Medicare Billing in Public Hospitals

Information for practitioners billing Medicare for patients in public hospitals.

Page last updated: 29 March 2021


    Difference between Public and Private Hospitals

    Public hospitals, in Australia, are those that are government-funded through both Commonwealth and State or Territory payments. This funding is underpinned by the National Health Reform Agreement (NHRA).

    When a person is admitted to a public hospital, they are treated as a public patient, that is, unless the person elects to be treated as a private patient. Patient election is based on informed financial consent. Patients can elect to be a public patient in a public hospital or a private patient in a public hospital.

    A public patient in a public hospital should be provided treatment, throughout the hospital episode, free of charge, providing the patient has a current Medicare card and the treatment is deemed clinically necessary.

    If a patient is treated as a public patient this means that no claims should be made against the Medicare Benefits Schedule, regardless of whether that service is bulk billed or not (a bulk billed service is, by definition, not a public service).

    Importantly, all associated care for public patients is the responsibility of the hospital, including all pathology and diagnostic tests.

    Practitioners should not refer public patients for private MBS services – this includes tests conducted prior to admission and generally also includes follow-up appointments related to the episode of care.

    Patient election status and practitioner billing options

    Private Patient | Public Hospital

    • Can choose to be treated, after providing informed financial consent, as a private patient in a public hospital
    • Patient entitled to MBS rebates for attendances
    • Practitioners with a right to private practice must ensure arrangements do not involve the practitioner and/or hospital being paid twice for a service

    Private Patient | Private Hospital

    • Commonly funded through a mix of private health insurance and MBS arrangements
    • It is unlikely that there will be a situation where MBS claiming also involves a public hospital payment or arrangement for a private patient in a private hospital, noting that practitioners in private hospitals can see public patients (see below)

     Public Patient | Private Hospital

    • Private hospitals can contract out to provide services to public patients
    • Record keeping for these patients should be carefully managed
    • Ensure patient’s election status is clearly tracked, including if the patient elects to change status
    • Ensure MBS claims are not made for services funded as public services

    Commonwealth Health Insurance Act 1973

    Eligibility for Medicare is governed by the Health Insurance Act 1973 (known as the HIA hereon in). Section 19(2) of the HIA states that unless the Minister otherwise directs, a Medicare benefit is not payable in respect of a professional service that has been rendered by, or on behalf of, or under an arrangement with a) the Commonwealth; b) a State; c) a local governing body; or d) an authority established by a law of the Commonwealth, a law of a state or a law of an internal Territory.

    This means, unless the Minister provides an exemption, it is a contravention of the HIA to claim a Medicare benefit for a professional service where the same professional service is already paid for through another mechanism or arrangement with the Australian Government or a State or Territory Government.

    The National Health Reform Agreement

    The National Health Reform Agreement (or NHRA), specifically, clause G17 provides that services provided to public patients should not generate charges against the commonwealth MBS.

    Additionally, for a professional service rendered to a patient in a public hospital to be eligible to claim Medicare benefits, the following criteria must be met:

    • The patient has elected, in writing, to be treated as a private patient
    • The patient is eligible for a Medicare benefit
    • Referrals are valid for Medicare and NHRA purposes
    • The MBS item number is billed correctly and only for the service(s) rendered by the individual provider
    • When a medical service (or MBS item) is billed under Medicare the service must not be partly or fully paid under an alternative arrangement (e.g. NHRA, WorkCover).
    • The provider must have rights through a hospital agreement to treat patients under private practice and can only bill Medicare if the patient has elected to be a private patient under admission
    • The patient has been referred to a named specialist (if relevant) who is exercising their rights of private practice and the patient has chosen to be treated as a private patient

    Patient Election

    Under the NHRA, all eligible patients who are admitted to a public hospital have the right to be treated as a public patient for the entire hospital episode, unless they elect, in writing through informed financial consent, to be treated as a private patient.

    As set out in the NHRA, once has a patient has decided to be treated as a private patient, a further change in patient election status from private back to public is only permitted where unforeseen circumstances occur. These include complications requiring additional procedures; extensions in the length of the patient’s stay beyond what was originally and reasonably planned by a health professional; or patients having a change in social circumstances such as loss of a job (further information can be found at G30 in the NHRA).

    Changes in patient status are effective from the date of the change onwards. If a patient elects to change from a public to a private patient, all services provided to that patient from the point of private election onward during their hospital episode will be claimable under Medicare.

    Any services that have been rendered to the patient prior to becoming a private patient will not be eligible for Medicare payments

    Provider Responsibility and Medicare Compliance

    Medicare Compliance

    The Department of Health has a strong program that PROTECTS Australia’s health payments system through the prevention, identification and treatment of incorrect claiming, inappropriate practice and fraud by health care providers and suppliers.

    Department of Health | Medicare Compliance – Provider Benefits Integrity Division

    The compliance program has been structured to ensure that activities are:

    • Targeted to the identified provider behaviour, recognising the vast majority of health providers and practice staff do the right thing
    • Informed by understanding provider behaviour, through the use of data analytics and established feedback mechanisms
    • Responsive as a result of analysing, interpreting, and understanding changing trends in provider behaviour to allow compliance treatments to be proactive

    This model strengthens our compliance response by allowing the Department to:

    • Support providers by delivering education and advice to help them remain in cooperative compliance
    • Focus compliance efforts on the type of non-compliance identified and taking different actions to address incorrect or inappropriate claiming, inappropriate practice or fraud

    Provider Responsibility

    Under Medicare, each billing practitioner must ensure they have fulfilled the service requirements as specified in the item descriptor have been met and that the services provided are eligible for Medicare benefits to be paid.

