Medicare, bulk-bill, gap, rebate

Watch for Ambiguous Billing Terminology

I learnt a valuable lesson during the month of March, 2023. Words we think mean one thing, can mean something completely different to other people – I think in general life we are all used to this. When it comes to money, especially money involved in the costs of medical treatment, different interpretations can result in an unexpected and unwelcome hit to the bank balance and the budget.

I share these small examples to encourage ALL patients to double and triple check what their provider actually means when they refer to some of these terms. I also encourage the medical profession to be consistent and use clear terminology, removing all risk of ambiguity.

The terms I am looking at today are:

  • Bulk-bill
  • Out-of-pocket
  • Gap
  • Rebate
  • Non-rebateable

“They do not bulk-bill” does not technically mean the same as “there is no rebate” for a service. Many providers do not bulk-bill, but the patient still gets a rebate. Happens every time I go to my GP. I pay $260.00 and I receive the Medicare rebate of $223.40 overnight into my bank account. Please note that rebate is after having reached the Safety Net Threshold for the year. The fee is also for a long appointment.

The $36.60 is the gap and, to me, my out-of-pocket. A quick unofficial survey on Twitter showed 34% of respondents believe the same as I do. A service that has no rebate and is paid for totally by the patient is, in my simple view of the world, a private service. Like prescriptions for off-label use not being covered by the PBS subsidy – a private prescription.

So, when I was recently told an imaging provider did not bulk-bill, that is what I expected. That is not what happened.

When I arrived I filled out the MRI information and permission forms, including agreeing to $345 “out-of-pocket” expenses. Now, my pain medication befuddled thought process went like this. “That is the standard gap, but they don’t know I’ve hit the threshold, therefore my out-of-pocket will be much less.” The term out-of-pocket does NOT scream to me that there is NO rebate for what you are about to have done. Yet, in this case, that is exactly what it meant.

I knew that in order to receive a Medicare rebate for a knee MRI at my age, I now (Liberal govt changes to Medicare) needed a specialist referral rather than a GP referral. I had the specialist referral. So I thought I was OK here.

Turns out, Medicare “license” only certain specific MRI machines to be allowed to do rebateable knee MRIs for older patients. Other MRIs I have no idea about, but I will ask if I need any! The machine I had been in? No rebate. It isn’t that they don’t bulk-bill, it is that they CANNOT lodge a Medicare claim for my situation at all. Big difference!

The other incident was similar, but different. I rang to book an appointment to have an ultrasound guided steroid shot in a finger. The staff member taking the booking told me the cost was $285. I explained my having reached the safety net threshold to the staff member. Even then I was NOT informed that the $285 included a non-rebateable item number at a cost of $115. My having reached the Safety Net Threshold was not going to have any affect at all on that component of the bill. Why was I not informed? I have no idea.

When did I find out? After the service was provided, as I paid the bill.

In checking numbers for this article, I have just realised I am currently seeing a provider and paying a bill that is NOT being submitted to Medicare at all. At this point I have no idea why, but I will be enquiring. It maybe there is no Medicare item number for this visit type – is this another Liberal govt change to our Medicare system? When I was working, these sorts of things didn’t bother me and probably if they had happened would have slipped under the radar. Now, being on a fixed income, I pay much more attention to the dollars and cents involved in my medical care, given that is where most of my dollars and cents go these days!

Please note, in the grander scheme of things, these are minor expenses. One contact of mine details thousands involved in a chemo treatment that is not on the PBS for the particular cancer being treated. However, minor expenses, especially for those on fixed or low incomes, mount up. I had visions of a single parent being unable to do the grocery shopping this week because of such a situation. I’m also not an inexperienced patient – I’ve been walking this road for a while now. Yet even I got caught out by the ambiguity.

Be careful.

Let’s Talk About the Medicare “Fraud”

Two days ago the ABC published a scathing assessment of fraud and waste. Sadly, this alleged behaviour has generally been attributed to general practitioners (GPs).

My writing focuses on Movement As Medicine and the challenges of chronic illness. Doctors are a vital part of the life of any person with a chronic illness. At one point in my journey I had ten, yes, that’s right, TEN specialists. I am quite an experienced patient, one would suggest, including experience with the topic of billing. Furthermore, I am an accountant. And I have worked in hospital finance departments with exposure to the complexities of billing.

