Diagnostic imaging equipment (Capital Sensitivity) FAQ

Implementation arrangements

Page last updated: 29 January 2019

General

  1. What is the purpose of the Capital Sensitivity measure?
  2. Does the Capital Sensitivity measure cover all diagnostic imaging modalities?
  3. What is the relevant age of my equipment?
  4. How do I calculate the age of my equipment?
  5. What were the changes announced in the 2014-15 Federal Budget?
  6. How do the Capital Sensitivity arrangements relate to accreditation arrangements?
Exemptions
  1. Are there exemptions from the Capital Sensitivity measure?
  2. If I am applying for an exemption(s), can I claim the full (K) rebates while my application is under consideration?
  3. Can a decision by the Department of Health not to grant a remote area exemption be appealed?
  4. Were there recent changes to the remote location exemptions for Computer Tomography (CT) and angiography equipment?
Age of equipment and upgrades
  1. What if practices cannot easily identify the age of a piece of equipment?
  2. From what date do I calculate the age of equipment?
  3. What is the definition of upgrade for the purposes of claiming the five or ten year extension period?
  4. Will the Department of Health or the Department of Human Services be assessing individual claims that equipment has been upgraded?
  5. Do practices claiming an upgrade need documentary evidence?
  6. When does the five or ten year effective life extension period begin?
  7. Will this measure affect the Extended Medicare Safety Net (EMSN) capping arrangements?
  8. How do I know which Remoteness Area my practice is located in?
  9. When do I need to provide information about the age of my equipment and upgrades?
More information
  1. Where do I find information on the NK items?
  2. Is there an email address for general enquiries about the measure?

General

1. What is the purpose of the Capital Sensitivity measure?

The measure encourages improved quality of diagnostic imaging services by providing a higher rate of reimbursement for Medicare Benefits Schedule (MBS) services performed on newer and upgraded equipment.

2. Does the Capital Sensitivity measure cover all diagnostic imaging modalities?

With the exception of positron emission tomography (PET), it covers almost all diagnostic imaging modalities listed in the Diagnostic Imaging Services Table (DIST), specifically: ultrasound, x-ray, Orthopantomogram (OPG), mammography, fluoroscopy, nuclear medicine imaging, magnetic resonance imaging (MRI), computed tomography (CT), and angiography.

3. What is the relevant age of my equipment?

Equipment that has not been upgraded is classified by the ‘effective life age’ of the equipment. Equipment that has been upgraded is classified by the ‘maximum extended life age’ of the equipment. An upgrade is an additional reasonable investment made by the service provider to improve the overall performance of the imaging system so that it is equivalent to new equipment supplied in Australia at the time of the upgrade.

Effective life age and maximum extended life age

ModalityMBS ItemsEffective
Life Age
Maximum extended life
(including extension for upgrades)
Ultrasound5005-5585510 years15 years
Computed Tomography (CT)56001-5736310 years15 years
X-ray57529-57723
58102-59104
59504-60101
15 years20 years
Orthopantomogram (OPG)57911-5796815 years20 years
Mammography59301-5931910 years15 years
Fluoroscopy60501-6111015 years20 years
Nuclear Medicine (excluding PET)61651-6172910 years15 years
Magnetic Resonance Imaging (MRI)63013-6352310 years20 years
Angiography59903-6007810 years15 years

4. How do I calculate the age of my equipment?

If the equipment was installed new, age is calculated from the date the equipment was first installed.

If the equipment was installed used, age is calculated from the date that the:
  • equipment was first used in Australia (for equipment previously used in Australia); or
  • equipment's oldest component was manufactured (for equipment previously used outside Australia).

5. What were the changes announced in the 2014-15 Federal Budget?

As part of the 2014-15 Federal Budget the Government announced the ‘Medicare Benefits Schedule – revised Capital Sensitivity provisions for diagnostic imaging equipment’ measure, which will strengthen the quality and safety of MBS diagnostic imaging services through alignment and consistency of the Capital Sensitivity measure across all modalities (except PET).

