Changes to Legislation – Improved Medicare Compliance

This page includes information to assist health professionals comply with health payment requirements.

Page last updated: 17 December 2019

The Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Bill 2008 (the Bill) came into effect on 1 July 2018. The key changes are:

Record Keeping

It’s important to maintain good records and now all health professional groups (such as doctors, dentists, allied health professionals and pharmacists) across the relevant Acts are required to keep and maintain records for a minimum period of two years (noting that State or Territory requirements may differ). The changes standardise record keeping requirements among different professional groups. For example

  • Allied health practitioners now have the same requirements for record keeping as doctors and are required to keep copies of referral documents for two years.
  • All practitioners are required to keep copies of documents that were created as a condition of claiming a MBS item such as Mental Health Plans or Chronic Disease Management Plans.
  • Pharmacists are now required to retain copies of prescriptions for a minimum of two years.

Notice to Produce

Health professionals are required to retain relevant documents. From 1 July 2018 changes to the National Health Act brings pharmacies and pharmacists into line with all other health professionals by enabling the Department, when conducting compliance activities, to require health professionals to produce these documents. For example:

  • Pharmacists are now required to not just retain, but also produce copies of prescriptions when requested to do so by the Department to substantiate a PBS claim.
  • Medical Practitioners are now required to retain and produce documents such as Health Management Plans if requested to do so by the Department to substantiate an MBS claim.

Debt Recovery

The recent changes strengthen debt recovery arrangements for practitioners who owe money to the Commonwealth from a compliance activity. The Department now has several mechanisms to recover debts from incorrect claiming, which include:

  • Co-operative arrangements where an agreement is reached between the health professional and the Department to repay the debt
  • As of 1 July 2018 the option to offset or deduct part or all of a debt owed from amounts payable to the provider or pharmacy, after all rights of review have expired.
  • As of 1 July 2018 the option to put in place a Garnishee Order. This allows the Department to recover money from the debtor's bank account after all rights for review under the relevant Act have expired.

Offset and garnishee arrangements can be applied to existing and new debts from 1 July 2018 and will only be applied if:

  • the debtor does not agree to a repayment plan within 90 days; and
  • all rights for review have expired.

A debtor may apply to appeal a decision to garnishee funds to the Administrative Appeals Tribunal.

Administrative Penalties

Financial Administrative Penalties can be applied to a debt of more than $2,500 if a health professional fails to provide substantiating documents within the required timeframe. The changes mean that compulsory administrative penalties on compliance debts now apply to all health professionals including dentists and pharmacists so they are treated the same as other Medicare practitioners.

Financial administrative penalties are applied at a base rate of 20 per cent of the total debt, if the debt amount is more than $2,500. Providers can avoid administrative penalties by understanding and following their regulatory and claiming requirements and by responding to suggestions from the Department to voluntarily review their claiming. For example administrative penalties may be reduced if you:

  • identify, voluntarily acknowledge and take action to correct claiming errors before a compliance activity commences; or.
  • inform the Department that an incorrect amount has been paid before the specified period for a notice to produce documents ends.

Shared Debt Recovery Scheme

From 1 July 2019 the Shared Debt Recovery Scheme (SDRS) will commence. The SDRS is intended to introduce a fairer approach to address organisational billing practices and will enable the Department to hold an employing or contracting organisation responsible for a portion of any debts incurred as a result of incorrect Medicare claiming.

This change recognises that there has been an increase in the role of practices, corporate entities and hospitals in the billing of MBS services on behalf of individual practitioners. It also highlights that both parties have a responsibility to ensure MBS claims are made correctly, in that:

  • Medical Practitioners have a responsibility to ensure claims made under their provider number meet the MBS requirements; and
  • Medical practices have a responsibility to ensure that Medical Practitioners within a practice are claiming MBS items correctly.

More information can be found on the Shared Debt Recovery Scheme page.

Medicare provider number application form changes

Where the Commonwealth pays Medicare benefits for health services it requires information about the parties who claim and receive a direct benefit from Medicare to ensure the integrity of the Medicare payments system. This includes ensuring that the benefits are being paid to the right person or organisation.

From 1 July 2018, health practitioners applying for a Medicare provider number from the Department of Human Services are required to supply details about their employer or contracting organisation. An employer or contractor can be a health or medical practice, corporate provider, hospital or other entity a health professional is engaged with to provide health services. The Application for a Medicare Provider Number form now contains additional fields to capture a practitioners employers details including:

  • Australian Business Number (ABN)
  • Australian Company Number (ACN) (If applicable)
  • registered business name
  • business type
  • premises type.

The requirement to provide information about an employer or contracting organisation reflects the increased role of practices, corporate providers and hospitals in billing Medicare services on behalf of, or in partnership with a health practitioner.

The Department is working to implement the recent changes to legislation and will continue to communicate with Colleges and professional bodies throughout this process. There will be further consultation in the coming months on the operation of the SDRS. If you require any information about the changes, please contact the Department at


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