As a patient, I have skin in this game. You come after my doctors, you are coming after me too.

I will say upfront yes, I have no doubt fraud does occur. Let’s be honest here, I am an accountant yet I know full well there have been convictions of crooked accountants. There have been convictions of crooked lawyers. No profession is free of bad apples.

It is also very obvious that Medicare is a VERY complicated system. Sometimes even a stupid system. Example: I can not have two foot MRIs on the same day. Why? I have two feet. Should I have one MRI at 11:50 PM and the other at 12:10 AM the next day? This is a stupid rule. I know of a mother whose child was injured in a sporting accident. Child needed MRIs of BOTH lower limbs. Medicare rebate only allowable for one, so mother had to pay for the other MRI in full. I once went to a pathology collection site with three pathology request forms from three different doctors. I was told I’d need to come back the next day for one of them as two doctors had ordered the same test (amongst others). The pathology organisation in question would not automatically share the result of a single test. Protecting their revenue stream, yes, I get that. Not good, but not exactly illegal. I paid, in that case, as I did not have the time to visit again the next day.

Which brings me to the next point. Medicare is not just GPs. It covers pathology, imaging (MRIs, CTs, x-rays), child dental, psychology, specialists, surgeons, various allied health providers under Health Care Plans….. the list goes on. Why is it being suggested GPs are the primary alleged perpetrators here?

Medicare expert Dr Margaret Faux believes wrongful claims are being applied to millions of billings

Believes? Believes? I do hope Margaret doesn’t say to patients “I believe you have cancer, here take this chemo”. Actually, patients are safe, as Margaret is a lawyer, not a medical doctor. She has a PhD in “Claiming and compliance under the Medicare Benefits Schedule”, completed in October 2021. Interestingly she runs a medical billing business – more accurately an administrative solutions to the health care sector business that includes billing.

I’ll let you think about that, it would be inappropriate of me to comment further.

Quite rightly, many GPs are not feeling great about this sort of media coverage.

I don’t blame them. I’m upset on their behalf. I’m also, personally, concerned that this is being driven by the never-ending attempts by certain political persuasions to completely privatise our health system. To become the USA, where patients ration their insulin. Where you can’t choose your doctor, essentially your insurance company does. Where insurance companies can overrule medically indicated treatments.

I have no doubt errors occur. Classic example is the processing of bulk-billing then charging a gap fee. Simply administratively wrong as the patient then fails to met the safety net threshold (the gap must be recorded). This is lack of training, billing incorrectly does NOT advantage the doctor financially, it is simply incorrect. Not only do doctors need an MBBS or MD degree – they need a masters degree (or their staff do) in Complex Bureaucratic Nightmare Systems. Simplification would solve many of the issues.

Patients, including me, have come out in support of GPs.

I think Ronni Salt summed it up.

When the accusers can show me clear, forensic evidence of widespread fraud, then I will listen. I am not interested in rumour, innuendo and “believing”.

To my own GPs, my specialists, my surgeons and my allied health providers – THANK YOU from the bottom of my heart for your care of me.

Addendum: Since I wrote this article, the MJA’s (Medical Journal of Australia) Insight has published “Medicare rorts? We read Dr Faux’s thesis so you don’t have to“. A very good read!

So, About the Safety Nets Thresholds


Some years ago in Australia it was possible to claim a certain amount of out-of-pocket medical expenses on one’s tax return at the end of the year.

A few years ago, this changed. It was replaced with a system of higher rebates once a certain level of out-of-pocket expenses had been reached for the calendar year. This is beneficial, as the patients don’t have to wait for that money to be received once a year at tax time.

I have discerned some confusion about how this all works, so this article is an attempt to put “how it all works” in simple terms.

The one aspect I think is MOST important is registering as a family or couple, especially if you have a person in your family with a chronic or underlying condition. Watch out for that heading below!

Please note if you are reading this article after 2022, you may need to locate current links. The links given herein are current as at the time of writing, for 2022.

PBS and Medicare Thresholds

The Pharmaceutical Benefits Scheme (PBS) and Medicare Benefits Schedule (MBS) are managed differently and have different safety nets thresholds. It is important that both are understood.

Medicare is managed centrally and the details and your current status is easily accessed in your Medicare app if you have it installed on your phone or via MyGov/Medicare.

