‘Critical failure’ in plan to phase out Medicare cheques

Medicare rebate cheques are set to disappear for good by July 2028 – but the RACGP has criticised the detail of Federal Government plans to change the system that buoyed their use.
 
Last December, the Government set out plans to kill off Medicare cheques, a move long called for by the college, and change the Pay Doctor Via Claimant (PDVC) cheque system which allows patients to pay only the difference between the Medicare rebate and the full fee, also known as ‘gap-only'.
 
The RACGP has long called for an end to the ‘outdated’ system, which accounted for around 870,000 cheques issued in the past financial year, but is opposing plans to keep a 90-day payment delay under a proposed electronic-payment-only system.
 
The college added that the cost of implementing the Government’s proposal would be around $3.9 million each year.
 
While a Government impact analysis argues that reducing or removing the payment delay ‘would likely encourage price inflation and discourage bulk billing,’ the RACGP said the suggested approach is ‘a critical failure of the proposed model’.
 
‘The RACGP supports replacing cheque-based Medicare payments with digital claiming and supports gap-only billing in principle as a mechanism to reduce upfront patient costs,’ a submission to Government consultation states.
 
‘However, the proposed model retains the central structural flaw of the PDVC scheme – a reimbursement delay of up to 90 days – which is financially unviable for general practices and will limit provider participation.’
 
The submission sets out the RACGP’s preferred option for reform ‘that enables real-time or near real-time Electronic Funds Transfer (EFT) reimbursement to providers, consistent with bulk billing arrangements, or at minimum a substantially reduced reimbursement timeframe (e.g., within 30 days)’.
 
The current process means that a patient, after paying a gap fee, receives a cheque from Services Australia made out to the provider. If the cheque is not given to the provider within 90 days, the fee is electronically transferred.
 
Health officials said they had considered ditching the PDVC scheme but concluded that keeping gap-only billing in a modernised form offers ‘the greatest net benefit’.
 
‘Removing PDVC arrangements is likely to increase the risk that patients would not be able to access services,’ a Department of Health, Disability and Ageing (DoHDA) analysis states.
 
‘This may result in some patients delaying access to care or refusing care, potentially impacting their health.’
 
The RACGP, however, warns the plan is unlikely to work in its current form.
 
‘Without legislative reform to enable providers to be the legal payees under a gap-only model, the proposed arrangements will not achieve their intended objectives,’ the submission states.
 
According to the impact analysis, of the 1.3 million services provided under PDVC arrangements, 37% were for concession card holder patients.
 
‘If these patients are unable to access a viable alternative, affordability and access to timely care will suffer,’ the college warned.
 
The Government also proposes limiting ‘gap-only’ billing to MBS services with fees more than $697, a move the RACGP submission said ‘may inadvertently exclude common services in general practice that still impose significant costs on patients – such as long consultation’.
 
That $697 sum, which would be indexed, represents the fee where the difference between an MBS item and an 85% Medicare benefit would exceed the existing greatest permissible gap of $104.50.
 
There is currently no minimum threshold.
 
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