Centrelink's new data-matching project targets Medicare fraud

The department says its programs are a target for identity and other employment and income-based welfare fraud.

The Department of Human Services (DHS) has detailed a new data-matching project, this time concerned with Medicare fraud.

As detailed in a new program protocol [PDF], the focus of the data-matching project is to identify individuals that have a "high likelihood of fraudulent behaviour".

Specifically, this program seeks to match identities and details held in Centrelink records with those held in Medicare records.

"The purpose of this activity is to discover individuals who are not recorded as having experienced a series of expected 'life events' across both programs," the department wrote. "Where expected life events have not occurred this may highlight high-risk identities and the need for further analysis to determine possible fraudulent behaviour and/or record correctness."

The paper was quietly published on the department's website, with senior lecturer in Administrative Law at La Trobe University, Darren O'Donovan, bringing it to public attention via Twitter on Monday.

Department of Human Services general manager Hank Jongen told ZDNet late Monday that the process is not new and that it is "enhancing the already established data sharing arrangements between Centrelink and Medicare to better protect people from identity crime".

"The misuse of identity information for fraud and criminal purposes causes substantial harm to the economy and individuals each year. This is just one of the tools we can use to detect potential fraud and matches with community expectations in allowing our two systems to 'talk' to each other," he added.

The key elements, DHS said, are: An initial match between identities in Centrelink and Medicare records; checking for Medicare usage within the past five years in relation to Centrelink customers; and checking whether original creation of Medicare records occurred at the appropriate time according to the individual's age or residency status in Australia.

Among the list of objectives of the data-matching project, DHS wants to use it to provide rigour around the authenticity of recipient identities that it expects will contribute significantly to the government's desire to provide more services online.

It also hopes to provide net savings by detecting overpayments and recovering debt.

See also: Human Services has spent AU$375m on 'robo-debt'

In addition to helping the department find cases of fraud, it expects its protocol will support data cleansing activity.

"When highrisk identities are analysed and found to be genuine, details will be forwarded to the relevant business area to update customer records where appropriate," DHS said.

DHS said it will only be matching Medicare Benefits Schedule (MBS) data and not Pharmaceutical Benefits Schedule (PBS) data, with welfare payment data. However, where MBS data identifies an anomaly in customer claiming, DHS said it may, where appropriate for investigative purposes, undertake a separate check with a customer's PBS data held by the department under the National Health Act.

"A range of business rules will be used in conjunction with the data match to only select persons for investigation that are high-risk identities," the protocol explains.

"Where matched data identifies some anomaly in customer claiming, officers in the Fraud Investigation Branch will investigate further. Data will be used for individuals who are flagged by the use of high-risk matching profiles. Only cases that merit further examination would be progressed through to intelligence assessment and subsequent investigation."

DHS said where a decision to investigate a case is made, supporting intelligence will include seeking specific transaction data on individuals from Medicare.

A review is then initiated by the investigations team, which will have all the information loaded into two different systems.

There are three main outcomes of an investigation: A brief referral to the Commonwealth Director of Public Prosecutions; administrative action, such as raising a debt and/or reducing, suspending, or cancelling a customer's payments and/or benefits; or the investigation will not proceed if there is a lack of evidence.

"Matters that do not meet the fraud investigation selection criteria (or do not progress as investigations for other reasons) but may require some corrective treatment, will be referred to the relevant business areas for appropriate intervention," DHS wrote.

"Administrative action may include the reduction, suspension or cancellation of benefits and also includes actions taken to recover any overpaid amounts."

In 2016, DHS kicked off a data-matching program of work that saw the automatic issuing of debt notices to those in receipt of welfare payments through Centrelink.

The Online Compliance Intervention (OCI) program automatically compares the income declared to the Australian Taxation Office (ATO) against income declared to Centrelink, resulting in debt notices -- along with a 10% recovery fee -- subsequently being issued when a disparity in government data was detected.

One large error in the system was that it was incorrectly calculating a recipient's income, basing fortnightly pay on their annual salary rather than taking a cumulative 26-week snapshot of what an individual was paid.

The false claims caused anxiety, fear, and humiliation, and reportedly even resulted in suicide.

The program has cost AU$375 million so far, but has only recovered a little over AU$326 million in overpayments, while at least 31,000 debt claims have been wiped.

It was also revealed by ABC's 7.30 on Monday that the pressure put on DHS staff to raise debts is leading to mistakes.

See also: Human Services claimed people wouldn't pay debts if informed about its IT systems

DHS will evaluate its new program after three years of operation and at least every three years while the program continues, it said.

It also said DHS will be the only entity that makes use of the program's data.

Updated Tuesday 30 July 2019 at 10.49am AEST: Added comments from Department of Human Services general manager Hank Jongen.

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