Pathology Questions and Answers

Page last updated: 01 February 2016

Pathology Frequently Asked Questions

What is the Medicare Benefits Schedule (MBS)?
What is the Pathology Services Table (PST)?
What constitutes a professional service in terms of Medicare benefits?
What is a Schedule fee?
What is a Medicare benefit?
What steps can I take to ensure I get a Medicare benefit, if eligible?
What are out-of-pocket costs and gap amounts?
How do I find out what I will be charged?
How much will I be charged for a pathology test?
Am I entitled to choose my own pathology provider?
What is a bulk-billing incentive?
What are patient episode initiation (PEIs) fees and who can claim them?
What is episode coning?
What are the rules for rounding of MBS fees and MBS benefits?
What is a Rule 3 exemption?
What is a pathologist determinable service (Section 4BA)?
What is the pathology process?

What is the Medicare Benefits Schedule (MBS)?

The Medicare Benefits Schedule (MBS) is a listing of medical services subsidised by the Australian Government. The schedule is part of the wider Medicare Benefits Scheme which is managed by the Department of Health and Ageing and is administered by the Department of Human Services. The Schedule is divided into eight different service categories and outlines all Medicare Item numbers for GPs, specialists and other health practitioners.

The Medicare system of benefits only funds services for private patients, whether in a public or private hospital or out in the community. The primary legal authority for these arrangements is the Health Insurance Act 1973. There is subordinate legislation for the operation of the various categories of the MBS. The MBS is not a legal document and, in cases of discrepancy, the primary legislation and sub-ordinate legislation is the legal authority for payments of Medicare benefits.

MBS Online reflects the latest MBS; a listing of the Medicare services subsidised by the Australian Government and is updated as changes occur to the MBS. General information about Medicare eligibility and services is published by the Department of Human Services, and can be accessed on the Department of Human Services website.

What is the Pathology Services Table (PST)?

The Pathology Services Table (PST) is a Schedule to the Health Insurance (Pathology Services Table) Regulation 2012. It lists the pathology tests for which Medicare benefits are available, their Schedule fees and conditions for use. Under section 4A of the Health Insurance Act 1973, the PST must be remade annually.

In the PST, each professional service listed has been allocated a unique item number. Located with the item number and description for each service is the Schedule fee and Medicare benefit, together with a reference to an explanatory note relating to the item (if applicable). See example below:
Item
66655
Prostate specific antigen - quantitation - 1 of this item in a 12 month period
(Item is subject to rule 25)
    Fee: $20.15 Benefit: 75% = $15.15 85% = $17.15
Unlike some other categories of the MBS, the pathology items are not indexed annually as expenditure is governed under the Pathology Funding Agreement which includes capped yearly growth.

What constitutes a professional service in terms of Medicare benefits?

Section 6A of the Health Insurance Act 1973 stipulates Medicare benefits are payable for professional services. A professional service is a clinically relevant service which is listed in the MBS. A ‘clinically relevant’ service is one which is generally accepted by the relevant profession as necessary for the appropriate treatment of the patient.

When a service is not clinically relevant, the fee and payment arrangements are a private matter between the practitioner and the patient and a Medicare benefit is not applicable.

Services listed in the MBS must be rendered according to the provisions of the relevant Commonwealth, State and Territory laws. For example, medical practitioners must ensure that the medicines and medical devices they use have been supplied to them in strict accordance with the provisions of the Therapeutic Goods Act 1989.

What is a Schedule fee?

A fee for a professional service set by the Australian Government.

What is a Medicare benefit?

