Commission’s and the Victorian WorkCover Authority’s administrative processes for medical practitioner billing

An investigation into the Transport Accident
Commission’s and the Victorian WorkCover
Authority’s administrative processes for
medical practitioner billing
July 2009
Ordered to be printed
Victorian government printer
Session 2006-09
P.P. No. 221
2
3
LETTER OF TRANSMITTAL
To
The Honourable the President of the Legislative Council
and
The Honourable the Speaker of the Legislative Assembly
Pursuant to section 25 of the Ombudsman Act 1973, I present to the Parliament
the report of an investigation into the Transport Accident Commission’s and
the Victorian WorkCover Authority’s administrative processes for medical
practitioner billing.
G E Brouwer
OMBUDSMAN
28 July 2009
4
5
CONTENTS
EXECUTIVE SUMMARY
6
INTRODUCTION
8
BACKGROUND
9
INVESTIGATION
10
Failure to detect inappropriate medical practitioner billing practices 10
in
the electronic payment system
12
Inadequate controls to ensure compliant medical practitioner
billing behaviour 18
Failure to investigate outlier medical practitioner billing behaviour
23
TAC’s analysis of medical practitioner billing behaviour
24
WorkSafe’s analysis of medical practitioner billing behaviour
24
Exercise of compliance powers
Civil recovery action
TAC’s prosecution policy
Investigations into fraud by WorkSafe
27
27
29
30
CONCLUSIONS
34
SUMMARY OF RECOMMENDATIONS
35
practitioner billing practices.
and WorkSafe’s current scrutiny
6
EXECUTIVE SUMMARY
1. Given the considerable amounts of money involved in administering
the Transport Accident Commission (TAC) and the Victorian
WorkCover Authority (WorkSafe) schemes it is imperative that both
organisations make sound investments in ensuring their systems
and processes minimise waste. This investigation has
highlighted in both
This investigation has highlighted organisations’ capacity to detect
in both organisations’ inappropriate medical practitioner
capacity to detect inappropriate medical billing practices. Both organisations
were initially sceptical and reluctant
to endorse my concerns. However, in
recent times the TAC under its new Chief Executive has demonstrated
a strong commitment to promptly and address the issues
raised by my investigation and WorkSafe has given a commitment to
deal with the issues raised.
2. The potential for TAC and WorkSafe’s systems to be exploited,
intentionally or otherwise by
The potential for TAC and WorkSafe’s medical practitioners, exists.
systems to be exploited, intentionally The consequences of this are
or otherwise by medical practitioners, It is clear that the TAC
exists. The consequences of this are of their systems have shown they
were vulnerable to fraud and being
taken advantage of by service providers. Both organisations have now
responded to these issues.
3.
This investigation found that the TAC and WorkSafe’s electronic
payment systems and associated controls failed to detect billing
practices that were inconsistent with the Commonwealth Medical
Schedule (MBS) rules. Both the TAC and WorkSafe have
accepted my conclusions on these issues.
4.
My investigation has also revealed inadequacies in TAC and WorkSafe’s
audit frameworks for detecting and dealing with outlier medical
practitioner billing behaviour.
5.
I also consider that both TAC and WorkSafe did not have adequate civil
recovery strategies in place. However, I note both organisations have
taken to steps to address this issue.
6.
I have made a number of recommendations, including that both the
TAC and WorkSafe:
needed improving and were not
7
Provide me with further information regarding the new treatment
payment system and how it will be designed to ensure medical
practitioner billing is compliant with the MBS.
Advise me of the outcome of audits conducted to assess the
effectiveness of changes introduced to their current account
processing systems and controls.
Provide me with the results of investigations into outlier medical
practitioner billing behaviour.
Report on the development of policies for recovering money
from service providers or others when it is established that such
money has been incorrectly paid, regardless of whether or not any
prosecutorial action is taken.
7.
Both the TAC and WorkSafe have accepted my recommendations.
8. WorkSafe accepts my conclusion that their systems for dealing with
TAC and WorkSafe’s electronic payment surgical costs within the scheme
systems and associated controls failed robust at the time the
to detect billing practices that were issue became a matter of public
inconsistent with the Commonwealth interest. The TAC has also accepted
my that its payment
processes and associated controls
were not designed to monitor the accuracy of medical practitioner
billings against the MBS.
8
INTRODUCTION
9.
On 11 March 2008, I decided to conduct an investigation on my own
motion under the provisions of section 14 of the Ombudsman Act 1973
into the Transport Accident Commission (TAC) and the Victorian
WorkCover Authority (WorkSafe). This investigation related to the
administrative processes of the TAC and WorkSafe in relation to the
management of payments made to medical practitioners and others
for the treatment of trauma patients. These matters were
in my Report of an investigation into issues at Bayside Health1 (Bayside
Health Report).
1
Ombudsman Victoria, Whistleblowers Protection Act 2001. Report of an investigation into issues at
Bayside Health, Melbourne, October 2008.
9
BACKGROUND
10.
In my Bayside Health Report I concluded that the failure of the TAC to
monitor and audit a surgeon’s bills had resulted in
incentives for what in my opinion were inappropriate billing practices.
I also formed the opinion that this failure had cost the Victorian public
considerable amounts of money for payments that ought not to have
been made and in some cases for services not provided.
11.
In forming the conclusions in my Bayside Health Report, I relied on a
wide range of evidence collected by my details of which are
set out in that report. The evidence included a report dated March 2008
on the results of a clinical review of a surgeon conducted by a panel
engaged by Bayside Health (the peer review panel report). In its report
the panel concluded that the surgeon had:
billed the TAC, Victorian WorkCover Authority and Medicare Australia:
(i)
for surgeries that were not performed
(ii)
for surgeries he had not performed
(iii)
utilising multiple item numbers that are mutually exclusive
(iv)
utilising item numbers not in the spirit of the funding agreement
(v)
for surgery that was not necessary.
12.
During the early stages of my Bayside Health investigation it became
apparent that:
Both the TAC and WorkSafe maintained limited and inconsistent
controls over surgeons’ billings for services provided in hospitals.
Despite the TAC and WorkSafe adopting the Commonwealth
Medicare Schedule (MBS), both organisations failed to
consistently apply the MBS’s explanations, rules and
conditions for the billing and payment of medical services.
13.
During that investigation I became aware that:
Historically the TAC and WorkSafe have treated bills from
surgeons with a fair degree of trust.
The TAC and WorkSafe did not consider billing by surgeons
presented a high risk to their organisations.
14.
As a result of my preliminary concerns, I decided to conduct an own
motion investigation into the administrative processes of the TAC and
WorkSafe in relation to the management of payments made to medical
practitioners and others for the treatment of trauma patients.
10
INVESTIGATION
15.
My obtained evidence from witnesses under oath or
under the provisions of the Evidence Act 1958 and obtained relevant
documentation and records from the TAC and WorkSafe.
Failure to detect inappropriate medical practitioner
billing practices
16.
The TAC and WorkSafe administer legislation which establishes
Victoria’s compensation schemes in relation to transport and work
accidents respectively.
17.
