What is medical bulk billing and how does it work?

If you’re setting up a new medical practice, how you’ll charge your patients is one of the most important factors to consider. Most practices choose to bulk bill, charge privately or a combination of both.

How you choose to bill makes a big difference to the way your practice runs, so it’s not a decision that should be made lightly. If you do decide to offer bulk billing to your patients, there are a few things to be aware of.

What is bulk billing Medicare?

Medicare was set up in 1984 by the Australian government as a universal health insurance scheme for Australians. Under Medicare, eligible Australians can get free hospital treatment, along with free or subsidised treatment for other services including visiting a doctor, psychologist, dietitian and some specialist services. The amount Medicare will pay towards each service is laid out in the Medicare benefit schedule.

Why is the Medicare benefits schedule important?

If you’re going to bulk bill in your practice, it’s crucial that you understand the Medicare benefits schedule. With bulk billing, every service you claim for needs to relate to a Medicare item. You send your claims to Medicare where they’re assessed and paid to you if approved.

How can technology help health professionals with Medicare bulk billing? 

A lot of specialised healthcare software can take the load off your Medicare bulk billing by automating the process of submitting claims and tracking their progress. Healthcare software can also help you remain compliant with Medicare changes so you can make sure you’re claiming for the widest possible range of health services.

How does bulk billing work?

When a health professional wants to bulk bill a patient, the patient will need to sign a form and show their Medicare card. After providing the services, bulk billing doctors will then need to claim back the cost of providing the service from Medicare. Depending how their billing is set up, Medicare may provide full payment or part payment of the service.

Who pays for the Medicare benefit?

While bulk billing is funded by the government, it requires a Medicare levy from Australians of 1.5% of their annual income. This is increased for Australians who choose not to use private health insurance. Concessions and health care card holders can often get additional rebates on Medicare, including free medicines and bulk billed services that would otherwise be charged privately.

When patients are bulk billed, they either pay nothing at the time of their consultation or they may pay a fee, which is then repaid directly into their bank account once the Medicare rebate comes through. This is more common with practices that use a combination of bulk billing and private billing.

Who sets the bulk billing rates? 

Bulk billing rates are set by Medicare. For the last few years, the rates have been frozen, which means that the rebates have stayed the same, while the cost of providing healthcare services has increased. Fortunately, Medicare is starting to increase their bulk billing rates, so medical professionals can recoup more of their running costs.

Who is eligible for bulk billing?

To be eligible for bulk billing, patients need to be Australian permanent residents or citizens. Some medical professionals choose to bulk bill certain patients, for example concession card holders, pension card, DVA card holders or students, and charge out of pocket for other patients. They may also use their own discretion to determine if a patient’s personal circumstances make them eligible for bulk billed services.

Public hospitals generally bulk bill for their inpatient services, and some outpatient services, depending on the hospital and the nature of the services. Private hospitals generally don’t bulk bill, although patients who have private health cover can often get rebates through that, although they will still need to pay a gap fee.

What is the difference between bulk billing and private billing?

With private billing, the practice chooses their fees and the patient pays in full, which may or may not be supplemented by their private health insurance. The patient will then claim the rebate from Medicare themselves.

When health professionals bulk bill, the entire fee is billed back to Medicare so there are no out of pocket expenses for the patient. The practice will claim the bulk billed consultation costs, which will be paid directly to them.

There is also a third type of billing, which is becoming more common among practitioners. This is when practices charge a small fee on top of the Medicare rebate – so patients are a bit out of pocket, but not as much as if they were covering the entire fee themselves.

Can telehealth consultations be bulk billed?

In 2020, the Australian Government required that all telehealth consultations for patients vulnerable to COVID-19 be bulk billed. For most doctors that bill privately, this caused financial challenges. Fortunately, this requirement has now been removed and rebates for telehealth services are now the same as face-to-face consultations. You can keep up with all the latest changes to telehealth legislation on the Australian government’s website.

Should you offer bulk billing or private billing? 

If you’re trying to weigh up between a private practice and a bulk billed one, it’s important to do your research as there are pros and cons to each. For example, you can charge more per consultation when you bill privately, but you may find it harder to attract new patients.

The right type of billing for your practice will depend on your patient demographics, the services you offer and what you need to be profitable.

What are the advantages of bulk billing? 

Many doctors bulk bill because they want to make sure their medical services are accessible by everyone. Bulk billing means medical practitioners may get paid less per consultation than practitioners that charge private fees, but it does have some advantages as well. As a bulk billing practice, you can often enjoy a steady stream of patients. Because fewer and fewer practices offer bulk billing, a practice that bulk bills is often in high demand.

Can I bulk bill for more than one service? 

As a medical professional, it’s common to provide more than one service in a single consultation. It is very common to bulk bill for more than one service, but you will need to list each service separately to make sure you’re getting the appropriate Medicare rebates.