Medicare is in crisis.

On Friday, the national cabinet discussed recommendations from the newly released Strengthening Medicare report—only to announce that a decision on proposed reforms won’t happen until it meets again in late April.

“I want to tell Australians honestly, it’s not going to be quick and it’s not going to be easy, and it’s not going to be fixed in one Budget,” Health Minister Mark Butler said.

But time is ticking.

Bulk billing has fallen to a historic low, with less than half of GP clinics offering it to some or all patients. Allegations that $8 billion per year is being lost to fraud and incorrect billing have sparked an inquiry, and burnout and workforce shortages are on the rise.  

In response, Healthed recently asked GPs for their views on the underlying causes of Medicare’s woes—and their proposed solutions.

What’s causing the crisis?

Over-servicing, in various forms, was the most frequently suspected source of Medicare misuse— though 27% blamed “state hospitals billing Medicare for outpatient services,” and more than a third denied that there is inappropriate use of Medicare funds at all. 

But many GPs also felt under-billing was an important issue, contributing to financial pressure and burnout. More than two-thirds of surveyed doctors said they underbill, suggesting that Medicare leakage goes both ways. 

“Under billing is the bigger issue, with doctors scared of being targeted,” one GP said. 

Meanwhile, more than 57% of GP clinics no longer offer bulk billing for all their patients, a report released in January found. 

GPs also pointed to bureaucratic inefficiency and unnecessary complexity as major reasons for leakage of funds out of Medicare. Several GPs said that confusion or lack of clarity with MBS item numbers was leading to incorrect billing – which could manifest as overbilling or underbilling depending on the situation.

So what do GPs reckon we can do right now to fix Medicare?

Reform bulk billing

Several GPs recommended that bulk billing be stopped altogether—but many also suggested changes to increase consumer awareness of the costs of services they’re using. For example, GPs suggested patient co-payments, clear itemised receipts and education campaigns on Medicare spending. Others said patients should billed directly and claim back from Medicare themselves. 

“Introduce a small co-payment so patients are aware what is billed on their behalf”

“We need to go back to pre-Medicare billing where working patients are not bulk billed and a rebate is given at the discretion of the Doctor. This allows the patient to see what they are being billed for. 

“The patient needs to have a receipt or notification on what has been billed after the service.” 

Raise the rates 

Not surprisingly, one of the most common proposed solutions was: “increase the rebates.” 

The combination of a six–year freeze on Medicare rebates, and indexing that isn’t in line with the actual costs of running a practice, has heightened the financial pressure many GPs face.  

In November, a report by the AMA found that inadequate indexing had saved the government $8.6 billion from 1993 to 2022—”with this cost shifting to Australian general practices and patients by way of out-of-pocket costs and shorter consultations for patients, and revenue loss for practices.” 

The AMA reported that  the MBS has had an annual average indexation rate of 1.1% between 1995-2022, while the average annual change to the CPI and Average Weekly Earnings was 2.4% and 3.5% respectively.  

In other words, indexing hasn’t kept up with the increased cost of running a medical practice.  And GPs comments reflected this.

 “We need increased Medicare rebate rates across the board of item numbers, especially to GPs – in line with index to CPI,” one GP wrote. 

GPs also noted the disparity between GP billing and that of their medical peers, as well as the need for rebates that “reflect the responsibility of the work we perform,” and for improved after hour attendance fees which could lessen the pressure on EDs. 

Other GPs said some Medicare rebates should be adjusted relative to others, to reflect the true effort required—for example long consultations which would allow enough time to properly explore a complaint.  

 “Seeing 12 patients in 90 minutes will give you about $480. But if you see one patient in 90 minutes, you get less than $150,” one GP said.  

More clear and simple billing  

“It’s a nightmare,” one GP said of the current billing system.   

Several GPs said simpler, less ambiguous Medicare Items that better represented the work they do would save time, improve billing accuracy and reduce misuse.  

GPs recommended: 

• reduced number of items 
• clearer guidelines for when to use each item, particularly for care plans and mental health 

• removing the process which automatically chooses which item numbers to bill from practice software 
• more accurate time-based rebates (e.g. five-minute chunks) to better compensate those who see complex patients;  
• provide an easier online method to correct a Medicare number when under or over-claimed accidently. 

Time-based billing “would also mean that our high-earning, flick-and-tick colleagues would have no incentive to stick to the quick and easy problems. They could then rediscover the excitement and fulfilment of more holistic care,” one GP said. 

GPs also recommended education, including regular updates from Medicare about item numbers and changes; tutorials on common item numbers and when to apply them; courses to clarify common issues; education on care plans specifically; and a CPD requirement on ethical and appropriate Medicare billing.   

Decriminalise mistakes and shift the target of billing audits 

While a few GPs supported the current inquiry to “weed out the few bad apples” as one GP put it, several proposed changes to how billing errors are investigated to reduce underbilling and  over-servicing, and provide clarity on the appropriate billing practices.  

Many GPs felt that a better approach would be to decriminalise mistakes and educate GPs to improve their billing practices– rather than the current situation where many GPs live in fear of being audited.  

In a nutshell: helpful, instead of blame and shame sums up the preferred approach.  

“If an abnormal profile is observed, the doctor should be given the chance to justify it and if appropriate a time to change it…education first before legal action,” one GP said.

How would you fix Medicare? GPs in their own words. 

“Give doctors training in Medicare billing at university. Rewrite basic item numbers to reward longer consultations for SPECIALIST GPs who are the coordinators of all healthcare and kept things going through the pandemic often at cost to them. Consider salaried positions even if that means rewriting the constitution.” 

” Care plans by the usual GP only, definitely not the one-off GP at the fast throughput clinic: that should be invalid. “ 

“Better integration of hospitals and GPs, especially with timely discharge summaries and including the results which arrive a few days later, so GPs do not have to waste time.” 

“Outlaw ‘bulk billing’. Patient has to pay and claim even if 100% rebate by their insurer (Fed Govt)

“Ban ownership of General Practice other than Owner /Operators. No more corporates.”

“Cease allowing for bulk billed care plans and health assessments.”

 “Allow GP’s to charge a gap payment to ease the cost of an upfront payment for fee for service.” 

“Fewer item numbers and simplified system. Increased payment for longer consultation. Simplified system for care plans and TCAs. Better remuneration for mental health care.”

“Random auditing of care plans – mine take on average an hour to complete and are patient-based, not specific-condition-based – many I see are a total waste of space.” 

 “Practices with a high proportion of care plans relative to total visits should be audited”.  

 “Closer look at corporate bulk billing practices and telehealth ones”.  

“Simple didactic patient-education leaflets should be created and written by Medicare representatives themselves – it should not be the job of GPs to explain Medicare’s arcane rules/qualifications/exemptions and the like.” 

Credits

Survey conception and design– Dr Ramesh Manocha

Survey analysis and visualisation; Reporting– Yasmin Clarke

Editing– Lynnette Hoffman