MEDICARE has become dysfunctional, with billions of taxpayer dollars wasted each year due to inadequate safeguards against rorting, the former head of the body charged with overseeing it has argued.
In a scathing critique published in the Medical Journal of Australia today, Tony Webber said Medicare was ''a scheme based on the honour system'' and ripe for abuse by unscrupulous practitioners.
Dr Webber was director of the Professional Services Review - established to ensure Medicare payments were made appropriately - from 2005 until he resigned late last year.
He said he believed misuse of Medicare was costing Australians between $2 billion and $3 billion a year.
In particular, policies that provided financial incentives for doctors to refer chronically ill patients to allied health practitioners and dentists were being widely abused, in what had become ''a bonanza for some practices'', he said.
The intention of general practice management plans and team-care arrangements was to allow patients with chronic or terminal diseases to receive previously unaffordable care, he said. But they had also created perverse incentives for practitioners to over-service patients, creating ''a monster'' that had eroded the integrity of the health budget.
Dr Webber was also highly critical of the Medicare safety net - designed to compensate for high out-of-pocket health costs - which he said contained ''gaping holes''.
He gave the example of a small group of obstetricians raising their fees for antenatal care from about $3000 to $10,000 following the safety net's introduction in 2004, which allowed them to raise their fees without patients incurring additional costs.
While caps have since been placed on rebates for some services, including obstetrics, opportunities to rort the safety net remained, Dr Webber said.
He was aware of instances where the safety net was used ''to subsidise cosmetic procedures, including surgery for 'designer vaginas' at $5000 to $6000 each''.
A further problem was a failure to re-evaluate fees paid to practitioners despite advances in technology that had greatly simplified procedures, he said. He gave the example of cataract surgery, which once required a week-long hospital stay but could now be performed in 20 minutes under local anaesthetic.
Dr Webber's criticism follows the government's commissioning of an independent review into the Professional Services Review following a Federal Court decision in July that declared many of its investigative committees invalid because the Australian Medical Association had not been consulted on their members as required.
The decision, which the government will appeal to the High Court, cast doubt over orders for about 50 doctors to repay inappropriately claimed Medicare benefits of nearly $5 million.
A spokesman for the acting Health Minister, Nicola Roxon, said Medicare monitored compliance with the scheme, and the Professional Services Review investigated only the most serious breaches.
A Department of Human Services spokeswoman said the department used sophisticated data modelling to identify practitioners whose practice profile was significantly different to their peers. Cases were investigated for possible referral to the review.
The spokeswoman said $28.24 million of incorrectly claimed benefits were identified for recovery last financial year.