Payment Integrity Investigations

Our client, a major player in the Australian healthcare market, engaged us to conduct a detailed Medicare billing review as part of due diligence for a potential acquisition. The target business was a large, multi-site general practice operation with over 200 GPs contributing to Medicare claims over a 12-month period.

We were tasked with analysing approximately 26,500 claim lines, valued at over $35 million, to assess billing integrity, compliance risk, and any red flags that could impact the value or viability of the acquisition.

Our review involved:

• Identifying patterns of concern or inconsistencies in billing
• Assessing potential exposure to Medicare audits or repayment liabilities
• Evaluating billing practices against legislative and policy requirements
• Providing insights into billing literacy and documentation adequacy across the provider network

This was a high-stakes, high-value engagement where the financial and reputational risks were significant. Our findings helped the client gain a clear picture of the billing environment and potential compliance liabilities.

Outcome:

Based on a combination of factors – including our findings – the client ultimately decided not to proceed with the acquisition.

This report was prepared for the Australian Broadcasting Corporation to assess payment integrity in spinal surgery billing, as part of a broader investigation into chronic low back pain.

Our brief was to analyse private health insurance inpatient billing for spinal surgeries to identify red flags, patterns, and areas for reform. Six private health insurers, covering 25% of the market, provided billing data for 23,635 patients who underwent spinal fusions and decompressions between November 2017 and May 2023, totalling $647 million in claims.

We partnered with Kirontech (a UK-based healthcare fraud detection company) to analyse 79,725 lines of billing data. Kirontech’s proprietary software was used to detect anomalies, while Synapse conducted a parallel manual review. All findings were cross-validated by both teams.

Our findings reveal an alarming trend: Australia’s healthcare system is being drained by widespread billing abuse.

Key issues included:

1. Billing for services that were not provided.
2. Billing for longer or more complex services than were actually delivered.
3. Charging for add-on services—such as bone grafts or additional spinal levels—that were not performed.
4. Unwarranted ICU admissions.
5. Providing and billing for unnecessary, sometimes harmful, procedures.
6. Double billing for the same time period or service.
7. Breaches of specific Medicare rules, particularly around spinal fusions.
8. Concerning use of invasive monitoring by anaesthetists.
9. Implausible high-value item billing by physicians and geriatricians.

Although data-driven, our review led to a shared conclusion: fraud, waste, and abuse in spinal surgery billing is a serious and systemic issue. The sample – representing a quarter of the private health insurance market – is large enough to be considered representative. The problems were widespread, affecting many aspects of billing, and suggest a deeper cultural and structural problem that enables reckless billing practices to thrive.

Our client, a state government regulator overseeing workers compensation schemes, engaged us to assess the integrity of medical practitioner billing and claims management processes.

Following initial discussions, we agreed to a proof-of-concept project. Synapse was tasked with analysing medical specialist invoices (excluding GPs) for 1,000 workers compensation claims identified by the regulator as having high utilisation of medical services.

We reviewed over 32,000 invoice lines totalling nearly $30 million, uncovering approximately $10 million in incorrect payments.

Key issues included:

• Lack of transparency – Anaesthetic billing breakdowns are hidden due to AMA rules, allowing excessive use of modifiers and inflated time units.
• Weak internal controls – Payers frequently paid incorrect rates and invalid item combinations.
• Low billing literacy – Among both claims processors and medical practitioners, leading to systemic errors.
• Absence of clear billing rules – No consistent application of any formal billing framework.
• Widespread confusion – Between AMA, MBS, Workers Compensation Fee Orders, and the ASA RVG Guide for anaesthetists.
• Evidence of upcoding – Suggesting deliberate inflation of service claims.

Our findings highlighted the urgent need for improved billing literacy, clearer rules, and stronger controls to protect scheme integrity and reduce waste.

Dr Margaret Faux was engaged to provide an independent expert opinion regarding the Medicare billing compliance of a medical specialist under review by the Professional Services Review (PSR) Agency. The PSR is responsible for investigating whether services billed to Medicare comply with Part VAA of the Health Insurance Act 1973.

This particular engagement required Dr Faux to conduct a detailed analysis of the full sample of claims under investigation. She reviewed all available evidence – including item numbers billed, service patterns, and supporting documentation – to determine whether the claims complied with Medicare legislation, regulations, and relevant policy frameworks.

Dr Faux’s role was to offer an objective, evidence-based opinion, addressing key compliance questions and provided clear, reasoned conclusions on whether the practitioner’s billing conduct met the applicable standards.

This matter forms part of a broader body of work in which Dr Faux has been engaged by legal representatives and regulatory bodies to provide expert opinions in multiple PSR investigations. Her deep legal expertise and practical understanding of Medicare billing make her a trusted authority in some of the most complex and sensitive billing compliance reviews in the country.

Dr Margaret Faux was engaged to provide an expert opinion in a high-stakes matter concerning the Medicare billing practices of a medical specialist working within a public hospital setting. The case formed part of a formal state inquiry examining the conduct and compliance of medical practitioners in the public system.

Dr Faux’s role was to assist the inquiry in unpacking the highly complex and nuanced details of Medicare law, policy, and billing regulations. Drawing on her decades of experience, she provided a clear and impartial assessment of whether the billing in question complied with legal and administrative requirements.

