Since its 2014-15 Budget the Government has pursued an agenda of fiscal policy – not health policy – to strip $3.5 billion out of Medicare and shift these costs on to patients.
The AMA’s strong and sustained advocacy resulted in a number of concessions by the Government. [click here to read more about the original Government proposals and AMA advocacy]
While the Government has abandoned almost all of its policies and their iterations, it has remained steadfast on its four year freeze of Medicare rebates.
Medicare indexation freeze
The Government is freezing indexation of Medicare rebates for four years from 1 July 2014 until July 2018.
As with all small businesses, the costs of providing medical care go up each year. Costs to run medical practice include wages for receptionists and nurses, rent, medical equipment, cleaning, electricity, computers and insurance. All these costs must be met by the single fee the doctor charges the patient for their care.
Medicare rebates have been frozen since 1 November 2012 for GP* and specialist consultations and operations and will not be increased until 1 July 2018. *GP consultations were indexed by 2% on 1 July 2014.
Medicare rebates for pathology and diagnostic imaging services have not increased for more than 15 years.
Freezing Medicare rebates for four years is simply winding back the Government’s contribution to patients’ health care costs. The freeze will also have a knock-on effect that could ultimately lead to higher private insurance premiums and higher out-of-pocket costs for patients.
If doctors absorb the freeze, their practices will become unviable.
Use the Indexation Freeze Gaps Poster prepared by the AMA to show your patients the impact of the MBS indexation freeze compared to annual indexation of medical fees.
Review the graphs prepared by the AMA to see the Potential impact of the MBS indexation freeze on privately insured in‑hospital services.
Use the AMA guide for patients on how the healthcare system funds medical care to explain to your patients how their health care is funded and why they might have out of pocket costs for their medical care.
Use the AMA Template Letter To Patients About Increased Medical Fees to tailor your practice’s information to your patients about how the Medicare freeze will impact the fees your practice charges for its services.
The AMA Checklist For Patient Billing provides guidance to medical practices about introducing patient billing and increasing medical fees.
The Information for patients on registering bank account details with Medicare will assist a smooth transition to patient billing for practices that cannot continue to bulk bill patients as a result of the Government’s indexation freeze.
Original Government proposals and AMA advocacy
In May 2014 the Government announced significant changes to Medicare:
- Mandatory $7 co‑payments for general practice, pathology and diagnostic imaging
- $5 cut to rebates for general practice, pathology and diagnostic imaging
- A two year freeze on indexation of Medicare schedule fees
AMA advocacy focussed on the unfair impact on vulnerable patients who would have trouble paying mandatory co‑payments, usually accumulating over a very short period of time.
In December 2014 in its Budget update, the Government changed tack on how it would strip more than $3.5 billion out of Medicare.
It dumped the very unpopular mandatory $7 co-payment for general practice, pathology and diagnostic imaging and the rebate cuts for pathology and diagnostic imaging.
Instead it cut the rebates for general patients for GP consultations by $5, and imposed a ten minute threshold for Level B MBS consultation items which effectively cut the rebate for short consultations by $
Then in January 2015, as a result of the AMA harnessing its membership and their patients to place the Government under significant public pressure, the Government withdrew its regulation imposing a ten minute time threshold for Level B MBS consultation items only four days before they became law.
AMA meetings with GPs around the country on 8 February 2015 made it abundantly clear that the $5 rebate cut was a real and serious threat to the viability of general practice.
By 3 March 2015 the $5 rebate cut for GP consultations was “taken off the table”.