Compliance and business integrity
The department is committed to ensuring people only receive what they are legally entitled to under the law.
The department has a diverse range of compliance activities which reassure both the government and customers that we are taking preventative and other measures to protect the integrity of government outlays. Cases where deliberate deception and intent to defraud can be established are referred to the CDPP.
Social Security and Welfare Programme compliance
Social security and welfare payment accuracy and correctness
Payment accuracy reflects the department’s ability to pay the right person the right amount of money, through the right programme, at the right time, and takes into account customer and administrative error.
DSS calculates payment accuracy using data from random sample surveys and reports this in its annual report.
Payment correctness for social security or family assistance payments is also calculated using data from random sample surveys. Payment correctness is the percentage of surveys when the customer received a correct payment without administrative error. With a target of 95%, in 2014-15 the department achieved payment correctness of 98.1% compared to 97.9% in 2013-14.
In 2014-15 the focus for customer compliance remained on using interventions to manage identified payment risks. The department increasingly uses early intervention to help people receive their correct entitlements and meet their obligations and responsibilities. The department also works with people to resolve issues when they have not complied with requirements because of genuine mistakes.
During the year the department’s targeted early intervention strategies included sending letters and SMS messages to remind customers of their obligations and to prompt self-correction. Whenever possible, we made immediate contact, usually by phone, to remind our customers about their reporting obligations and to update their records to avoid overpayments.
In 2014-15 more than 250,000 customers were contacted using these approaches which prevented $61.4 million in overpayments. This allowed customers most at risk to receive the support they needed to ensure their payments were correct.
|Reductions in payments||85,318||77,272||52,100||–32.6|
|Fortnightly savings in future outlays||$20.9 million||$19.2 million||$18.2 million||–5.1|
|Prevented outlays||$89.4 million||$51.8 million||$61.4 million||+18.5|
|Total debt value||$219.9 million||$283.6 million||$362.1 million||+27.7|
The department’s risk-based compliance approach uses data from a variety of sources and combines it, where appropriate, so that we can help by looking at a wider picture of the customer’s circumstances. Data from both internal and external sources is used in data-matching exercises to identify customers at risk of incorrect payment. In 2014-15 external sources included:
- the Australian Securities and Investments Commission
- the ATO, other than using the Data-matching Program (Assistance and Tax) Act 1990
- the Commonwealth Superannuation Corporation
- the Department of Education and Training
- the Department of Employment
- the Department of Health
- the Department of Immigration and Border Protection
- the Department of Veterans’ Affairs (DVA)
- Defence Housing Australia
- public and private education providers
- state and territory departments of corrective services
- state and territory registrars of births, deaths and marriages
- state and territory land titles offices
In accordance with section 6 of the Data-matching Program (Assistance and Tax) Act 1990, the department, the ATO and DVA participated in 4 complete data-matching cycles. These activities resulted in 24,178 reviews and returned $134.6 million in net benefits to government.
|Net benefits||$118 million||$132.7 million||$134.6 million||+1.4|
See Appendix D on page 258 for more information about the department’s Data-matching Program.
Details of the department’s data-matching initiatives are also reported to the OAIC and are publicly available through the Personal Information Digest available at oaic.gov.au.
Reviews of social welfare payment decisions
A customer may ask for a review of a decision—an independent process undertaken by an officer not involved with the original decision. The review officer will contact the customer to explain the original decision and may ask for further information. The review officer can affirm, vary or set aside the original decision.
In 2014-15 the department had an explicit focus on managing outstanding reviews of decisions. An improved business model saw a significant reduction in both the number and the age of reviews on hand. This, in turn, led to an overall decrease in the average time taken to finalise a customer review.
Once this internal process is completed, if still unsatisfied the customer can apply for review to the Social Security Appeals Tribunal (SSAT) and then the Administrative Appeals Tribunal (AAT). The SSAT was amalgamated into the AAT from 1 July 2015.
Decisions most commonly challenged were:
- rejection of claim for payment such as Disability Support Pension
- raising or recovery of debts, including Family Tax Benefit reconciliation debts
- participation failure
- start date of payment
- rate of payment
1. This refers to the Secretary of any department where the Minister is responsible, under the Administrative Arrangements Order, for part of the social security laws that allow decisions to be appealed to the AAT.
|Unchanged decisions2||Changed decisions|
|Internal review officer||63.9%
- 1. In any given financial year, appeals decided will include cases that were received in prior financial years, as well as a portion that were received and decided in the same financial year.