    It is at the provider’s own risk to allow hospital administrators or any other party to claim Medicare benefits utilising their provider number as there may be potential for incorrect claiming to occur.

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    Key messages

    • 1. Patients can receive private services in a public hospital

      It is entirely appropriate for patients to receive private (MBS and/or private health insurance-rebated) services in a public hospital where the hospital arrangements support this type of service. This helps to ensure the sustainability of the health system.
    • 2. Patients should be given the choice to receive public or private services

      Patients should be given the choice on whether they receive public or private services as part of informed financial consent. Patients should not receive preferential treatment – such as earlier access to the same health practitioner in the same hospital – based on this choice.
    • 3. Health practitioners should actively manage referrals, requests and claiming arrangements to ensure services are not paid for twice through public hospital and MBS funding.

      The variety and complexity of working arrangements in a public hospital can lead to inadvertent inappropriate claiming.

      Health practitioners should actively manage referrals, requests and claiming arrangements to ensure services are not paid for twice through public hospital and MBS funding.

      Health practitioners should consider:
      • The public or private election status of a patient – it is particularly important that this is established where referred or requested services, imaging or testing is provided
      • Whether the practitioner has rights to private practice, or is receiving payment for the service from the public hospital
      • Whether the service could be part of pre-care (e.g. tests prior to admission) or aftercare (follow-up) relating to a public episode that should be funded as a public service

    Further information

    Further information can be found on:

    Frequently Asked Questions

    How are public hospitals funded?

    Public hospitals are funded by both the Commonwealth Government, and state and territory governments. The Commonwealth contributes funding for public patients in public hospitals primarily through Activity Based Funding (ABF), whereby hospitals get paid for the number and mix of patients they treat. The Commonwealth also contributes to block funding, which contains a fixed and a variable component. Block funding is generally paid to smaller rural and regional hospitals.

    Commonwealth contributions to hospital funding are calculated by the National Health Funding Body (NHFB) according to prices set by the Independent Hospital Pricing Authority (IHPA).  The NHFB and IHPA are independent bodies set up under the National Health Reform Agreement (NHRA).  States and territories are responsible for funding the remainder of the cost of public hospital care once the Commonwealth contribution is determined.

    Regardless of whether public hospitals are funded through ABF or block payments, the funding hospitals receive covers the entire cost of a patient’s episode of care, and, other than in specified exempt circumstances, no Medicare billing should occur for public patient care.

    I’ve been asked to give a billing officer access to my provider number for Medicare billing purposes – what should I know before agreeing?

    It is not uncommon for medical practitioners to provide their provider number to practice/hospital billing offices, but there are some risks involved in allowing a third party to bill on your behalf - incorrect and/or duplicate billing could occur.    Key points to consider:

    • Your provider number is your responsibility and billing, referrals and requests for services under your provider number are your responsibility. You should be aware of what is being billed in your name.
    • Most services listed in the MBS must be billed against the provider number of the practitioner rendering the service.
    • Headline billing – billing on behalf of other practitioners - may occur under regulations for specific services generally provided in the specialties of radiation oncology, diagnostic imaging, and pathology. For other services, including attendances, the service must be personally performed by the medical practitioner claiming Medicare benefits and cannot be claimed on behalf of another practitioner, although essential assistance can be provided by another practitioner according to accepted clinical practice. 
    • Shared debt or other provisions may apply to cases where a third party has incorrectly billed against another’s provider number. In these cases, the person who undertook the billing may be considered responsible for any debt owing as a result of incorrectly claimed benefits.
    • The determination as to whether a debt is shared or owed by another party is made by the Chief Executive Medicare or delegate.  In most cases, establishing whether a determination should be made would require information from the person whose provider number was used.
    • The person whose name has been billed against will be the first point of contact in relation to any concerns about Medicare billing.

    Remember: As a practitioner working in a public hospital, it is very important that you establish if a service is eligible to be billed under Medicare.  Medicare billing for practices/services at a public hospital carries a risk of being non-compliant unless you can verify the private status of the patient, or an exemption has been made under Section 19(2) of the Health Insurance Act 1973 allowing Medicare billing for a public patient.

    I think a MBS item has been incorrectly billed against my name, or that a duplicate payment has been made. What should I do?

    If you find out a MBS item has been incorrectly claimed on your behalf, or the service has been funded through hospital funding as well as Medicare billing (a duplicate payment), you can ask the billing officer to rectify it by submitting a Voluntary Acknowledgement of Incorrect Payment form. If you believe your provider number is being used inappropriately and/or without your consent, you may wish to consider contacting your medical defence organisation.

    What constitutes an episode of public care for funding purposes?

    An episode of care involves all of the care needed for the treatment of the patient’s condition, under the financial arrangements the patient has agreed (public funded or privately funded care). Timeframes for episodes of care, as well as the services involved, vary according to the clinical and care needs of the patient.  The principle for every episode of public care is that all of the services needed for the patient’s care will be provided free of charge and funded through public hospital funding arrangements.