Both the TAC and WorkSafe are large public organisations with
considerable resources at their disposal. As at 30 June 2008 WorkSafe
had 1066 employees and the TAC 794 employees.2 The TAC and
WorkSafe Chief Executives, in conjunction with their respective
Boards, are responsible for overseeing assets and liabilities in the
billions of dollars. As at 30 June 2008 WorkSafe’s total assets were
$10.3 billion dollars and the TAC’s $7.5 billion.3 The income sources of
both organisations include compulsory contributions from members
of the public. For the TAC this income source is by way of transport
accident charges for motor vehicles, railways and tramways.4 In the
case of WorkSafe, it is primarily funded by insurance premiums paid by
Victorian employers who are covered by the workplace injury insurance
scheme. In 2007-08 this totalled $1.66 billion.5
18.
Both organisations have a responsibility to discharge their statutory
duties in relation to claims against their respective compensation
schemes. This means that the TAC and WorkSafe Chief Executives, in
conjunction with their respective Boards, are responsible for
liabilities each year. As at 30 June 2008 WorkSafe’s total liabilities were
at $8.2 billion and the TAC’s at $6.7 billion.6 Of these liabilities, the
total gross claims incurred in 2008 by the TAC were $1,119,432,0007 and
$1,236,686,0008 by WorkSafe. Of the total gross claims liabilities, the
total gross cost of medical liabilities for WorkSafe was $416,451,000.9
2
3
4
5
6
7
8
9
Transport Accident Commission Annual Report 2008, p.95; Victorian WorkCover Authority
Annual Report 2008, p.94.
Victorian WorkCover Authority Annual Report 2008, p.34; Transport Accident Commission
Annual Report 2008, p.29.
Transport Accident Commission Annual Report 2008, p.30.
Victorian WorkCover Authority Annual Report 2008, p.11.
Transport Accident Commission Annual Report 2008, p.29; Victorian WorkCover Authority
Annual Report 2008, p.34.
Transport Accident Commission Annual Report 2008, p.64.
Victorian WorkCover Authority Annual Report 2008, p.55.
This includes medico-legal costs. See Victorian WorkCover Authority Annual Report 2008, p.55.
provides explanations,
rules and conditions for the use
MBS.
11
19.
I that both the TAC and WorkSafe paid surgeons’ bills that
were inconsistent with the MBS. This is despite both organisations
requiring medical practitioners’ bills to be consistent with the
provisions of the MBS.
20. The MBS is produced by the Commonwealth Department of Health
and Ageing for the purposes of governing how medical practitioners
bill Medicare. The MBS allocates
The TAC and WorkSafe paid surgeons’ a unique item number (the MBS
bills that were inconsistent with the item) to a vast range of medical
MBS. This is despite both organisations and cognate services. The MBS also
requiring medical practitioners’ bills to
be consistent with the provisions of the of MBS items. While the MBS
was designed for use in relation
to Medicare, the TAC and WorkSafe have applied it as the basis for
medical practitioners’ bills to their organisations.
21.
As part of my investigation I examined the application of
MBS rules and principles by the TAC and WorkSafe. In particular I
considered:
The ‘after-care’ principle. The MBS after-care as ‘all
professional attendances necessary for the purposes of post
operative treatment of the patient’.10 As the after-care period
varies according to the patient and the surgical procedure
performed, the MBS provides a guide to the interpretation of the
after-care period, stating it ‘includes all attendances until recovery
from an operation … plus the check or examination’. 11 The
MBS guidelines go on to state:
Attendances which form part of after-care, whether at hospitals, rooms or
at the patient’s home, should not be shown on the doctor’s account. When
additional services are itemized, the doctor should show against those
services on the account the words “not normal after-care”, with a brief
explanation of the reason for the additional services.12
The ‘complete medical service’ principle. Part 14 of the MBS
explanatory notes explains:
Each professional service listed in the Schedule is a complete medical
service in itself. However, it may also form part of a more comprehensive
service covered by another item, in which case the provided for the
latter service covers the former as well.
10
11
12
Australian Government Department of Health and Ageing, Medicare Schedule Book
Effective 1 November 2006, p.216 - para T8.7.1.
Ibid, para T8.7.3.
Ibid, para T8.7.4.
and WorkSafe commenced an
practitioners when they billed. This
Despite some initial defensiveness
by WorkSafe, both the TAC and
WorkSafe have now acknowledged
with the MBS.
12
The ‘mutually exclusive’ principle. The MBS guidelines provide
that certain combinations of MBS items, due to the nature of the
procedures described, are mutually exclusive.
The ‘multiple operations’ principle. Where an individual patient
sustains multiple injuries, a surgeon is often required to carry
out a number of complex operations on the patient on the one
occasion. I understand this frequently occurs in the trauma
setting. The ‘multiple operation’ principle provides that where a
medical practitioner performs two or more operations on a person
on the one occasion, the medical practitioner will be paid ‘step
down’ fees. That is: 100 per cent for the MBS item, 50 per cent
for the second item and 25 per cent for each other item.13
22.
In my Bayside Health Report I concluded that the TAC had failed to
adequately monitor surgeons’ compliance with the MBS when they
billed the TAC. I am WorkSafe has also failed in this regard.
23.
Both the TAC and WorkSafe say they relied on the honesty of medical
practitioners when they billed. This resulted in both organisations’
account processing systems and controls not being designed to detect
medical practitioner bills that were inconsistent with the MBS.
24. During my investigations I raised with both the TAC and WorkSafe
my concern that there were shortcomings in their account processing
systems and controls in relation to medical practitioner billings,
particularly surgeons. I am
Both the TAC and WorkSafe say that during 2008 both the TAC
they relied on the honesty of medical analysis of the way in which they
resulted in both organisations’ account processed medical practitioner bills.
processing systems and controls not
being designed to detect medical
practitioner bills that were inconsistent to me that their systems and controls
were inadequate in this regard. Both
organisations have initiated changes
to their electronic payment systems and associated controls, improving
the capacity of their systems to detect inappropriate billing practices.
25.
My investigation has established that the electronic account processing
systems utilised by the TAC and WorkSafe were not designed to
detect billing practices that were inconsistent with the MBS rules and
generally inappropriate.
13
Medicare Schedule Book Effective 1 November 2006
, para T8.5.
13
26.
Both the TAC and WorkSafe use electronic payment systems to process
and pay expenses associated with claims, including medical practitioner
bills. The TAC’s electronic payment system is referred to as TAPS and
WorkSafe’s as ACCtion. Unlike the TAC, WorkSafe related medical
practitioner bills are processed and paid by the six insurance agencies
engaged by WorkSafe to pay compensable claims. The agents’ systems
for processing accounts are fairly similar; however two agents, QBE
and Allianz, utilise their own systems to support the process.
Each agent uses ACCtion to process practitioner invoices.
27.
In summary I
that TAPS had:
Not been programmed to detect breaches of the MBS rules, such
as compliance with the ‘after-care’ principle or the ‘complete
medical treatment’ principle.
Been unable to detect the incorrect application of the rules, such as
the use of mutually exclusive items.
Contained vulnerabilities when applying MBS rules, such as the
multiple operations rule.
Been unable to detect other straightforward instances of
inappropriate billing practices by medical practitioners, such as
bill splitting.
28.