- 2. Unchanged decisions include reviews that have been withdrawn.
- 3. This refers to the Secretary of any department where the Minister is responsible, under the Administrative Arrangements Order, for part of the social security laws that allow decisions to be appealed to the AAT. Secretary applications are managed in accordance with the partner department’s instructions.
In 2014-15 the department continued to raise debts from customers—see Table 49.
|Number of debts raised||2,006,991||2,230,894||2,350,131|
|Amount raised||$1.8 billion||$2.2 billion||$2.5 billion|
People with payment debts have several options to make repayments, including by cheque, money order, direct debit, BPAY, phone or internet banking, or Australia Post’s Postbill service. For a customer still receiving a payment the most common method of repaying a debt is through withholdings from their payment.
When a customer has difficulties repaying a debt, the department organises a repayment agreement that ensures the customer is not put in serious financial hardship.
When a person is no longer receiving payments and has failed to make their repayments, the department may use a contracted collection agent to recover a debt, with commission only paid on the recovered amount—see Table 50. The department also has an investigative and intelligence capability to locate former customers who have large debts and the capacity to pay them. If necessary, legal action may be taken to recover the amounts owed.
|Total debts recovered||1.16 billion||$1.27 billion||$1.43 billion|
|—amount recovered by contracted agents||$114.7 million||$124.8 million||$131.3 million|
|—percentage of total recovered by contracted agents||9.9%||9.9%||9.2%|
The Social Security Act 1991 encourages people to use private financial resources, such as compensation payments, before accessing the taxpayer-funded social security system. It also ensures that any compensation payments for an injury or illness are considered in the calculation of any social security benefits. So that people fully understand how a compensation payment affects future income support payments, the department contacts them to ensure they are aware of preclusion periods. This helps people make informed decisions about their financial position.
Individuals and their legal representatives can also access a tool on our website to estimate the impact of a pending compensation claim. Information is also available for compensation recipients, compensation authorities, and legal, insurance, union and community representatives.
Our intelligence capability
During 2014-15 the department used a range of intelligence activities to identify and disrupt fraud and non-compliance associated with social and welfare payments. The range of activities included managing tip-offs, using proactive detection strategies (such as data mining, analytics and data matching) and undertaking audits and investigations.
The department undertook extensive research into fraud and non-compliance risk. We also worked with other government and non-government agencies, for example, with the Australian Federal Police, the Australian Crime Commission, the Australian Medical Association, the Royal Australian College of General Practitioners and the Pharmacy Guild of Australia—see also Customer compliance on page 99.
The department also continued to develop its ICT capability that directly supports the detection of fraud and non-compliance.
Increased Data Matching Reviews
The Increased Data-Matching Reviews measure was implemented on 1 July 2014. This involved increasing the review numbers for data matching for additional customers with earned income and investment income and allowed for an extra 5,000 compliance interventions each year.
Health Programme compliance
New compliance reviews
Compliance in large health practices
The 2012-13 Budget measure: Fraud prevention and compliance—Increased billing assurance for the Medicare Benefits Schedule assessed the risks to billing assurance in large practices and ceased on 30 June 2015. Findings from the project will inform future compliance approaches.
Up to $71.48 million in savings were achieved over 2012-15, exceeding the expected target of $20.7 million. This was mainly due to changes in billing behaviour by practitioners who were interviewed under the department’s Practitioner Review Program, practitioners who were peers in the same practice as those interviewed, or practitioners who had received a targeted letter about their servicing levels. Savings included $0.54 million repaid by practitioners determined to have engaged in inappropriate practice under the Professional Services Review Scheme.
Improved billing practices within public hospitals
Under the Fraud Prevention and compliance—Improve billing practices within public hospitals measure we have already gained a clearer understanding of Medicare billing practices within public hospitals. During the year products were published on the department’s website to help medical practitioners and hospital administrators understand their legal responsibilities and Medicare Benefit Schedule requirements when billing under Medicare in public hospitals. This 4-year measure will finish on 30 June 2016.