    Examples of what medical services would generally form part of an episode of care include, but are not limited to:

    1. A patient presenting to the hospital with lobar pneumonia might require X-rays, ward care and a scheduled follow up in the medical clinic (aftercare) to confirm resolution of the illness. 
    2. A patient referred for management of inguinal hernia might require an initial assessment visit, pre-anaesthesia consultation, ward time, theatre time, surgery, anaesthesia, post-operative removal of sutures at appropriate times and reviews as needed until the patient is formally discharged as “‘cured”.
    3. A patient referred for crescendo/unstable angina might require angiograms, pre-anaesthesia consultation, theatre time, ICU time, ward time, surgery and rehabilitation, as well as a final review by the surgeon.

    All of these would be provided free of charge and funded through public hospital funding arrangements.

    What is a duplicate payment?

    A duplicate payment occurs when two funding systems – such as Medicare and hospital funding - pay for a clinical service without an explicit exemption allowing this kind of ‘double billing’ to occur.

    Using the situations noted above, please see the below for duplicate payment examples:

    In Case A: If the hospital requests the X-rays for the patient while the patient is admitted, and X-rays are billed against Medicare, the Medicare payments will be duplicates.

    Why: Imaging costs for public patients are covered under the hospital’s funding.

    In Case B: If the anaesthetist bills an MBS item for a pre-anaesthesia consultation, this would be a duplicate payment.

    Why: Public hospital funding provides for the holistic care of inguinal hernias. The hernia requires surgery, and the pre-anaesthetic consultation is required for the patient’s anaesthesia during surgery. On this basis, billing to the MBS constitutes a second payment for the service.

    In Case C: Two surgeons scrub in for an emergency surgery to remove a blockage causing the patient’s unstable angina (angioplasty).  The patient has elected to receive public care. One surgeon is salaried by the public hospital, but the other only works in the hospital under rights of private practice.  The latter surgeon bills an MBS item for the surgery and bulk bills the cost so the patient is not out of pocket.  The MBS rebate is a duplicate payment.

    Why: In this case, the patient is a public patient therefore all required care is funded through public hospital arrangements.  While the surgeon generally operates under rights of private practice, this does not entitle the surgeon to bill an MBS item when providing care for a public patient.  The hospital should have (solely) funded the service.  Bulk billed services are not equivalent to public services. Public services involve no additional charge to any party, including the patient and, importantly, the Commonwealth and other entities. In contrast, bulk billed services involve a cost to the Commonwealth.

    The Commonwealth Department of Health will endeavour to recoup duplicate payments to ensure the appropriate expenditure of public monies.

    I have been advised all patients being seen in an out-patient clinic must have a referral to a named specialist in the clinic.  What should I know about providing named referrals for my patients?

    The requirement for a named referral is determined by whether the patient is being seen in the out-patient clinic as a public or private patient. Under the National Health Reform Agreement (NHRA), private services can be provided in public hospital outpatient clinics as long as:

    • a named referral has been provided to a medical specialist who is exercising a right of private practice
    • the patient has chosen to be treated as a private patient, and
    • the referrer has obtained the patient’s informed financial consent to be treated privately. 

    A named referral is, therefore, a fundamental requirement for private services in an out-patient setting. Patients being seen in an out-patient clinic as a public patient do not require a named referral.

    The NHRA requires that referral pathways to hospitals, including outpatient clinics, must not be controlled so as to deny access for patients to free public hospital services.  Practitioners are not required to provide named referrals for patients to receive services, but can and should do so if the patient has asked to be seen as a private patient.

    How can providers ascertain if a patient has elected to receive public or private care?

    Prior to billing for services, it is important to identify if a patient is public or private to ensure any Medicare billing is compliant.  There are several sources of potential information, including referral forms, discharge summaries/clinical handover notes, request forms (for pathology and diagnostic imaging, noting most forms explicitly request information on the patient’s public/private status), and, of course, the patient.

    In some cases, the above sources may not be able to adequately answer the question, and a practitioner may need to contact the requester, hospital administrator, discharging officer or another party for certainty.  While this may take additional time, providing the service without confirmation means the practitioner assumes the risk that billing is non-compliant, and may be asked to make repayments for the services rendered.

    Providers in public hospitals may be asked to substantiate that the patient chose to be a private patient. Guidelines on how practitioners can substantiate services provided under rights of private practice at public hospital outpatient departments can be found on the Department of Health website.

    I have concerns about a request to write a named referral, a referral I’ve received, or another matter involving a public hospital.  What are my options for communicating these concerns?

    Depending on the concern, it is generally preferable to first discuss, and hopefully resolve, your concerns with the person who has written the referral, request, discharge summary, or been directly involved in the patient’s care.

    Commonly, bigger hospitals/hospital networks have ‘hospital liaison officers’, who are often also medical practitioners. These officers can assist with resolving any issues with requests, referrals, discharge summaries etc. Primary Health Networks are another resource that assist in this space.

    When can a medical practitioner providing clinical supervision in the public hospital setting bill a professional attendance under the MBS?

    For a consultation to qualify as a professional attendance, a medical practitioner must personally attend and have seen a patient.

    While attendances can be claimed where essential assistance is provided by another practitioner, such as a trainee, Medicare benefits are not payable where public funding contributes to the cost of the service, such as for the salary of a practitioner providing essential assistance to a public hospital patient.

    Can interns, registrars, or nurse practitioners provide Medicare rebateable services in the Emergency Department of a public hospital?  What about other practitioners?

