Review of methadone treatment in Australia

12.6 Suggested funding approach

Page last updated: October 1995

In section 9, we outlined a preferred service delivery model which could be used as a guide for future service delivery mechanisms. This model has been based on the criteria of matching individual clients' needs with the services provided by suitably qualified and experienced practitioners. In this section, we describe a funding approach which seeks to provide an appropriate mechanism for the remuneration of the services provided under this model.

The preceding discussion of alternative funding approaches compared and contrasted the relative advantages and disadvantages of four alternative approaches, and variations thereof. The approaches were also rated against a number of criteria as specified in the Terms of Reference for this review.

Discussions with the steering committee for this review have suggested that the most important criteria for the selection of a funding approach are:

  • the capacity of the funding approach to promote best practice in treatment
  • simplicity of administration of the funding approach and
  • the capacity of the funding approach to minimise potential for abuse and fraud.
Of the alternatives considered, the choice narrows down to the existing fee for service approach, with methadone services separately identified in the CMBS (i.e. option 2) and the client management approach (option 3).

Option 1 represents maintenance of the status quo, which for the reasons outlined previously, needs improvement. Option 4 may embody either option 2 or option 3 in its payment mechanisms, since its structure represents more a change to the funding and purchasing roles of the States and the Commonwealth, rather than a change to the underlying payment methodology. This Option could therefore apply under either option 2 or option 3.

The choice between the two preferred options becomes primarily one between the extent to which they provide opportunities to promote best practice and support the proposed service delivery model, and their acceptability to service providers. The client management approach is more likely to satisfy the first of these criteria, while the fee for service approach is more likely to satisfy the latter. Both are expected to offer similar advantages (and disadvantages) in respect to their administrative simplicity and potential for abuse.
Top of page
On balance, we consider that a client management payment approach is most likely to provide the appropriate financial framework for the service delivery model described. The key elements of the suggested payment approach are:
  • An annual fee for the treatment of stable clients by approved medical practitioners, based on the average cost over a two year period using the treatment profile outlined in the approved guidelines for methadone treatment. This could be achieved by establishment of an annual fee payable by the Commonwealth as a Health Program Grant which would cover all consultations with the treating practitioner for methadone maintenance therapy and the costs of urinalysis. The level of fee to be paid may be expected to be of the order as that described in section 10 (table 20) for GPs. The treating practitioner would be responsible for the payment of any urinalysis tests ordered, as part of their client management role. Urinalysis tests for clients participating in methadone programs would therefore be removed from the CMBS.

  • For more complex cases, a similar fee structure would apply under the Grants scheme, with the fee set at a higher level to take account of the additional qualifications and training of practitioners approved for these services (as described in the service delivery model) and the greater intensity and frequency of services provided to these clients. The level of this fee needs to be determined, but may be expected to be higher than that paid for stable clients, and lower than the average costs exhibited for psychiatrists under the current payment structure. In this regard, further analysis of the treatment profile of this group of clients together with consideration of the level of training required is needed.

    Given that these clients may be expected to either reach a level of stability (in which case they should be treated under the preceding item number), or cease to participate in the program altogether, monitoring of clients receiving these services for extended periods may help to reduce any tendency to charge at the higher levels for unnecessarily long periods.

    Practitioners would apply to the Commonwealth for a grant at the time a client is admitted to their care. This will require a list of accredited practitioners to be established and maintained to ensure their eligibility for grants at the different levels of complexity. In addition, the process of application needs to be streamlined to facilitate and encourage practitioner involvement.

  • Fees charged for the dispensing of methadone would be separate from the annual fee paid under the grant. Two options are considered in relation to these fees. Regardless of which option is chosen, and as previously recommended, we consider that dispensing fees should be capped at an affordable client contribution level as part of the approval process for dispensers. This would apply to both community and clinic-based pharmacies.
Under the first option, the current arrangement of clients paying pharmacists directly for dispensing of methadone would continue. This approach is administratively more simple, and enables payment to be made at the time the service is provided. Setting a maximum fee for these services reduces the potential for abuse or overcharging.

Under the second option, clients would pay the medical practitioner a fee equal to the approved dispensing fee. The concept behind this approach is that it reinforces the role of the medical practitioner as the case manager. The timing and frequency of these payments is somewhat problematic, particularly since the frequency of dispensing is considerably greater than the frequency of consultation by practitioners. The practitioner would then be responsible for establishing a contract with pharmacists (either community or clinic based) and pay the approved fee for dispensing services to them on behalf of clients under their treatment.

The key difference between these options relates to the extent of control conferred on medical practitioners by the funding approach, and the level of administrative burden placed upon them. Under the first approach, separation of the funding mechanisms used to pay the prescriber and dispenser provides greater flexibility to clients in regard to their choice of dispenser. It also limits the administrative burden on the medical practitioner. Under the second approach, the existence of a financial linkage between the prescriber and dispenser may help reinforce the clinical relationship that the service delivery model seeks to establish. As such it may promote a closer relationship between the two main components of treatment, which is consistent with models of best practice. However, it does so at the cost of a greater administrative burden on the medical practitioner, and at the risk of potential abuse either through collusion between the two parties, or the exercise of financial power by one party over the other. Under these circumstances, the issue becomes one of judgment as to the value placed upon the relationship between the dispenser and the prescriber, and the extent to which the funding system should reinforce that relationship.
Top of page
Application of this funding approach clearly faces many challenges, both in its underlying principles and in its use in practice. The concept of a client management funding approach is receiving greater support in institutional settings in both the public and private sectors in Australia (for example the use of casemix payments in public and private hospitals) and in a range of health services overseas. However, it does not yet have widespread support among medical practitioners in Australia, particularly when applied to clients treated in community settings. Consequently, its implementation in the field of methadone services is likely to receive considerable attention and possible opposition.

At the same time, there are a number of practical issues that will need to be addressed. These include:
  • Determining an appropriate differential fee structure for complex and stable cases, having regard to differences in service intensity both between the two groups and over time, and the qualifications and experience of service providers treating the different client groups
  • Identifying and agreeing the mechanism for payments to pharmacists for the dispensing and administering of methadone
  • Assessing the acceptability of the payment system to medical practitioners, and the potential impact on the capacity of the system to meet current and anticipated demand for services
  • Minimising the administrative complexity for medical practitioners to apply for Health Program Grants for methadone services and
  • Establishing a payment mechanism by the Commonwealth for methadone services which minimises the potential for duplication of payment between practitioners, while also providing for client mobility between practitioners.
Each of these issues will need to be addressed in conjunction with the relevant professional bodies and associations, as well as the State and Commonwealth health authorities.

It must be recognised that any payment system is limited in its capacity to influence practitioner behaviour and the quality of services provided. It is essential, therefore, that the payment system be augmented by appropriate clinical training and accreditation programs of the type described elsewhere in this report. These programs should apply at both the individual prescriber and dispenser level, as well as to the settings in which services are provided.
Top of page