Chronic Disease Dental Scheme compliance
Over the period of its operation (1 November 2007 to 1 December 2012) the Chronic Disease Dental Scheme (CDDS) allowed chronically ill people, who were managed by their general practitioner under team care arrangements, access to Medicare rebates for dental services. The rebates were capped at $4,250 over 2 calendar years.
The Dental Benefits Legislation Amendment Act 2014 commenced on 4 November 2014. This allows the Chief Executive Medicare or delegate to waive certain debts incurred by dental practitioners under the CDDS. The department had previously applied for debt waivers under the PGPA Act.
Waiver of debts or act of grace payments can occur where the dental practitioners have genuinely tried to comply with the documentation requirements of the CDDS. In cases like this, if they resubmit their claims with the correct details, any debt they had to the department is waived or they can receive an act of grace payment.
When dental practitioners have not provided services or have failed to show they have met the criteria supported for waiver, the department will not support the waiver of debts. In these circumstances the department will continue to seek recovery of the debts.
At 30 June 2015 the department had completed 656 audits and supported the waiver or repayment of debts of 543 dental practitioners.
Health programmes debt
In 2014-15 the department initiated action to recover more than $63.9 million in incorrect Medicare payments. This was through:
- identifying recoverable amounts from audits and investigations
- practitioners acknowledging incorrect billing at a Practitioner Review Program interview
- payment orders resulting from successful prosecutions
- payment orders resulting from determinations by the Director of Professional Services Review
- voluntary acknowledgements
- penalties, including civil, criminal and administrative
Of the total debt amount raised, 83% or $53.1 million related to CDDS matters.
|Medicare Benefits Schedule||639||3.61||970||9.8||1,760||61.4|
|Pharmaceutical Benefits Scheme||105||0.7||146||0.7||211||1.2|
|Health support programmes||28||0.5||35||0.2||39||1.3|
|Child Dental Benefits Schedule||-||-||-||-||33||0.03|
- 1. This figure is different to the figure reported in the department’s 2012-13 annual report due to a quality assurance process.
- 2. Total has been rounded to the nearest decimal point.
Health Compliance Professionalism Survey
The professionalism survey invites health professionals to provide feedback about their experience during Medicare compliance audits. Feedback from the survey guides training initiatives and improvements to business processes. Health professionals’ satisfaction is measured by the following metrics:
- treated respectfully, courteously and in a professional manner
- management of privacy and confidentiality
- audit reason clearly explained
- timely communication
- opportunity to respond to concerns
- improvement in their understanding of MBS/PBS requirements
In 2014-15 the department received completed surveys from 389 health professionals showing an overall satisfaction level of 91.8%.
Education and engagement
Education and engagement assists health professionals meet their compliance obligations through a range of activities and information.
General education and targeted feedback letters
General education and targeted feedback letters are sent when analysis reveals claiming anomalies across a large population of health professionals or the risk of non-compliant claiming by a health professional is low.
In 2014-15, 505 general education and targeted feedback letters were distributed to health professionals covering a range of issues, such as bulk bill incentive items to remind health professionals to check concession entitlement of patients at the date of service when claiming items.
Health Professional Guidelines
One aspect of the department’s health compliance program is to provide education and support materials for health professionals. Developed with the Department of Health and peak bodies, Health Professional Guidelines help health professionals understand what documents can be used to substantiate services if they are asked to participate in a health compliance audit or review. At 30 June 2015 there were 20 guidelines, with more in development.
Audit and review activities
Audits and reviews examine the compliance of individuals and businesses, and support payment integrity. They include general audits, practitioner review or criminal investigation.
|Pharmaceutical Benefits Scheme||265|
|Medicare Benefits Schedule||2,896|
|Child Dental Benefits Schedule||191|
|Health support programmes||328|
- 1. From 1 July 2014 excludes general education and targeted feedback letters.
- 2. Other includes programmes such as Australian Childhood Immunisation Register and Continence Aids Payments Scheme.
In 2014-15 the department improved its risk identification and priority business processes to more effectively target significant compliance risks. This included introducing improved risk pre-assessment processes, systemic reviews and strengthened governance processes.
The 2014-15 work programme focused on targeted high risks. Eight priority work areas were identified:
- Child Dental Benefits Scheme
- Health Support Program
- Practice Incentives Programme
- pathology services
- general practitioners
- public fraud
- Pharmaceutical Benefits Scheme
Details of specific compliance strategies in 2014-15 are outlined below.
