Greatest Permissible Gap (GPG)

About the operation of the Greatest Permissible Gap (GPG).

Page last updated: 22 February 2018

Predating the OMSN and the EMSN, the GPG is defined in Section 10(3) of the Health Insurance Act 1973 and requires that the difference between the MBS fee for an item and the 85% Medicare benefit must not be greater than a specified amount. In other words the GPG is a rule that sets a maximum gap dollar amount.

From 1 November 2017, the GPG is set at $81.70, which means that all out-of-hospital Medicare services which have an MBS fee of $545.00 or more will attract a benefit that is greater than 85% of the MBS fee. If, for example, the schedule fee for a service is $1000 then the 85% benefit would be $850 which means that the gap is $150. In this case the GPG would apply and the patient would receive a Medicare benefit of $918.30, not $850 (i.e. $1000 minus the GPG of $81.70).

The Department of Human Services automatically calculates and applies the benefit payable for those services impacted by the GPG.

Threshold

The GPG amount is indexed annually on 1 November in line with the Consumer Price Index (June quarter), and from 1 November 2017, the amount is $81.70 which affects all MBS items that have an MBS fee of greater than $545.00.

Benefit

The benefit payable for those items meeting the threshold is the MBS fee less the GPG amount. The GPG amount is to be rounded up to the nearest multiple of 5 cents.

Eligibility

The GPG applies to all out-of-hospital Medicare services where the difference between the MBS fee and the MBS rebate exceeds the GPG amount.

History

  • Introduced in 1974 as part of Medibank, with a GPG amount of $5.
  • GPG increased to $10 in 1984 with the introduction of Medicare.
  • Increased to $20 in 1986.
  • Increased to $50 in 1996, to be indexed annually.
  • Increased to $80.20 on 1 November 2016.
  • Increased to $81.70 on 1 November 2017.