Australian Health Insurance Association 2007 Private Health Insurance Claims Leakage and Fraud Forum Hon Dr Michael Armitage 23 July 2008 Australian Health Insurance Association 2007

AUSTRALIA 21.18 million population 10.87 million with PHI 38 health funds 758 public hospitals 278 private hospitals 265 day hospitals 2.94 million private admissions . Overview Australian health system 2

Private Sector Contribution Selected Episodes: Proportion Performed in Private Hospitals Data Source: AIHW 2008 Major procedures for malignant breast conditions 55% Cancer Therapy (Chemotherapy) 55% Hip Replacements 55% Other major joint replacement & limb reattachment 63% Mental health treatment, sameday 70% Lens procedures 73% Complex Middle Ear Infection 70% Other Knee Procedures 77% 3

Benefits Paid for Individual Procedures for Members of PHI 12 months to 1 January 2007 Selected claims over $100,000 Source: AHIA Annual High Claims Survey 4

Benefits Paid for Individual Procedures for Members of PHI Less than 30 Years of Age 12 months to 1 January 2007 Selected Top 30 High Claims, less than 30 Years of Age (excluding Premature Births) Source: AHIA Annual High Claims Survey 5

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Private Health Insurance Ombudsman: Complaints 2006/07 Data Source: PHIO Annual Reports Complaints about registered health funds 2,209 PHI Cover        10,282,379 Transactions (Hospital, Medical and General Treatment) 78,870,668 Complaints per PHI transaction 0.0028% PHI Complaints as a % Phi Cover 0.022% 10

Private Healthcare Fraud Changes post 2007 Fraud Forum - New Federal Government - Premium Adjustment 4.99% - Budget (MLS Threshold) - Govt financial dividends from BHC and preventative healthcare - No short term fix!

Private Healthcare Fraud Health Minister – won’t approve premium adjustments based on membership decline! Need to target every arrow in our quiver Fraud an important arrow! Estimate 1 - 2% claims inappropriate

Private Healthcare Fraud Difficult to quantify excellent impact of Fraud Committee’s work No question it contributes to lower premiums Integrity of the PHI Industry Reduces waste Protects Govt investment (30% rebate etc) Sends a positive message to providers, consumers and industry opponents of PHI

Fraud & Security Committee Code of Conduct for the Sharing of Information. Last year I reported that the Code had received the ACCC tick “While making the usual caveat about not being able to give legal advice we do not see any Trade Practices issues with the Information sharing Code as it stands” ACCC Commissioner John Martin on the 5th of March 2007.

CODE OF CONDUCT AHIA legal advice: Health funds could share information only after a provider was aware that their information may be shared. 40,000 providers! Seeking further legal advice re: Can the AHIA notify providers on behalf of all funds without any Trade Practices Act or Privacy Act issues?

What is FRAUD? Suspected unlawful activity by health care providers could include: billing for services not provided; up-coding duplicate billing for the same service inappropriate service delivery that may put the privately insured consumer at risk financially AND MORE….

Health Advertising 1930s

Beating Obesity!!

PRIVACY & FRAUD Health Care has come a long way! Still a long way to go “Rogue” providers can hide behind privacy: Knowingly using an inappropriate prostheses Knowingly perform unnecessary procedures = FRAUD

Private Healthcare Fraud “Healthcare fraud is a problem that’s growing and making healthcare more expensive for everyone. But working together, we can stop it.” (Blue Cross Blue Shield Assoc)

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Private Healthcare Fraud Fraud & Security Committee one of AHIA’s most active At Committee’s instigation the AHIA will seek to partner with Medicare and health funds to produce an Australian version of the brochure Benefits: Government Health Funds Consumers Health care system

Fraud “Break Out” session AHIA Conference 2008 SYDNEY OCTOBER 8 AND 9 Fraud “Break Out” session Colin Bridge – Medicare Australia General Manager – Professional Services Division Nicholas Adamo – Founder & CEO of Forensic Data Services Specialising in Data Recovery, Data Conversion, Electronic Discovery and Computer Forensics. Jim Gee – UK counter fraud specialist Former NHS – 2007 joined KPMG Forensic as Director of Fraud Services.

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