Brothel patrons in Sydney are gaining extraordinary cash bonuses by claiming sex services on health insurance.
After an investigation spanning almost a year, government-owned Medibank Private has cancelled at least 30 service provider registrations nationally, finding some of its affiliated therapists were in fact prostitutes subsidising sex under the guise of ''remedial massage''.
In a further bid to stop the rebate scam, Medibank has, for several months, been refusing all new applications from prospective remedial massage providers.
Last week, Fairfax Media revealed there were at least 34 illegal brothels operating within a five-kilometre radius on Sydney's north shore - the majority of which were disguised as remedial health clinics.
It was also reported 15 of those parlours were served brothel closure orders, more than two years ago.
Medibank benefits risk manager Keith Joyce said: ''We are continually looking out for suspicious practices to ensure members are receiving correct treatment and Medibank is paying for the relevant services. One particular area recently focused on is remedial massage.''
Referring to the crackdown he said: ''It is not fair to allow individuals who are doing the wrong thing to undermine the professional work of those remedial massage therapists doing the right thing.''
The Massage Association of Australia (MAA) has confirmed the ''growing issue'' will be tackled at its annual meeting, next Saturday.
''It's on our agenda,'' acting president Chrys Abraham said. ''We don't want to leave our organisation open to undesirables who engage in such fraudulent practice. The aim must be to block this loophole.''
With 3.8 million members and an approximate 30 per cent market share, Medibank is Australia's largest private health fund.
Earlier this year, it wrote to several massage industry associations, including the MAA, advising it had contacted more than 200 therapists, outlining both its ''provider recognition criteria'' and ''remedial massage definition''.
As part of the inquiry, 35 providers received an impromptu visit by a Medibank official. Fairfax Media can reveal that ''more than 90 per cent'' of those therapists were ''not adhering to the definition''. And, in some cases, it was ''evident'' remedial massage ''was not taking place'' due to the volume of daily services the practices were ''delivering''.
Mr Joyce said a factor fuelling the rort was the number of registered training organisations issuing ''fast-track qualifications''.
''We have been working with industry bodies and government departments ... due to these discoveries, Medibank is in the final stages of implementing a new tighter recognition criteria,'' he said.
Last week Fairfax Media identified numerous illegal suburban brothels engaged in the rebate fraud. While street signage might depict services as being purely therapeutic, underground brothel review forums tell a very different story.
In its front window, the Bexley Remedial Massage Centre offers both legitimate treatments and fund rebates. But on the Australian XXX Reviews website, several customers can be found crowing about the sexual services on offer, all culminating in a ''happy ending''. On the same forum, ''punters'' vent their anger and frustration at Medibank's sex clampdown. One - who boasts of a ''full rebate'' from a male practitioner who has one of his unqualified ladies ''do the work'' - proclaims: ''We're doomed.''
''This day has been coming,'' writes another. ''The lesson here is to be careful you don't get caught up with the ongoing issue of fraud ... it may come back to haunt you.''
Private Healthcare Australia, which represents 21 insurers and more than 12 million Australians, confirmed other funds were onto the rort. PHA head, Dr Michael Armitage said: ''The industry is aware this activity may be taking place and if funds can get the evidence of this, they should take appropriate action and deregister the providers.''
- Sydney Morning Herald