    State or territory salaried practitioners, including interns, registrars and nurse practitioners, are employed by the public hospital system and as such are generally not eligible to bill MBS items for public hospital emergency department patients.  This includes Medicare billing for pathology and diagnostic imaging services provided to public patients.

    It is noted there may be some hospitals, in very specific situations, where private emergency treatment services may be provided by GPs and funded through the MBS as a single source of funding. However, this arrangement is rare and by exception, and can only be entered into with the agreement of relevant Health departments.

    There are also exemptions under the Health Insurance Act 1973, subsection 19(2), allowing some services provided in public hospital emergency departments and outpatient clinics to be billed under Medicare.

    I think (a public hospital funded service) has a 19(2) exemption allowing it to also be billed to Medicare – how can I check?

    In the first instance, you should contact your state or territory health department to confirm whether a public hospital service can be billed to Medicare.

    Information on hospitals and health services approved to bill Medicare under the Council of Australian Governments (COAG) Improving Access to Primary Care in Rural and Remote Areas – COAG s19(2) Exemptions Initiative can be found online by going to www.health.gov.au and searching for ‘COAG 19(2) exemption initiative’.

    Where can I get other information on Medicare billing?

    Case Studies for billing Medicare in a public hospital

    Practitioners should be cautious not to generalise the answers given in the case studies below to all situations. Practitioners are ultimately responsible for Medicare claims made against their provider number, including whether they are compliant. When in doubt, practitioners should seek advice from AskMBS (by emailing AskMBS@health.gov.au).

    Case Study 1

    Ms A is admitted as a private patient at her public hospital with a fractured forearm and is treated by Dr B, an orthopaedic surgeon.

    While in hospital Ms A has an asthma attack and Dr B refers her to Dr C, a respiratory physician. Dr C’s registrar, who is employed and paid a salary by the hospital, reviews Ms A and arranges for appropriate treatment of her asthma. Doctor C does not physically attend the patient for review or treatment.

    Dr C then bills MBS item 110 for a consultation because Ms A is a private patient and was seen by his registrar, who is a trainee physician accredited by the Royal Australian College of Physicians.

    Is this appropriate?

    No.

    Registrars are not considered specialists for the purposes of claiming Medicare benefits.

    A registrar cannot provide a referred initial attendance for a patient.

    If the registrar provides an initial attendance on behalf of the physician, neither the registrar nor the physician can bill for this service.

    In addition, MBS attendance items are personal attendance items and services such as referred consultation services will attract Medicare benefits only if the consultant physician who bills for the service is the person who actually personally performed the service.   

    If the service is performed by another doctor employed by the hospital, which in this case is the registrar, Medicare should not be billed for this service

    In circumstances like this, the payment by the hospital of a practitioner salary, as well as the payment of a Medicare rebate for the same service creates what is termed a duplicate payment, which is not permitted under the National Health Reform Agreement and the Health Insurance Act 1973.

    Key Points

    • 1. Registrars are not considered specialists for the purposes of claiming Medicare benefits
    • 2. A registrar cannot provide a referred initial attendance for a patient
    • 3. If the service is performed by another doctor employed by the hospital, which in this case is the registrar, Medicare should not be billed for this service

    Case Study 2

    Ms A visits Dr B, a dermatologist, at her private practice rooms. Dr B has admitting rights to the local public hospital and so arranges for Ms B to be admitted for her condition.

    Ms A elects to be admitted as a private patient and be seen by Dr B privately. Dr B routinely sees patients privately at this public hospital, pays a sessional fee to the hospital for use of the facilities and required services, and otherwise retains the full fee as income.

    The next day Dr B sees Ms A on the ward and arranges for further investigations. Dr B records her clinical findings and treatment plan in Ms A’s clinical notes.

    Dr B bills MBS item 104 for the initial consultation provided at her private practice rooms and then bills MBS item 105 for the subsequent consultation provided in the hospital.

    Is this appropriate?

    Yes.

    Ms A is an admitted private patient and Dr B personally performed both the initial consultation and the subsequent consultation.

    The different locations for these services is irrelevant for Medicare purposes.

    Dr B has maintained adequate and contemporaneous clinical notes of the services provided to Ms A. The services were paid for by a single funding source (Medicare).

    It should be noted, however, that different contractual or payment arrangements could lead to the service infringing the legislation, for example if those contractual arrangements explicitly require the provider to bill Medicare for services provided on hospital premises and/or result in payments for the service being received from both the public hospital (or administrator) and Medicare.

    Practitioners should consider seeking their own legal advice on any risks associated with particular arrangements when providing private services in a public hospital.

    Key Points

    • 1. The different locations for these services is irrelevant for Medicare purposes
    • 2. Different contractual or payment arrangements could lead to the service infringing the legislation

    Case Study 3

    Mr A is suffering from cellulitis and is an admitted private patient at his local public hospital where he has stayed for four days.

    Dr B the consultant physician performed an initial consultation in the medical ward on day one, with junior medical staff, employed by the hospital, reviewing and attending to Mr A during his stay on days two and three.

    Dr B attended, reviewed and discharged the patient sending him home on day four.

    Mr A receives a hospital bill for MBS item 110 (initial attendance) and three charges for MBS item 116 (subsequent attendance).

    Mr A is unsure about the bill because he only saw Dr B on two occasions – on the day he was admitted and on the day he was discharged.

