"Why Is There A Difference Between Medicare's Rebate and My Doctor's Fee?"

Patients often have difficulty appreciating why doctors charge more than the governments Medicare rebate. Two main lists of medical services and fees are published each year. These are a) the governments Medicare Benefits Schedule (MBS); and b) the Australian Medical Association's list of Medical Services and suggested fees (AMA List). Superficially, both books are the same, as they have a common origin and list the same medical services. The main difference between the MBS and the AMA list is the fees for specific medical services. MBS fees have not kept pace with rising costs, that is, increases in the costs of providing quality medical services. In contrast, the AMA List has been adjusted in line with the movement of these costs.

What is the MBS?

The commonwealth Auditor General has stated that fees in the MBS "simply represent the amount that the government, having regard to budgetary and economic considerations, is willing to pay." The MBS shows the amounts on which the Commonwealth government bases the payment of Medicare rebates. It is not described as a list of fair and reasonable fees, nor does it suggest that the fees are adequate to cover costs.

What is the AMA List?

Each year the AMA publishes its AMA List, which contains fees which cover doctors' work and practice costs. In the AMA's opinion, these fees are fair, reasonable and appropriate for the services listed. The fees adequately reimburse doctors for their time and skill and the many costs incurred in providing medical services. The suggested fees in the AMA List are adjusted in two ways:

Individual items - Items are added when a new medical procedure or test is approved. A costing exercise is often undertaken to determine the costs involved in providing the new service and a suggested fee is proposed at a level to reward doctors for their skill and to recover their outlays.

Adjustments to overall fee levels - There are many costs in running a quality medical practice. These include staff salaries and wages, practice costs (rent, stationary etc.), medical defence insurance and superannuation. Fees are adjusted for cost increases, which allows doctors to continue to provide quality medical services at the high level that is expected by the community.

When both lists were developed in the early 1970's, the fees contained in each were virtually the same, and gaps were not such a problem. Over recent years the suggested fees in the AMA list have increased in line with rising costs. The fees in Medicare's MBS have not.

Associated articles:

Consultation Fee Policy
Known Gap Policy
Surgery Payment Options

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