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Medicare rebates and co-payments: a summary

Posted 14 January 2015

Health Minister Susan Ley has announced that proposed changes to Medicare have been put on hold for further consultation with GPs and the sector.

The Abbott Government’s 2014-15 Budget introduced a $7 Medicare co-payment fee for all Australians to visit their GP’s. As it became clear that the proposal would fail to pass the Senate, the Government instead proposed an amended co-payment plan in the 2014-15 Mid-Year Economic and Fiscal Outlook (MYEFO).

These new arrangements will impact directly on the rebate paid for GP consultations, based on both the type and length of time. The key changes are detailed below.

Changes to the Medicare rebate and consultation classifications

 From 19 January 2015 the structure and timing of Level A and Level B consultations will be changed. From that date, GPs will need to provide a 10 minute consultation to attract a standard Level B consultation rate. All consultations below 10 minutes will attract a lower Level A rate.

From 1 July 2015 the Medicare rebate for GP consultation items and after-hours items will be reduced by $5 for all non-concessional patients.

The Government will amend the Health Insurance Act 1973 to allow doctors to charge $5 or less and receive the Medicare rebate directly, rather than requesting patients to pay the entire cost and then seeking reimbursement.

Children under the age of 16, concession card holders, veterans and residents in aged care facilities will continue to be bulk billed, at a rate of $6.15 in metropolitan areas and $9.25 in rural, regional and remote areas. This is incorrect. See paragraph below. The bulk-billing incentive is an additional fee paid by Medicare to doctors to encourage them to treat those patients at no added cots to the individual.

Bulk billing incentives will remain for Commonwealth concession care holders and children under the age of 16, consisting of $6.15 in metropolitan areas and $9.25 in rural, regional and remote areas.

Medicare rebates for GPs, specialists, allied health, nurse practitioners, midwives and dental surgeons will be paused until 1 July 2018, meaning that rebates will not be increased to match inflation or the increased cost of living.

The amended consultation structures and current and future rates are tabled below:

 

Current rebate

Adjusted rebate for non-concessional patients (from 1 July)

Level A – currently untimed – will now be less than 10 minutes

$16.95

$11.95

Level B – standard consultation, currently up to 20 minutes – will now be 10 to 20 minutes

$37.05

$32.05

Level C – 20 to 40 minutes

$71.70

$66.70

Level D – more than 40 minutes 

$105.55

$100.55

Political context

It is important to note that both a legislative and regulatory approach will need to be taken by the Government to achieve its goal of introducing the co-payment. The proposed changes to the Health Insurance Act 1973 will require passage through both the House of Representatives and the Senate, meaning further debate and negotiation will be required with the Senate cross bench and the opposition.

The Minister for Health is able to alter the Medicare rebate via the General Medical Services Table (GMST) in the Medicare Benefits Schedule. The GMST contains thousands of items, each with a service description and service fee, as the Minister needs to be able to make swift changes, including additions and deletions in accordance with current medical practice.

While changes to the GMST are frequent, they are done so by amending the GMST regulation, which is then registered on the Federal Register of Legislative Instruments and tabled in parliament. The GMST regulation is a disallowable parliamentary instrument, this means that either chamber can vote to disallow the regulation.

Given the resistance to the previous version of the co-payment by the Senate cross bench, and the relatively fluid nature of the cross bench voting blocs, it remains to be seen whether the $5 reduction of the consultation rebate will pass unimpeded.

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