My concern that WorkSafe’s electronic payment system, ACCtion, had
similar inadequacies is supported by the conclusions of WorkSafe’s
internal auditor. In February 2008 WorkSafe requested its internal
auditors to conduct an audit of the controls in place for managing
invoices from private medical practitioners and public hospitals. The
initial report of April 2008 there was a lack of systems and
controls to ensure agents processed such invoices according to the MBS
rules.
29.
WorkSafe engaged its internal auditors to conduct a second audit into
private medical practitioners. The report of this audit dated August
2008 the key of the peer review panel report for
WorkSafe. The report stated the key were that WorkSafe had
received invoices which included:
1. Procedures that were not performed by the surgeon or anyone else.
2. Inappropriate use of multiple item numbers that are mutually exclusive.
3. Use of item numbers that are not in the spirit of the funding agreements
i.e. the MBS.
4. Surgery that was performed and not considered necessary by the Panel.
14
The internal auditors went on to state:
WorkSafe controls would not have detected and in fact have not
been designed to detect the billing practices highlighted above. The
ACCtion system and related accounts processing processes were not
designed to analyse the use of item numbers or verify the occurrence
or appropriateness of the procedures performed prior to processing the
invoices.
30.
In the following paragraphs I discuss in more detail my concerns
regarding the inadequacies of both the TAC and WorkSafe’s electronic
payment systems managing the principles in paragraph 21.
After-Care Principle
31.
During my investigations it became apparent that TAPS was not
designed to monitor the accuracy of medical practitioner billings
against the MBS rules.
32.
In my Bayside Health Report I discussed my that a surgeon
had billed for additional services during the after-care period. The
surgeon used the MBS item ‘subsequent specialist consultations’14.
However the surgeon’s bills did not specify that the consultations were
‘not normal after-care’. My report discussed that this billing practice
was different to the surgeon’s predecessor and had
resulted in a substantial income for the surgeon. I concluded that on
the face of it these consultations would be caught within the after-care
provisions of the MBS. I noted that the TAC had failed to query these
bills.
33.
Subsequent data analysis by the TAC and WorkSafe that
both organisations had made payments to providers for the MBS item
‘subsequent specialist consultations’15 for activity which would fall
within the MBS’s after-care period for surgical patients.
34.
The internal auditors reports for both the TAC and WorkSafe also
support my concerns that the accounts processing systems were not
programmed to identify bills which were contrary to the after-care
principle. The TAC’s internal auditors report of May 2008 found that:
There are no system or manual controls to identify and/or validate after-
care payments. As a result, invoices relating to subsequent consultations
are currently entered into TAPS and paid at the full amount, without any
14
15
MBS Item 00105. See Medicare Schedule Book Effective 1 November 2006
Ibid.
, p.92.
15
WorkSafe’s internal auditor’s report of April 2008 that
the auditor had analysed a sample of 85 invoices for the period
1 September 2007 to 28 February 2008. Of this sample there were
103 instances of after-care payments with 60 potentially not paid in
accordance with the MBS rules. As a result of this analysis the internal
auditor recommended that:
Management should:
Develop and implement procedures and controls to ensure that after-care
services are processed in accordance with the MBS rules.
Complete Medical Service Principle
35.
In my Bayside Health Report I also outlined my conclusion that
a surgeon’s bills had included combinations of MBS items which
contravened the ‘complete medical service’ principle.
36.
My conclusions in this matter are again supported by internal auditors’
reports for both organisations. The TAC’s internal auditor’s report of
May 2008 states:
Further, there are limited systems controls within TAPS to check and/or
identify MBS items that may be included in a more comprehensive item
invoiced on the same date.
The internal auditor also found that the account processing manuals
did not provide any instructions on assessing the comprehensiveness
of MBS items contained within invoices. WorkSafe’s internal auditor’s
report of June 2008 found there was limited knowledge of the MBS
rules, including the ‘complete medical service’ principle, at WorkSafe
and its agents. Also, there had not been a detailed review of the system
and processes to ensure that all MBS rules are followed.
Mutually Exclusive MBS Items
37.
My review of TAC’s records also that the TAC failed to detect
instances where medical practitioners’ invoices contained, contrary to
the MBS guidelines, combinations of MBS items which, according to the
nature of the procedures described, are mutually exclusive.
38.
An external consultant’s report of 13 January 2009 stated that an
analysis of payment data for all medical practitioner provider types
for the TAC during 2007-08 and WorkSafe for the period 2006-07
that TAC paid medical practitioners $4,290,000 and WorkSafe
$5,280,000 in relation to 526 mutually exclusive MBS items. Across both
organisations, surgeons received approximately 99% of the sums paid
in relation to the mutually exclusive item combinations.
16
Billing for Multiple Operations and Bill Splitting
39.
I understand TAPS is able to identify bills which include multiple
MBS items for operations occurring on the same date. However, the
electronic payment system had been unable to apply the ‘step down
fees associated with medical practitioner bills for multiple operations.
The system requires the manual processing of such invoices to
ensure the appropriate reimbursement for each MBS item. I consider
that such a system is vulnerable to human error and is particularly
concerning given the large volume of surgery billings the TAC
processes. On 28 November 2008 the TAC agreed with my conclusion
that TAC’s system for managing the ‘multiple operation’ principle
was vulnerable to human error.
40.
On 28 November 2008, the TAC also accepted that TAPS had not been
programmed to identify instances of bill splitting, such as when a
surgeon has sent multiple accounts that relate to the same service on the
same date.
41.
Again I note that the external consultant’s report of 13 January 2009
reported that its analysis of TAC’s and WorkSafe’s payment data for all
medical practitioner provider types the following payments
in relation to twice billing and multiple operations.
Table 1
Twice Billing
Multiple Operations
TAC16
$720,000
$471,000
WorkSafe17
$1,609,000
$1,122,000
Other inappropriate practices
42.
WorkSafe’s internal auditor also found that while there are process
and system controls to ensure that only the invoices for medical
practitioners registered with Medicare and within the WorkSafe
electronic payment system (ACCtion) are paid, there is no system
control to match the MBS items within an invoice with the medical
practitioners specialisation. The auditor went on to explain:
If a general practitioner raised an invoice for an orthopaedic surgery
and the invoice contains correct registration details, item codes and
descriptions, the invoice will be paid without detecting the mismatch in
the medical practitioner’s specialisation and the nature of the treatment.
16
17
TAC data relating to medical practitioners for the period 2007-08.
WorkSafe data relating to medical practitioners for the period 2006-07.
of its the TAC has agreed
and that there was need for
the of its electronic
systems. In response to the
has implemented various change
in its account processing syste
system to address these
17
Improvements to electronic accounts processing systems
43. During my investigations the TAC undertook work in
relation to reviewing its electronic account processing system in
relation to medical practitioner
WorkSafe accepts its account processing billing practices. As a consequence
system was not adequately programmed with my conclusions regarding
improvements to its processes and payment system. I note the TAC
WorkSafe has implemented changes. m, to its existing electronic payment s
including the integration of
MBS rules relating to after-care, complete medical service, multiple
operations payments and mutually exclusive MBS items.
44.
WorkSafe has also advised me that it accepts its account processing
system was not adequately programmed and that there was need for
improvements to its processes and systems. In response
to the in its account processing system, WorkSafe has
implemented the following changes:
System changes so that duplicated surgical items and service dates
are and require supervisor approval before payment.
