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Medicare monitors compliance. So can you.


By Kathy Gough
Team Leader Claims, Avant Mutual Group Limited


The total cost of the Medicare scheme is over $18 billion per year. Recent years have seen a significant increase in the resources allocated to ensuring that the Medicare scheme is not misused by patients, providers or others. Medicare benefits are now being accessed for a wider range of services and in circumstances where they might not have been in the past.

It is important that you understand your obligations as a provider of Medicare services and establish and maintain good billing practices. Those used to the Medicare system should keep abreast of changes to both the Medicare item numbers they use and the professional practices of their peers.

Medicare investigates complaints made by patients, colleagues or others, relating to alleged misuse or incorrect use of the Medicare system. Additionally, all providers of Medicare services will routinely have their Medicare billing statistics examined for variance from their professional peers and may be asked to explain any significant anomaly.

The computer algorithms used to analyse provider statistics are increasingly sophisticated. Ratios between services, combinations of services rendered on a single occasion or to a single patient and demographic information about the patient are analysed for statistical aberrance.

The consequences of the audit and review processes can be serious and include repayment of benefits, administrative and civil penalties, exclusion from the Medicare scheme and even referral to AHPRA.

Taking a proactive approach can avoid these serious outcomes.

  • Recognise your responsibility
  • Educate yourself and your employees
  • Stay in touch with your peers
  • Take action early when issues arise.

Recognise your responsibility

It is self-evident that the responsibility for the correct use of Medicare items rests with the clinician under whose provider number the service is rendered. That fundamental feature of the Medicare scheme applies equally whether the service was rendered by a solo practitioner or an employed optometrist.

Although the administration of Medicare claims may be delegated to support staff, the responsibility for ensuring claims are made correctly remains with the clinician and it will be to the clinician under whose provider number a claim was made that Medicare will look for any substantiation or, if the service is found to have been incorrectly claimed, repayment of benefit.

Accordingly, it is the clinician’s duty to recognise their responsibility and take action to ensure they are in control of the claims made in their name.

Where administrative staff members are responsible for submitting claims to Medicare, optometrists should require a daily print-out of the services being claimed against their provider number.

A few minutes should be taken at the end of the day to check what is being claimed in your name and any errors should be corrected as soon as possible. Keep a copy of that document for your personal records.

Educate yourself and your employees

Optometrists should know the elements of the Medicare Benefits Schedule (MBS) descriptors for the item numbers they use and any applicable explanatory notes. The up-to-date MBS can be readily accessed online and further advice can be obtained from Medicare.

Administrative staff members are essential to the efficient practice of optometry but appropriate training must be provided when necessary to defer to the judgement of the optometrist on item selection. Problems can arise where administrative staff members are given responsibility for the selection of MBS item numbers that require clinical knowledge for their selection and proper use.

Stay in touch with your peers

To be eligible for the payment of a Medicare benefit, it is a requirement that a service be ‘clinically relevant’. Clinical relevance means the service is generally accepted in the optometric profession as being necessary for the appropriate treatment of the patient to whom it is rendered.

The criterion for Medicare’s audit and compliance activities and reviews by Professional Services Review is inappropriate practice. Inappropriate practice may be any conduct in connection with the rendering or initiation of services which would be unacceptable to the general body of your peers. Such conduct may include:

‘Billing’ conduct

  • Using an incorrect item number or combination of item numbers
  • Failing to fulfil the descriptor of the item number
  • Billing Medicare for a service which is not eligible for a Medicare benefit


  • Providing unnecessary or excessive services, for example, where a patient routinely presents and a charge to Medicare is raised without there being a clinical need

‘Clinical’ conduct

  • Prescribing an inappropriate drug or dosage
  • Failing to take an adequate history of the patient’s presenting problem or to perform an adequate clinical examination
  • Treating the patient in a way which would be unacceptable to the general body of peers, for example, using out-dated or discredited techniques

‘Clinical Records issues’

  • Failing to make adequate and contemporaneous clinical records that would allow another practitioner to take over the management of the patient.

Because all of those potential grounds of inappropriate practice relate to the acceptability to your peers of what you do in your practice, staying closely connected with your peer group and keeping abreast of changing standards and practices is imperative.

Discussing how you use MBS items with your peer group can ensure your practices remain consistent with the acceptable conduct of your peers.

Take action early when issues arise

Being audited by Medicare or having your services referred for review by Professional Services Review can be worrying and stressful. However, it is important to remember that compliance activity is common. The mere fact that your practice or an item number that you use has been selected for audit or review does not mean you are doing anything incorrectly.

Even if errors have been made in your use of Medicare items or you are unsure whether you have mistakenly used an item number, action can be taken to resolve those issues and answer any questions.

If you have concerns you can contact your Optometry Australia state organisation or Luke Arundel, national professional services manager at Optometry Australia, at


Disclaimer: This article is not comprehensive and does not constitute legal advice. You should seek legal or other professional advice before relying on any content, and practice proper clinical decision-making with regard to the individual circumstances. Avant is not responsible to you or anyone else for any loss suffered in connection with the use of this information. Information is only current at the date initially published.


Avant provides professional indemnity insurance for members of Optometry Australia


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