Shared Debt Recovery Scheme
The Shared Debt Recovery Scheme allows us to split a debt where a practitioner has a third-party managing or benefiting from billing.
The Shared Debt Recovery Scheme commenced on 1 July 2019. It is governed by the:
- Health Insurance Act 1973
- Health Insurance (Medicare Compliance Shared Debt) Instrument 2019.
The scheme recognises that Medicare billing is often delegated to non-practitioners. It encourages health practitioners and their billing providers to work together to:
- minimise incorrect billing
- respond to Medicare audits
- promptly repay debts arising from incorrect Medicare billing.
The scheme enables us to make a shared debt determination. This means that we can split any debt between the health practitioner and the party managing the billing.
The practitioner is the primary debtor. Only they know if they have delivered a service correctly under the Medicare Benefits Schedule (MBS). The party managing the billing is the secondary debtor.
How the scheme works
The scheme applies when we detect incorrect payments during a compliance audit.
Where the practitioner is not managing the billing, they can request that the debt be considered a shared debt.
We contact the other party and notify them that they are a potential secondary debtor.
We may request documents from both parties about:
- the debt
- the contractual arrangement
- determining whether to share the debt.
We provide written notice to both parties that includes:
- the total amount of the debt
- how the debt is being split between the primary and secondary debtors
- how we determined the split.
We also share any documents provided about the debt.
Each party can make a submission on whether the debt should be shared, and how it should be split.
We consider the submissions before making a shared debt determination.
Refer to our audit process for further information.
When the scheme applies
We can only make a shared debt determination when the following criteria apply:
- there is a recoverable amount (a debt) from the making or providing of false or misleading information
- there is a relationship between the primary (practitioner) and secondary (organisation) debtor
- the secondary debtor could have controlled or influenced the making of the false or misleading statement, obtained a direct or indirect financial benefit from the making of the false or misleading statement, and/or there are other factors that make it fair and reasonable for a shared debt determination to be made.
When the scheme does not apply
The scheme does not apply to:
- adjustments that occur routinely as part of health practice, where a practitioner alerts us to an error to correct the claims record
- a voluntary acknowledgement by a practitioner of incorrect payments (where no debt is found)
- debts arising from inappropriate practice following referral to the Professional Services Review
- debts arising from false or misleading statements shown to have been made by someone other than the practitioner (in some cases)
- debts arising where one party has, without knowledge of the other, engaged in criminal conduct (fraud) in relation to Medicare claims or billing.
How the debt is shared
By default, the primary debtor is responsible for 65% of the debt, and the secondary debtor 35%.
However, we will consider setting a different split that is fair and reasonable, depending on:
- any arrangements between the parties for apportioning the benefits paid (if so, we'll look at the proportion of the benefits paid received by the primary debtor)
- what influence or control the secondary debtor may have had over the billing for the services under audit.