Pharmaceutical Benefits Scheme
- unapproved pharmacies—reviewed claims from approved pharmacies when allegations were made that they had claimed for medicines supplied by another pharmacy not approved to supply under the PBS
- multiple payments—reviewed approved pharmacies when prescriptions appeared to be claimed more than once
- tip-offs—reviewed claims from approved pharmacies when allegations were made that a pharmacy had made incorrect claims
Medicare Benefits Schedule
- MBS claims by members of the public—reviewed unusual MBS claims by patients to identify potentially fraudulent payments. We also conducted a review of claims made through Claiming Medicare Benefits Online to ensure the accuracy of the payments made
- GPs and specialists—removal of malignant neoplasms—audited health professionals MBS billing of removal of malignant neoplasms to determine if they had histopathology or specialist opinions confirming malignancy
- specialists—referred consultations—audited specialists’ claiming of referred consultations to determine if they had a valid referral before claiming the consultation
- pathology services—carried out an end-to-end audit of selected approved pathology authorities to ensure that pathology tests/services requested were the tests performed and claimed by the approved pathology practitioner
- diagnostic imaging—audited computed tomography and/or diagnostic radiology services to ensure that the services requested were performed and claimed by the billing practitioner
- Practice Incentives Programme—audited medical practices receiving incentive payments. Practices were required to substantiate general eligibility for the programme and eligibility for Procedural GP Incentive and Indigenous Health Incentive payments
- Practice Nurse Incentive Programme—randomly selected practices to check their eligibility to receive these incentive payments
- Mental Health Nurse Incentive Programme—randomly selected practices to check their eligibility to receive these incentive payments
Child Dental Benefit Schedule (CDBS)
- audited dentists to ensure payments made under the schedule met programme requirements
- sent targeted education letters to selected dentists
- provided information to dentists about the changes made in November 2014 to the Dental Benefits Act 2008 which incorporated increased compliance powers for the department when auditing dentists
Practitioner Review Program
80/20 rule—we referred practitioners who breached this rule to the Director of Professional Services Review. The Health Insurance Act 1973 specifies that general practitioners or other medical practitioners are deemed to have practised inappropriately if they have rendered 80 or more professional attendances on each of 20 or more days within a 12-month period. Practitioners identified as approaching the 80/20 service level without yet breaching the rule were reminded of their obligations by letter or at a Practitioner Review Program interview.
In 2014-15 the department completed 65 reviews of decisions relating to health compliance activities, including 41 legislative reviews and 24 administrative reviews. In approximately 58% of cases, the outcome was varied resulting in either an increase or a decrease in the recoverable amount. Review of decisions can be varied as health professionals are allowed to provide further information not available to the original decision maker. In the remaining 42% of cases the original decision was upheld.
|Allied health providers||9||12||6|
|General practitioners and specialists||3||9||42|
Improving transparency and accountability
On 22 September 2014 the Joint Committee of Public Accounts and Audit Report 445: Regional Cities Program, KPIs and Medicare was tabled in the Parliament.
The department accepted its 2 recommendations and has made good progress on addressing them. This work builds on that already undertaken as a result of an ANAO performance audit on Medicare compliance audits tabled in the Parliament in April 2014 including:
- improved governance—revised governance and reporting arrangements leading to redefinition of key activities in relation to performance measurement
- greater performance monitoring—working on an outcomes reporting framework which will detail an agreed set of methodologies to calculate direct savings (debts raised) and indirect savings (from behavioural change)
- greater targeting of resources and increasing cost effectiveness—achieved through improved risk identification and prioritisation, as well as better business processes and exploration of alternative treatment options
- greater data analytics—improving data analytics methods through collaboration with stakeholders, particularly the private health insurance sector
- greater productivity and efficiency—to be achieved through conducting an independent audit on health compliance activities
For more information about external scrutiny and the department’s responses, see Appendix E on page 264.
People can provide information to us by:
- reporting via the fraud page on our website
- phoning the Australian Government Services Fraud Tip-off Line on 131 524
- writing to us at PO Box 7803, Canberra BC ACT 2610
Information from the public about people who may have incorrectly or fraudulently claimed or received a payment or benefit is used to review entitlements and, if appropriate, carry out investigations.
