Patient Billing

The Federal Government, through the Department of Health and Ageing, each year sets fees which determine the amount the Government will contribute for most medical services that are rendered to patients in Australia who are eligible to receive Medicare benefits. The fees are published each year in what is known as the ‘Medicare Benefits Schedule’ (MBS), and the fees are known as the Schedule Fees. For patients admitted to private hospitals, Medicare pays 75% of this fee. For those patients who elect to have private health cover, their health fund contributes the remaining 25% of the MBS fee.

In the Private sector, a doctor may choose to charge in excess of the Schedule Fee, potentially leaving a patient with an out-of-pocket expense. That is, the patient will need to pay a ‘gap’.

Since 2000, many health funds have offered to pay doctors a loading in excess of the fee set by Medicare rate for services they provide, on the condition that they don’t charge the patient a separate out-of-pocket gap.

This is frequently done in the context of simplified billing, where doctors send their bills directly to the patient’s health fund, who recover the Medicare entitlement on behalf of the patient, and then contribute their own component to fully pay the bill. This is administratively simple, and relieves the patient and their family of the burden of filling out forms and having to coordinate and forward the payments. This means that while a patient is recovering from their surgery or illness, all medical bills are dealt with and a final statement from the health fund is sent to the patient for information only.

When Health Funds introduced these (‘no gap’) loadings in 2000, the amounts were based upon historical billing patterns by different specialist groups. That is, those who had previously charged higher gaps were ‘rewarded’ with higher loadings. As most Intensivists did not charge gaps at that time, the loadings were set at very low levels.

As an example, most Anaesthetic services are offered a loading of around 70%, as an incentive for Anaesthetic doctors not to charge gaps.

In addition, most Surgical operations are offered a loading of 40-65%, as an incentive for Surgeons not to charge gaps.

So what happens with Intensive Care Services?