This measure includes:
  • the extension of the Capital Sensitivity measure to all angiography services, including the previously excluded MBS items 60000 to 60078;
  • introduction of a ‘maximum extended life age’ of 15 years for CT and angiography services; and
  • increasing the ‘maximum extended life age’ for MRI services to 20 years.
The changes will take effect on 1 January 2015.

6. How do the Capital Sensitivity arrangements relate to accreditation arrangements?

All practices are required to be accredited under the Diagnostic Imaging Accreditation Scheme in order for Medicare benefits to be payable. However, the 50 per cent reduced (NK) rebates will apply to aged equipment.

Mammography equipment that is currently accredited under the Royal Australian and New Zealand College of Radiologists’ Mammography Quality Assurance Program automatically qualifies for the five-year extension period. For accredited mammography equipment, practices should indicate with a ‘Y’ on the age of equipment form that it has been upgraded.

Exemptions

7. Are there exemptions from the Capital Sensitivity measure?

If equipment that has not been upgraded is older than the applicable effective life age, or if equipment that has been upgraded is older than the maximum extended life age; practitioners may be eligible for an exemption depending on the practice location.

There are two types of exemption:
  1. automatic exemptions based solely on the location of the practice; and
  2. exemptions granted upon application to the Department of Health based on a number of factors.

1) Automatic Exemptions

This exemption will automatically apply to practices located in Remoteness Area (RA) categories of outer regional, remote and very remote. Practices in these RAs are exempt from the Capital Sensitivity measure and do not need to apply to the Department for a remote area exemption.

Practices can identify what RA they fall under at the Department of Health’s DoctorConnect.

On the DoctorConnect website, automatic exemptions apply to areas are classified as Remoteness Areas 3, 4 and 5.

2) Exemptions granted by the Department of Health

To grant an exemption for inner regional locations, the Department of Health must be satisfied that the practice is located in the RA category inner regional area, where the location was previously under the Rural, Remote and Metropolitan Area (RRMA) classification system, RRMA4 or RRMA5, and:
  • the diagnostic imaging equipment does not exceed the maximum extended life age by three years or more;
  • the equipment is operated on a rare and sporadic basis; and
  • the equipment provides crucial patient access to diagnostic imaging services.
Eligible practices may apply for an exemption

Practices will be notified by the Department upon receipt of a valid application.

8. If I am applying for an exemption(s), can I claim the full (K) rebates while my application is under consideration?

Yes. From the time you receive your notice from the Department of Health that your application is valid and under consideration, you may claim the (K) items. (K) items may then be claimed until you receive notice about the final outcome of your application. The Department of Health will notify you of its final decision within 28 days.

9. Can a decision by the Department of Health not to grant a remote area exemption be appealed?

Yes. Applicants who are dissatisfied with the decision have 28 days to request reconsideration of the decision.

In special circumstances, a period greater than 28 days may be allowed to request a reconsideration of the decision. Here are some examples of what may constitute a ‘special circumstance’:
  • natural disaster, for example, floods or fire;
  • failure in infrastructure that impacts upon an applicant’s capacity to submit their application within the given time frame, such as technological difficulties;
  • adverse personal circumstance, such as sickness or personal loss.

10. Were there recent changes to the remote location exemptions for computer tomography (CT) and angiography equipment?

Yes. From 27 November 2013, the exemptions that apply to CT (ie. MBS items 56001-57361) and relevant angiography items (ie. MBS items 59903-59974) have been amended so that they are consistent with other diagnostic imaging modalities (excluding PET services) in the Health Insurance (Diagnostic Imaging Services Table) Regulation 2013.