As part of the engagement, Dr Faux appeared as an expert witness before the inquiry, where she presented her findings and responded to detailed questioning. Her evidence played a key role in helping the inquiry understand the intricate interplay between Medicare, public hospital funding, and practitioner billing conduct.

This engagement highlights Dr Faux’s standing as Australia’s foremost authority on Medicare billing law and her trusted role in high-stakes, independent investigations.

Dr Margaret Faux was engaged to provide an expert opinion in the context of a criminal trial involving serious allegations of Medicare fraud. The case centred on a medical practitioner accused of deliberately and dishonestly claiming Medicare rebates for services that were either not provided, not legally billable, or incorrectly claimed under the Medicare Benefits Schedule (MBS).

Dr Faux’s role was to conduct a comprehensive, independent analysis of more than 7,500 Medicare claim lines and the corresponding clinical records. The task required detailed comparison of the billed item numbers against the documentation provided and the legal requirements for each service, as set out in the Health Insurance Act and associated legislative instruments.

Drawing on her extensive legal and clinical expertise, Dr Faux prepared an expert report addressing the core question: Did the evidence support a finding of deliberate fraud?

Her opinion was central to the legal arguments in the case, providing the court with a clear and accessible interpretation of complex Medicare billing rules and their application in real-world clinical settings.

This case is one of several where Dr Faux has been called upon to provide expert evidence, underscoring her reputation as Australia’s leading authority in this area.

Synapse Medical Services is delighted to announce that we are leading a national project to develop the non-admitted patient classification for the #Kingdom of Saudi Arabia across 9 clinical streams.

Project Team: Prof Kathy Eagar, Dr Margaret Faux, Annette Panzera, Heather Grain and Hala from our KSA partner, Anova Health.

The project is an initiative of the #National Casemix Centre of Excellence, aligned with #vision2030 of the Kingdom. 

The project team, led by Dr Margaret Faux, and with our KSA partner, Anova Health, and Australian company, Clarisoft , will design, test and pilot V1 of the classification, and make recommendations for V2 and beyond.

It is an honour to have been selected, and the team have been busy getting the project moving over the last few months. This project is a bit like building #Medicare from the ground up, and implementing it. Truly exciting!

Embassy Australia – Project Team

We are thrilled to be working on this groundbreaking project. Thank you to Australian Ambassador to Saudi Arabia H.E. Mark Donovan for the warm welcome in #Riyadh.

Our national non-admitted patient classification project team in the #Kingdom of Saudi Arabia has been involved in two weeks of intensive workshops with stakeholders across the spectrum of healthcare delivery. 10 amazing days of wonderful clinician engagement, future planning and project delivery. Led by Dr Margaret Faux, Annette Panzera, Heather Grain, Michael Richter, Manal Al Khalifah, Hefin Jones, Ehab Alatassi and the wonderful Kathy Eagar.

Left: One of the workshops – Dialysis. Superb clinician engagement.
Right: Ehab Alatassi, Executive Director of National Casemix Center of Excellence, KSA and Professor Kathy Eagar.

One endeavour that Synapse Medical Services was delighted to be part of was the appointment of our CEO, Margaret Faux, as an honorary advisor to the National Institute of Public Finance and Policy (NIPFP) in New Delhi, India.

This project was funded by the Bill & Melinda Gates Foundation with the intention of mapping the legal and administrative infrastructure of health insurance in India.

This research role involved delving deep into the complexity of the operation of all health insurance schemes, both public and private, operating across the Indian subcontinent, and Margaret was thrilled to be asked to head up a team of brilliant Indian lawyers, economists and health policy makers to map every health insurance scheme in India. The project focused specifically on the underpinning legal infrastructure and mechanisms that move health dollars and facilitate health financing transactions.

India is looking at large scale health reform as it transitions to a universal healthcare system, whilst balancing that against a budget allocation of 2.5% of GDP.

Synapse holds our India roots alongside our Australian ones in importance and were viewed as a perfect voice of reason for such a large undertaking, due to our position in the healthcare sphere. Our unique position sitting at the interface of payers, providers and patients, allows us rare vision at the transaction level of health systems where precious health dollars are spent, and we are passionate about sharing this knowledge through education and consultancy projects.

Image: Margaret Faux with Governor-General of the Commonwealth of Australia HE General Sir Peter Cosgrove, AK, MC (Retired) in Chennai in March 2018, sharing stories of successful Australian businesses like Synapse in the south of India.

Synapse is involved in an ongoing international stakeholder consultancy project focussed on AI enabled early detection of pathogens to enable countries to quickly ringfence and contain outbreaks of diseases such as Covid-19 before they become widespread.

Aircoder, our automated clinical coding tool, is being piloted via integration with one of our United Arab Emirates partners, through our Dubai office. Together, we are working on early symptom recording using information from available EMRs to gain actionable data by funnelling SNOMED codes through meticulously designed and tested predicative analytics & algorithms.

This project captures data from all clinics and hospitals in a geographic region, enabling governing bodies to see what is affecting their population in real time, and take appropriate action.

This project involves significant resource, deep knowledge of international coding and health system classifications, and multi-organisational training to ensure the integration of various systems is seamless, whilst producing the most accurate results possible.

This exciting partnership will soon to be rolled out across the UAE, enabling adopting organisations the ability to catch, and control dangerous pathogens quickly.

This is an ongoing consultancy project that is expected to be expanded internationally.