AusDoc investigation: 1.2 million MBS services hit if gap-only billing is banned
This is a story about how health policy is made when the civil service don’t provide you with the salient facts to inform public consultations.
Perhaps it should be a case study because in many ways it is quietly scandalous.
Last year, a consultation paper emerged from the Department of Health, Disability and Ageing.
It came out a week before Christmas — 18th December — always a sign that it contains ideas that someone in government wants to remain unexamined.
The AMA was alarmed, saying it knew nothing about it until we published an article on its contents on AusDoc.
The paper carried the title: Modernising gap-only billing — replacing Medicare cheques with electronic benefit payments.
Given that it was suggesting dumping the notorious Medicare cheque, the word ‘modernising’ was accurate. But the more important element was only discovered with further reading. It was also suggesting denying gap-only billing for hundreds of thousands of patients.
The payment option is obviously important. It is used by doctors when those on limited means cannot afford the full fees up front.
This would not be much of an issue if the government handed over the patient’s MBS rebate automatically. But it never has, deliberately sending patients those paper Medicare cheques which they are then required to submit to the practice to cash.
As such, the cheques are engineered to inflict cashflow pain on doctors to deter them from charging gap fees.
According to the consultation’s impact paper, over the last financial year, some 39,000 doctors billed 588,000 patients using the gap-only arrangements.
Nearly 40% of these patients were concession card holders. The Medicare rebates valued at $186 million give some indication of the money wrapped up in these transactions.
The consultation paper does not suggest an outright ban on gap-only billing. But it says it wants to restrict the arrangements to items where the Medicare fee is $697 or more.
“[To] mitigate the risk of fee inflation and preserve bulk-billing rates, gap-only billing would not be available for lower-cost services,” the paper states.
The idea here is that making gap-only billing too easy leads doctors to inflate their fees for no reason.
The department also argues that when fees are below this $697 threshold, the need to gap-only bill decreases because patients are more able to find the cash needed up front.
An important claim, but is it true? No evidence was given.
As we have reported before, the impact statement then goes on to argue that “high-cost” services (those with fees above $697) still make up around 30% of Medicare items on the MBS.
This is disingenuous. Thirty per cent is a lot. But it is different from saying 30% of the services provided. There is a wide range of high-end surgery for instance, all with their own item numbers.
You want to know how commonly these high-cost items are being claimed in the real world under gap-only billing.
The percentage of them in the MBS book is irrelevant if they are rarely claimed.
This is just one area where salient facts are missing in action from the department’s impact analysis.
How many of the services actually provided were billed under the gap-only arrangements over the last financial year and how many were below the suggested $697 threshold? A more relevant question.
And, importantly, for what kind of medicine?
Is it the sort where if the patient cannot afford the fee up front, the delays in care would be unimportant?
Or are we talking about MRI scans of the head, where you assume the results are better known sooner rather than later?
The impact statement was silent.
As some readers may know, AusDoc submitted an FOI request in January for information to fill the void.
The department must have it, we thought. The government paid out $186 million on the rebates under gap-only arrangements; and surely basic accounting mean they know something about the services for which they were providing rebates?
So identifying the medical care being offered under the $697 fee threshold would be a half-hour job with an Excel sheet and a strong flat white.
But after a couple of weeks of waiting, our FOI request was rejected.
After consulting the department’s relevant business area, the FOI response we were emailed claimed the information we were after did not exist.
“As outlined above, the relevant business area within the department has conducted searches of the department’s holdings,” the FOI officer wrote.
“The department has not identified any documents matching the description in your request.
“I am satisfied that all reasonable steps have been taken to find any other documents in the possession of the department and that such documents do not exist.”
Because the documents do not exist, the department said it had refused our request under section 24A of the Freedom of Information Act.
As promised, we did go back.
After numerous emails, a recommendation by the FOI people to withdraw our FOI, a suggestion we just go back to the same health department media unit which had already fobbed us off, a request by AusDoc for the department to look again, and then a 14-day extension to the FOI deadline because of the Easter holidays — finally, on 24 April, a miracle.
It was a short email from the FOI officer but with a PDF attached.
In the PDF was a list of some 1600 numbers and next to them another 1600 numbers. It didn’t look that interesting*. But these were lists of MBS items alongside the number of times each item had been claimed under gap-only billing arrangements in 2024/25.
A bit like a My Health Record pathology result, the FOI people said the information could only be provided as a PDF rather than as atomic data in the form of something useful like an Excel sheet.
When we asked, they said it was to “maintain the document’s integrity” (no, we are not sure either).
This was a small, unnecessary headache, but not without cure.
We removed the watermarks and used an Adobe tool to extract the numbers. Staring at 1600 item numbers with no clue as to what they represent was a heartsink moment for a Monday morning.
We spotted a ’23’ and a ’36’ and a couple of numbers for GP care planning, but beyond that, it read like machine code.
Eighteen months ago, at this point the health department would have won. Faced with the prospect of matching 1600 items numbers with the descriptors and fees listed in the MBS schedule, a document running to a quarter of a million words in a language only tangentially linked to English, we would have deleted the email and quietly walked away.
But with the wonders of the much-maligned ChatGPT, there was a fix. We fed the numbers into AI, along with the entire contents of the MBS schedule and its item descriptors.
After some false starts, we got ChatGPT to list the items in a table, with a brief description of the services they represented, the scheduled fees and the benefits paid, along with the number of services billed gap-only under the doctors’ cheque scheme in 2024/25.
We were then able to see the medical services which sat at or above the department’s $697 Medicare fee threshold and those below. Simple.
Once we crosschecked the ChatGPT computations with the actual data provided by the department and the MBS schedule itself, what we found was this.