Amendments to the ACCtion payment system to automatically
apply MBS rules relating to the complete medical service
principle, including mutually exclusive rules.18
Functionality improvements to ACCtion to implement rules
relating to the aftercare conditions.
45.
In addition to the changes both organisations have implemented to
their existing electronic payment systems, the TAC and WorkSafe
are working towards the implementation of a new treatment
payments system to be commissioned in 2010. I acknowledge that
the TAC recognises that any future treatment payment system must
be designed to improve the accuracy of billing against the MBS; be
designed to detect the issue of bill splitting; and incorporate step down
multiple operation rules. I note WorkSafe is also committed to the
commissioning of the new electronic payment system.
18
From August 2008 until the implementation of improvements to ACCtion in January 2009,
WorkSafe introduced manual systems within each agent to apply 9 MBS rules relating to
mutually exclusive MBS item number combinations.
billed in accordance with the MBS.
The potential for the TAC and
WorkSafe systems to be exploited,
organisations ar
18
Inadequate controls to ensure compliant medical practitioner
billing behaviour
46. In addition to the in the electronic payment systems of
TAC and WorkSafe, my investigation that both organisations
had inadequate controls in place
The potential for the TAC and WorkSafe to ensure medical practitioners
systems to be exploited, intentionally
or otherwise by medical practitioners,
exists and the consequences for both intentionally or otherwise by
medical practitioners, exists and the
consequences for both organisations
are The amounts involved have the potential to exceed
millions of dollars.
47.
During my Bayside Health investigation I that the TAC had
no process in place to verify whether surgeons had in fact performed
the services for which they billed the TAC. This is concerning given
the large sums surgeons have been paid by the TAC. In my Bayside
Health Report I concluded that if the TAC had obtained operation
notes associated with surgeon’s bills the TAC would have been able to
detect many billing anomalies. As the TAC’s processes did not require
surgeons to provide evidence to support their claims, such as operating
notes, the TAC’s system was clearly vulnerable to abuse.
48.
In the past the TAC accepted bills on trust and rarely queried them. In
my Bayside Health Report I noted that the TAC acknowledged that:
The TAC’s internal controls assumed there would be appropriate clinical
oversight and governance at the hospitals where medical services were
provided.
The TAC assumed medical practitioners would conduct themselves in an
honest and professional way and that:
- medical services billed for were, in fact, provided
- the treatment provided (and billed for) was appropriate, reasonable and
necessary
- billings were in line with the respective MBS or AMA guidelines and
were not excessive.
49.
The TAC considered this negated the need for it to have in place
internal controls or auditing of billing practices. I consider a
prudent use of public resources requires the TAC to evaluate the
appropriateness of a medical service provided before making payments
to service providers.
develop such processes as it relied
on clinical governance systems
within hospitals. The TAC has
accordance with their own internal
and did not carry out an independent
between the six agents. I note
19
50. The TAC has acknowledged my conclusion that it had no process in
place to verify whether surgeons had in fact performed the services
for which they billed the TAC.
The TAC has acknowledged that it had The TAC has explained it did not
no process in place to verify whether
surgeons had in fact performed the
services for which they billed the TAC. also acknowledged its system for
processing surgeons’ invoices did
not consider the appropriateness of the service.
51.
The TAC also failed to provide staff with adequate policies to guide
work practices in relation to processing claims submitted by surgeons.
My investigation that the TAC’s accounts processing and
claims manuals:
Were not dated.
Did not contain any records of updates or change histories.
Did not appear to have been the subject of internal quality control
mechanisms.
As a result there is no evidence of a consistent approach to staff
training. This is of particular concern given the abovementioned
shortcomings with TAC’s electronic payment system. The TAC has
accepted my conclusions in relation to the inadequacy of its accounts
processing and claims manual.
52.
During the course of this investigation I also that WorkSafe
had exercised limited power over its six agents’ account control
processes and did not carry out an independent analysis as to whether
or not the agents were complying with existing controls.
53. On 20 February 2009 WorkSafe advised me that apart from the general
guidance of the WorkSafe Claims Manual, the six agents have been
responsible for building their
WorkSafe exercised limited power over own account control processes in
its six agents’account control processes systems, procedures and resources.
analysis as to whether or not the agents Account control processes differ
were complying with existing controls. WorkSafe’s advice that it had
introduced some control
processes to assist agents, for example the introduction in 2007 of pre-
approval processes for certain services.
my view, this obligation requires
WorkSafe to actively ensure there are
bills are processed in a manner
consistent with the MBS.
20
54.
The existing contract WorkSafe has with its six agents requires each
agent to conduct an annual audit to certify whether it has complied
with internal quality controls. I have been advised that to date the
agents have made no declarations which have highlighted control
weaknesses in their accounts processing. Prior to 2008 WorkSafe had
only implemented a limited number of central controls regarding the
agents’ account processing systems.
55. I consider WorkSafe, as the authority responsible for the Victorian
workers compensation scheme, has a statutory duty to ensure the
scheme is fairly and appropriately
During 2008 both the TAC and WorkSafe administered by its six agents. In
have taken steps to improve the controls
in place to ensure medical practitioner appropriate controls in place so that
agents process medical practitioner
bills in a manner compliant with the
MBS. I also consider that WorkSafe
should monitor the agents’ compliance with these controls.
56.
I note my in relation to the inadequacies of WorkSafe’s systems
and controls are supported by WorkSafe’s internal auditors report
of June 2008. This report stated:
Internal Audit noted, through discussions with WorkSafe Management
and Agents, that there is limited knowledge of these rules [MBS rules] at
WorkSafe and the Agents.
The auditor concluded this lack of knowledge had led to a failure to
develop the necessary systems and monitoring controls to identify
billings which varied from the MBS rules.
57.
WorkSafe has acknowledged to me that it had inadequate controls in
place to ensure medical practitioners billed in accordance with the MBS.
Improvements to account processing controls
58.
During 2008 both the TAC and WorkSafe have taken steps to improve
the controls in place to ensure medical practitioner bills are processed in
a manner consistent with the MBS.
59.
I note that in response to the shortcomings the TAC
advised on 26 November 2008 that it had introduced some immediate
changes, including:
21
A new policy that requires surgeons to submit a copy of their
theatre notes with invoices. This is to ensure transparent and
accountable billing, consistent with the work performed and the
MBS rules.
The employment of theatre nurses to review surgery accounts to
verify MBS items with injury/surgery type and check for clinical
relevance in relation to the transport accident injury. Mechanisms
are also in place for a medical and specialist peer review by the
Health Services Group (HSG).
Cessation of automatic payments to high risk providers with
review by an audit team prior to payment.
Astop on manual override on ‘no payable’ providers.
are now referred to the HSG commercial team for review.
All
Development of a strategy to commence audits which target
certain provider billing behaviour, such as extreme value,
frequency, amount, provider capacity and service type.
Enhancements to the training, work practices and education
of accounts processing and claims management staff. This has
included TAC placing its accounts processing work practices in
its on-line claims policy manual and ensuring future changes to
the accounts processing work practices are now traceable with
previous versions remaining accessible.
60.
