• Health

Changes to the Medicare system

The Government is reintroducing the indexation of certain Medicare items, providing a fairer price for doctors. Along with this additional funding, the Government will target unusual billings and improve the consistency of administrative arrangements in the system.

Reintroducing indexation ahead of schedule

Last year the Government announced they would continue the pause on indexation for all Medicare Benefits Schedule (MBS) fees for a further two years.

Slightly earlier than expected, the Government has now confirmed an extra $1 billion will be allocated over four years as indexation is phased in for certain items on the MBS. This will include:

  • Bulk-billing incentives for GPs from 1 July 2017
  • Standard consultations by GPs and specialist attendances from 1 July 2018
  • Specialist procedures and allied health services from 1 July 2019.

In addition, for the first time since 2004, the Government will introduce indexation for certain diagnostic imaging items on the MBS including for mammography and radiology.

With the increased funding, the Government will also introduce changes to better target unusual business billings, improve compliance arrangements and enhance debt recovery practices.

BDO Comment

The phased reintroduction of indexation will placate the medical lobby. However, they should be careful what they wish for – the announcement also includes tougher controls on expenditure within the system to ensure doctors are doing the right thing.