Referral brokers undermining clinical care

Both groups are calling on the NSW Government to introduce regulations to safeguard the integrity of the referral process; ensuring referrals for medical services are based on the patient’s clinical need – not commercial interest.

The campaign was developed in response to increasing use of referral brokers. A survey of ADIA members revealed referral brokers control 10-40% of radiology referrals for workers compensation and other third-party insurers, depending on the region of NSW.

Under the referral broker model, referring clinicians request specialist services such as radiology through a referral broker, rather than directly to a provider – often at the direction of an insurer. Some referrers are incentivised through the payment of commissions.

It is understood that referrals are directed to providers who have contractual arrangements with the broker. Providers offer a cut rate in exchange for a bulk number of deals and the broker receives the difference between the fee paid by the insurer and the rate paid to the provider.

It is understood that the referral broker handles the booking arrangements and paperwork. ADIA members report patients have been contacted by a referral broker and redirected from the practice their GP or specialist referred them to.

According to the ADIA survey, in some circumstances, patients are told by referral brokers that their insurance claim will only be valid if made through a referral broker to a ‘preferred’ provider in circumstances where this may not be true. There are also claims that completed referral forms are being changed by the referral broker.

Critics of the referral broker model claim it incentivises referrers and influences clinical decisions.

There are also concerns that patient trust is compromised, as patients cannot be certain that they are being referred to a provider based on what their treating doctor has deemed to be in their best interest. There is no onus on clinicians to disclose benefits they receive from referral brokers.

The referral broker model also interrupts the direct flow of communication between clinicians and radiologists.

The referral model could impact patient outcomes, particularly in complex cases where clinicians advise patients to attend a radiologist with sub-specialist expertise.

Lastly, there are concerns that patient privacy is at risk of being breached in instances where patient information is sent to a referral broker, rather than directly to the referring clinician.

The referral broker model highlights the need to establish a legislative or regulatory framework to safeguard patients against the monetisation of clinical decisions.

Whilst Medicare has rules in place to protect the quality and safety of medical services, there currently does not exist a similar framework for non-Medicare services – except where the insurer stipulates that referrers and providers follow Medicare rules. However, even in those cases, the rules do not directly cover the risks associated with the referral broking model.

Under Part IIBA of the Health Insurance Act 1973 (prohibited practices legislation), providing a benefit intended to induce requests for radiology and pathology services covered by Medicare from a particular provider attracts both criminal and civil penalties. These provisions do not apply to non-Medicare services.

AMA (NSW) and ADIA are recommending:

1. Insurers be required to pay the gazetted rates for services;
2. That the NSW Government prohibit the use of a referral broker or intermediary;
3. That only providers of medical services be permitted to issue request forms;
4. That referrers be prohibited from receiving benefits from a provider of a medical service, or a related third party;
5. That all medical documents (including patient images) be sent to the referrer and/or patient, and that referral brokers be prohibited from requesting or accessing patient documents.

Other jurisdictions have recognised the threat to clinical care posed by referral brokers. WorkCover Queensland introduced service level standards for MRI services to worker’s compensation patients in 2014. The standards require insurers to pay radiology providers directly for MRI scans provided to workers compensation patients.

Changes to Impact Oncologists

New legislation will impact oncologists who treat firefighters – potentially increasing demand for medico-legal examinations and reports.

The NSW Government passed the Workers Compensation Legislation Amendment (Firefighters) Bill 2018 in November.

The legislation makes it easier for eligible firefighters diagnosed with specified primary cancers to claim workers compensation entitlements.

The new law enables paid and volunteer firefighters diagnosed with one of 12 specified primary cancers, who also meet corresponding qualifying employment or volunteer service periods, to automatically be presumed to have developed the cancer because of their firefighting work or service.

The automatic presumption applies to eligible firefighters who were diagnosed with any of the 12
primary cancers on or after 27 September 2018.

A firefighter who previously had a claim denied because they were unable to prove a link between the cancer and their employment, can make a new claim under the presumption.

Under the changes, oncologists providing treatment services to firefighters with an accepted claim must contact their patient’s workers compensation insurer regarding pre-approval for planned treatment and billing for services provided.

Paid, volunteer, current and former firefighters from the following organisations can access the presumption:

• Fire and Rescue NSW
• NSW Rural Fire Service
• Office of Environment and Heritage (NSW National Parks and Wildlife Service)
• Forestry Corporation of NSW
• Sydney Trains

The presumption does not apply to volunteers in a NSW Fire and Rescue Community Fire Unit.

While there is no post-employment time limitation on making a claim, an insurer can dispute the presumption by proving that the claimant’s cancer is not related to their past or present work or volunteer service as a firefighter.

Learn more about the new workers compensation reforms at www.sira.nsw.gov.au.