Administration of Medicare Electronic Claiming Arrangements

18 September 2017

Australian National Audit Office
GPO Box 707
Canberra ACT 2601
AUSTRALIA

Dear sir/madam

Administration of Medicare electronic claiming arrangements

The Community and Public Sector Union (CPSU) welcomes the opportunity to make a submission to this audit. As the primary union representing Department of Human Services employees, the CPSU is committed to providing a strong voice for our members in key public policy and political debates.

The CPSU is happy to provide information on the matters raised in this submission and supplementary information on other relevant issues. For further information, please contact Osmond Chiu, Research Officer via email or (02) 8204 6913.

Yours sincerely

Lisa Newman

Deputy National President

Community and Public Sector Union

CPSU (PSU Group) Submission:

Administration of Medicare electronic claiming arrangements

September 2017

There has been an ongoing process of increasing the number of online claims and automation of the work as part of the Australian Government’s Digital Transformation agenda. The Government aimed to have all major transactions completed online by 2017 and is pursuing a digital by default approach to interactions with government. In 2015-16, 96.1% of claims were lodged electronically[1], up from 86.7% of claims in 2012-13.[2]

Despite these figures from the Department of Human Services, members report that the successful electronic lodgement of claims figures are hugely inflated by bulk billingfigures. While these are a significant proportion of total electronic payments, there are still millions of claims lodged each year by alternative methods such as phone, mail or presentation at a service centre.

Furthermore, the Department’s shift to increased electronic claiming without proper consultation with staff has come at the cost of existing services for Medicare clients, leading to increased inefficiencies, poorer and slower services for the public, more errors and rework, andfraud, all exacerbated by ICT problems.

Inferior services

CPSU members are frustrated about the huge decline in service delivery standards to Medicare customers. It has led to a situation where not only are customers calling to find out about the status of their claims but they are physically presenting at offices asking where payments were. Members report that this was not only the public but doctors (providers) as well. The decline has been driven by the deprioritisation of Medicare work.

In 2016, DHS reallocated resources away from Medicare and towards Centrelink claims processing and payment. Prior to this,Medicare dedicated staff in service centres conducted face to face interviews and claims processing, processed claims in local offices and processed online allocations of electronically lodged Apps claims. In all cases, Medicare claims were meeting the set key performance indicator of 3 days from lodgement.

After the change in 2016, staff were advised to only provide face-to-face service in hardship cases, with customers presenting with paper claims to be advised to place the claims in a drop box for centralised scanning and processing.All allocation of Apps claims for processing was also removed from these staff.Medicare dedicated staff were redirected to Centrelink work, with most service centres now assigning only a single staff member to Medicare “walk ins” each day and many service centres now do not offer Medicare service at all across lunch breaks.

CPSU members routinely report being advised to prioritise Centrelink customers over Medicare customers. This was designed to force more electronic claiming. CPSU members advise there are significant numbers of customers who do not have the technology or capability to electronically claim and this cohort is being disadvantaged by considerably longer waiting times for payment than those who are tech savvy. This includes customers who have complex claims as MyGov electronic claiming covers only the most common item numbers, and Express Apps is incapable of accepting 2-way claims and complex multi-item claims such as pathology.

Late last year, there were media reports of significant delays for claims not lodged online due to an end to onsite processing.[3] Some waited more than a month for a refund.[4] Members have informed the CPSU that the centralisation of processing caused these delays. As a result of moving Apps claims to central processing, the KPI has shifted out from 3 days to 10 dayswith some claims up to 4-6 weeks behind.The remaining claiming methods reportedly have a KPI that has shifted from 3 days to 14. The centralisation of paper claims resulted in a scanned backlog which our members reported peaked at 300,000 claims, at which point the service centres were brought in on overtime to assist with the backlog. Unsurprisingly,service levels to the public have diminished considerably.

Our members’ reports have been reaffirmed by the Medicare Public Benchmarking Project 2017 which recently reported that:“It has become clear however that the average time to process work with a customer who is present and a paper form is markedly different (faster) than processing claims in a digital environment.Anecdotally a number of Medicare staff who have transitioned from the face to face Division have markedly reduced their output per hour for the same type of work.”This project was established to determine reasonable processing benchmarks in the digital environment.

