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05 May 2016

Main points

  • Medicare rebate freeze extended to 2020
  • Major practice group says it will begin charging some patients
  • $21.2 million cut to Practice Incentives Program

A major medical practice group is abandoning bulk billing for many of its patients and the AMA has received a spike in inquiries from providers about introducing a charge as GPs and practice managers respond to the Federal Government’s Budget decision to freeze Medicare rebates through to 2020.

Primary Health Care, which operates 71 bulk billing medical centres nationwide, has told that it has divided its business into two arms – one that bulk bills and one that does not – and will begin charging a fee for some patients.

“The outcomes of the Federal Budget serve to…accelerate our existing strategic initiatives,” a Primary Health Care spokeswoman told “To that end, new medical centre models are being developed…which will not rely solely on bulk billing”.

Primary’s move came a day after AMA President Professor Brian Owler warned that the Government’s decision to extend the Medicare rebate freeze for a further two years would prove to be the “tipping point” for many practices which had been bulk billing their patients.

“This announcement in the Budget really, I think, is a tipping point,” Professor Owler told radio 2SM. “It signals to practices that [the freeze is] going to last now to 2020 at least, which means they're not going to be able to hold on any longer and they have to transition now from bulk billing to charging patients a fee.”

He added that the AMA had “been approached by many practices to help them transition from bulk billing to start to charge a fee. And I suspect that the demand for that advice is about to really go up”.

The rebate freeze has been condemned by some as a “GP co-payment by stealth” and, combined with the decision to axe and cut bulk billing incentives for pathology and diagnostic imaging services, has raised the prospect of a backlash from patients during the forthcoming Federal election.

Professor Owler said the move, which the Government estimates will save it $925.3 million over the next four years, undermined the value of Medicare and would increasingly push the burden of health care off the shoulders of Government and on to doctors and their patients.

The Medicare rebate was first frozen by the previous Labor Government in 2013, and the following year the Abbott Government extended it until 2018. The latest decision means that it will be almost seven years by the time there is an increase.

Professor Owler said GPs had so far absorbed the cost, holding up bulk billing rates, but he cautioned that this could not continue.

“The rent for the rooms, the costs of providing equipment, the costs of providing staff – all those costs rise year on year,” he said. “GPs have absorbed it. They've absorbed the rebate freeze.”

But, Professor Owler added, this was “just something that cannot continue”.

He said the prospect of an additional two years without an increase would cause many doctors and medical practices to conclude that they could no longer afford to carry the cost.

“I think we’re going to see people…start to say, ‘We can't sustain it anymore, we can’t absorb these rebate freezes, we’re going to have to start to charge our patients’,” Professor Owler said. “We’re going to start to see that tipping point reached where Medicare patients now are going to start to be charged, and bulk billing rates are going to fall.”

Health Minister Sussan Ley said the decision to extend the rebate freeze for a further two years had been taken “in recognition of the current fiscal environment”.

But Ms Ley sought to reassure doctors by floating the possibility that the rebate freeze could be reviewed depending on the identification of improvements and efficiencies through its Healthier Medicare reform package, which aims to improve the care of patients with chronic and complex health problems.

Under the reform, dubbed Health Care Homes, chronically patients will nominate their preferred GP, who will then receive bundled payments to provide their care, while continuing to be paid fee-for-service for other patients.

The care model has been developed based on the recommendations of the Primary Health Care Advisory Group, and the Government envisages that the bundled payment model will give doctors the time and flexibility to develop care plans tailored to the needs of each patient.

In the Budget, the Government has allocated $21.3 million for a trial of up to 200 Health Care Homes involving around 65,000 patients with chronic and complex conditions.

But this is largely offset by a $21.2 million cut to the Practice Incentives Program (PIP).

The Health Department has announced the PIP system will be “streamlined and simplified” to reduce the regulatory burden on practices while ensuring incentives were better targeted.

“Redesigning the incentives will focus on quality improvement across the range of GP incentives, and will draw on best practice examples and feedback from across the sector,” the Department said.

Adrian Rollins


Published: 05 May 2016