Is an end in sight for Medicare rebate cheques?

The death knell may have sounded for Medicare rebate cheques under Federal Government plans to phase them out completely by mid-2028.
 
Under a long-mooted proposal released last month by the Department of Health, Disability and Ageing (DoHDA), government cheques will no longer be valid from July 2028.
 
The DoHDA documents, which are now out for consultation, also set out plans for limiting ‘gap-only’ billing – where patients only pay the difference between the Medicare rebate and the full fee – to MBS services with fees exceeding $697.
 
Doctors can currently offer patients this option without any threshold, but only by using Medicare rebate cheques under the Pay Doctor Via Claimant (PDVC) billing arrangement.
 
While services paid under this system have dwindled over recent years, the numbers are still significant.
 
According to the DoHDA’s impact analysis of the proposal, around 39,000 providers used the option in the past financial year to bill 588,000 patients, 40% of whom were concessional patients.
 
The document indicates around 870,000 overall claims were made this way.
 
Under the system, after paying a gap fee, the patient then receives a cheque from Services Australia made out to the provider for the outstanding amount. After 90 days, if the cheque is not given to the provider, the fee is electronically transferred.
 
The DoHDA documentation does not elaborate on which services are most claimed using PDVC, nor on which practitioners claimed them most.
 
The college has long called for Medicare cheques to be phased out, describing the system as ‘archaic’ and ‘an added administrative and financial burden’, as well as criticising the delayed 90-day payment.
 
However, it is not the first time the Government has published plans to ditch their use, with previous proposals set out in the 2021–22 and 2013–14 Federal Budgets never coming to fruition.
 
RACGP President Dr Michael Wright welcomed the renewed move to end their use altogether, which was set out in the Federal Government’s recent Mid-Year Economic and Fiscal Outlook papers.
 
‘It’s obviously sensible to modernise and bring Medicare into the 21st century by removing the use of cheques,’ he told newsGP.
 
Under the proposed new system using electronic payments, health professionals could still offer patients the option to pay gap-only costs for services that are not bulk billed, but the threshold Medicare fee of $697 would effectively exclude GP services.
 
It is a scenario acknowledged by DoHDA.
 
‘Providers of low-cost services (including general practice, allied health and pathology services) would not be able to bill using gap-only billing,’ its impact analysis states.   
 
‘The impact on patients would be determined by billing decisions of providers. Low-cost services are inherently more affordable.’
 
It says the approach to exclude low-cost MBS services is designed to ‘mitigate the risk of fee inflation and preserve bulk-billing rates’.
 
The $697 figure marks the sum where the difference between an MBS item fee and the 85% Medicare benefit paid for non-GP referred services would exceed the current greatest permissible gap of $104.50.
 
That $697 threshold would also be indexed, according to DoHDA plans.
 
Health officials referenced an idea to scrap the gap-only billing option altogether, but say the option of keeping it in a modernised form offers ‘the greatest net benefit’.
 
‘Patients who cannot afford high-cost services are likely to experience improved affordability at the time of service if providers choose to charge a gap and use modernised gap-only billing arrangements,’ the DoHDA analysis states.
 
They said the option ‘would deliver gap-only billing arrangements for providers who wish to charge a gap and use modernised arrangements to support patients’, as well as saving more than $11 million each in the regulatory costs of managing cheques.
 
Under the new proposal, there would still be a 90-day delay to payment, which officials say is intended to ‘preserve the attractiveness of bulk billing (immediate payment) relative to gap-only billing’.
 
The impact analysis also warns of ‘some set up costs for medical software suppliers if they choose to include gap-only billing in medical software’.
 
The consultation is open until 27 February, with the RACGP currently formulating a response – full details can be found on the Federal Government website.
 
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