The federal health department is falling well short of what it could recoup in dodgy or fraudulent claims, an audit has found.
The department spends almost $37 billion on three key health schemes, the largest of which is the Medicare Benefits Scheme.
As part of running the schemes, it aims to identify and deal with incorrect claims, inappropriate practices and fraud by health providers.
In 2018/19 the compliance program recouped $49.3 million, as well as delivered $123.4 million in "indirect savings from behaviour change".
After costs were taken into account, the net savings were $101.1 million.
However, a report by the auditor-general released on Monday said consultants had estimated the non-compliance figure should realistically sit between $366 million and $2.2 billion based on international benchmarks and other factors.
The largest of these estimates put the predicted rate of non-compliance at six per cent, while others estimated it at between two and five per cent of all payments.
The audit found the department's approach to compliance was "partially effective", but noted work was under way to put in place a revised model.
Of the department's 12,863 "active compliance treatments" in 2018/19, just over 12,000 took the form of letters "used to encourage providers to review and correct billing" through voluntary compliance.
Audits were conducted on 288 occasions to deal with suspended high-value non-compliant claiming, and an investigation process was used 57 times for serious and intentional misuse or fraudulent obtaining of Medicare benefits.
The department told the auditor-general improvements to the system were "coming to fruition".
"The department further acknowledges the benefits of implementing a more robust model to measure and assess the health provider compliance program performance measure," it said.