Pharmaceutical thresholds are tracked by your pharmacist, so if you get prescriptions from different pharmacies on a regular basis, you could be missing out.

Medicare Safety Nets Thresholds

The Medicare Safety Net Thresholds are set every year for the calendar year. Once you reach the threshold applicable to you, you get a higher rebate. What can this mean in dollars? Please note the below example is across two different years, so the rebates shown may have moved slightly. Also, different item numbers may attract the same consultation fee but have different rebates based on the item number. For example, a psychology consultation fee may also be charged at $210, but as it is a different item number than a GP consultation, the rebate will be different.

Given the above caveat, the below is sufficient for illustration purposes and the examples are actual transactions of mine.

StatusConsultation FeeRebateOut-of-pocket
Before I reach my threshold (from start 2022)210.0075.75134.25
After I reach my threshold (from end 2021)210.00183.0526.95

As you can see, after I reach my threshold, my out-of-pocket is reduced by $107.30 (for this consultation fee for this MBS item number).

Note all of these refer to “out of hospital” services. If you receive a service in a private hospital as an inpatient, the out-of-pocket costs will not count towards reaching your threshold (although the graphic above doesn’t state that), nor will you receive the higher rebate for any services you receive as an inpatient. I know this from personal experience!

Remember imaging and pathology fall under this scope.

Verified & Unverified Costs

In most cases these days, you pay for a consultation at the time of the consultation and the practitioner’s staff submit your Medicare claim for you. In that case the cost is a verified cost. However, if this does not happen, be aware there will be extra steps.

Verified costs are when you pay your doctor’s fee before you make a claim from us. When this happens, your gap amount and out of pocket costs count towards your thresholds. 

Unverified costs are when you don’t pay your doctor’s fee before you claim from us. When this happens, your gap amount and out of pocket costs don’t count towards your thresholds.

Once you pay the doctor the balance and provide that receipt to Medicare, then the gap payment will be considered verified. Make sure you do that!

Registering as a Family or Couple

Why is this important? Let’s assume you are an Aged Pension couple. If you are not registered as a couple, you each, individually, have to reach that magic $717.90 out-of-pocket expenditure to receive the maximum increased rebates. That is, together you need to reach a total of $1,435.80 before you both get increased rebates. One of you may receive increased rebates before the other, if one of you has higher medical costs.

If you are registered as a couple, then you both contribute to a single threshold: $717.90.

Being on the same Medicare card does NOT mean you are registered as a couple or a family. I suspect this is a result of the transition from the old tax deduction method to the thresholds. You need to actually register.

If you’re part of a family or couple, you can register as a family to combine your costs. This means you’re more likely to reach the thresholds sooner. Even if all family members are on the same Medicare card, you’ll still need to register.

You can see if you are, perhaps, a family of five, especially if a family member has high medical costs, registering as a family for the Safety Net is a very sensible move. There is a BIG difference between reaching $2,249.80 per year for each of you, or for all of you combined.

Pharmaceutical Benefits Scheme Safety Net

Please note that the PBS Safety Net is a little more complex than the MBS. The thresholds for 2022 are $1,542.10 for General patients and $326.40 for Concessional patients. Note that if you have private scripts, these do not count towards the threshold. Private scripts are those where the patient doesn’t qualify for the Government Subsidy, but is still able to be prescribed the medication – this could, for example, be for “off-label” use. That link also has good “The Real Cost of Medicines” examples illustrating how it works.

The scheme requires pharmacists, on request by patients, to record the supply of PBS and RPBS items on prescription record forms. When a patient reaches the Safety Net threshold within a calendar year, they qualify to receive PBS or RPBS items at a cheaper price or free of charge for the rest of that year. Any applicable special patient contributions, brand premiums or therapeutic group premiums must still be met by the patient.

The Safety Net threshold is reached by accumulating eligible patient contributions for PBS prescriptions supplied through community pharmacies and private hospitals and for out-patient medication supplied by public hospitals.

Pharmaceutical benefits (including authority items) can only be counted towards the Safety Net threshold when prescribed and supplied according to PBS conditions. A medicine supplied by a pharmacist not approved to supply pharmaceutical benefits cannot count towards the Safety Net.

