Medicare, Gaps and Private Cover
Why don't most surgeons bulk bill?
Bulk billing is the term for doctors accepting the Medicare rebate directly from the Government as full payment of their fees. Because of inflation, the fee that bulk billing doctors accept is decreasing in real terms each year. This ongoing situation carries the risk that the quality of care that some doctors provide may be affected.
Can I claim my surgeon-related expenses back from Medicare?
Yes. However, there may be a gap payment that you need to pay.
Why is there a gap in Medicare rebates?
Gaps in what Medicare pays (as opposed to what doctors charge) have arisen as a result of “the Schedule” — a list of operations compiled and updated by the Commonwealth Government. Under this Schedule, each operation is allocated an item number and fee. Rather than being a recommended fee, it “simply represents the amount that the government, having regard to budgetary and economic considerations, is willing to pay”. (Auditor General Report No. 32, 1990-91).
Unfortunately this Schedule, which was first established in 1985, has not increased in line with inflation. Consequently, if doctors continued to charge their fees as per the Schedule, they would be taking bigger and bigger pay cuts every year. For example, if doctors increased their fees according to inflation, a $1000 operation in 1985 would now cost $1700 and the gap would be $950.
Presently, the Medicare rebate that you can claim back is 75 per cent of the government Schedule fee for in-hospital expenses (such as operations) and 85 per cent of the Schedule fee for out-of-hospital expenses (such as consultations). For example, if the Schedule fee for an operation is $1000, the Medicare rebate is $750 and the gap $250.
What if I have private health insurance?
Most health funds will make up the difference between the Medicare rebate and the Schedule fee for in-hospital expenses. In other words, if the Schedule fee for the operation is $1000, the Medicare rebate for the operation will be $750 and the health fund rebate $250. However, there will still be a gap, namely the difference between the Schedule fee and what the doctor charges.
What is gap cover?
Recently, private health funds were allowed to cover gap costs for the first time. However, rebates vary from fund to fund as each fund has its own list of fees paid for specific operations (known as a schedule) and its own rules. Consequently, these payments may not reflect any increased costs incurred by surgeons in the course of providing their services.
A surgeon can choose to send his or her bill directly to the relevant health fund and then be paid the amount the health fund nominates for the particular operation performed. However, some funds allow the doctor to charge more than the health fund gap-cover rebate. In these instances, patients pay the difference (known as a co-payment) between the gap-cover rebate and the surgeons' fees. Most co-payments involve only small amounts when compared to the total gap
Why do some surgeons not participate in gap cover?
Although, at first glance, gap cover schemes seem a good idea, some surgeons have a number of concerns regarding them.
Firstly, having health funds increasingly involved in treatment processes is a worrying trend, seen as a possible precursor to the introduction of a US-style managed care system. In the US, managed care has largely failed in its major goal of controlling medical costs. Many also view its impact on the quality of health care delivery as chiefly negative.
The setting of fees by health funds, rather than doctors, also overlooks the complexity of various operations, as well as doctors' levels of expertise.
The publication of lists of gap cover doctors — and these lists are often inaccurate — also interferes with the decisions patients and their GPs make regarding choosing the best, safest and most suitable specialists for various procedures.