WorkSafe has now also introduced controls at the processing level. For
example on 28 November 2008 WorkSafe advised it had introduced the
following controls to agents’ account processing practices:
All surgery invoices are to be accompanied by a hospital
operation report to assist future targeted audits to check where
surgery was billed but not performed and to check compliance
with the MBS rules.
Restrictions on payments of certain provider types working in
public hospitals by the HSG.
Letters to surgeons reminding of their requirement to bill in
accordance with the MBS.
WorkSafe has also advised me that each agent now has two operators
who have sole responsibility for surgical invoices. WorkSafe has
advised that since August 2008 it has also provided monthly
information sessions to these operators regarding the new systems
associated with processing surgeons’ invoices. It has also established
an internal ‘Accounts Solutions’ team to oversee the infrastructure,
processes, systems and training of the designated operators.
22
61.
WorkSafe has advised that in the future the agent contracts will
require each agent to engage an external auditor to assess the agent’s
compliance against WorkSafe controls.
62.
In addition to the auditing requirements under the agent contracts,
WorkSafe has also developed an audit program to check each agent’s
compliance levels, ‘Agent Health Checks’. In December 2008 WorkSafe
commenced the phase of the agent health check program. The
second, fully documented agent health check program commenced in
late March 2009. This program consists of the following weekly and
monthly activities by WorkSafe’s Accounts Solution Team:
On a weekly basis the team generates and analyses reports
which identify duplicate payments, exceptions to the MBS rule of
mutually exclusive item numbers and after-care.
The conduct of monthly reviews of randomly selected from
each agent. Each month the review focuses on invoices that fall
within one of certain categories, for example, payment of invoices
associated with trauma surgery. The review considers whether
the ‘end to end’ processing of invoices in the particular category
has complied with the work practices of each agent.
I note WorkSafe provides the agents with feedback on both the weekly
and monthly activities of the agent health check program.
Recommendations
I recommend that the TAC:
1.
Provide my by 31 January 2010 with details of how the new
treatment payment system will be designed to ensure medical
practitioner billing is compliant with the MBS rules as well as the
scheduled timeframe for implementation of the new system.
2.
Provide my by 31 August 2009 with details of the results of audits
conducted to date, including implications for TAC’s account processing
systems and controls and action taken as a consequence of the audit
TAC response:
The TAC has indicated support in responding to these recommendations within the
proposed timeframes.
and billing pr of all service
the int grity of paymen s made to all
whose bil ing practices are
and work accident compensation
and/or trends in practices across
23
I recommend that WorkSafe:
1.
Provide my by 31 January 2010 with details of how the new
treatment payment system will be designed to ensure medical
practitioner billing is compliant with the MBS rules as well as the
scheduled timeframe for implementation of the new system.
2.
Provide my by 31 August 2009 with a report on the audits
conducted under the agent health check program since March 2009.
This report should include a summary of the issues raised; the action
taken by the agents to address issues of non-compliance; and the action
taken by WorkSafe to monitor such compliance.
WorkSafe response:
WorkSafe accepts these recommendations and will endeavour to respond within the
dates.
Failure to investigate outlier medical practitioner billing
behaviour
63.
During this investigation I became aware that historically the TAC
and WorkSafe did not have a strategy for investigating outlier medical
practitioner billing practices. That is, strategies for conducting statistical
analysis of data which will identify data that deviates from the general
and appropriate pattern of behaviour. I was informed this was because
the TAC and WorkSafe had not considered medical practitioner billing
in the trauma and acute setting as posing a high risk’.
64. In my view, the TAC and WorkSafe should monitor the integrity of
payments made to all service providers under the transport and work
accident compensation schemes to ensure a prudent use of public
resources. I consider this requires a program that involves monitoring
provider compliance with billing rules both pre- and post-payment.
Both organisations should develop a
The TAC and WorkSafe should monitor rigorous strategy to monitor claims
service eproviders under tthe transport providers l to identify practitioners
schemes to ensure a prudent use of public substantially different to their peers
resources. categories of providers which are
non-compliant with the organisation’s rules. This will assist the TAC
and WorkSafe in identifying high risk areas of non-compliance across
the business and not just in areas which have a cumulatively higher
share in the respective markets.
24
TAC’s analysis of medical practitioner billing behaviour
65.
In my Bayside Health Report I outlined the highest TAC fee earnings
for surgeons in 2006-07. During that year one surgeon received
approximately three times more income than any of his peers. Further
analysis revealed he had disproportionate statistics in relation to
billings for particular item numbers. This disparity in earnings should
have caused TAC to conduct an analysis into why this individual was
earning substantially more than his peers.
66.
In 2007 another surgeon emerged as the highest TAC earner. Again this
should have triggered a closer examination of this surgeon’s billing
practices. However, the TAC did not identify this surgeon as a risk until
an anonymous complaint brought about a review of payments made.
67.
The TAC informed me that the high earnings of some medical providers
did not trigger a review of payments made to these practitioners:
As our outlier systems and fraud detection processes are geared towards
the areas of greatest risk to the scheme they have traditionally
been focussed on the post acute phase of a clients [sic] recovery.
68.
I understand in late 2006 the TAC, as a result of identifying that patient
treatment costs at one hospital were twice as much as another, initiated
a review. This review raised concerns about the ‘remuneration
arrangements’ of consulting surgeons. Despite this review TAC took
no follow up action on the high earnings of several surgeons. It was
only after my investigation interviewed TAC staff and the peer
review panel report was completed, that senior TAC administrators
took steps to more closely examine the billing practices of surgeons.
69.
My review of TAC payment data also anomalies
across other professional service groups. As a result of the issues
the TAC has commenced an analysis of radiology, pathology
and anaesthetic services billed in the period 2001–08.
70.
I note that the TAC has now commenced an outlier program to link
income/billing analysis with peer/clinical review across all disciplines.
WorkSafe’s analysis of medical practitioner billing behaviour
71.
WorkSafe, like the TAC, requires medical practitioners to submit bills in
accordance with the MBS. Historically WorkSafe has also relied on the
honesty of medical practitioners billing in accordance with the MBS.
the activities of this team have
included reviewing a sample of 11
surgical providers who may have
billed mutually exclusive item
combinations. I have also been
has that its intent on is to u e
analysis of a range of medical
improvements of i s systems and
has potential billing issues
25
72.
As a result of my Bayside Health investigation my
instances where surgeons had received payment from WorkSafe for
bills that were inconsistent or contrary to the MBS. I note throughout
2008 WorkSafe has responded by initiating various improvements to its
account payment systems and associated controls.
73.
On 20 February 2009 WorkSafe advised me that it had engaged an
external consultant to conduct an analysis of WorkSafe data to identify
categories of ‘outlier billing behaviour by practitioners.
74.
The data analysis was conducted between 23 December 2008 and
9 January 2009. The data was drawn from payments of all types of
surgery (both elective and trauma) for the period 1 July 2005 to 30 June
2008. The analysis a amount of money that could
be attributed to payments that are potentially inconsistent with the
MBS. I note WorkSafe’s caveat that this sum of money may not have
been ‘incorrectly paid’.
75.
In December 2008 WorkSafe established two audit teams to conduct
prospective and retrospective data analysis of medical practitioner
billing. I was advised that the retrospective audit team is responsible
for reviewing medical services billed for the period between 1 July
2005 and 30 June 2008. I have been informed that as a result of the
data analysis conducted by the external consultant in December 2008,
the retrospective audit team conducted an audit of 16 ‘very high risk’
surgical providers, covering approximately 536 exceptions.
