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Diagnostic Imaging

Capital Sensitivity for Diagnostic Imaging Equipment

There are no significant changes to the capital sensitivity arrangements from 1 July 2012.

Capital sensitivity rule for all diagnostic imaging equipment

All services listed in the Diagnostic Imaging Services Table of the Medicare Benefits Schedule (MBS), excluding Positron Emission Tomography (PET) services 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 all diagnostic imaging equipment providing services under Medicare. The measure is intended to improve the quality of diagnostic imaging services by encouraging providers to upgrade and replace aged equipment as appropriate.

How has the capital sensitivity measure beeen implemented?

The measure is being implemented in two phases. This has allowed for initial arrangements from 1 July 2011 to 30 June 2012 and the ongoing arrangements from 1 July 2012.

What do practices need to do from 1 July 2012?

There are no significant changes to the capital sensitivity arrangements. The actions practices need to take are outlined below. For practices that have already updated their age of equipment records, the only action needed is to monitor the age of their equipment overtime. It is a legal requirement for practices to ensure their Location Specific Practice Number (LSPN) records with Department of Human Services are current and accurately identify the age of each piece of ultrasound, diagnostic radiology, nuclear medicine imaging (excluding PET) and magnetic resonance imaging (MRI) equipment.

This includes practices identifying whether a piece of equipment has undergone an upgrade that could extend the life of the equipment by an additional five years (this provision is under consideration for CT and angiography equipment). There are no changes to the effective life age for equipment or the arrangements for upgraded equipment – see Table 1 below. It is the responsibility of providers to identify whether their equipment has undergone an upgrade. An guide about what constitutes an upgrade can be viewed on the Frequently Asked Questions page. Practices should refer to the table to make the decision about whether their equipment has undergone an upgrade and if appropriate update their LSPN records with Medicare.

Practices that operate CT and angiography equipment will also need to ensure their LSPN age of equipment records held by Medicare are current and accurate. The provisions that currently apply to CT and angiography (i.e. a ten year effective life age and remote area exemptions based on ‘the 30km rule’) will continue to apply. The five year extension for upgraded CT and angiography equipment is under consideration.

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

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

If equipment is older than the new effective life age or the maximum extended life age, practitioners may be eligible to apply for an exemption depending on the practice location. Full details about the remote location exemptions, the rules for claiming the K and NK items, and the definition of upgrade, are available in the Frequently Asked Questions.

Further enquiries about the capital sensitivity arrangements can be directed to the email the Department of Health and Ageing

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

The LSPN Register should now include capital sensitivity information related to the age of all equipment and upgrades. Practices are required by law to submit this information to the Department of Human Services. Practices that do not provide this information will be subject to a formal request, which in the case of non-compliance could result in Medicare benefits ceasing to be payable. To update your LSPN information, practices may access the relevant forms and contact details on the Medicare Australia Website

For other enquiries related to LSPN matters the Department of Human Services also operates a toll free number 1800 620 589 Monday to Friday, 07.30am to 5.00pm Western Standard Times or email Medicare Australia.

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

Contact information
For general enquiries about the measure please email the Department of Health and Ageing

For assistance with LSPN details, contact the Department of Human Services toll free on 1800 620 589 Monday to Friday, 07.30am to 5.00pm Western Standard Times or email Medicare Australia