23 JUNE 2021

Many readers will have heard about the forthcoming changes to Medicare that are due to come into effect next week on 1 July.

The Australian Government has announced that the changes will affect the rebates the government provides under Medicare for general surgery, orthopaedic procedures such as hip and knee replacements as well as medical treatment involving cardiac devices. In all close to 900 Medicare items will be impacted.

The government’s announcement and very short time for implementation has understandably resulted in a lot of confusion and concern among patients booked in for treatment for conditions in these areas after 1 July – many of whom will be experiencing pain and restrictions on mobility while they wait for their procedures.

These concerns will likely have been amplified by the reactions of some medical groups and the AMA expressing concerns in response to the announcement. As we are in the lead up to an election, the ALP has also raised concerns about the impact of potential changes to Medicare adding to the suspicions that many people will have about a large number of complex changes taking place at a time when the public is mostly focused on COVID 19 and vaccine rollouts.

So where have these changes come from and what do they mean for people about to receive treatment?

Firstly, we need to be clear that the changes only affect private patients - there is no impact on public patients (although they will impact on patients being treated in public hospitals who have elected to go private).

The changes have resulted from the recommendations of the Medicare Benefits Schedule (MBS) review, which has been running since 2015.

The MBS is a complex document that lists over 5,700 treatments or items provided by doctors (and some services provided by allied health workers) covering just about every medical treatment and intervention that you can imagine. Each item has a description of the particular service, as well as information about the circumstances or setting in which the item can be used and who is eligible to provide it. The item also contains a “fee amount” determined by the Australian Government.

Understandably, it is not easy to keep such a detailed document up to date with advances in medical science. New treatments are discovered, existing treatments are refined and others are replaced or found to be of low value. The technologies and costs associated with providing treatments also change over time. In some cases, such as cataract surgery, new technology can drastically shorten the time and cost of such procedures.

While the government has from time to time updated particular parts of the MBS in consultation with providers and consumer groups, the MBS as a whole has rarely been reviewed and there are many items which have never been examined since the MBS came into being back in 1983.

The MBS review was an attempt to examine and update the whole document. It has been working with providers and consumers through a range of expert committees, which have provided their reports at various times to the government for consideration. Painaustralia Board Director, Dr Chris Hayes chaired the Pain Management Clinical Committee comprised of experts in pain management and consumer representation. 

Painaustralia provided input on the draft MBS pain report and strongly supported the Committee’s recommendations for new item numbers that would introduce multidisciplinary plans and services such as access to allied health and group therapy (MBS review input) We are yet to see these beneficial outcomes put into place. After the minister and government have had time to consider the recommendations from each committee, they make a decision and announce it to the wider world, including the doctors who provide the affected services.

In this case announcing 900 changes three weeks before they are to take effect has understandably caused consternation and concern.

For people planning to receive treatment as a private patient after 1 July they will want to know the out-of-pocket costs that they may have to pay. At the time of writing, it is not clear how big these changes are likely to be.

As anyone who has received treatment as a private patient in Australia will know, the amount that private patients pay for medical services under Medicare is rarely simple to work out, whether before the procedure or after it.

Private doctors in Australia have a constitutional right to set their own fees. The fees charged can vary considerably depending on the specialty, experience of the doctor, complexity of the procedure or treatment, the location of the doctor’s practice and often by what the doctor feels they can charge their patient.

Separately, the government decides its contribution to cover the cost of a procedure. It does this by determining a “fee” for each MBS item and provides a rebate of 75% of that amount for a treatment provided in hospital and 85% if provided out of hospital, for example in a specialist’s rooms.

Private health funds will then top up some or all of the difference between the government rebate and the doctor’s charge. As a minimum, the health fund needs to pay the difference between the rebate amount and the MBS fee. They may then pay an additional amount if the doctor agrees to use the health fund’s “no gap” or “known gap” product.

Not all doctors use the “no gap” or “known gap” schemes of each health fund, but all doctors are required to have a conversation with their patients about their own fees, if possible well before the procedure to allow the consumer to work out how much they will have to pay. This is further complicated by the fact that the average surgical procedure can involve as many as 7 different providers, all of whom charge their own fees. These can include a surgeon or other proceduralist, anaesthetist, surgical assistant, as well as pathology and diagnostic imaging.

Confused?

It’s not surprising given the complexity that out-of-pocket costs are difficult to determine even when all of the above factors are known well in advance. 

However, when governments announce major and complex changes that have taken years of government consideration only three weeks before they are to be implemented with the expectation that doctors and health funds will have determined their charges and rebate amounts within that time, it is unlikely that things will go well.

Unfortunately, a large number of consumers are about to have surgery from 1 July with no idea how much it is actually going to cost them and no ability to make an informed financial decision.

The changes to the MBS, while significant, should also be seen in a wider context of changes taking place across the health system, which will impact on those experiencing ongoing pain.

These include the adequacy of funding going to public hospitals and the ongoing balance between public and private funding as well as the role and funding of primary care.

With the introduction of MBS cuts, ideally we will soon also see the addition of important MBS items that will provide a counterbalance to these punitive measures and  much needed benefits to people living with pain conditions.

Carol Bennett, Painaustralia CEO