76. I am advised the prospective audit team is responsible for conducting
clinically supported audits on medical practitioners who have
provided services after 1 July 2008.
WorkSafe intends that the prospective Since January 2009 I understand
audit team will conduct regular audits of
surgeons and other medical practitioner
disciplines on an ongoing and open ended
basis to enhance compliance’. WorkSafe
these audits for iensuring scompliance advised that following a preliminary
by service providers tand feeding into practitioner disciplines WorkSafe
controls. with providers in disciplines other
than surgery. An audit of the top
billing medical practitioners in relation to these potential billing issues
commenced in February 2009.
26
77.
I note WorkSafe intends that the prospective audit team will conduct
regular audits of surgeons and other medical practitioner disciplines on
an ongoing and open ended basis to ‘enhance compliance’. WorkSafe
has that its intention is to use these audits for ensuring
compliance by service providers and feeding into improvements of its
systems and controls.
Recommendations
I recommend that the TAC:
3.
Provide my ofce by 31 August 2009 with a detailed report on the
ndings of its analysis of radiology, pathology and anaesthetic
services billed in the period 2001-08, as well as all actions taken as a
result of the
4.
Provide my by 31 August 2009 with a detailed report on the
outlier program developed to link income/billing analysis with peer/
clinical review across all disciplines.
TAC response:
The TAC has indicated support in responding to these recommendations within the
proposed timeframes.
I recommend that WorkSafe:
3.
Provide my by 31 August 2009 with a report on the of
the retrospective audit team’s investigation into the ’16 very high risk’
surgical providers. This report should include an explanation of the
action WorkSafe is taking as a result of these
4.
Provide my by 31 August 2009 with a report on the activities and
of the prospective audit team’s activities. This report should
include an explanation of the action WorkSafe is taking as a result of
the as well as this team’s proposed activities for the following
twelve months.
WorkSafe’s response:
WorkSafe accepts these recommendations and will endeavour to respond by the
dates
27
Exercise of compliance powers
78.
An important component of WorkSafe’s and the TAC’s statutory
responsibilities is the exercise of compliance powers. Both organisations
have the power to:
Investigate individuals and companies who may have
contravened the legislation each authority administers19 as well
parts of the Crimes Act 1958.
Issue and conduct prosecutions in relation to offences committed
under their relevant legislation.
Initiate civil recovery action for monies incorrectly paid.
79.
Both organisations have separate compliance branches responsible for
investigating non-compliant activities.
Civil recovery action
80.
My investigation established that both WorkSafe and the TAC had
inadequate practices in relation to recovering money incorrectly paid to
service providers.
81.
WorkSafe’s best practice manual states that WorkSafe works towards
delivering an effective WorkCover compensation system by, amongst
other things:
Applying a model of constructive compliance to individuals and
companies which … defraud the system.
Prior to December 2008, I understand WorkSafe’s prosecution and
recovery guidelines: RCBU Compliance and Enforcement Policy stated that
WorkSafe would initiate recovery action in relation to practitioners it
had investigated and prosecuted:
Following a of guilt by a court, the Authority will generally seek
an order from the court seeking recovery of any payments made as a result
of the commission of the offence in accordance with section 249A of the
Accident Compensation Act 1985.
I note that since December 2008 WorkSafe has supplemented this
policy to include the consideration of civil recovery action in relation
to investigations which do not result in the initiation of criminal
prosecutions.
19
The Accident Compensation Act 1985 for WorkSafe and the Transport Accident Act 1986 for the TAC.
which are broader than purely
the relevant rules, su h as the MBS,
advised my that when
program that is in addition to and
to recover funds from medical
28
82.
The TAC has a generic policy regarding recovery action for monies
inappropriately paid. However my investigation that there
was a lack of guidance for TAC regarding recovery action in
relation to allegations of fraud by treating practitioners. My
requested that the TAC advise me of its progress in recovering monies
(via caution letters) for 13 randomly selected cases. The following table
demonstrates the results of these letters:
Table 2
Repaid in full
Partially repaid
Nil repayment
Unknown
2
2
4
4
NOTE: One of the 13 matters was ‘being held in abeyance’ at the time of this request.
83.
My was advised by a TAC recoveries staff member that the TAC
has taken no action against the six individuals who had not repaid
the TAC in full. The TAC recoveries staff member further stated that
there is no written guidance to assist ofcers in deciding what action
to take, if any.
84.
The four ‘unknown’ results represent caution letters that were sent by
the TAC’s compliance team, but were not referred to the recoveries
unit. The TAC recoveries staff member advised my that he was
unaware whether these letters had been sent. He stated that no action
had been taken to follow up these matters.
85.
The TAC has acknowledged that further work may be required to
address these issues in relation to training to improve the consistency
with which its recovery policies are understood and applied, and to
address recoveries from service providers.
86. During my investigation I made enquiries with Medicare Australia
regarding its compliance
I consider WorkSafe and the TAC’s management strategies. Medicare’s
response to service provider billing compliance management strategy
behaviour which is not compliant with incorporates a variety of activities
should include a civil crecovery action enforcement based activity. Medicare
separate from any prosecutorial action. have been incorrectly paid it seeks
practitioners in addition to any action Medicare may take in relation to
prosecution based activities.
Where an investigation has
will assist service providers to
to initiate a prosecution
voluntary compliance of the
schemes. Where an investigation
has that monies have
29
87. I consider WorkSafe and the TAC’s response to service provider
billing behaviour which is not compliant with the relevant rules, such
as the MBS, should include a civil recovery action program that is in
addition to and separate from any
prosecutorial action. I also consider
that monies have been incorrectly paid, a separate recovery program
regardless of whether the evidence is understand the WorkSafe and
for criminal activity, I consider good TAC schemes as well as promote
compliance management requires an
organisation to take action to recover
the incorrectly paid monies. been incorrectly paid, regardless of
whether the evidence is to
initiate a prosecution for criminal activity, I consider good compliance
management requires an organisation to take action to recover the
incorrectly paid monies.
88.
I also consider that good administrative practice requires the TAC and
WorkSafe provide clear written guidance to staff on recovery action in
relation to payments wrongly made to service providers.
TAC’s prosecution policy
89.
My investigation into the TAC an apparent reluctance
to conduct formal investigations where the subject was a medical
practitioner.
90.
TAC staff informed my that TAC’s senior management conduct
what appears to be a brief overview of the evidence available at the
preliminary assessment stage to determine the perceived of
proving a surgeon had ‘intent’. It would appear that the perceived level
of is then used as a reason not to investigate.
91.
I have been advised that prior to April 2008, the TAC had never
formally investigated or prosecuted a surgeon. In contrast, the TAC has
successfully prosecuted several pharmacists and physiotherapists.
92.
In order to understand the TAC’s approach to prosecution, my
requested that the TAC provide a copy of its prosecution policy. I was
advised that prior to August 2008 the TAC did not have a prosecution
policy and instead referred to the of Public Prosecutions’ (OPP)
policy and a TAC paper, dated 23 July 2001. I note that the
purpose of the paper was to ‘inform the CEO’. It is unclear
whether this information was communicated to the TAC staff.
