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Diagnostic Imaging

Capital Sensitivity for Diagnostic Imaging Equipment

Implementation arrangements from 1 July 2011

Extension of capital sensitivity rule to all diagnostic imaging equipment

From 1 July 2011 all services listed in the Diagnostic Imaging Services Table of the Medicare Benefits Schedule (MBS), excluding Positron Emission Tomography (PET) services, will have two different schedule fees - K items (100% of the MBS Fee) and NK items (50% of the MBS Fee) for diagnostic imaging services provided on aged equipment.

This rule, known as ‘capital sensitivity’, is currently in place for computed tomography (CT) and angiography and will be extended to improve the quality of diagnostic imaging services by encouraging providers to upgrade and replace as appropriate aged equipment.

How will the capital sensitivity measure be implemented?

The measure will be implemented in two phases. This will allow for initial arrangements from 1 July 2011 to 30 June 2012, which will include further analysis and consultation with health professionals, industry and manufacturers to determine the final arrangements around upgrades and remote area exemptions that will apply from 1 July 2012.

The capital sensitivity rules applying to CT and angiography will not change as part of the initial arrangements.

What do practices need to do before 1 July 2011?

Practices need to check their records and identify the age of each piece of ultrasound, diagnostic radiology, nuclear medicine imaging (excluding PET) and magnetic resonance imaging equipment. This includes identifying whether a piece of equipment has undergone an upgrade which could extend the life of the equipment by an additional five years – see Table 1 below.

Table 1: Effective life age and maximum extended life age for full Medicare benefits

Modality	ATO depreciation schedule	New effective life age	Maximum extended life age (including 5 year extension for upgrades)
Ultrasound	5 years	10 years	15 years
OPG	15 years	15 years	20 years
Mammography	7 years	10 years	15 years
Fluoroscopy	15 years	15 years	20 years
X-ray	15 years	15 years	20 years
Nuclear Medicine (excl. PET)	10 years	10 years	15 years
MRI	7 years	10 years	15 years

If your equipment is older than the new effective life age or the maximum extended life age, you may be eligible to apply for an exemption. Applications for exemptions close on Friday 29 July 2011. Full details about the exemptions, the rules for claiming the K and NK items, and the definition of upgrade are available in the Frequently Asked Questions.

View the full list of new NK items with their K counterparts (PDF 24 KB)
View the full list of new NK items with their K counterparts (Word 321 KB)

The new NK items with full descriptors can also be accessed by clicking on
Health Insurance (Diagnostic Imaging Capital Sensitivity) Determination 2011

General enquiries about this measure can be directed to Medicare Australia’s email address at cap.sens@medicareaustralia.gov.au

When do practices need to provide information about the age of equipment and upgrades?

The Department of Health and Ageing and Medicare Australia will write to all practices in early May and early June 2011 to notify them of the measure and to begin the process of updating Medicare Australia’s Diagnostic Imaging Register to include capital sensitivity related information.

The letters will contain a form to begin collecting details about the age of equipment and upgrades. While the Minister for Health and Ageing has legislative authority to formally request this information under section 23DZW of the Health Insurance Act 1973, the Department is seeking the cooperation of practices to voluntarily submit it to Medicare Australia by Friday 29 July 2011.

Practices may access and complete the form electronically and forward it by email to Medicare Australia at cap.sens@medicareaustralia.gov.au

Alternatively, practices can print out and complete the form and return it to Medicare Australia by reply paid mail or fax:

Provider Eligibility and Accreditation Section
Medicare Australia
Reply Paid 1001
TUGGERANONG DC ACT 2901

Fax: (02) 6124 6219

Contact information
For all general enquiries about the measure please email Medicare Australia at cap.sens@medicareaustralia.gov.au.

Frequently Asked Questions

Form: Age of Equipment and Upgrade Information