Doctors who prop up the ailing rural health system are billing $1.3 billion per year, with a single specialist claiming $3.5 million under an ineffective government scheme creating a major budget black hole.
The $1.3 billion spent on more than 7000 visiting medical officers in NSW in 2024/25 represented nearly 10 per cent of the state health department's total clinical costs, according to an audit.
That figure is more than what rural health advocates have been lobbying for to reform services right across Australia.
Visiting medical officers (VMOs) are contracted doctors employed by local health districts and are a vital part of delivering medical care in regional and rural areas.
Radiologists were among the top five highest claimants in the year, with top payments ranging from $3.5 million to $1.7 million, according to the auditor-general's report tabled in NSW parliament on Thursday.
One doctor was allowed to claim for 7325 hours worked between June 2024 to May 2025, or an average of 20 hours per day at a cost of $2.3 million.
The auditor-general's report found NSW Health did not maintain effective control over payments to visiting medical officers and did not actively monitor or report on spending.
Checking of claims was found to be lacklustre, with verification and approval processes on large amounts completed in under eight minutes.
The department also unnecessarily fulfilled old claims, with a total $4.8 million paid out for work conducted more than two years before.
Local health districts are able to apply a 100 per cent discount on claims made two years late.
Poor payment monitoring heightened the risk of double-billing, as visiting medical officers are also allowed to hold salaried staff specialist roles, the report found.
"The ministry cannot demonstrate that VMO arrangements are efficient, represent value for money, comply with policy requirements or support the financial sustainability of its workforce," auditor-general Bola Oyetunji said in the report.
In a response to the auditor-general, department secretary Susan Pearce said NSW Health had introduced a central oversight system, better data analytics and processes to identify double billing and overwork.
The state audit comes as a separate federal inquiry examines access to Medicare in rural Australia.
Visiting medical officers and locums - a different class of doctors employed at a premium - are heavily relied upon, but funding should be geared towards a local workforce, the inquiry has been told.
"This is because it stops the discontinuation of care and the never-ending revolving door of workforce turnover, builds trust and relationships locally due to the understanding of the local culture, situation and services," the National Rural Health Alliance's submission said.
The alliance has also called for a dedicated national rural health fund to support sustainable primary care in the bush, at a starting cost of $1 billion per year.
