of date and risks bleeding more taxpayer money.

The review was prompted by media investigations last year, which alleged flaws in Medicare's systems made it easy for some medical professionals to rort, and almost impossible to detect fraud. 

The Philip review found a significant amount of the money being lost was attributable to non-compliance errors rather than premeditated fraud.

In his report, Dr Philip wrote; “Legislation, governance, systems, processes, and tools are currently not fit for purpose and, without significant attention, will result in significant levels of fraud.”

Health Minister Mark Butler said the review showed the “overwhelming majority"”of health professionals were well-meaning and protective of Medicare, “but they also understand that, at a time of great pressure on household and government budgets, every dollar in Medicare is precious and must be spent directly on patient care”.

Dr Philip said there is “real potential” that fraud and non-compliance could rise to $8 billion if new controls, systems, and education were not put in place. 

The Philip review made 23 recommendations, including improved governance, updates to legislation relating to Medicare to ensure it is effective and fit for current health needs, and the creation of better systems to detect and disrupt fraud and non-compliance. 

AMA president Steve Robson agreed that the overall system has become too complex.

“This leads to mistakes in billing by doctors trying to map best-practice patient care to an out-of-date system, exacerbated by a lack of education and definitive advice about how to correctly bill some Medicare funded services,” he said. 

The full report is accessible here.