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Changes to the Medicare Bulk Billing Incentive Item

December 2019

From 1 July 2019 practices that were previously classified as RRMA 1-7 (Rural, Remote & Metropolitan Area) are now classified as MMM 1-7 (Modified Monash Model).

This geographical classification change has a major flow on effect as to which bulk billing Medicare incentive item practices can now claim and will impact on many outer metropolitan regions.

Practices can claim the bulk billing incentive item (10990 or 10991) if they bulk bill patients who are:

  • under 16 years of age or
  • pensioners or
  • health care card holders.
This applies to both ‘in surgery’ and ‘out of surgery’ visits (i.e. home visits, RACF visits)

Previously some practices in RRMA areas were classed as ‘outer metropolitan’. This meant that the practice could claim Medicare Item 10991 which is worth $9.65. With the reclassification of practices to the MMM some of those practices are now no longer classed as ‘outer metropolitan’ which means they can no longer claim Item 10991 as of 1 January 2020. Instead these practices will now only be able to claim Item 10990 which is worth $6.40.

What does this mean to your practice?

In short it could mean a significant financial loss each year.  

For practices that are fully private billing this change will have little or no effect on them, however for mixed billing or full bulk billing practices the financial impact could be huge depending on the number of bulk billing consultations they perform per year.

For example, for every 10000 bulk billing consultations you perform per annum the loss will be $32,500. Depending on your business structure and whether you are a solo GP or multi GP site, this loss may be borne entirely by the solo GP or split as a percentage between the Practice and the individual contracting GP/s.

To combat this loss, practices may choose to implement a fee for all patients (either full fee or discounted)  and do away with bulk billing altogether. For practices in low socio-economic areas or practices that have a high number of elderly patients this may not be practical. Implementing a fee for all patients could mean that their patients will look for alternative options such as other practices close by who remain at full bulk billing or present at local hospital accident and emergency. This could mean that the care of patients becomes fragmented and disjointed.

Practice owners and managers should review their business model and make any adjustments to manage this loss.

Get in touch with our office for further information and assistance if you believe your practice may need some assistance in this area (02) 4928 8500 or cnmail@cutcher.com.au.

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Topics: Accounting, medical accounting, Superannuation

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