So what is Bulk billing ?

Much have been written in the last few weeks about Medicare Rebates and being bulkbilled.

There are two separate issues that needs clarification here.

The first issue is the value of the rebate – the following graph clearly demonstrates the fact that the rebate is now worth much less in real buying power than it was in 1975 when Medibank started


(Click here for bigger image)

The AMA recommended fee represents a carefully calculated suggested value of what a medical professional, with a minimum formal training of nine to ten years, should charge for a consultation. Charging only the Medicare rebate represents no less than a 50% discount on that amount and unless there are either a rapid churning of patients or some crafty interpretation of the Medicare rules no Practice could survive on bulkbilling.

This brings us to the second issue:

Medicare’s rules on bulkbilling are very clear:

“Bulk billing is when your health professional accepts the Medicare benefit as full payment for a service. You cannot be charged additional costs such as a booking or administration fee, or be charged for consumables such as bandages.”

Seems straightforward doesn’t it? It would however appear that there are crafty ways around this and unfortunately with a bit of support from sympathetic politicians and ample support from the local media it would appear that one can get away with a lot.

This brings me to one such example – The National Health Cooperative which is currently arguably the biggest single GP entity in the ACT.

Firstly I should declare upfront that I have no issues with the service that this organisation provides – they serve an important purpose and they, and our clinic, started providing services to a very under services part of Canberra in 2006 when there was no-one else doing this.

There are however some serious concerns with their funding model.

The Co-op charges an annual membership fee (Starting at $130 for the first year and then $100 a year) and from there on they do not charge out of pocket expenses.

The problem that I have is that they advertise these services as being bulkbilled. They obviously had good legal advice to back this approach up but it really boils down to a very crafty  alignment of the out of pocket expense with a membership fee as opposed to a booking or administrative fee – an out of pocket fee that averages out to over $25 per visit on average which is not all that different to the average gap many of the private GPs in the area charges.

I queried the process with Medicare’s investigative unit and their Director’s advice to me was that what was being done was “not in the Spirit of the Legislation” yet that his hands was tied unless there were formal complaints made.

My next question was if all clinics could create their own “loyalty club” in this fashion and he declined to give me a straight answer but to instead get my own legal advice on the matter. I must have spoken to the wrong Lawyers as I was told in no uncertain terms that we could not do this.

It still remains an out of pocket payment and can surely not by any stretch of the imagination be referred to as a bulkbilling service.

Yet this is what the Canberra Times does. In article after article, editorial after editorial, they sing the praises of this bulkbilling service. Every new clinic, every new service that is being offered, ends up with a half page advertorial, disguised as an ordinary article in the publication. And very often there is a Politician on hand for the photo opportunity.

There are several other issues affected by this process some of which are highlighted by the most recent editorial in the Canberra Times:

  • Once again the system is promoted as a bulkbilling facility
  • The system is credited with a rise in bulkbilling rates – which is statistically true
  • The average Canberra visits a GP 4.7 times a year which means that the $130 initial yearly membership fee means resulted in an average “gap” payment of nearly $27 per visit – hardly bulkbilling by any means

I have on many prior occasions written to the Canberra Times to point our these errors – my communication is ignored.

There are two more issues that needs addressing:

  1. The Co-op reports their visits to Medicare as bulkbilled visits. This means that, for every child under 16, aged pensioner and concessional card holder, they get an additional bulkbilling incentive payment of nearly $ 8 per visit. In a fully bulkbilling clinic this could add up to nearly 10 % of the total income from Medicare and it is my contention that there is a very strong argument to be made that this incentive should not be claimable.
  2. When the Co-op started their focus was on the West-Belconnen area – in fact their original name was the West Belconnen Health Co-operative. This was appropriate given that this area was very under serviced in terms of GP facilities. Their focus have since however changed considerably and they now run seven facilities across the ACT many of which are in direct competition to existing small owner operator clinics. It is already very hard for these small clinics to compete against the very large supermarket type Corporate clinics. It is near impossible to compete against organisations that not only promote themselves as bulkbilling but also charge an annual fee, have easy access to free marketing through the local media and covert support form the local Politicians

This has already and will in future see more and more small clinics facing financial ruination and closing down

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