The federal government will review how Aboriginal medical services spend their funding after revelations rugby league star Greg Inglis was paid up to $90,000 a year from Medicare income for promotional work.
Health authorities were forced to investigate after the Aboriginal Medical Service (AMS) at Redfern admitted it used Medicare billings income to pay the South Sydney Rabbitohs fullback, who has a five-year, $4 million deal with the club.
The Department of Health said Medicare income at grant-funded Aboriginal medical services could only be used for primary healthcare services.
After investigating for less than a week, it determined the health promotion work Inglis did for the medical service fell within the scope of primary healthcare service provision.
But Health Minister Peter Dutton said that was not good enough.
''Indigenous medical services are funded with taxpayer money to deliver health services to indigenous patients,'' he said.
''We are concerned about these reports. We want to make sure that funding is spent effectively.''
Mr Dutton said the government would review any ''sponsorship'' arrangements.
''Role models are an important part of that. However, we are going to review the way these sponsorship arrangements work when government funding is involved,'' he said.
Inglis will continue his $50,000 a year contract with the Redfern medical service and did not consider suspending it even when it was under investigation.
''It's never even been canvassed or thought about at this stage, or mentioned,'' Inglis' manager, Allan Gainey, said.
It was revealed on Saturday the Souths star was paid up to $90,000 a year between 2010 and 2013 by the medical service using Medicare income. In return, he was expected to do promotion and ambassadorial work.
The contract was renewed in December last year at a reduced rate of $50,000.
The AMS defended the use of Medicare income to pay Inglis and said it was well within its rights to spend the money that way.
The third-party agreement - outside Inglis' salary from the Rabbitohs - was lodged with the NRL and it is understood there is no suggestion of a salary cap breach.
The Redfern AMS is a registered charity and chairman Sol Bellear is a former director of Souths.