    Mr A contacts Dr B’s office to question the account. The practice manager tells him, that as an admitted private patient he must be charged for each day that he was in hospital.

    Mr A is still unsure and contacts the department to see if the billing is correct.

    Is this appropriate?

    No.

    Referred consultation services will attract Medicare benefits only if the consultant physician or specialist who bills for the service is the person who actually renders the service.

    It is not appropriate to bill Medicare daily simply because the patient remains admitted on that day.

    As Dr B personally rendered the patient’s initial consultation on the day of admission to hospital, he is entitled to bill item 110 to Medicare for this service.

    Similarly, as Dr B personally rendered the service on the day of discharge from hospital, he can bill item 116 to Medicare.

    On days two and three the patient was reviewed only by the hospital’s junior medical staff.

    Dr B cannot bill Medicare for services he did not personally render.

    In addition, Medicare cannot be billed for services provided in a public hospital by doctors in receipt of a public salary at the time the services occurred, as is the case with the junior medical staff in this case.

    Key Points

    • 1. Referred consultation services will attract Medicare benefits only if the consultant physician or specialist who bills for the service is the person who actually renders the service

    Case Study 4

    Ms A takes her son to a public hospital emergency department because he has just swallowed a button battery.

    The child is admitted and undergoes an endoscopic removal of the button battery performed by gastroenterologist, Dr B.

    The child is observed overnight and discharged the next day.

    The next month when Ms A checks her  myGov  account for medical services provided to her son, she is surprised to find that her son received a bulk billed consultation from Dr B.

    She is concerned because her son was admitted as a public hospital patient. Even though they have private health insurance, as it was only a short stay, Ms A signed the hospital administration form to say that her son was to be admitted as a public patient.

    Ms A contacts the department to make a complaint.

    Is this appropriate?

    No.

    Medicare benefits are not payable for services provided to a public patient in a public hospital.

    Clause G18 of the National Health Reform Agreement stipulates:

    An eligible patient presenting at a public hospital emergency department will be treated as a public patient, before any clinical decision to admit. On admission, the patient will be given the choice to elect to be a public or private patient in accordance with the National Standards for Public Hospital Admitted Patient Election processes (unless a third party has entered into an arrangement with the hospital or the State to pay for such services). If it is clinically appropriate, the hospital may provide information about alternative service providers, but must provide free treatment if the patient chooses to be treated at the hospital as a public patient. However:

    • a. A choice to receive services from an alternative service provider will not be made until the patient or legal guardian is fully informed of the consequences of that choice; and
    • b. Hospital employees will not direct patients or their legal guardians towards a particular choice.”

    Eligible patients have the right to elect to be admitted as a public patient regardless of their private health insurance status.

    A public hospital must not assume that a patient who has private insurance will automatically elect to be admitted as a private patient.

    A patient election form must be made in writing on the basis of informed financial consent.

    Key Points

    • 1. Medicare benefits are not payable for services provided to a public patient in a public hospital
    • 2. A public hospital must not assume that a patient who has private insurance will automatically elect to be admitted as a private patient

    Case Study 5

    Mr A presents to a public hospital emergency department with a suspected fracture.

    The emergency physician requests an X-ray and an INR (a test to see how thin the blood is), from contracted private diagnostic imaging and pathology services, as Mr A is on warfarin.

    Following confirmation of the fracture Mr A signed an election form to be treated as a private patient and is admitted as a private patient at the public hospital with a fractured forearm and is treated by Dr B, an orthopaedic surgeon.

    The contracted private diagnostic imaging and pathology services billed Medicare for the requests from the emergency department

    Is this appropriate?

    No.

    Clause G20 of the National Health Reform Agreement stipulates: Where a patient chooses to be treated as a public patient, components of the public hospital service (such as pathology and diagnostic imaging) will be regarded as a part of the patient’s treatment and will be provided free of charge.

    Medicare benefits are not payable for services provided to a patient in a public hospital emergency department.

    Diagnostic imaging and pathology service providers should check the patient’s status before billing Medicare – this is generally done via a request form.

    The companies concerned should have billed the hospital for the services.

    As Mr A had signed an election form, on the basis of informed financial consent, to be treated as a private patient once a fracture was confirmed by X-ray, all future clinically relevant MBS services could be billed to Medicare.

    It is noted that sometimes request forms do not indicate whether a patient is public or private. In these circumstances, it remains the responsibility of the biller to ensure the patient is eligible for a Medicare-billed service, including through contacting the requesting physician.

    Key Points

    • 1. Medicare benefits are not payable for services provided to a patient in a public hospital emergency department
    • 2. Diagnostic imaging and pathology services providers should check the patient’s status before billing Medicare

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    Case Study 6

    Patient Journey

    Ms A is admitted as a public patient at her local public hospital with an umbilical hernia and is treated by Dr B, a general surgeon. While in hospital, Ms A has an asthma attack and Dr B, after obtaining informed financial consent for private care and agreement to refer for a private service, provides her with a named referral to Dr C. Dr C is a respiratory physician working within the public hospital outpatient clinic who also has a right to private practice on the hospital premises.