These exemptions include automatic exemptions for practices located in the Remoteness Area (RA) categories of outer regional, remote and very remote, and exemptions granted by the Department to practices located in the RA category inner regional area, where the location was previously under the Rural, Remote and Metropolitan Area (RRMA) classification system, RRMA4 or RRMA5. Eligible practices which meet the relevant criteria may apply for an inner regional location exemption by filling out the Inner Regional Australia Exemption Application Form.

The ‘30km rule’ for CT services no longer applies. Providers of CT services who were previously exempt under ‘the 30km rule’ should check on the Department of Health’s DoctorConnect website to identify under which RA they fall. Practices that were previously granted an inner regional location exemption for other modalities are requested to update their information with the Department of Health by filling out the Inner Regional Australia Exemption Application Form.

There are no exemptions for practices located in RA major cities.

Age of equipment and upgrades

11. What if practices cannot easily identify the age of a piece of equipment?

Practices in this situation should contact the relevant equipment supplier.

12. From what date do I calculate the age of equipment?

If the equipment was installed new, age is calculated from the date that the equipment was first installed.

If the equipment was installed used, age is calculated from that date that the:
  • equipment was first used in Australia (for equipment previously used in Australia); or
  • equipment's oldest component was manufactured (for equipment previously used outside Australia).

13. What is the definition of upgrade for the purposes of claiming the five or ten year extension period?

Upgrade means an additional reasonable investment made by the service provider within the effective life age that improves the overall performance of an imaging system so that it is equivalent to new equipment supplied in Australia at the time of the upgrade. For further guidance on what is, and is not, considered an upgrade, practices should contact the relevant equipment supplier, as it should have a good understanding of contemporary up-to-date aspects of diagnostic imaging equipment.

14. Will the Department of Health or the Department of Human Services be assessing individual claims that equipment has been upgraded?

No. Individual practices need to refer to their relevant documents, the definition of upgrade supplied and the upgrade explanatory table.

15. Do practices claiming an upgrade need documentary evidence?

Yes. Practices claiming the maximum extended life age must keep documentary evidence of the additional investment(s) made for potential compliance purposes. In the same way that records are kept for tax purposes the onus on maintaining and storing documentary evidence of upgrades and new equipment rests with the individual service provider.

Examples of documentation to substantiate upgrades and new equipment include:
  • suppliers’ technical brochures or quotes;
  • service installation reports;
  • purchase orders; and
  • invoices confirming that the relevant upgrade(s) have been completed.

16. When does the five or ten year effective life extension period begin?

The five or ten year effective life extension period, as appropriate to a particular modality, will commence at the end of the effective life age. For example, if an additional investment is made to upgrade an ultrasound unit at year five of a ten year effective life, the five year extension period will commence at the end of year ten, giving the equipment a maximum extended life of 15 years.

17. Will this measure affect the Extended Medicare Safety Net (EMSN) capping arrangements?

Yes. The Capital Sensitivity arrangements apply to the 22 capped obstetric and gynaecological items. The arrangements provide 22 mirror items with a 50 per cent reduced Schedule Fee and EMSN cap.

18. How do I know which Remoteness Area my practice is located in?

A map locator is integrated into the Department of Health’s DoctorConnect.

19. When do I need to provide information about the age of my equipment and upgrades?

The Department of Human Services should be informed of any changes that should be recorded on the LSPN record within 28 days of the change occurring. Practices need to ensure that their equipment details are current and accurate.

Practices can access and complete the form to update their LSPN record at Department of Human Services (Medicare).

Alternatively the form can be downloaded, completed and returned to Department of Human Services by reply paid mail or fax to:

Provider Eligibility and Accreditation Section
Department of Human Services
Reply Paid 1001
Tuggeranong DC ACT 2901
(02) 6124 6219 (Fax)

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

20. Where do I find information on the NK items?

The list of NK items, with full item descriptions, is available at MBS online.

21. Is there an email address for general enquiries about the measure?

For general enquiries about Capital Sensitivity contact the Department of Health by emailing Capital Sensitivity team.