Electronic claiming for Medicare benefits was first introduced in 1992. Channels to facilitate electronic claiming were progressively introduced for use by medical practitioners, members of the public and private health insurers over the intervening decades. In 2016–17, claims for just over 97 per cent of the approximately $22 billion of Medicare benefits paid were lodged electronically.
The Department of Human Services (Human Services or the department) currently administers eight electronic claiming channels: six provider channels for point of service claiming1 and two channels for claiming by patients at their convenience. In addition Human Services provides a number of manual claiming options (in-person, dropbox, post and phone). Most of the electronic claiming channels were introduced ten or more years ago—prior to Medicare’s integration into the Department of Human Services in July 2011.2 The provider channels are:
Simple Mail Transfer Protocol (1999);
Medicare Online (2002);
Electronic Claim Lodgement and Information Processing Service Environment (2004);
Bulk Bill Webclaim (2015); and
Patient Claim Webclaim (2016);
The additional channels for use by patients are Claiming Medicare Benefits Online (2011) and Express Plus Medicare Mobile App (2013).
The department’s administration of claiming channels is focussed on its overarching strategy of achieving as close as possible to 100 per cent electronic claiming.
On 19 October 2016, the Government announced it will replace the current systems used by Human Services to deliver health, aged care and related veterans’ payments as they are ‘old, complex and at risk of failure and therefore need to be upgraded’.3 The program of work is being led by the Department of Health and supported by the Departments of Human Services and Veterans’ Affairs, and the Digital Transformation Agency. This decision provides Human Services a further opportunity to consider what if any changes could be made to the current channel service offer.
Audit objective and criteria
The objective of this audit was to assess the effectiveness of Medicare electronic claiming arrangements, including an assessment of the extent to which claiming and processing efficiencies for the Government, health professionals and Medicare customers have been achieved.
To form a conclusion against the audit objective, the ANAO adopted the following high level criteria:
Was effective planning undertaken for the implementation and ongoing delivery of Medicare electronic claiming channels?
Has the implementation and ongoing delivery of Medicare electronic claiming channels been effective?
Does Human Services monitor and evaluate the efficiency and effectiveness with which it delivers Medicare electronic claiming?
The audit’s methodology included:
examination of documentation relating to the administration of Medicare electronic claiming channels, including program documentation and performance reports;
review and analysis of departmental data related to the performance (take-up, costs/savings and timeliness) of the range of electronic channels currently available;
ANAO analysis of quantitative data from Human Services ICT systems; and
interviews with relevant departmental staff.
The Department of Human Services has been effective in driving the take-up of Medicare electronic claiming, with more than 97 per cent of all claims for Medicare services being lodged electronically. The department’s approach to implementing future Medicare electronic claiming could be improved by clear analysis of the costs of developing and maintaining individual claiming channels and the extent to which planned efficiencies have been realised.
The objectives of introducing electronic claiming (to improve convenience and timeliness and reduce costs to Government and the health care sector) have been met through the introduction of a range of individual channels over time to allow claiming by different users. Human Services has mechanisms in place to identify issues and consider whether channels can be improved to meet user needs.
The introduction of electronic claiming channels has led to improved access to payments for the community and providers. More than 97 per cent of claims for Medicare services are lodged electronically and a majority of these are paid within one day of lodgement.
The ANAO reviewed the available data related to expected savings and costs from implementing electronic claiming channels. These expected savings were only estimated by Human Services in some cases. Where estimates were made either take-up rates or dollar savings have not been achieved.
Although the department monitors rates of electronic lodgement and tracks movements between channels by claim type and reductions in manual services, the long term benefits and relative efficiencies from introducing individual channels are largely unknown.
Human Services’ monitoring and reporting includes business analytics used to inform channel delivery, and departmental management of risks and issues are supported by a range of plans. The department’s delivery of claiming channels is not supported by either: benchmarking of expected achievements; or a full understanding of the costs and benefits of individual claiming channels. There is a lack of information on whether the development of individual channels has delivered the intended administrative savings; and whether the savings achieved have outweighed the costs of introducing new channels. As such the department has not established a sufficiently strong information base to inform its business decisions.