    Dr C reviews Ms A and arranges for appropriate management for the asthma attack. Dr C bills MBS item 110 hyperlink: http://www9.health.gov.au/mbs/fullDisplay.cfm?type=item&qt=ItemID&q=110 for a consultation as he had a named referral and was exercising his right to private practice as a staff specialist. On Dr C’s advice, the patient is referred to a public hospital respiratory nurse practitioner to receive advice on the proper use of inhalers. The respiratory nurse practitioner sees the patient, advises the patient on proper use of inhalers and breathing techniques, and bills MBS item 82210 for the service. hyperlink: http://www9.health.gov.au/mbs/fullDisplay.cfm?type=item&qt=ItemID&q=82210

    Is this appropriate?

    • Billing by Dr C of item 110 is appropriate - as he had a named referral and was exercising his right to private practice.
    • Billing by the nurse practitioner of item 82210 is not appropriate – as publicly employed (hospital salaried) nurse practitioners cannot bill Medicare for services provided. This applies to all allied health providers employed by the public hospital. Unless a specific exemption is in place, only nurse practitioners and allied health providers in private practice are entitled to bill Medicare.

    Patient referral requirements

    In this example, Ms A is an admitted public patient for the treatment of the umbilical hernia. The asthma attack is an unrelated (underlying or new) condition; care for the asthma is not included in the public hospital funding for the umbilical hernia. It is therefore acceptable for Ms A to elect to receive private care and be referred to Dr C for consultation regarding the asthma attack. The referral from Dr C to the nurse practitioner is similarly part of Ms A’s service pathway for the asthma and is unrelated to the care for umbilical hernia; however, this referral shifts Ms A’s care for the asthma into the public hospital system and should not be billed to Medicare.

    It is a requirement of the National Health Reform Agreement (NHRA) that patients must have a named referral before they can obtain private outpatient services on public hospital premises. Three conditions must be met for this to be appropriate:

    1. The named referral must be to a medical specialist exercising a right of private practice;
    2. The patient must have elected to be treated as a private patient; and
    3. The referrer must have obtained the patient’s informed financial consent.

    It is not a requirement for public patients receiving public hospital services to have named referrals. If a public hospital outpatient clinic sees both public and private patients, it is the decision of the patient on whether they receive care as a public or private patient. The clinic should not require named referrals for all patients; a named referral should only be sought if the patient has elected to be a private patient.

    Additionally, in accordance with the NHRA, it is a requirement that referral pathways must not be controlled so as to deny access for patients to free public hospital services. This reinforces the importance of patients making a choice of being a private or public patient.

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    Case Study 7

    Patient Journey

    Day 1 – A patient sees their GP for fever and cough. The GP, with appropriate history and examination, diagnoses a viral illness and advises review in three days if the patient is not better, and bills MBS item 23

    Day 4 – The patient returns to the GP feeling unwell. The GP, after review of the patient’s history and appropriate examination, suspects it could be pneumonia and requests a full blood count (FBC) test and a chest X-ray (both MBS funded). The GP also prescribes amoxicillin and doxycycline (PBS) and over the counter paracetamol (private). The GP then bills item 23 (MBS).

    Day 5 – The GP rings the patient to check how the patient is feeling. The FBC shows white cell counts are high and the chest X-ray reveals bronchopneumonia and an apical nodule, which could be indicative of a cancerous growth. The patient advises the doctor that he has pain while breathing, feels a bit short of breath and has had a restless night. The GP recalls the patient for reassessment, and subsequently refers the patient to the local public hospital for management of bronchopneumonia and investigation of the apical pulmonary nodule. The GP contacts the admitting officer of the hospital and briefs him on the referral. The GP bills MBS item 36.

    Days 5-9 – The patient is admitted at the local public hospital as a public patient by a medical registrar who briefs the respiratory physician on call and admits the patient, under the physician’s bed card, for IV antibiotics. The patient is reviewed by the treating team and the physician (funded through activity based funding (ABF)). The respiratory physician advises the patient that antibiotics are expected to resolve the patient’s illness, but that the apical nodule may need further review as it has a small possibility of being cancerous. The patient confirms that they would like the review to be conducted by the public physician as a public patient.

    The patient is discharged on day 9 with 3 days of antibiotics (funded by ABF). While the IV antibiotics appear to have resolved the patient’s illness, the respiratory physician asks the patient to come back and be seen in a public outpatient clinic with scans to review the patient’s apical nodule.

    From the ward the patient is discharged and referred to:

    1. The respiratory physician’s (public) outpatient clinic with an appointment to be seen six weeks after discharge.
    2. The originating GP with a discharge letter advising them:
      1. that the patient will be seen in the public respiratory clinic in six weeks;
      2. review the patient in a week’s time for recurrence of symptoms and/or general health markers that may indicate the apical nodule is significant;
      3. to do a CT scan of the chest with contrast medium, FBC, kidney and liver function tests (UEC/LFT) in five weeks’ time; and
      4. to refer the patient to the public hospital’s respiratory outpatient clinic and to include the CT report and the blood results.

    *NOTE: the patient has not been asked if they wish to, nor made a decision to see the GP for aftercare and testing.

    Day 16 – The GP reviews the patient and the patient appears to be symptom-free (MBS).

    Day 45 – The GP requests a CT scan of the chest with contrast material, FBC, UEC/LFT and bills item 23 (all MBS).

    Day 52 – The patient is seen by the respiratory physician at the public hospital outpatient clinic. The physician, after an appropriate history and examination, reviews the available results (from the GP’s investigations) and reassures the patient that the bronchopneumonia is completely resolved and the nodule on the chest X-ray appears innocuous (ABF).

    Is this appropriate?