A Medicare benefit is the percentage paid to the service provider based on schedule fees determined for each medical service and whether it is an in-hospital or out-of-hospital service. The major elements of Medicare benefits and the different levels are contained in the Health Insurance Act 1973, as amended, and include the following:
  1. Free treatment for public patients in public hospitals.
  2. The payment of ‘benefits’, or rebates, for professional services listed in the Medicare Benefits Schedule (MBS). In general, the Medicare benefit is 85% of the Schedule fee, otherwise the benefits are
    1. 100% of the Schedule fee for services provided by a general practitioner to non-referred, non-admitted patients;
    2. 100% of the Schedule fee for services provided on behalf of a general practitioner by a practice nurse or Aboriginal and Torres Strait Islander health practitioner;
    3. 75% of the Schedule fee for professional services rendered to a patient as part of an episode of hospital treatment (other than public patients);
    4. 75% of the Schedule fee for professional services rendered as part of a privately insured episode of hospital substitute treatment.

What steps can I take to ensure I get a Medicare benefit, if eligible?

  1. Always discuss the financial implications of a medical service request form with your referring doctor, prior to presenting at a pathology collection centre with the request form from the referring doctor. This is known as ‘informed financial consent’.
  2. Ensure that your referring doctor selects the ‘bulk-bill’ option, if present on the pathology request form and also encourage them to make any relevant clinical notes on the form.
  3. Contact your choice of pathology provider to check if they bulk-bill for the referred service. In cases where your doctor specifies a particular pathology provider on the request form due to clinical reasons you will not be able to choose any pathology provider. However, check the financial implications of the service with this pathology provider.
Once you have the invoice you can claim your Medicare benefit:
  • at a local Medicare service centre
  • online (Medicare Online Services), or
  • over the phone by calling 132 011
More information on how to lodge a claim can be found on the Department of Human Services website.

What are out-of-pocket costs and gap amounts?

The out-of-pocket cost is the difference between the Medicare benefit and what the medical practitioner, in this case the pathology provider, charges the patient. The gap amount is the difference between the Medicare benefit and the schedule fee.

How do I find out what I will be charged?

The Government encourages all patients and service providers (requesting practitioner or approved pathology practitioner) to have a discussion regarding all financial implications of the services being accessed prior to receipt. After the discussion, the patient can agree to have the service for the amount advised. This is known as ‘informed financial consent’. The requesting practitioner may indicate on a request form that a patient should be bulk-billed or only charged the schedule fee however; it is the approved pathology authority or the approved pathology practitioner that has the final say on whether a pathology test, listed on the MBS, is bulk billed or an out-of-pocket payment is incurred by the patient.

Some pathology tests have conditions associated with the number of times the item is allowed to be claimed with Medicare in a year. For example, prostate specific antigen testing MBS item 66655 for prostate cancer screening in a previously undiagnosed person is restricted to being claimed once in a 12 month period. The Department of Human Services calculates this as 365 rolling days from the date of service. If more than one test is performed within this period the patient will be responsible for the full payment of the test.

How much will I be charged for a pathology test?

Generally, bulk-billing rates are high in pathology for out-of-hospital testing; the cost for consumers of a test is typically the MBS benefit for that test so there is little incentive to publicly publish costs of tests. Medical practitioners are free to set their fees for their professional services. The amount specified in the patient’s account must be the amount charged for the service. The fee may not include a cost of goods or services which are not part of the MBS service specified on the account. However, the Government cannot control the fee that medical providers choose to charge nor can it compel them to bulk bill. For this reason an out-of-pocket payment may be required in certain instances. It may be worthwhile to check this with your pathology provider.

Am I entitled to choose my own pathology provider?

A patient can take a pathology request to a pathology provider of their choice unless the requesting practitioner has indicated that a particular approved pathology practitioner should perform the pathology tests for clinical reasons.

In addition, all branded request forms distributed to requesting practitioners on or after 1 August 2012 must carry a mandatory patient choice advisory statement regardless of hard copy or electronic format. The statement is to be as follows:

Your doctor has recommended that you use [insert name of pathology provider]. You are free to choose your own pathology provider. However, if your treating practitioner/ doctor has specified a particular pathologist on clinical grounds, a Medicare rebate will only be payable if that pathologist performs the service. You should discuss this with your doctor.

What is a bulk-billing incentive?

