Key points
- Doctors spent years inappropriately billing Medicare and private health insurers for expensive and questionable spinal surgery.
- A review of about 1200 health insurance claims for spinal fusion revealed more than 85 per cent were inappropriately billed.
- Private Healthcare Australia, the insurance industry’s peak body, said the findings were more likely evidence of error, not fraud.
Doctors spent years inappropriately billing Medicare and private health insurers for expensive and questionable spinal surgery, something a leading surgeon has compared to giving a vampire the keys to a blood bank.
A 2018 review, conducted by spine surgeon Dr Roy Carey, of about 1200 private health insurance claims for spinal fusion revealed more than 85 per cent were inappropriately billed.
Spinal fusion involves the joining of two or more vertebrae.
He and a panel of surgeons were also commissioned to review another 300 spine operation requests for WorkSafe Victoria. They found 293 were inappropriately billed.
“When you start to see what other people charge for things – I thought ‘f—’. I could have been on my fourth Bentley by now,” Carey, a former board member of the Australian Orthopaedic Association and a former president of the Spine Society of Australia, told The Age and The Sydney Morning Herald.
“Sadly, surgery now seems to have become a business, not a profession.”
In 2018, following a review, the government made substantial changes to the Medicare benefits schedule for spine surgery, in part to prevent inappropriate billing.
Because that happened after his review, Carey said he could not be sure what current levels of inappropriate billing were. “Anecdotally, it seems more difficult to game,” he said.
Carey’s revelations, which he quietly published in an industry journal in 2020, come as two large new Australian studies reveal these expensive spine surgeries – which can cost more than $50,000 – are having extremely poor outcomes and leaving some previously-healthy people so badly disabled they are unable to work.
“They are young people, in the prime of their life, they are getting this surgery – and two years later the vast majority of them are not back to work in any capacity,” said University of NSW epidemiologist Adriane Lewin, lead author on one of the studies. “It does not feel to me like a surgery that’s working.”
The Age and the Herald this week revealed estimates billions of dollars were being siphoned from Medicare by billing mistakes or fraud. Medicare essentially operates on an honour system with doctors paid for services they say they are providing.
Dr Roy Carey reviewed about 1200 private health insurance claims for spinal fusion.
In recent years, private health insurers say they have seen a dramatic increase in the amount, and an even more dramatic increase in the cost of spine surgery. That prompted Bupa, one of the nation’s two largest insurers, to engage Carey to review about 1200 spinal fusion insurance claims in 2018.
He found more than 85 per cent of accounts included inappropriately billed Medicare item numbers. Carey believes it is one of the few in-depth reviews of item number-billing done by a medical specialist.
Carey conducted a similar review with a panel of six surgeons for WorkSafe Victoria and found the same billing problem.
“[There were] things that were plainly impossible – like billing for services which were not possible, given the nature of the operation described,” he said.
“For example, correction of a scoliosis when none was present, or removal of part of a vertebrae which would be contra-indicated given the operation described.”
“It seems to be the perfect crime. Patients don’t know. Hospitals may benefit – more item numbers mean a higher billing band. Private health insurers are constrained by the Private Health Insurance Act. They are not able to refuse payment on items which Medicare accepts.
“The current situation is like letting those Draculas amongst us drink freely in an unpoliced blood bank.”
Private Healthcare Australia, the insurance industry’s peak body, confirmed Carey’s figures and said they were concerning – but were more likely evidence of error, not fraud.
“Sadly, surgery now seems to have become a business, not a profession.”
President of Australian Spine Society, Dr Rob Kuru, said the inappropriate billing was caused by Medicare’s spine schedule being decades out of date and “not fit for purpose”. Medicare rebates have also not kept up with costs – forcing surgeons to bill for multiple items to recoup the cost of surgery.
“I’ve certainly seen some billing over the years which you would find hard to justify in any interpretation,” he said. “But most of what Roy’s referring to, I think, is the variance that was seen under the old schedule.”
Two new studies reveal for the first time just how little expensive spine surgery is really helping Australian patients.
The first study, co-authored by Carey, looked at 874 injured Victorian workers who received a spinal fusion – a procedure where two or more vertebrae are joined – between 2008 and 2016.
Overall, the surgery led to just an 8 per cent increase in the number of people with substantial work capacity; 77 people who were working before the operation were not working two years after the surgery.
The second study, looking at injured NSW workers who had spine surgery, found even more dismal outcomes – and substantial harms. After a spinal fusion, just 19 per cent had returned to work within two years; almost one in five patients needed a second spine surgery within two years of the first operation, with some needing up to five reoperations.
“If someone said we’ll give you a surgery, and there’s a one-in-five chance you’ll be back here in five years … that’s really, really high,” said Adriane Lewin.
In an effort to deal with the problem, WorkSafe Victoria set up panels of surgeons to review proposed spinal fusions. Over the 18 months to December 2019 the panel rejected almost half of fusions proposed by outside surgeons.
Kuru – who co-authored one of the studies – said spinal fusions were not likely to help workers return to moderate or heavy-labour jobs. “But if you go to them and ask ‘has this decreased your level of pain’? Then yes, it’s better than it appears from looking at return-to-work rates.”
The findings do not surprise Dr Chris Maher, founding director of the Institute for Musculoskeletal Health at the University of Sydney.
Studies have repeatedly shown spinal fusions do not provide good outcomes for back pain. Many surgeons seem blind to that evidence, Maher said. “They believe in it. It’s like going to Hillsong [Church]. They are telling us: I know in my patients this works.”
“Unfortunately, the answer seems to be: it costs a lot of money to get workers spinal surgery, and the outcomes are not particularly good.”
A spokesman for the Australian Orthopaedic Association, Dr Michael Johnson, said Medicare had never audited spine surgery before the 2018 review.
“So, not unreasonably, people thought ‘well, what I’m doing must be OK’. And invariably there will be a small number of people who will take advantage of the system,” Johnson said.
The new system dramatically cut inappropriate billing, he said. However, “in terms of an audit process, there is [still] none,” he said. “It is pretty clear the department is under-resourced.”
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