    • Day 1-5: Appropriate as the patient is a general practice patient (MBS).
    • Day 5-9: Appropriate as the patient is a public patient (ABF).
    • Day 16: Appropriate (MBS). This is a general post discharge consultation as part of the transition of care, not clinical aftercare. General practitioners are central to the holistic management and integration of care and will commonly, and appropriately, review patients after discharge from hospital.
    • Day 45: Not appropriate. The CT scan and blood tests are for the patient’s public outpatient review. Public outpatient reviews and tests required by a public patient are considered part of an episode of public care and are funded under public hospital arrangements. In this case, the hospital has shifted essential follow-up of a public patient with resolving pneumonia to a GP who has billed Medicare. Billing of Medicare in addition to hospital funding for the same services will result in duplicate payments for the services (MBS and ABF).
    • Day 52: Appropriate as the patient is a public patient (services are funded through ABF).

    Patient discharge and transition of care:

    It is expected that patients being discharged from hospital should have a discharge summary sent to their GP, including any plans or recommendations for appropriate management of the patient’s condition post discharge.

    However, any necessary follow-up component of the medical intervention that is an intrinsic part of the public hospital episode of care is covered by public hospital funding. This follow-up treatment should not be billed to the MBS. In this case study, the patient has elected for a review to be conducted in a public clinic as a public patient, therefore the tests required for the follow-up should have been requested by the hospital prior to discharge. The NHRA clause G16 states that: “Where care is directly related to an episode of admitted patient care, it should be provided free of charge as a public hospital service where the patient chooses to be treated as a public patient, regardless of whether it is provided at the hospital or in private rooms.”

    In practice, this means that even if some tests or care cannot be provided on public hospital grounds (for example, in rural/remote areas where certain testing facilities may not be located at the public hospital), the hospital remains responsible for funding required tests and services for public patients. If a public hospital requests an external (to the premises) provider, such as a GP, pathologist, radiologist or other provider to provide components of public patient care, the hospital should organise remuneration as appropriate.

    What each party can do to ensure compliant billing in this type of circumstance:

    • The hospital, discharging officer, or practitioner preparing a discharge summary should clearly identify the patient’s election status in terms of the services requested (as being for public patient follow-up), and consider requesting the tests directly rather than through a GP;
    • The GP should ensure any requests they generate for radiology or pathology identify the patient’s election status (in this case, that the patient is public);
    • The pathologist or radiologist should bill according to the patient’s election status.

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    Case Study 8

    Patient Journey

    Day 1 – A patient sees her GP with concerns about her general health. She complains of feeling tired for the last three months, has a poor exercise tolerance and has a palpable lump in her left breast. The GP, after an appropriate history and examination, diagnoses the lump as being suspicious and requests an ultrasound of the left breast, a full blood count (FBC), and kidney and liver function tests (UEC/LFT), all as MBS-rebated services. The GP then bills MBS item 36 for a consultation lasting more than 20 minutes.

    Day 2 – The patient has the requested tests conducted, which are claimed under appropriate MBS item numbers.

    Day 3 – The patient is reviewed by her GP with the results of the ultrasound and pathology indicating mild anaemia and a suspicious lesion in the breast. The GP requests a fine needle aspiration (FNA) of the left breast lump to be billed against the MBS. The GP then bills MBS item 36.

    Day 7 – The patient is reviewed again by her GP with the results of the FNA indicating that the patient has breast cancer. The GP discusses with the patient her option to be a public or private patient when receiving care and what this means for the care and costs to the patient and health system. After considering her options, the patient elects to be a public patient at the local tertiary hospital. The patient is referred to the public hospital breast clinic with the referral letter, as per hospital requirements, addressed to the head of the breast clinic, together with all the available results. The GP then bills MBS item 36.

    Day 14 – The patient attends the public hospital’s breast clinic and is seen by the registrar. The registrar discusses the case with the breast surgeon, who reviews the results but does not see the patient. The registrar then requests further pathology and diagnostic imaging (DI) tests under the MBS. The surgeon then bills MBS item 104. The pathology centre and DI/radiology centre do not establish whether the patient is a public or private patient and also bill for services under the MBS.

    Day 27 – The patient is discharged and referred back to the GP with a discharge letter. The hospital asks the patient to see the GP in three days for review of the wound and re-dressing of the wound site.

    Day 28 – The patient’s partner calls the GP practice and advises that the patient is complaining of increasing shortness of breath and chest pain. The GP does a home visit and, after an appropriate history and examination, suspects deep vein thrombosis (DVT), and sends the patient back to the public hospital by ambulance. The GP then bills item 37.

    Is this appropriate?

    • Day 1-7 – Appropriate as the patient is a general practice patient (MBS).
    • Day 14 – 27 – MBS billing is not appropriate as the patient is a public patient (ABF).
    • Day 28 – Appropriate billing.

    Reason MBS billing on days 14-27 was not appropriate:

    A patient should be treated free of charge as a public patient unless they have a named referral and they have elected to be a private patient. In this case study, the patient has elected to be a public patient; the named referral does not change this fact. As part of public hospital care, the consultation, pathology and DI are funded through public hospital arrangements and should not be billed to the MBS.

    Providers should ensure and clearly document that a patient has elected to be a private patient before billing Medicare. Providers, including those working in pathology and DI in public hospitals may be asked to substantiate that the patient chose to be a private patient. A named referral does not necessarily substantiate that a patient has elected to be a private patient. Guidelines on how practitioners can substantiate services provided under rights of private practice at public hospital outpatient departments can be found on the Department of Health website.