While nationally the DHS service model states that any customer who requests face to face service can have it, DHS Zone Service Leaders apply that in different ways across different zones, with most now only providing that level of service in hardship cases. There is a serious issue with inconsistency across the DHS Service centres in terms of the level of Medicare service provided. In all cases it is an inferior service to that provided up to 2015.

Errors and fraud detection

The electronic payment of Medicare claims relies on correct bank details being registered with Medicare, as opposed to the doctors surgery. Members report thatmany people neglect to advise of new bank details whichwas previously picked up in face-to-face service. It can result in considerable delays in payments of rebates: if no bank details are held by Medicare the claim payment is automatically “held”. If incorrect bank details are registered by Medicare the claim is rejected by human intervention and the customer would need to follow up and ask why their claim has been rejected. Ifbank details are wrong and funds are returned to Medicare the funds are automatically held until such time as the customer contacts to see what has happened to their rebate. If a customer contacts the Department to provide bank details, staff in a processing centre donot check if any Medicare payments are owing whereas Service Centre staff always did this. Members have advised there are currently millions of dollars being held as a result of incorrect bank account details asthe Departmentno longer follows these up with customers.

One example of the inefficiency is if a customer manages to obtain a face-to-face service in a service centre to chase up an unpaid claim.Staff can see the claim and the supporting documents on their screen but they are not allowed to pay the rebate. They must advise the customer to return to their doctor, obtain a second copy of all the documentation and then bring than back to the service centre and only then can they pay the claim, further delaying payment of their claim. Often when they return with the documents they are forced to leave them in the drop box. Treatment of drop box claims is different in each service centre, with some only processing claims from the box one day a fortnight.Again, delaying the customers rebate.Some of these claims can be for thousands of dollars, seriously inconveniencing the customer and often delaying follow up medical treatment.

Furthermore,Service Centre staff used to be a valued source of fraud detection, their knowledge of the local health provider community is invaluable.Since the prioritisation of Centrelink over Medicare work, members are reporting reluctance from Team Leaders to allow time for fraud follow up. One member advised the CPSU that she reported a major potential fraud to her team leader, only to be told to “pretend you didn’t see it because we can’t afford to have you off the floor for the time it would take to report it.”

ICT problems

Our members in the telephony and processing environment report that the biggest issue in leading to inefficiency is inadequate technology. The problems are such that the Benchmarking Report noted on its first page that face to face service are faster than electronic claiming. It is of little surprise that the public and even specialists are waiting in service centres and insisting on face to face service to query Medicare payment delays.

On-line claiming via MyGov has significant downsides:

• It is incredibly clunky with each family member needing a separate log on meaning families must keep a record of each to facilitate claims;
• It is very difficult to navigate; and
• It automatically pays claims the next day, so it is essentially an honesty system with no human intervention. This method is regarded by staff as a “fraudsters paradise.” Because of this, DHS recently introduced a requirement that claims lodged through MyGov must include scanned verifying documentation for the service. Many members of the public do not have access to scanners so this will significantly reduce access to this option.
• MyGov is also restricted to the 10 most common GP items, which confuses customers when a service delivered by a GP is not included in that list.

Members consistently report the old mainframe from the 1970s is more efficient and faster than the internet based telephony and processing now being used.In their view, DHS appears only to be prepared to fund the “basic model” which delivers inferior service to the public.Members report constant system freezes, drop outs, and seriously slow screen accessing times.In one members view “there was a theory that they took the face to face processing away from service centres to get people off the system because it just can’t handle the number of staff it needs to support the timely processing of claims.” The outcome was a blow out in the time the public had to wait for their rebates, frustrated customers being turned away at service centres, bulging drop boxes, missing claims and staff being instructed not to tell customers their claims would not be processed locally. Members believe had the Department spent more on the system, increasing its capacity, processing claims would be both more efficient and faster.