Anyone in need of a repair or replacement of the ascending thoracic aorta, do not worry. You do not have to find the money up front. You can be billed gap-only. The fee for the relevant item ($3622) sits above the suggested threshold.
Other services included item 13200 for an assisted reproductive technology superovulated treatment cycle proceeding to oocyte retrieval. Claimed by 2600 women, the fee is $3628. And item 38502 for a coronary artery bypass — claimed by 162 patients under gap-only arrangements — is also safe.
In fact, 28,000 of the gap-only billed services provided in 2024/25 were for items above the suggested threshold.
But then you get to the services below the department’s threshold.
How many? Well, according to figures given to us by the department, it seems that some 1.2 million MBS services would not have been gap-only billed under the department’s proposals.
That is a lot of care not mentioned in the impact analysis.
The most commonly claimed item under gap-only billing turned out to be those 23 and 36 numbers — the GP attendance items.
In 2024/25, 119,317 level B consults (item 23) and some 42,088 level C consults (item 36) were billed.
So it looks like there would be a significant impact on GP patients. No gap-only billing for any of them. You need to find the money up front.
Of course it would be much better to know the actual fees these patients faced. At a minimum it could be a few dollars above the rebates, but you assume it would be significantly more.
And yes, a request for the distribution of the full fees was part of our FOI request.
We failed to get them, even though we suspect the department would have those all-important numbers too.
What of the other clinical areas which would be hit by a ban on gap-only billing? This is where some of it gets disturbing.
The department’s impact statement tries to provide reassurance. It states on page 13: “The $697 threshold would be indexed each year and would cover many surgical, radiation therapy, and diagnostic imaging services.”
That is true. But what does “many” in this context mean? Are we meant to feel comforted?
It turns out that item 63001 would be excluded from gap-only billing. Item 63001 is for an MRI scan of the head for a tumour of the brain or meninges.
Some 4486 patients paid using gap-only billing in 2024/25. That is a substantial number.
The rebate pays at $375. Again, we do not know the range of gap fees each patient faced, but logically all these patients would have had to find at least more than $375 up front, presumably much more, or otherwise the doctor would have taken the financial hit by bulk-billing.
Is an MRI brain scan optional?
There is also item 56507. This is for a CT scan of the upper abdomen and pelvis — that sounds like a significant diagnostic intervention too.
Some 11,729 patients paid for this service under gap-only arrangements during the last financial year.
Based on the rebate, they would have to find at least $448 up front to access care, or hope they could secure a bulk-billed option.
And item 55076 — this is for an ultrasound of both breasts, including an ultrasound scan for post-mastectomy surveillance.
Some 9000 women were billed under gap-only arrangements. These patients would have to find at least $106.
In fact, there are literally dozens of diagnostic imaging items under the $697 threshold being claimed by thousands of patients. None of this information was in the consultation document purporting to be an impact analysis.
CT angiography — item 57357 for exclusion of pulmonary arterial stenosis, occlusion, aneurysm or embolism — rebate maximum benefit $476 claimed 3310 times under gap-only billing.
And here are some other medical services where gap-only billing would have been denied had the department’s suggested regime been in place.
Item 31358 for excision of a malignant skin lesion from the nose, eyelid, eyebrow etc. Maximum rebate payable $268. Claimed by 3400 patients in 2024/25.
Item 42788 — laser capsulotomy. Claimed 2100 times. Rebate $350.
There are also items in the list for ED doctors to attend elderly patients in private hospitals. In fact, when you add in the emergency items for complex emergency care of children and adults, you are talking about 60,000 services.
Then you can see the way this policy could deny access to psychiatric care. Psychiatrist consultations are not cheap, even with the Medicare rebate.
Some 19,000 psychiatric consults were billed under gap-only arrangements, according to the department’s own figures.
But again, under these arrangements, these patients have to find the money up front, hope for bulk-billing, or they walk away until they get the cash.
If you want to get an idea of the 1400 items excluded under the plan and how many times they were claimed in 2024-25, you can go through them here [**].
These reforms have emanated under a government whose health minister, Mark Butler, says there is a crisis when it comes to patient access to specialist care, in fact it’s a “barbecue stopper”. Is this policy likely to fix it?
There is another issue.
The information provided under the FOI is materially useful in understanding the actual impact on patients. None of it is complicated. It should have been included in the impact analysis. It was not. So why?
We have asked the department to explain, having sent them our own Excel sheets offering a picture of reality. We even thought about offering to cover the cost of the flat white. It’s reply was short saying nothing — we have included it below.
The deeper question here is simply about the duties on the civil service to provide consultation documents fully informing the ‘stakeholders’ with the relevant details.
Gap-only billing exists to support patients with limited means to access medical care. There is a genuine debate about doctors using it to inflate fees and there are good reasons why governments do not want that to happen.
But given the moral dimension underpinning the debate on access to medical care, central to Medicare’s existence, the authors of this alleged impact statement, more accurately the official in the department who signed it off, should be slightly ashamed of themselves.
They have weakened the public debate in times when it needs to be treasured.
Editor’s note: We offered the department full right of reply to the criticism made in this article. It sent the following statement on Monday.
“The department is consulting with clinical and consumer groups on modernised arrangements for gap-only billing, including the proposed MBS Fee threshold to define high-cost services.
“The department is working on providing the Commonwealth Government with implementation advice and recommendations on an appropriate threshold.“
[*] The PDF includes a number of redactions. This was to protect privacy/confidentiality when the number of services claimed for the particular item is very small.
We have assumed that the numbers are so small that their exclusion does not dramatically alter the overall number of services paid under gap-only billing.
[**] Just stress, all the specific items and service volumes mentioned in this article have been checked against the MBS and the health department material.
However, the table, as we explain, was generated using AI. We have manually checked a sample of the results but not the details of all the 1,400 items listed.