30
93.
I understand the policy compiled in August 2008 was developed in
relation to the retrospective activities (2001-08) undertaken by
the TAC in relation to matters raised as a result of the peer review panel
report and my investigations. On 20 November 2008 TAC advised that
it continues to consider it appropriate to base its prosecution policy on
the OPP guidelines and has done so since 2001.
94.
In my view, it is inappropriate to base any prosecution decisions
solely on the OPP policy as this policy does not take into account the
objectives and functions of the TAC.
95.
I note in response to my draft investigation report the TAC has agreed
to develop a TAC prosecution policy in relation to all matters
the TAC may prosecute.
Investigations into fraud by WorkSafe
96.
WorkSafe has advised my that the Compliance and Enforcement
Division (formerly Business Support Division) commenced
investigations into surgeons as a result of the peer review panel report.
An investigation into one surgeon commenced in May 2008 and is
now completed. As a result of this investigation WorkSafe has referred
issues to the Medical Practitioners Board of Victoria. I understand
investigations into seven other surgeons commenced in mid to
late August 2008 and were completed in April 2009. I am advised
WorkSafe is not initiating any prosecutorial action in relation to these
seven surgeons and is currently considering whether any recovery
action will be taken in relation to the billing anomalies by
the investigations and/or whether matters should be referred to the
Medical Practitioners Board of Victoria. WorkSafe has advised any such
action is expected to be completed by August 2009.
97.
According to Section 248B(2) of the Accident Compensation Act,
WorkSafe has an obligation to notify Victoria Police once it ‘commences
an inquiry or investigation’ into activities of a person which WorkSafe
reasonably believes were or may have constituted certain offences.
Section 248B of the Accident Compensation Act provides:
(1)
The Authority may, subject to and in accordance with the
regulations, inquire into and investigate activities carried on by
any person or persons in the course of which the Authority
reasonably believes an offence against section 248, 248AA, 248A
or 249 was or may have been committed.
(2)
Upon commencing an inquiry or investigation under subsection (1),
the Authority must give notice in writing to the Chief
Commissioner of Police of the proposed inquiry or investigation.
31
98.
In relation to the obligation under section 248B(2) of the Accident
Compensation Act, WorkSafe’s Manual of Best Practice states:
It is a requirement that the VWA [WorkSafe] notify the Victoria Police
Chief Commissioner of any intended20 fraud investigations pursuant to our
obligations per the Accident Compensation Act. During an investigation,
if other persons or entities become targets of an investigation, the
Enforcement Manager is to be immediately so that the persons or
entities details can be supplied to the Chief Commissioner. Administration
staffs [sic] are responsible for drafting and forwarding this letter when
they are requested to raise an investigation The letter is to be signed
by the Enforcement Manager and forwarded via normal mail. A copy of
the letter is to be attached to the investigator’s and is to be available
for production if required by a Prosecutor.
Only investigations touching on fraud, bribery and false information
or which have the potential to involve21 fraud, bribery and false
information les pursuant to the ACA or the Crimes Act are to be
reported to the Chief Commissioner.
99.
In relation to the investigation commenced in May 2008, WorkSafe
has advised me that in accordance with WorkSafe’s obligation under
section 248B(2) of the Accident Compensation Act, WorkSafe formally
Victoria Police of its investigation on 30 September 2008. I note
this was approximately four months after the investigation
was initiated. WorkSafe has explained the section 248B(2)
occurred at this time as it had ‘formed the requisite belief’.
100.
The Investigators scoping paper dated 20 May 2008 explained
the investigation commenced as a result of the in the peer
review panel report that a surgeon had ‘engaged in inappropriate
billing practices in respect of the … Victorian WorkCover Authority
[WorkSafe]’. The objectives of the investigation were recorded as being:
To determine if there has been any breach of the relevant provisions of the
Act with particular emphasis on –
Obtaining payments fraudulently – section 248
Provide false information – section 249.
101.
I note the peer review panel report discussed the circumstances in which
it considered the surgeon had engaged in inappropriate billing practices,
including billing for surgeries that were not performed; utilising multiple
item numbers that are mutually exclusive; and utilising item numbers not
in the spirit of the funding agreements. I consider the matters discussed
by the peer review panel report provided sufcient information to cause
WorkSafe to initiate an investigation into whether or not the surgeon
had engaged in billing practices which contravened the provisions of the
Accident CompensationAct relating to obtaining payments fraudulently
and/or by providing false information.
20
21
My emphasis.
Supra.
related to over-servicing and
accordance with its best practice
were received by letter, e-mail
surgeon’s billing practices.
32
102. In considering how WorkSafe applies its section 248B(2) obligation,
on 17 December 2008 my requested and were provided with
the last ten WorkSafe had made to Victoria Police under
section 248B(2) of the Accident Compensation Act. In these ten matters
it took WorkSafe an average of six and a half days following receipt
of the allegations to notify Victoria Police. Seven of the matters were
referred within six days. WorkSafe’s
I consider WorkSafe failed to act in records indicate these ten allegations
manual in relation to the investigation dishonest claims. The allegations
it commenced in May 2008 regarding a and telephone from a variety of
sources, including ex-partners and
anonymous persons. From the
information provided to my it appears that in these ten matters
WorkSafe had Victoria Police at a time when WorkSafe intended
to conduct an investigation in which there was potential to involve fraud
and/or false information. The information relied on by WorkSafe to
justify the need to notify Victoria Police would, on the face of it, have
been considerably less than the information obtained by WorkSafe in
the four months before notifying Victoria Police about the investigation
into a surgeon that it commenced in May 2008.
103.
WorkSafe’s best practice manual provides WorkSafe investigators
with guidance on the interpretation and application of section 248B
of the Accident Compensation Act. The manual clearly states that
Victoria Police should be where WorkSafe intends to conduct
an investigation that may potentially involve fraud and false information
offences under the Act. I consider that the application of this policy
should mean that WorkSafe Victoria Police once it commences
investigations which may involve fraud or false information offences.
The information provided by WorkSafe regarding its recent
to Victoria Police support my understanding of its best practice manual.
104.
WorkSafe has advised the nature of investigations typically handled
by their investigators are not as complex as matters pertaining to the
surgeon. WorkSafe has explained that its referral to Victoria Police
was on the basis of a reasonable belief that the surgeon had provided
false or misleading information rather than fraud. I note that WorkSafe
does not accept that there was a delay in notifying Victoria Police and
considers that its process was appropriate.
33
105.
I consider WorkSafe failed to act in accordance with its best practice
manual in relation to the investigation it commenced in May 2008
regarding a surgeon’s billing practices. At the time WorkSafe
commenced its investigation it had in its possession the peer review
panel report. This report discussed in detail how it considered the
surgeon had engaged in inappropriate billing practices. I consider this
discussion provided enough information for a reasonable person to
believe that an investigation into the billing practices of the surgeon
had the potential to involve, at the minimum, the offence under section
249 of the Accident Compensation Act of obtaining payments from
WorkSafe by false information. In light of the of the peer
review panel report, I consider it would have also been reasonably open
to WorkSafe, when turning its mind to the nature of the investigation, to
consider that the investigation had the potential to involve the offence
of fraud.22
Recommendations
I recommend that WorkSafe:
5.
