MBS indexation freeze means higher out-of-pocket costs for patients

16 10 2013
AMA List of Medical Services and Fees 2013

The AMA has finalised the AMA List of Medical Services and Fees 2013, which provides guidance to AMA members in setting their fees based on their own practice cost experience.

AMA President, Dr Steve Hambleton, said today that Medicare Benefits Schedule (MBS) patient rebates continue to lag behind the real cost of providing quality patient care, but this year patient out-of-pocket costs will be higher because of the freeze on MBS indexation.

The previous Government announced a delay in MBS indexation from 1 November 2013 to 1 July 2014 in the May Budget – a decision that has denied patients $664.3 million in rebates for their GP visits and private surgery.

As a result of the freeze, the MBS patient rebate for a standard Level B GP consultation will remain at the current level of $36.30 until 1 July next year.

The new AMA fee for a standard Level B GP consultation is $73, up from $71 in 2012.

Dr Hambleton said there is a long history of MBS indexation lagging well behind the contemporary costs of providing medical care, which has caused a significant difference between the AMA fees and MBS fees today.

“The MBS simply has not kept pace with the complexity or cost of providing high quality medical services,” Dr Hambleton said.

“The difference between patients’ medical fees and Medicare rebates will be greater because of the freeze but, despite the widening gap, doctors have kept medical fee increases to a minimum.

“Eighty one per cent of GP consultations are bulk billed.

“Eighty nine per cent of privately insured in-hospital medical services are charged according to the patient’s private health insurer’s schedule of medical benefits, which means the patient has no out-of-pocket cost for their doctor’s fee.

“The average total out-of-pocket costs per person for medical fees in 2011-12 was $131, only $2 more than the previous year.

“The AMA applauds the private health insurers that have stuck with the tradition of indexing their schedule of benefits on 1 November.

“These insurers have acted in good faith to minimise the cost impact on their members,” Dr Hambleton said.

This year, AMA fees have been indexed, on average, by 2.93 per cent. This compares with the Labour Price Index of 3.19 per cent and Consumer Price Index of 2.40 per cent.

The AMA indexation places significant weight on increases in the Labour Price Index because of the high labour component in providing medical services.

Practice costs – such as wages for practice staff, rent, electricity, computers, continuing professional development, accreditation, and professional insurance – must all be met from the single fee charged by the doctor.


16 October 2013

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Background:

Facts about medical fees

In 2012-13:

  • there were 343,600,526 Medicare rebates paid for medical services;
  • 81.1 per cent of the 115,510,216 general practitioner services provided were bulk billed, which means these patients incurred no out-of-pocket cost;
  • the average out of-pocket cost for general practitioner services that were not bulk billed was $28.58
  • 87.2 per cent of the 120,624,060 pathology services provided were bulk billed; and
  • 74.8 per cent of the 21,393,931 diagnostic imaging services provided were bulk billed.

Source: Department of Health Annual Medicare Statistics – Financial Year 2007-08 to 2012-13

In 2011-12:

  • the expenditure on medical services by all sources of funds was $23,900 million;
  • medical services represented 17 per cent of total health expenditure;
  • 77.9 per cent of medical services expenditure was paid for by governments;
  • 12 per cent of medical services expenditure was paid for by individuals;
  • 5 per cent of medical services expenditure was paid for by private health insurers;
  • the average total amount spent per person for medical services in the year was $131 (an increase of $2 from the previous year); and
  • the average total amount spent per person for over the counter medicines – including pharmacy-only medicines, aspirin, cough and cold medicines, vitamins and minerals, herbal and other complementary medicines, and a range of medical non-durables such as condoms, adhesive and non-adhesive bandages – was $358.

Source: Australian Institute of Health and Welfare Health expenditure Australia 2011-12

In the June 2013 quarter:

  • there were 8,229,526 in-hospital medical services covered by private health insurers;
  • the proportion of medical services with no medical gap* was 89 per cent;
  • the proportion of medical services with a known medical gap** was 3.5 per cent;
  • the proportion of medical services where there was a gap and no agreement was 7.5 per cent; and
  • the average gap payment, where a gap was paid, was $188.17.

Source: Private Health Insurance Administration Council Quarterly Gap Payments & Medical Benefits Statistics June 2013 and Medical Services June 2013.

*No gap agreement is where the medical practitioner agrees to accept a payment by the insurer in full satisfaction of the amount owed so that there is no gap, or no out-of-pocket expenses to be paid by the insured person

**A known gap agreement is where the medical practitioner agrees to accept a payment by the insurers in part satisfaction of the amount owed and the patient has provided informed financial consent so that the gap or out-of-pocket expenses to be paid by the insured person are known in advance

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