A doctor billed taxpayers $3.5 million, and another was billed the equivalent of five full-time roles in one year, an audit of NSW’s payment system for contractor doctors shows.
The NSW Inspector General’s report, released on Thursday, warned that NSW Health’s “significant and persistent weaknesses” in its payment processes for 8000 visiting medical officers (VMOs) exposed it to errors and fraud.
One doctor claimed payment for working 9250 hours in 2024-2025, an impossibility considering it would be equivalent to working 25.3 hours a day, every day of the year.
NSW spent $1.32 billion on costs incurred by VMOs, who provide essential services in the public system, particularly in regional and rural areas where health services struggle to recruit and retain staff.
But the audit office found that NSW Health’s “failure” to effectively monitor VMO payments, compliance and “emerging risks” enabled some doctors to double-bill – billing multiple local health districts for the same hours worked.
The top five billable VMOs billed between $1.6 million and $3.5 million in 2024-2025, and 93 VMOs billed the equivalent of 1.5 full-time roles.
VMO hiring was largely ad hoc rather than long-term strategic planning, with little regard for value for money, and VMO spending has increased by more than 10 percent annually, the report said.
South Western Sydney LHD paid more than $405 million to VMOs, surpassing rural and regional LHDs.
Vice-president of the Australian Medical Association (AMA) NSW Dr Fred Betros said this increase in the use of VMO reflects the increase in patient demand and increasing pressure on the public hospital system.
Betros said the VMO’s decision and related awards are “outdated and no longer fit for purpose”, and “lack of oversight and lack of governance is the main issue”.
The report also found “segregation of duties” analysis, with more than $10 million paid out for claims where the same person performed review and approval duties, and high use of “bad” claims.
NSW Health paid anesthetist VMO more than $300 million, the highest grossing specialty.
Betros said this was not surprising, given that anesthesiologists were essential to every surgery performed.
Generalists were the next highest billing group – billing over $172 million – while there were GP deficiency in the regions and Sydney outer suburbs.
VMO psychiatrists – sent in large numbers after psychiatrists resigned during a long dispute and Minns government in 2025 – billed about 127 million dollars.
Over $5.5 million was paid to VMOs for services. More than $5.5 million was paid to VMOs for services provided two or more years before the invoice date, in breach of NSW Health policy.
NSW Health accepted the report’s recommendations, including strengthening VMO payment management and introducing mandatory controls for local health districts.
A NSW Health spokesperson said its use of VMOs supported critical clinical services that could not be provided without them.
NSW Health was committed to improving oversight and protecting public finances, the spokeswoman said, and was introducing new safeguards, including a statewide VMO compliance dashboard.
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