Provide my by 31 August 2009 with the outcome of the review of
the seven surgeons in relation to recovery action and/or referrals to the
Medical Practitioners Board of Victoria.
6.
Report on the progress of its recently implemented civil recovery
program by 31 August 2009.
7.
Review its training and procedures for investigators to ensure that
criminal prosecutions are effectively handled. A report of the outcome
of this review should be provided to my by 31 August 2009.
WorkSafe response:
WorkSafe accepts these recommendations and will provide the requested reports by
31 August 2009. WorkSafe has commenced actioning recommendation seven.
I recommend that TAC:
5.
Further develop policies in relation to recovery actions. A copy of the
current policy should be provided to my by 31 August 2009.
6.
Develop a TAC prosecution policy in relation to all matters the
TAC may prosecute. A copy of the updated policy should be provided
to my by 31 August 2009.
TAC response:
The TAC has indicated support in responding to these recommendations.
22
See section 248 of the Accident Compensation Act 1985.
34
CONCLUSIONS
106.
This investigation into the administrative practices of the TAC and
WorkSafe has inadequacies in both organisations’ accounts
payment processes and associated controls with respect to their ability
to detect billing practices that are inconsistent with the MBS rules.
Although I am disappointed with the delays in addressing these issues,
I note both the TAC and WorkSafe have accepted my conclusions in
this regard and have commenced reforming their account processing
systems and associated controls to ensure medical practitioners’ bills
are consistent with the MBS. I will be actively monitoring the progress
and adequacy of these reforms.
107.
In addition to poor administrative systems and controls this
investigation established that both TAC and WorkSafe failed to have
strategies in place to monitor outlier medical practitioner billing
behaviour. I consider good compliance management should include
strategies for monitoring, analysing and investigating outlier behaviour
across a business. Such strategies assist an organisation to identify
where it is vulnerable to fraudulent activity and/or misuse. It is also
an essential mechanism for an organisation to assess and improve the
performance of its systems and controls. I note both organisations have
now introduced strategies for monitoring and investigating outlier
medical practitioner billing practices. Again, I will be monitoring these
activities and their adequacy.
108.
I am concerned that both organisations have failed to have rigorous
policies and practices around civil recovery for money incorrectly paid
to medical practitioners. This investigation has also highlighted gaps
in both organisations policies and practices relating to investigations
into medical practitioner billing behaviour which may involve
breaches of the Accident Compensation Act, Transport Accident Act
and the Crimes Act.
35
SUMMARY OF RECOMMENDATIONS
I recommend that the TAC:
1.
Provide my by 31 January 2010 with details of how the new
treatment payment system will be designed to ensure medical
practitioner billing is compliant with the MBS rules as well as the
scheduled timeframe for implementation of the new system.
2.
Provide my ofce by 31 August 2009 with details of the results of
audits conducted to date, including implications for TAC’s account
processing systems and controls and action taken as a consequence of
the audit
3.
Provide my by 31 August 2009 with a detailed report on the
of its analysis of radiology, pathology and anaesthetic services
billed in the period 2001-2008, as well as all actions taken as a result of
the
4.
Provide my by 31 August 2009 with a detailed report on the
outlier program developed to link income/billing analysis with peer/
clinical review across all disciplines.
5.
Further develop policies in relation to recovery actions. A copy of the
current policy should be provided to my by 31 August 2009.
6.
Develop a TAC prosecution policy in relation to all matters the
TAC may prosecute. A copy of the updated policy should be provided
to my by 31 August 2009.
I recommend that WorkSafe:
1.
Provide my by 31 January 2010 with details of how the new
treatment payment system will be designed to ensure medical
practitioner billing is compliant with the MBS rules as well as the
scheduled timeframe for implementation of the new system.
2.
Provide my by 31 August 2009 with a report on the audits
conducted under the agent health check program since March 2009.
This report should include a summary of the issues raised; the action
taken by the agents to address issues of non-compliance; and the action
taken by WorkSafe to monitor such compliance.
3.
Provide my by 31 August 2009 with a report on the of
the retrospective audit team’s investigation into the ’16 very high risk’
surgical providers. This report should include an explanation of the
action WorkSafe is taking as a result of these
36
4.
Provide my by 31 August 2009 with a report on the activities and
of the prospective audit team’s activities. This report should
include an explanation of the action WorkSafe is taking as a result of
the as well as this team’s proposed activities for the following
twelve months.
5.
Provide my by 31 August 2009 with the outcome of the review of
the seven surgeons in relation to recovery action and/or referrals to the
Medical Practitioners Board of Victoria.
6.
Report on the progress of its recently implemented civil recovery
program by 31 August 2009.
7.
Review its training and procedures for investigators to ensure that
criminal prosecutions are effectively handled. A report of the outcome
of this review should be provided to my by 31 August 2009.
G E Brouwer
OMBUDSMAN
OMBUDSMAN’S REPORTS 2004-09
2009
Whistleblowers Protection Act 2001
of Interest and Abuse of Power
by a Building Inspector at Brimbank City
Council
June 2009
Whistleblowers Protection Act 2001
Investigation into the alleged improper
conduct of councillors at Brimbank City
Council
May 2009
Investigation into Corporate Governance at
Moorabool Shire Council
April 2009
Crime statistics and police numbers
March 2009
2008
Whistleblowers Protection Act 2001
Report of an investigation into issues at
Bayside Health
October 2008
Probity controls in public hospitals for the
procurement of non-clinical goods and
services
August 2008
Investigation into contraband entering a
prison and related issues
June 2008
of interest in local government
March 2008
Conict of interest in the public sector
March 2008
2007
Investigation into VicRoads driver licensing
arrangements
December 2007
Investigation into the disclosure of
electronic communications addressed to the
Member for Evelyn and related matters
November 2007
Investigation into the use of excessive force
at the Melbourne Custody Centre
November 2007
Investigation into the Ofce of Housing’s
tender process for the Cleaning and
Gardening Maintenance Contract -
CNG 2007
October 2007
Investigation into a disclosure about
WorkSafe and Victoria Police handling of a
bullying and harassment complaint
April 2007
Own motion investigation into the policies
and procedures of the planning department
at the City of Greater Geelong
February 2007
2006
Conditions for persons in custody
July 2006
Review of the Freedom of InformationAct
June 2006
Investigation into parking infringement
notices issued by Melbourne City Council
April 2006
Improving responses to allegations
involving sexual assault
March 2006
2005
Investigation into the handling, storage and
transfer of prisoner property in Victorian
prisons
December 2005
Whistleblowers ProtectionAct:
Ombudsman’s Guidelines
October 2005
Own motion investigation into VicRoads
registration practices
June 2005
Complaint handling guide for the Victorian
Public Sector 2005
May 2005
Review of the Freedom of InformationAct:
discussion paper
May 2005
Review of complaint handling in Victorian
universities
May 2005
Investigation into the conduct of council
ofcers in the administration of the Shire of
Melton
March 2005
Discussion paper on improving responses to
sexual abuse allegations
February 2005
2004
Essendon Rental Housing Co-operative
(ERHC)
December 2004
Complaint about the Medical Practitioners
Board of Victoria
December 2004
Ceja task force drug related corruption:
second interim report
June 2004