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Rural case study

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.

The exemption allowing Medicare billing in a public hospital in this case study is not based on an existing exemption; it is illustrative only.

Case study

Day 1 – A 50 year old man presents to a rural public hospital emergency department (ED) with shortness of breath and fever.

Services provided to non-admitted patients in this hospital’s ED can be billed to Medicare and funded through the NHRA through a specific exemption that has been put in place by the Minister for Health under the Health Insurance Act 1973.  No other services can be billed to Medicare for public patients in this hospital.  The town has 2 GPs who each work a mix of time between consulting rooms, the ED and caring for admitted patients.  Surgeries and other interventional care are managed through ‘fly in, fly out’ arrangements with several general surgeons living in the region.

The nurse on duty takes a history and vital signs. They triage the patient as category 3 (to be seen in 30 minutes) and advise the on-call doctor. 

The doctor arrives and takes a history examination, diagnosing acute lobar pneumonia.  The doctor admits the patient to the hospital as a public patient and prescribes bed rest, oxygen therapy, and IV and oral antibiotics. The doctor also requests an X-ray and blood tests from the hospital’s contracted diagnostic imaging (DI) and pathology providers.  The doctor bills MBS item 47.

Day 2 - X-ray and blood tests are completed and reported by the contracted DI and pathology providers. The contracted providers bill multiple relevant Medicare items.

Days 2-4 - During this period the patient is seen by the doctor daily. The public hospital funds the attendances through a salary arrangement with the doctor.

Day 5 - The patient is discharged with an oral antibiotic. With the advice to see a GP if there are any strong side effects from the antibiotic. Or if the pneumonia does not appear to be resolving.

Day 17 – The patient seeks a follow-up with one of the town’s GPs in consulting rooms.  The pneumonia appears to be almost completely resolved and the GP decides not to prescribe any further antibiotic.  MBS item 23 is billed by the GP.

Is this appropriate?

Day 1 - Medicare billing is appropriate under the terms of the exemption. Noting it is for services provided in the ED and not to an admitted patient or outpatient (MBS and ABF).

Day 2 diagnostic imaging/pathology - Not appropriate (MBS).

Days 2-4 attendances by a GP under salary arrangementsAppropriate (ABF). 

Day 17 post discharge follow-up appropriate (MBS). As the follow-up was sought by the patient and was not required as part of the episode of public care.

Explanation: days 2-4

The patient was admitted as a public patient on day 2, therefore attendance by the GP between days 2 and 4 under salary arrangements is appropriate. As this involves a public funding stream for public patient care.  However, the Medicare billing of tests required for public care on day 2 results in duplicate payments being made through public hospital funding and Medicare for the same DI and pathology services.

Last updated: 
9 June 2021

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