I strongly recommend if you or a family member has high medication costs, you ensure you are availing yourself of the benefits.


The confusion I have noticed among members of the general public is I suspect partly due to the transition from the tax deduction days. I don’t remember how well the “new system” was publicised at the time.

I recommend couples and families ensure they are registered because if someone suddenly does become unwell, the last thing anyone thinks of AT THAT TIME is registering with Medicare. With the risk of Long Covid currently, best to be prepared.

If you do have high pharmaceutical costs, please check with a pharmacist. I never hit the PBS Safety Net so I do not know nearly as much about how it works.

The Costs of Chronic Conditions

A Croakey article, “Out of Pocket Costs: a Critical Health Issue to Watch in 2018” floated past my Twitter stream this week.

It is clear that out of pocket costs are a significant health equity and public health concern; a 2014 report by the Grattan Institute stated that:

“High and rising out-of-pocket costs are one reason that a sizeable minority of people avoid health care. The impact is greater for people on low incomes, in rural areas and who have poorer health status and disabilities.”

The article also links to an online survey launched by the Consumers Health Forum of Australia, of which I am a member, “to find out more about the impact of out of pocket costs  to help inform its work on a new Ministerial advisory committee.” I encourage readers to complete the survey.

I completed the survey from a personal perspective. One of the first questions was were the out-of-pocket expenses incurred in or out of hospital and the survey branched based on your response. I made the comment (in the appropriate box) that this was not representative of the ever increasing number of the population suffering chronic conditions. We have out-of-pocket expenses ALL the time, on a weekly, if not daily basis. We have those out-of-pocket expenses in and out of hospital. I am one of the healthiest chronic condition people around, but I often joke I work (my reduced hours) merely to pay my medical team and related costs. Those who are severely affected by their condition or conditions will have higher care needs and less ability to work: it becomes a vicious cycle. Can’t work, can’t afford to get well, not well, can’t work. Condition progression and the downward spiral continues.

Please note, overseas readers, I am writing ONLY of the Australian situation.

If a patient is in the public system and has a concession card (disability, pension, etc) they either see specialists through the public system or MAY be bulk-billed by private specialists if they are lucky (I was, one of my lovely doctors bulk-billed while I was unemployed and studying). Prescriptions for medications are filled at (current rate) $6.30 instead of the full PBS price. Woe betide you if you need anything not on the PBS, which I have at times. Most of my “standard” prescriptions run between $21.65 and around $32.00. As I have reduced my dosages, the ‘scripts last longer. For example, I started on 400 mg (two tablets) a day of one medication. I am now on half that. My thyroid medication has now been completely eliminated due to the radioactive iodine treatment, so that is a saving!

But there are other things we need that are not covered by anything. When I was first diagnosed back in late 2014, my Vitamin D level was “undetectable”. I must take a Vitamin D supplement every day, as ordered by my specialist. I am not allowed out of the house without sun protection, I have sun screen in my desk drawer, my gym bag, my swimming bag. A special one for my face. I am not allowed to use soap, I must moisturise – dermatologist specified products. These are out-of-pocket expenses that just get ignored by the powers that be, both medical and political.

Given I have chronic conditions, why do I stay in the private system? I have developed trusting and valued relationships with my treating specialists and I want to maintain that continuity of treatment. I do not want to see a different consultant every time I turn up at a public hospital consulting room. Yes, that is my choice: a choice I make for the benefit of my health. I believe anyone with a chronic condition should be assured of continuity of treating specialist, whether public or private. The peace of mind that comes with continuity is a massive psychological support.

I have endoscopies almost every year, sometimes more than once. My hospital excess is $500 a year, paid on the first admission. I’ve rarely paid anything else for hospital treatment: $117 once, I believe. I get the procedures done at a time that suits my schedule, usually within a week of the procedure being deemed necessary. To me, personally, that is worth $500 a year. Having said that, health insurance is about to go up, by twice as much as wages. I don’t know if I can continue to justify the expense. But if I drop it, not only do I lose the benefits I’ve just outlined, the tax man will hit me for not having private health insurance. We can’t win.

