Service locations and private services in public hospitals

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 visits Dr B, a dermatologist, at his private practice rooms. Dr B has admitting rights to the local public hospital and so arranges for Ms A to be admitted for her condition.

Ms A elects to be admitted as a private patient and be seen by Dr B privately. Dr B routinely sees patients privately at this public hospital. They pay a sessional fee to the hospital for use of the facilities and required services, and otherwise retains the full fee as income.

The next day Dr B sees Ms A on the ward and arranges for further investigations. Dr B records his clinical findings and treatment plan in Ms A’s clinical notes.

Dr B bills MBS item 104 for the initial consultation provided at her private practice rooms. Dr B then bills MBS item 105 for the subsequent consultation provided in the hospital.

Is this appropriate?


Ms A is an admitted private patient and Dr B personally performed both the initial consultation and the subsequent consultation.

The different locations for these services is irrelevant for Medicare purposes.

Dr B has maintained enough clinical notes of the services provided to Ms A. The services were paid for by a single funding source (Medicare).

It should be noted, however, that different contractual or payment arrangements could lead to the service infringing the legislation. For example, if those contractual arrangements explicitly require the provider to bill Medicare for services provided on hospital premises, and/or result in payments for the service being received from both the public hospital (or administrator) and Medicare.

Practitioners should consider seeking their own legal advice on any risks associated with particular arrangements when providing private services in a public hospital.

Key Points

  • The different locations for these services is irrelevant for Medicare purposes.
  • Different contractual or payment arrangements can lead to the service infringing the legislation.
Last updated: 
9 June 2021

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