Rights to private practice and billing by hospital-salaried providers

There are many situations that can arise in the administration of Medicare billing in public hospitals. These case studies have been constructed to help you find how you can improve your Medicare billing practices.

Case study

Ms A is admitted as a public patient at her local public hospital with an umbilical hernia. She is treated by Dr B, a general surgeon. While in hospital, Ms A has an asthma attack. Dr B obtains informed financial consent for private care and refers Ms A for a private service. Dr B provides Ms A with a named referral to Dr C. 

Dr C is a respiratory physician working within the public hospital outpatient clinic who also has a right to private practice on the hospital premises. 

Dr C reviews Ms A and arranges for appropriate management for the asthma attack. Dr C bills MBS item 110 for a consultation as he has a named referral and is exercising his right to private practice as a staff specialist.

On Dr C’s advice, the patient is referred to a public hospital respiratory nurse practitioner to receive advice on the proper use of inhalers. The respiratory nurse practitioner sees the patient, advises the patient on proper use of inhalers and breathing techniques, and bills MBS item 82210 for the service.

Is this appropriate?

Billing by Dr C of item 110 is appropriate as he had a named referral and was exercising his right to private practice.

Billing by the nurse practitioner of item 82210 is not appropriate as publicly employed (hospital salaried) nurse practitioners cannot bill Medicare for services provided. This applies to all allied health providers employed by the public hospital. Unless a specific exemption is in place, only nurse practitioners and allied health providers in private practice are entitled to bill Medicare.

Patient referral requirements

In this example, Ms A is an admitted public patient for the treatment of the umbilical hernia. The asthma attack is an unrelated (underlying or new) condition. Care for the asthma is not included in the public hospital funding for the umbilical hernia.  It is therefore acceptable for Ms A to elect to receive private care and be referred to Dr C for consultation about the asthma attack. The referral from Dr C to the nurse practitioner is similarly part of Ms A’s service pathway for the asthma. It is unrelated to the care for umbilical hernia. However, this referral shifts Ms A’s care for the asthma into the public hospital system and should not be billed to Medicare.

It is not a requirement for public patients receiving public hospital services to have named referrals. 

If a public hospital outpatient clinic sees both public and private patients, it is the decision of the patient on whether they receive care as a public or private patient. The clinic should not require named referrals for all patients. A named referral should only be sought if the patient has elected to be a private patient. 

Additionally, under the NHRA, it is a requirement that referral pathways must not be controlled to deny access for patients to free public hospital services. This reinforces the importance of patients making a choice of being a private or public patient.

Key Points

It is a requirement of the National Health Reform Agreement (NHRA) that patients must have a named referral before they can obtain private outpatient services on public hospital premises. Three conditions must be met for this to be appropriate:

  1. The named referral must be to a medical specialist exercising a right of private practice.
  2. The patient must have elected to be treated as a private patient.
  3. The referrer must have obtained the patient’s informed financial consent.
Last updated: 
9 June 2021

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