We also assess patient complaints and tip-offs about potential fraud and other concerns relating to health care programmes to determine if a compliance investigation is required. Allegations about patient safety are referred to the relevant authorities.
In 2014-15 the department received more than 49,000 tip-offs through the Australian Government Services Fraud Tip-off Line and more than 59,000 tip-offs from other sources.
|2012-13||2013-14||2014-15||% change since
|Tip-offs through Fraud Tip-off Line||55,229||52,942||49,140||–7.2|
|Tip-offs from other sources||50,029||51,134||59,701||+16.8|
The department investigates fraud and refers cases to the CDPP. The department’s fraud control processes are deliberately focused on the most serious cases of non-compliance, rather than on people making honest mistakes.
In 2014-15 the department conducted 2,346 investigations into fraud compared to 3,107 investigations in 2013-14. These included:
- 12 identity fraud investigations
- 20 undeclared family relationships investigations
- 8 investigations into organised and systemic fraud
- 169 investigations of potential criminal conduct of health professionals, pharmacists, corporate fraud, as well as the general public and receptionists
- 65 child support investigations
During the year the department:
- established a digital forensic capability to further improve our ability to obtain evidence held on computers and other electronic devices
- continued to strengthen workforce capability by investing in qualifications and specialist development for program managers, analysts and investigators
- worked with the CDPP to develop and trial paperless presentation of briefs of evidence
Optical surveillance involves observation of people, vehicles, places or objects. The department continued to use optical surveillance where other types of investigation were unsuccessful and when there was reasonable suspicion of fraud, serious cases of child support avoidance, or income minimisation. In 2014-15 the department completed 20 investigations using optical surveillance compared to 79 in 2013-14.
Partnerships in combating crime
The department works in partnership with many Australian, state and territory government agencies and private sector entities to enhance the department’s ability to combat fraud and non-compliance. Activities include contributing to whole-of-government committees, working groups and taskforces, data sharing, and targeted intelligence activities and investigations.
Australian Transaction Reports and Analysis Centre
The Australian Transaction Reports and Analysis Centre gives the department access to its records of significant or suspicious financial transactions. This information is used to detect undisclosed income or unexplained wealth, as these may be an indicator of potential fraud.
Australian Crime Commission
The department supports the Australian Crime Commission (ACC) in combating organised crime by seconding officers to the ACC. The department provides 1 officer to the ACC’s Fusion Centre that focuses on financial crime and another to the ACC’s Australian Gangs Intelligence Co-ordination Centre. The department receives information and intelligence from the ACC when relevant to fraud and non-compliance associated with social and welfare payments.
Australian Federal Police
The Australian Federal Police (AFP) supports the department’s fraud control efforts. We seconded an officer to the AFP Fraud and Anti-Corruption Centre in 2014-15. The centre is a multi-agency initiative focusing on strengthening law enforcement capability associated with serious and complex fraud, corruption by Australian Government employees and complex identity crime.
We also had 10 seconded federal agents working within the department, assisting with our investigations and preparing and executing search warrants. These federal agents also provided training and advice to departmental investigators.
Referrals and Prosecutions
For cases suspected of more serious non-compliance, the department can refer them to other agencies and if proven apply administrative, criminal or civil penalties.
Director of Professional Services Review
In 2014-15 the department referred 61 practitioners (including 12 practitioners who breached the 80/20 rule) to the Director of Professional Services Review—see Practitioner Review Program on page 110.
Medicare Participation Review Committees
Medical Participation Review Committees (MPRCs) are independent statutory committees established on a case-by-case basis under Part VB of the Health Insurance Act 1973. They make determinations about whether a practitioner should retain the right to bill for professional services that attract a payment under the MBS.
|Open matters at start of year||9||7||1|
|Open matters at end of year||7||1||0|
1. From December 2013, the scope of matters referred to MPRCs was reduced.
The sole case finalised in 2014-15 resulted in the practitioner retaining the right to bill for the professional services.
Commonwealth Director of Public Prosecutions
The department and the CDPP continued to work together to respond to fraud against social, health and welfare programmes. The department detects and investigates potential fraud and refers matters involving criminal intent to the CDPP which decides whether to prosecute.
