Medicare Benefits Schedule (MBS) Provider Obligations Under the Health Insurance Act 1973

Legislative framework

Medicare benefits are paid under the Health Insurance Act 1973 (Cth) and the Health Insurance Regulations 2018. The Act establishes the legislative basis for Medicare and outlines the conditions under which benefits are payable. Section 10 of the Act specifies that a Medicare benefit is payable for a 'professional service' rendered to an eligible person by or on behalf of a medical practitioner. My Health Records Act 2012 explained

The Medicare Benefits Schedule (MBS) is a key component of this framework. The MBS lists the services for which Medicare benefits are payable, detailing a fee, a benefit, and descriptive text for each item. Services Australia (which incorporates Medicare) administers payments related to the MBS, while the Department of Health and Aged Care sets MBS policy.

The Health Insurance (Professional Services Review Scheme) Regulations 2019 underpin the Professional Services Review (PSR) scheme administered under Part VAA of the Act. This scheme provides a mechanism for review of professional services billed to Medicare.

Provider numbers and eligibility

Providers must apply to Services Australia for a Medicare provider number for each location where they provide services. Eligible professions include medical practitioners, optometrists, midwives, nurse practitioners and certain allied health professionals (under specific MBS items). Registration with a relevant professional body is generally a prerequisite for obtaining a Medicare provider number, and medical practitioners are subject to further restrictions. AHPRA Health Practitioner Regulation National Law governs the registration of many health professionals.

Section 19AA of the Act restricts access to Medicare benefits for medical practitioners who do not have a fellowship of a recognised specialist college, with limited exceptions. Furthermore, Section 19AB restricts overseas trained doctors and former overseas medical students from accessing Medicare for 10 years after first registration, requiring them to work in areas of workforce shortage.

Section 124B of the Act requires providers to maintain adequate and contemporaneous records of services for which they bill Medicare. These records are essential for demonstrating compliance with MBS requirements.

Bulk billing and assignment of benefit

Section 20A of the Health Insurance Act 1973 enables a patient to assign their right to a Medicare benefit to their provider. This assignment allows the provider to bill Medicare directly and accept the benefit as full payment, a practice known as bulk billing. The MBS schedule fee, which determines the Medicare benefit amount, is set by the Department of Health and Aged Care; the Medicare benefit is generally 85% of the schedule fee for out-of-hospital services and 75% for in-hospital services. PBS pharmaceutical benefits scheme providers may also be involved in patient care.

Providers who bulk bill eligible patients, including concession card holders and children under 16, may be eligible for a bulk billing incentive in addition to the standard schedule fee. Incentive items such as 10990, 10991, and 10992 are available for this purpose. From 1 November 2023, the Australian Government has increased these incentive payments threefold for GP attendances by children under 16, pensioners, and concession card holders.

When a patient is bulk billed, providers cannot charge a co-payment for the service, with limited exceptions for defined circumstances such as genuine non-MBS components of care.

Compliance, PSR and fraud

Compliance with the Health Insurance Act 1973 is essential for all MBS providers. The Department utilises a two-tiered compliance program, beginning with the Practitioner Review Program. Should concerns regarding ‘inappropriate practice’ arise, these may be escalated to the statutory scheme outlined in Part VAA of the Act, known as the PSR.

PSR determinations can result in a range of consequences for providers. These may include reprimand, counselling, repayment of benefits, partial or full disqualification from Medicare, or disqualification from specific MBS items.

The Act outlines serious penalties for non-compliance. Section 129AC mandates repayment of Medicare benefits obtained through false or misleading statements. Furthermore, sections 128A-128B create offences, carrying potential penalties of up to 5 years imprisonment or 1,000 penalty units. Coordinated compliance reviews are conducted, with oversight provided by the Australian Government Inspector-General of Medicare.