What's new?

July 2014

Improvements will be made to the way some PBS medicines are processed under the Highly Specialised Drugs Programme from 1 July 2015.


Fraud is any deceitful or dishonest conduct, involving acts or omissions or the making of false statements, orally or in writing, with the object of obtaining money or other benefit from, or evading a liability, to the Australian Government.

Fraud Investigation

Medicare Australia has investigators in each State who investigate fraud by practitioners and the general public against Medicare, the Pharmaceutical Benefits Scheme and other government programs administered by Medicare Australia. In some cases, investigations are conducted in liaison with State and/or Federal Police.

The Medicare Australia Act 1973, provides Medicare Australia with additional powers which enhance its ability to perform its functions in relation to fraud investigation.

The Act allows Medicare Australia to:

  • issue a notice requiring a person to give information or produce documents
  • enter premises with the consent of the occupier and conduct a search for the purpose of monitoring compliance with regulatory requirements
  • enter premises, conduct searches and seize evidential material under warrant, where there are reasonable grounds for believing that a 'relevant offence' is being or has been committed, and the Chief Executive Officer has approved the use of the powers for that specific investigation.

The use of these powers is required to be reported in the Annual Report under section 42(3A) of the Medicare Australia Act 1973.

Protecting public funds

Each year significant amounts of public funds are lost as a result of fraud committed against Australian Government programs such as Medicare. To combat this the Government has issued its Fraud Control Policy. The Policy is designed to 'protect public money and property, protect the integrity, security and reputation of our public institutions and maintain a high level of services to the community consistent with the good Australian Government.' (Commonwealth Fraud Control Policy, 1994, p.1).


The national and state focus of intelligence analysis is to provide support to investigators and strategic intelligence advice to Medicare Australia.

Information Reports relating to suspected fraud and abuse to the Government Programs administered by Medicare Australia are captured. These reports are collected to provide analysis and can be searched at state and national level within the Program Review Branch Network.

The Program Abuse Information Report commenced operation on 1 July 1996 and as at 30 June 2001 a total of 12,000 reports have been received. Reports come primarily from Medicare offices and processing centre staff and provide a valuable source of intelligence on fraud and inappropriate practice. Many individual reports generate a requirement for further investigation.

Post-Payment Auditing

Medicare Australia monitors payments on claims paid for both Medicare and the Pharmaceutical Benefits Scheme (PBS) through a program of audits.

Along with more traditional methods of auditing Medicare Australia has developed sophisticated methods of analysis to permit more precise targeting of suspected fraud or inappropriate practice.

Random Compliance Audits

Random compliance audits quantify and document incorrect payments from the Medicare and PBS programs administered by Medicare Australia . These audits select claims on a random basis and verify all aspects of randomly selected services with all parties to the transaction, i.e. patients, medical practitioners, pharmacists.

Medicare Australia applies a nationally consistent methodology for the conduct of random compliance audits. These audits identify critical errors that have a dollar value effect and quantify incorrect benefits paid. The audits also identify administrative errors which do not affect the amount of benefit paid.

Targeted Compliance Audits

Targeted compliance audits are specific, in-depth reviews aimed at confirming compliance with the appropriate legislation or benefit schedules. They are part of a number of strategies applied to address threats or abuse against the various programs administered by Medicare Australia . Audits are conducted by Medicare Australia program review staff in consultation with professional advisers.

Last updated: 4 March, 2013