Andrea Golic, 31, pleaded guilty in Bendigo County Court on Tuesday to two counts of dishonestly obtaining financial advantage and one charge of attempting to to dishonestly claim financial advantage.

The court heard the Malmsbury woman created copies of a doctors' surgery invoices and used them to make fraudulent Medicare claims.

Crown prosecutor Matt Ryan said between March and November 2012, Golic claimed $199,875 from the government health fund.

He said between December 2012 and May 2013 she attempted to lodge further claims of about $16,000, but identical existing claims were identified and an investigation begun.

Mr Ryan said Golic also obtained $42,723 from her private health fund using the fraudulent invoices.

The court heard the woman also gambled away about $200,000 of her parents' money, forcing them to re-mortgage the family home.

Defence lawyer Martin Amad told the court his client had a long history of mental illness and had started gambling in 2006 after her employer introduced her to poker machines.

He said Golic's gambling developed into a pathological condition around the same time she began to experience symptoms of a brain tumour which would be declared inoperable.

The court heard following the diagnosis Golic lived not knowing whether she would survive for "a week, a month or ten years".

"Most weeks she would lose her wage the night she was paid," Mr Amad said.

In January 2011, she found a surgeon who would operate, and had the tumour successfully removed.

Mr Amad said after living with a death sentence for so long, his client had become socially isolated and depressed and could not handle being cured.

He tendered psychiatric reports which suggested Golic's pathological gambling, which is identified as a mental illness, lessened her moral responsibility for her criminal behaviour.

Judge Mark Dean said the case highlighted the cost to society of gambling additions.

But he said it was difficult to disconnect Golic's long-standing mental illness and trauma associated with the brain tumour from her offending.

"Mercy has a place in criminal law...one can't lose sight of that in exceptional types of circumstances," Judge Dean said.

"Your client's personal circumstances are exceptional."

Judge Dean ordered Golic be assessed for a community corrections order, but made it clear he had not yet concluded whether a jail term was warranted.

Golic will be sentenced later this week.