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# Radiologists accused in “scan scam”

BMJ 1999; 319 (Published 30 October 1999) Cite this as: BMJ 1999;319:1156
1. Christopher Zinn
1. Sydney

The Royal Australian and New Zealand College of Radiologists has defended itself against allegations that its members in Australia backdated and falsified contracts for magnetic resonance imaging machines after hearing of a potentially profitable budget leak.

In what has become a bitter political scandal, the Australian parliament has been told that radiologists, who helped to negotiate a new health insurance rebate for scanners, ordered a new batch of the machines after somehow learning of the budget measure.

But the college said that the possibility of the changes were widely known within the profession for some time, that there was a genuine need for more machines to reduce waiting times for scans, and that to its knowledge there had been no wrongdoing.

Under the changes, which were meant to be secret until Budget night on 12 May 1998, the magnetic resonance imaging machines could each qualify for rebates of up to $A1.6m (£627000) a year. The budget was to fund 40000 scans over three years, under the publicly funded Medicare scheme, and give a rebate of about$A500 per patient, but only for existing machines or those under order.

According to figures given in parliament, during 1987 to 1997, radiologists bought 59 of the machines, which can cost up to \$A3m. But between 10 February and 12 May last year, 39 machines were purchased. After the budget, 13 more were bought, with radiologists claiming that they were ordered before 12 May.

The first talks between the government and the college canvassing the proposed changes were held on 10 February 1998.

The Labor party opposition has been calling for the resignation of the health minister, Dr Michael Wooldridge, claiming the accusations are the “biggest scam in living memory” against the federal government.

Dr Wooldridge has denied that he leaked any of the information but admitted that it could have come from at least four government departments as the result of an administrative error. He has announced a series of inquiries into the scandal, which has become known as the “scan scam.”

“I have no doubt the majority of radiologists are honourable and honest,” he told parliament. “It would appear, however, that a significant number have behaved in a manner which can only be described as a scam.”

The president of the college, Professor John Earwaker said that prior knowledge of the budgetary change was well known. “There was widespread anticipation within the profession at large that there would be some sort of funding for magnetic resonance imaging,” he said.

“In the course of negotiations with the department, regular bulletins were issued to fellows so that they were aware that negotiations were proceeding.”

The government's auditor general and the Health Insurance Commission are both conducting investigations. Twenty nine contracts have been examined, 16 of which have been or will be referred to the federal director of public prosecutions.

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(Credit: PR NEWSFOTO)

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