The Medicare Safety Net threshold helps with doctors’ bills, once I hit the threshold each year (and with seven specialists, I do). There is a PBS Safety Net too, but I never hit that as the medications I am on (luckily) are not horrendously expensive. I have a friend who, some years ago, was on a drug that was NOT on the PBS at that time. It cost her $3,600 every six weeks. She fought to have the drug placed on the PBS schedule. Like me, she has chronic conditions and reduced working hours. Her savings were somewhat depleted by trying to stay alive at the time.

Once you have a chronic condition you qualify for Health Care Plans. This can be physiotherapy, psychology etc. Speak to your GP to see what you may qualify for. Once on a Health Care Plan, a Medicare rebate is available for a limited number of services a year. While this is great, it certainly doesn’t cover the number of services that may be needed to stay well at an optimal level. Chronic conditions are DAMN HARD WORK to manage and, if you are really lucky, defeat. Also expensive.

Thankfully, MOST blood tests are also bulk-billed, although I have had blood tests that are not covered and have incurred out-of-pocket costs for blood tests. Most x-rays, CT scans, ultrasounds, MRIs etc are also covered, but again, not all.

None of the above takes into consideration the other costs of being healthy. Move, they say; get exercise, they say. Yes, I agree. I am a living, breathing advocate of exercise, for Movement As Medicine: Limber Up to Live Life. But you know what? I don’t come free, because I have my own medical costs to meet (plus I do like to eat). The gym costs money, swimming costs money – not just the fees, but the equipment as well. The pool staff are not overly impressed by naked swimmers. Then I have a variety of equipment at home:

  • two foam rollers
  • small hand weights
  • swiss ball
  • resistance bands
  • thera-bands
  • spikey massage balls.

None of those were free.

I also have my special kyBun shoes which I swear by. I believe they have contributed to the improvement in my back, allowing me to avoid radiofrequency facet joint denervation recently. I also think getting my thyroid under control, resulting in muscle strength returning, was another contributing factor. These shoes are not cheap, yet they are a vital part of my personal “get well, stay well” program. They are also better than my needing a walker or wheelchair.

kyBoot shoes

Food costs are not considered medical either, but if we want to get and stay healthy, we need to ensure we are eating the right balance of nutrients. Junk food is out. Lots of fresh green leafy vegetables and lean meat in most cases (there are exceptions). Fresh fruit. We have to watch the nutritional labels on everything and sometimes what is best for us is far from the cheapest.

If we do get ourselves healthy we are not a drain on the “public purse”. We stay off the Disability Pension, we use less medical services (prescriptions, x-rays, scans, Medicare rebate, hospital admissions, etc etc etc).

In my view it is definitely in the public interest to financially assist chronically ill patients to be the healthiest they can possibly be. That includes, if necessary, supporting their access to appropriate exercise, healthy foods, dietary supplements as recommended (e.g. my Vitamin D and fish oil). Get patients to a point where they able to regain quality of life and suitable employment, enable independence and self-sufficiency. Much cheaper to the community in the long run than a life on a pension AND, MORE IMPORTANTLY, so much more rewarding for the patient.

Out-of-pocket health costs are NOT just the difference between the doctors’ bills and the Medicare rebate or the prescription costs. There are so many other aspects to fighting chronic illness and winning.

Early intervention, early treatment, is paramount. Yet if people put off going to the doctor for a year or two, the disease can be merrily progressing. Some patients, if things are deteriorating slowly, tend to just get used to it until one day we reach a point of loss of functionality or pain that forces us to an emergency room or our GP. If the patient is in a rural area or is a low income patient, that delay is more likely. How much damage to our body has happened in that time? We may even put functional changes down to the aging process, as I did initially. Guess what, I was wrong.

I hope the new Ministerial advisory committee referred to above considers more than just the obvious. Will they?

How expensive is staying well for you? Are you prevented from doing what you need to by the cost? Please share.

EDIT Jan 28, 2018: Two other non-medical costs of chronic illness are:

  • the need for additional heating and or cooling – e.g. I am severely heat intolerant, symptom of one of my conditions, my air-con costs are therefore elevated AND as I have reduced working hours, I am home more often than a healthy person;
  • transport costs to and from the various service providers we all attend on a regular basis (physio, gym, pool, doctors, pharmacy, pain clinic – the list is extensive). This may be public transport fares or fuel for our car.

Yes, these are costs everyone has, but for those with chronic illness the costs can be increased considerably, thereby reducing the patient’s ability to afford other support that would assist them in condition management.