The overwhelming view of our members is that the most efficient and fastest way to lodge a claim is through your health care provider’s surgery. However, the removal of the practice incentive payment for this claim method has inhibited this claiming method, particularly among allied health providers in small practices.

In the processing environment, the issueour members report that with slow loading times for each page relevant to a claim means our members believe that it is almost twice as fast to process a claim with the paper on your desk, than to have to work the claim digitally. This is reinforced by the Benchmarking Report referred to earlier.

Failure to consult led to these problems

Many of the problems with electronic claiming have arisen from the failure to consult with staff.Members commented that the senior Executives who are in charge of the Department of Human Services are not familiar with Medicareclaims processing.They report that there is an assumption that the work is simple as it has traditionally been carried out by APS3 level staff. But tThe work is actually complex and requires thorough knowledge of the Schedule and medical language. Complex claims such as skin biopsies which rebates differing percentages depending on how many components of the procedure are completed on the one day need high level assessment skills. It is crucial that staff with this knowledge are consulted when work reorganisations are planned.

Under the terms of the currentEnterprise Agreement, the Department is obliged to consult staff on major change which is likely to impact on their employment.Despite continued requests for consultation about digital roll outs and changes to the Medicare Service offer in service centres, DHS has refused to consult the CPSU.This has effectively denied staff the opportunity to influence decisions relating to technology roll out. Staff could have told DHS this had they consulted them about the change to the service offer. This could have avoided the huge reduction in service to Medicare customers and the backlogs of claims which reportedly peaked at 300,000.

Proper consultation can also avoid wastage of public monies on IT. For example, in the Compensation area of Medicare, $120 million was expended on a new system which was ultimately abandoned because it could not do the required work. There was no consultation with Compensation staff who would actually work with the system.

Recommendations

The CPSU recommends the following changes to improve electronic claiming:

Consult staff

Staff should be consulted before changes are made. They understand how the systems operate and have an interest in improving work processes. Their knowledge canavoid expensive investments in technology thatresult in slower processing times and huge delays in payments to the public.

Process claims locally

Medicare work should not be deprioritised at service centres as it simply adds to workloads, backlogs and delays in payments.DHS should enable service centre staff to facilitate claims payment from documents already scanned to records. Medicare service levels at Service Centres should be nationally consistent.

The digitisation or scanning of paper claims from drop boxes only delays processing of those claims. Claims should be processed locally by properly trained assessing officers in service centres. Whether paper claims are digitised centrally or locally, local service centre staff should check the claims are complete prior to digitisation and be given time to follow up locally if they are not. Claims without correct paperwork attached or without a signature being scanned incomplete delays payment and adds rework.

In the world of the health professional there is no such thing as a standard receipt.There are many cases where contact with the customer is necessary for processing and payment of a claim, for example if a doctor adds restrictions or text to a receipt.Medicare is not a program that can be completely digitised.Currently staff are sending people away for things that cannot be completed by phone or digitally.Forcing people to electronically claim disadvantages the most needy, particularly the elderly, chronically ill, disabled and poor.

If the digitisation of paper claims at the local level continues, to enable electronic processing of these claims the issue of scanners being unable to scan documents smaller than A4 will need to be addressed as many medical receipts are issued in A5 or smaller.

Upgrading training

Medicare processing/telephony staff needs to be trained to assess claims as well as process them.The Medicare Public benchmarking project found a number of outdated processes, task cards and learning materials.

CPSU members consistently report training is too short and confined to self directed training which is an acquired skill. Previously new staff undertook a 6 week training course for new staff. It is now covered off in a matter of days. The lack of proper training adds to a huge error and rework problem and delays in payments. The increasing complexity of billing and its interaction with Medicare points to the need for a clear division between simple processing and proper assessment. Medicare used to call this Tier 1 and TeirTier 2 levels of responsibility. Both levels are being paid at APS3 classification. here is a strong case for moving complex pathology, IVF, public hospital (a very large number of public hospitals do not interact with Medicare on-line) to assessing staff who should be remunerated more appropriately at the APS4 level. This is complex work involving claims often in the tens of thousands of dollars. A typical IVF claim involves a payment of over $8,000. Staff should be appropriately trained and remunerated.

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