Medicare Benefits Schedule – changes to diagnostic imaging and pathology services bulk billing incentives

Page last updated: 18 December 2015

From 1 July 2016, the Government will amend or remove bulk billing incentives to providers of pathology services and diagnostic imaging service providers. The Government will target bulk billing incentives where they are most needed, saving the taxpayer more than $600 million over four years.

For diagnostic imaging, bulk billing incentives will now only be paid to providers for concessional patients, such as pensioners and children under 16. The MRI incentive paid to providers for bulk billing concessional patients and children will be reduced from 100 per cent of the Medicare fee to 95 per cent to line up with the current arrangements for other diagnostic imaging services.

For pathology, all bulk billing incentives will be removed for pathology providers, due to the existing high levels of bulk billing rates generated by strong competition in the sector.

The bulk billing incentives are paid directly to the provider, not the patient.

The pathology measure will remove all bulk billing incentives for pathology services. Pathology providers will receive between $1.40 and $3.40 less for each patient test.

Pathology bulk billing rates have only increased by about 1 per cent since the incentive was introduced in 2009/10, despite the subsidy costing half a billion dollars over the same five year period.

This is a competitive market with more than 5000 pathology providers – and the Government does not expect the changes to affect the majority of consumers due to the high level of competition in the sector.

Similarly, bulk billing of diagnostic imaging services has consistently grown at the same rates per year. In this case, the incentive has cost $1.3 billion over five years, but has not improved bulk billing rates beyond natural growth.

The Government does not set the charging practices of those who provide diagnostic imaging and pathology services.

The Medicare Safety Net will continue to protect patients with high out-of-pocket medical costs.

The changes will not come into effect until 1 July 2016, giving providers time to accommodate the changes.