In order to support bulk billing, a small fee is paid on top of the relevant Medicare benefit, if the pathology provider chooses to bulk-bill the entire episode.

What are patient episode initiation (PEIs) fees and who can claim them?

PEI fees are for the collection and management of specimens – not for the pathology tests themselves. The PST contains item numbers relating to the collection of pathology specimens in various circumstances. These are called PEI items and each item has a corresponding fee for the collection of pathology specimens.

Depending on where the specimen is collected, the PEI fee will vary. However it is still considered part of the patient episode. For example; if a patient is billed for the episode they are entitled to receive a rebate for the PEI fee charged. In the instance that the patient is bulk-billed the Medicare benefit paid to the approved pathology practitioner will also include the PEI rebate. Only one PEI item is claimable per patient episode no matter how many pathology tests are performed. It is also important to note that a PEI can only be claimed where the approved pathology practitioner is a specialist pathologist.

What is episode coning?

For pathology services under the MBS, a patient episode comprises a pathology service or services which are requested for a single patient, on the same day by one or more practitioners.

Episode coning is an arrangement, described in Rule 18, which places an upper limit on the number of services in an episode for which Medicare benefits are payable and was introduced to prevent over servicing by doctors. Generally, when more than three items are requested in an episode by a general practitioner for an out-of-hospital service, Medicare only pays for the three most expensive items. Pathology services requested for hospital in-patients, or ordered by specialists, are not subject to these coning arrangements.

What are the rules for rounding of MBS fees and MBS benefits?

The Schedule fee and Medicare benefit levels for the medical services contained in the MBS are located with the item descriptions. The rules for rounding of these are explained below:

MBS benefits

MBS benefits, which may be 75% or 85% of the MBS fee depending on whether the service is provided in-hospital or out-of-hospital, are rounded up. This is outlined in Section G.10.1 of the Medicare Benefits Schedule Book, 'Where appropriate, the calculated benefit has been rounded to the nearest higher 5 cents', and is based on Section 10 (2A) (4) of the Health Insurance Act 1973, which states 'If an amount calculated under subsection (2) is not a multiple of 5 cents, that amount is to be rounded up to the nearest multiple of 5 cents'.

MBS fees

MBS fee rounding rules are that, after an adjustment to the MBS fees, they are rounded to the nearest 5 cents. When the calculated MBS fee is exactly midway between the 'rounded to' value (e.g. $114.975) then the value is rounded down. This is consistent with Government policy on rounding rules that have been in place since 1 November 1993, which arose from The Auditor General, Audit Report No 32, 1990-91.

What is a Rule 3 exemption?

Rule 3 restricts the payment of Medicare benefits so that when one or more requests are made on the same day for pathology services covered by the same item in the PST, only one benefit will be payable for the item, regardless of the number of times the test is performed either on the same day or on different days.

Rule 4 provides for a number of exemptions to this restriction allowing multiple services to attract benefits whenever they are performed for seriously ill or chronically ill patients with certain specified conditions. One of these specified conditions is for the estimation of prothrombin time (INR) in respect of a patient undergoing anticoagulant therapy. In these circumstances the account is endorsed “Rule 3 Exemption” by the pathology provider so that the Department of Human Services pays the rebate.

This is a suitable arrangement for this item since this test is required regularly and it would be inefficient and costly to make the patient get a new referral each time.

A Rule 3 exemption means that Medicare will pay a rebate for tests which would otherwise not be eligible.

What is a pathologist determinable service (Section 4BA)?

Most pathology services are Medicare eligible only if requested by the patient’s treating practitioner. Section 4BA of the Health Insurance Act 1973 specifies that the Minister may, after consulting the Royal College of Pathologists of Australasia, determine particular services that are Medicare eligible if the pathologist, on the basis of requested test outcomes, determines they are necessary.

What is the pathology process?


Flow chart showing pathway from medical consultation to Medicare claim.Long description of Figure 1: What is the pathology process?
Description of Figure 1:What is the pathology process? (Other 1 KB)