Claims processing must be in the hands of public servants who are not motivated by profit, medical billing services pioneer Margaret Faux has written in a passionate defence of Medicare, which, she says, is "too precious to be preyed upon by corporate greed".

The US experience in private billing of public medical services offers a chilling warning of how the private sector can plunder the health budget if given the chance, Ms Faux has written on health blog Croakey.

Plans for a private player to take over Medicare, Pharmaceutical Benefits Scheme and even some Veterans' Affairs payments date back to 2014, and were well advanced until being dumped this month by the Coalition, under pressure from Labor's claim the Turnbull government was bent on full privatisation.

It remains unclear what will happen to the $5 million, 20-strong public service taskforce set up to plan the outsourcing.

Prior to dumping the plan, the Coalition argued the payments system was not related to patient care and outsourcing would not affect the core functions of Medicare.

But Ms Faux, founder and managing director of one of the largest medical billing companies in Australia, is dismissive of those claims.

"You cannot separate payments from patients because money is a component of every encounter between a doctor and a patient and, as a result, payments and payment systems do affect patients and also health outcomes," she wrote.

Private players paying out government health benefits is a dangerous recipe, Ms Faux argues, citing evidence from the US that Medicare contractors there were "one of the most serious sources of vulnerability in the Medicare program".

Dodgy dealings by outsourced payment providers in the US had included unfairly withholding or delaying payments, destroying claims, embezzlement, collusion and bid-rigging, denying treatment and forcing patients through appeals processes before agreeing to pay their claims.

Ms Faux cited a Harvard professor who dubbed the US system a "licence to steal".

"Australia is vulnerable to all of these types of behaviours (some already exist inside the private health fund payment schemes), all of which are designed to redirect government money into corporate pockets," she wrote.

"It is reasonable to be concerned about any ideas, ideologies or even innocent scoping exercises that examine privatisation of Medicare, because it is too precious to be preyed upon by corporate greed."

Ms Faux also warned against any move to take Medicare payments out of the hands of the public servants, arguing they were critically important to keeping the system moving and were doing a good job.

"Public servants in the Department of Human Services fulfil the critically important human roles, and as someone who works at the Medicare claiming coal face every day, I can confidently assert that without the involvement of DHS staff the so-called Medicare payment system would completely collapse, and further, many of the roles they currently fulfil cannot be replaced by a computer."

Nor was the Medicare payments system "broken", as was frequently asserted.

"It might be a little cumbersome and difficult to understand for an outsider, but it's probably one of the most efficient parts of Medicare," Ms Faux wrote.

"However, if a team of appropriately talented individuals can be sourced and engaged to rebuild a brilliant new Medicare computer system, then that would be a worthwhile investment for Australians."