Surgery frauds alleged

The Age.
Richard Baker and Nick McKenzie
July 30, 2009

UP TO 27 surgeons may have been involved in defrauding the Victorian
Government’s accident insurers of millions of dollars, an investigation by
state Ombudsman George Brouwer has found.

Mr Brouwer, in a report tabled in Parliament yesterday, said flawed billing
procedures at the Transport Accident Commission and WorkSafe had exposed
both agencies to fraud.

He found the agencies had paid surgeons for procedures that never occurred
or for operations performed contrary to accepted medical guidelines.
‘‘The amounts involved have the potential to exceed millions of dollars,’’
Mr Brouwer said. The report follows a previous inquiry into The Alfred
hospital’s ex-trauma chief, Thomas Kossmann, who was found to have
billed the TAC and WorkSafe for surgery that had not occurred or was
done by others.

Dr Kossmann, who has denied wrongdoing, is being investigated by Victoria
Police for alleged fraud. The chief executives of The Alfred and the TAC r
esigned after the Kossmann controversy.

In his latest investigation, Mr Brouwer focused on suspect billings by up
to 27 surgeons.

Mr Brouwer said an external consultant engaged by WorkSafe last year
found 16 ‘‘very high risk’’ surgeons had submitted bills between 2005
and June last year containing hundreds of procedures performed contrary
to the Commonwealth Medicare Benefits Schedule.

A separate WorkSafe audit of payments since June last year had identified
another 11 surgeons who may have billed inappropriately. This audit also
found suspect invoices from other medical service providers.

An examination of TAC and WorkSafe payments in 2006-07 and 2007-08
found $9.5 million went to doctors who submitted bills that contradicted the
rules."It is clear that the TAC and WorkSafe’s current scrutiny of their systems
have shown they were vulnerable to fraud and being taken advantage of by
service providers," the report said. ‘‘During the investigation I became aware
that historically the TAC and WorkSafe have treated bills from surgeons with a
fair degree of trust … (they) did not consider billing by surgeons presented a
high risk.’’

Mr Brouwer also found the TAC and WorkSafe were reluctant to investigate
claims of inappropriate billing, noting that both failed to take the issue seriously
until investigators from his office began questioning senior executives under
oath last year. ‘‘My investigation into the TAC identified an apparent
reluctance to conduct formal investigations where the subject was a medical
practitioner.’’

Out of a random sample of TAC requests to 13 doctors to repay money, only
two had done so in full, Mr Brouwer found. Two others had partially repaid
money, while four had refused to do so and the status of a further four was
unknown.

In response to the inquiry, the TAC and WorkCover have agreed to:

■ Develop and report to Mr Brouwer new payment systems to minimise rorting.

■ Continue audits of payments to radiology, anaesthetic and pathology providers
between 2001 and 2008.

■ Develop policies to prosecute and recover cash from doctors.

Opposition Leader Ted Baillieu said the Government should refer the
allegations to the Auditor-General to determine how much public money has
been lost. ‘‘This Government was warned about these failures in November ’
07 … and they’ve failed to act,’’ he said.

Premier John Brumby defended the TAC and WorkSafe, saying both acted
as soon as they became aware of the problem. ‘‘Illegal billing of any description
is inexcusable,’’ he said.

TAC chief executive Janet Dore said the agency was improving the
accountability and transparency of billing. ‘‘It is fair to say that our billing
system was in need of an overhaul and that’s what we’ve done.’
’
WorkSafe deputy chief executive Ian Forsyth said the organisation continued
to introduce improvements, such as prior approval for elective surgery and
requiring stronger evidence of procedures performed.

With AAP