    Further to not being entitled to bill the MBS for a public patient, the surgeon has not met the requirement of MBS item 104 by simply reviewing the patient’s test results. It is in any case a requirement of MBS item 104 that the practitioner personally performs the service. To bill this item, the practitioner must have attended the patient.

    The Pathology and DI services should not be claimed under the MBS for hospital services, even if the referrer has not made it clear whether the patient is public or private. As with other providers, pathology and DI providers are obligated to substantiate whether a patient is entitled to Medicare benefits before billing the MBS. It is noted that most ordering forms for pathology and DI request information on whether the patient is private or public. If in doubt, the provider can ask the hospital or the patient. Note that, by billing Medicare, a provider is stating that the patient is eligible to receive a Medicare rebate.

    In asking the GP to conduct a MBS funded post-surgery review in three days’ time, the hospital has handed over responsibility for wound aftercare relating to a hospital-funded episode to the GP. This is inappropriate. GPs should not be directed in a discharge summary to provide specific treatment (although recommendations can be made).

    It is noted that GPs routinely review patients post discharge and, for medico-legal reasons, GPs may not be in a position to immediately refer the patient back to the hospital when they attend the GP’s practice. Communication between practitioners can help to avoid concerns around hand-over of publicly funded care becoming systemic. It is recommended that the GP communicate any concerns back to the referring practitioner, discharge officer or the GP liaison in the hospital.

    All of the payments in this period would be duplicate payments.

    Explanation of the appropriateness of day 28:

    The GP has claimed a MBS item during what would generally be considered a care period relating to a public episode. However, the claim is appropriate because:

    • the GP service was independently sought, i.e. not referred or recommended by the hospital, for a matter that was not routine aftercare (note: practitioners should notate the account as ‘not normal aftercare’);
    • the service was not part of the requested review/hand-over of aftercare; and
    • the public hospital had no involvement or knowledge of the service.

    *NOTE: These case studies demonstrate the importance for each practitioner and provider of services to understand the election status of the patient, and to not presume that their own arrangements, such as rights to private practice, determine whether they can bill Medicare for services. In addition, it is the responsibility of the provider to determine that the patient is eligible for Medicare benefits before making any claims. This includes establishing that the service has not been funded elsewhere, as per section 19(2) of the Health Insurance Act 1973, which states that Medicare benefits are not payable for services that are otherwise arranged or funded by the Commonwealth or state governments.

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    Case Study 9: Rural Case Study

    Note: the exemption allowing Medicare billing in a public hospital in this case study is not based on an existing exemption; it is illustrative only.

    Patient Journey

    Day 1 – A 50 year old man presents to a rural public hospital emergency department (ED) with shortness of breath and fever.

    Services provided to non-admitted patients in this hospital’s ED can be billed to Medicare as well as funded through the NHRA, through a specific exemption that has been put in place by the Minister for Health under the Health Insurance Act 1973.  No other services can be billed to Medicare for public patients in this hospital.  The town has two GPs who each work a mix of time between consulting rooms, the ED and caring for admitted patients.  Surgeries and other interventional care are managed through ‘fly in, fly out’ arrangements with several general surgeons living in the region.

    The nurse on duty takes a history and vital signs, and triages the patient as category 3 – to be seen within 30 minutes - and advises the on call doctor. 

    The doctor arrives and takes a history examination, diagnosing acute lobar pneumonia.  The doctor admits the patient to the hospital as a public patient and prescribes bed rest, oxygen therapy, and IV and oral antibiotics. The doctor also requests an X-ray and blood tests from the hospital’s contracted diagnostic imaging (DI) and pathology providers.  The doctor bills MBS item 47.

    Day 2 - X-ray and blood tests are completed and reported by the contracted DI and pathology providers. The contracted providers bill multiple relevant Medicare items.

    Days 2-4 - During this period the patient is seen by the doctor daily. The public hospital funds the attendances through a salary arrangement with the doctor.

    Day 5 - The patient is discharged with an oral antibiotic with advice to see a GP if there are any strong side effects relating to the antibiotic, or if the pneumonia does not appear to be resolving.

    Day 17 - The patient seeks a follow-up with one of the town’s GPs in consulting rooms.  The pneumonia appears to be almost completely resolved and the GP decides not to prescribe any further antibiotic.  MBS item 23 is billed by the GP.

    Is this appropriate?

    • Day 1 Medicare billing is appropriate under the terms of the exemption, noting it is for services provided in the ED and not to an admitted patient or outpatient (MBS and ABF).
    • Day 2 diagnostic imaging/pathology - Not appropriate (MBS).
    • Days 2-4 attendances by a GP under salary arrangements – Appropriate (ABF).
    • Day 17 post discharge follow-up – appropriate (MBS), as the follow-up was sought by the patient and was not required as part of the episode of public care.

    Explanation: days 2-4

    The patient was admitted as a public patient on day 2, therefore attendance by the GP between days 2 and 4 under salary arrangements is appropriate, as this involves a public funding stream for public patient care. However, the Medicare billing of tests required for public care on day 2 results in duplicate payments being made through public hospital funding and Medicare for the same DI and pathology services.

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    Questions on MBS items can also be directed to AskMBS@health.gov.au.

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