Health NZ rejects PSA criticism of audit changes

PSA criticisms of changes to our Audit, Assurance and Risk function are wrong.

Our proposed new structure would introduce front-end preventive controls to sit alongside existing detection controls, further strengthening and enhancing these existing controls.

The reduction in some roles in this change process is targeted at extra layers of management and duplication created when DHBs were merged into Health NZ. We will actually be able to increase from an 11.8 Health Payment Integrity Team (HPIT) audit team to an integrated audit team of 26, and the size of the Data Analytics team and the Risk Management team will be doubled.

The new structure would enable numerous new measures to protect the integrity of health system funding, including:

• strengthening front-end preventive controls to deal with the root causes of fraud

• expanding the use of data analytics and computerised audits so that we can detect fraud in near real-time

• promoting a provider accreditation process

• triaging cases for prosecutions

• promoting fraud awareness and the Health Integrity Line (an 0800 toll free number)

All of this represents an increase in long-term value because, currently, only a small portion of overclaims is captured. There is clearly more value in preventing these overclaims from happening in the first place.

The PSA also incorrectly states that “the Audit, Assurance and Risk team … ensures funding of the primary health care sector is paid out correctly”. In fact, that is the role of contract managers, who sit in different teams.

Our auditors and investigators don’t currently “prevent fraud”, as the PSA claims. Rather, their function is to uncover fraud if it occurs. However, fraud prevention will be enabled by the new structure and the front-end preventive controls it introduces.

Health NZ would be happy to discuss this change with the Auditor General, if the Auditor General wishes.