Health insurers are urging Australians who have undergone surgery in private hospitals to review their medical bills following allegations that some specialist doctors may have systematically defrauded patients, health funds, and Medicare for personal gain.
Private Healthcare Australia (PHA) has confirmed it is investigating nearly 50 doctors accused of charging hidden fees of up to $5000 under “no gap fee” arrangements—agreements where patients should not incur out-of-pocket costs. The allegations primarily target anaesthetists, surgeons, an obstetrician, and a gastroenterologist.
Reports indicate some doctors claimed they were bulk billing patients but charged additional fees labelled as “booking fees” or “administrative fees.” A survey by a major health fund found 31% of respondents treated under a “no gap fee” arrangement had been charged fees, while 23% treated under a “known gap fee” arrangement were billed amounts exceeding the $500 limit.
PHA CEO Dr Rachel David described the allegations as “deeply disturbing,” emphasising the trust patients place in their specialists. “Patients, often at their most vulnerable, do not expect to be financially exploited,” she said. Dr David urged consumers to review their medical bills, particularly for discrepancies in “bulk billed” or “no gap fee” treatments.
Rising Costs and Affordability Issues
The investigation comes amid growing financial pressure on Australians. Recent Australian Bureau of Statistics data revealed 11% of Australians are delaying or avoiding specialist medical treatment due to costs, up from 8% the previous year.
Medicare statistics also show a decline in bulk billing for specialist consultations, with just 29% of consultations in 2023-24 bulk billed, compared to 30% the previous year. Meanwhile, private health insurers covered 33.82 million in-hospital services under “no gap” agreements, comprising 83% of all such claims, while 9.3% were billed under “known gap” agreements.
Dr David further warned that “shadow billing”—charging under-the-table fees not reported to Medicare or insurers—undermines the accuracy of government data on healthcare costs. “This industrial-scale fraud erodes trust in Medicare, private health insurance, and publicly available medical cost information,” she added.
Reporting Potential Fraud
Consumers concerned about potential overcharging are encouraged to:
- Complete the Government’s health provider fraud tip-off form
- Call the fraud hotline: 1800 829 403
- Email suspected cases to: [email protected]
Understanding Fee Arrangements
- No Gap Fee: Specialists and hospitals receive higher payments from insurers to ensure no out-of-pocket costs for patients.
- Known Gap Fee: Patients pay a capped fee of up to $500, with insurers covering the remainder.
PHA has vowed to address proven cases of fraud and ensure greater transparency in the healthcare sector.
This story was originally reported by RPP FM and repurposed by STPL News with permission.
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