In 2014-15 the department referred 1,470 cases to the CDPP including:
- 1,366 cases related to customers receiving social security or family assistance payments compared to 1,071 in 2013-14
- 10 cases related to customers receiving Child Support services compared to 29 in 2013-14
- 74 cases related to the general public and receptionists claiming Medicare services and receiving benefits compared to 54 in 2013-14
- 20 cases relating to health professionals, pharmacists and corporate entities fraudulently claiming Medicare services and receiving benefits, compared to 4 in 2013-14
- 89 cases were outstanding at 30 June 2015
Child Support customer compliance
In 2014-15 the department continued to implement its child support compliance programmes. The department uses various activities to collect ongoing and overdue child support including those listed in the tables below.
|Number of actions||Child support
|Tax lodgement enforcement||36,353||40,443||65,678||25.3||33.9||27.4|
|Tax refund intercept payment||109,764||111,612||105,202||116.4||130.4||121.5|
|Departure prohibition orders||467||271||218||6.7||6.2||6.7|
The following tables describe the performance of child support compliance and enforcement activities.
|30 June 2013||30 June 2014||30 June 2015|
|Active paying parents with employer withholding payments set up—the department may initiate this measure for both current liability and child support debt.||63,924||63,982||64,390|
|Amounts collected from Centrelink and DVA payments—these deductions may be made for both current liability and child support debt.||$26.7 million||$28.9 million||$30.5 million|
|Number of income tax periods finalised—Target: 105,000. Customers may be referred to the ATO for investigation of non-lodgement of tax returns or attempts to avoid obligations by under-declaring incomes.||132,047||177,034||236,436|
|Of these, the following were finalised as a result of tax return lodgement—the remainder were finalised through ATO Default Assessments or Return Not Necessary determinations.||67,569||76,563||109,216|
|Number of customers finalising all their outstanding tax obligations||36,653||40,443||65,678|
|Amounts collected under Departure Prohibition Orders—preventing overseas travel by customers who have not made satisfactory arrangements to clear substantial debts.||$6.7 million||$6.2 million||$6.7 million|
|Amounts recovered through litigation—the department commences litigation targeting parents who repeatedly avoid paying their child support when other enforcement options have been unsuccessful and an assets or income stream is identified.||$4.1 million||$4.4 million||$3.7 million|
Reviews of Child Support decisions
In accordance with the Child Support (Registration and Collection) Act 1988, the department is required to finalise all objections to child support decisions received within 60 days for domestic customers and 120 days for international customers.
We contact parents throughout the objection review process before we make a final decision. Both parents are given the opportunity to provide information to ensure decisions are accurately based on their individual circumstances and financial capacity, and to promote greater procedural fairness.
The department provides feedback to original decision makers on the number and outcomes of objections received to help improve future decision making.
We are continuing to review and enhance the objections process by making it more accessible to customers, while upholding the integrity of the Child Support Scheme.
|Number of objections received||15,307||15,074||16,317|
|- percentage relating to care||29.1%||34.3%||34.7%|
|- percentage relating to change of assessment||21.9%||18.4%||18.7%|
|- percentage relating to estimates||21.9%||15.0%||14.2%|
|Percentage finalised in 60 days—domestic||73.7%||80.4%||83.8%|
|Percentage finalised in 120 days—international||77.0%||82.8%||86.6%|
Objections to change of assessment
The objection rate to change of assessment has increased slightly from 15.3% in 2013-14 to 16.9% in 2014-15. This is an increase of 286 change of assessment objections from 2013-14 or a 10.3% increase.
|Change of assessment applications finalised||20,262||18,074||18,092|
|Change of assessment objections received||3,358||2,770||3,056|
Social Security Appeals Tribunal reviews
The SSAT received 2,053 applications for review of child support decisions in 2014-15 compared to 1,863 applications in 2013-14. The SSAT was amalgamated into the AAT from 1 July 2015.
|Unchanged decisions2||Changed decisions|
- The total number of applications will not match the number of changed/unchanged decisions due to a number of applications either withdrawn/dismissed or still in progress.
- Unchanged decisions are those made by the SSAT affirming the original decision made by the Child Support Registrar. Unchanged decisions do not include withdrawn or dismissed applications.
To improve service delivery and policy outcomes the department reviews child support review decisions to identify any systemic procedural or operational issues.