Annual Report 2016-17

Programme 1.2 Services to the community - Health - Annual Report 2015-16


Medicare is Australia’s universal health care system, which gives eligible people access to cost effective medical, optometry and hospital care and, in special circumstances, other allied health services.

In 2015-16, 24.6 million people were enrolled in Medicare and $21.4 billion was paid in benefits. The percentage of claims made digitally continues to grow achieving a high result of almost 96.1% with approximately 40% of all health practices digitally lodging 100% of Medicare claims generated at their practice.

Eligibility overview

To be eligible for services under Medicare a person must be 1 of the following:

  • an Australian citizen residing in Australia
  • a permanent resident or a New Zealand citizen residing in Australia
  • an applicant for permanent residency, meeting certain other criteria-restrictions and other requirements apply to people who have applied for a parent visa
  • covered by a ministerial order
  • a resident or citizen of a country with which Australia has a reciprocal health care agreement—only for medically necessary treatment while visiting Australia
Table 6: Medicare enrolments
  2013-14 2014-15 2015-16 % change
People enrolled at 30 June 23.8 million 24.2 million 24.6 million +1.7
Active cards at 30 June 13.5 million 13.7 million 13.9 million +1.5
New enrolments 603,070 581,922 588,574 +1.1

Medicare Entitlement Statements

People who do not meet the eligibility criteria for Medicare may apply to be exempt from paying the Medicare levy. If the application is approved, the department issues a Medicare Entitlement Statement which the person must lodge at the Australian Taxation Office (ATO) with their income tax return.

Table 7: Medicare Entitlement Statements
  2013-14 2014-15 2015-16 % change
Accepted applications 134,813 141,625 122,529 -13.5
Rejected applications 6,044 3,699 2,452 -33.7
Total applications 140,857 145,324 124,981 -14.0

Medicare Safety Net

The Medicare Safety Net helps eligible individuals, couples and families with the cost of out-of-hospital medical expenses.

Eligible out-of-pocket expenses count towards a Medicare Safety Net threshold. Once this threshold is reached a higher Medicare benefit is paid.

There are 2 Medicare Safety Net thresholds-the Original Medicare Safety Net and the Extended Medicare Safety Net.

The Original Medicare Safety Net threshold for the 2016 calendar year is $447.90 and applies to all Medicare cardholders. The amount that counts towards this threshold is the gap amount, which is the difference between the Medicare Benefits Schedule (MBS) fee that the government has set for the service and the Medicare benefit.

The Extended Medicare Safety Net has 2 threshold levels for the 2016 calendar year-$647.90 for Commonwealth concession card holders and FTB Part A recipients, and a general threshold of $2,030 for all other Medicare cardholders (singles and registered families). The amount that counts towards this threshold is the out-of-pocket cost, which is the difference between the doctor’s charge and the Medicare benefit.

Medicare claiming

A health professional can bulk bill a patient-this means the health professional can claim the Medicare benefit directly from the department as full payment for the service and not charge the patient a fee.

If a health professional charges the patient a fee, the patient can claim by:

  • paying the account, and then, if the health professional or practice offers electronic claiming, practice staff can lodge the claim electronically with the department and the benefit will be paid into the patient’s bank account, usually on the next working day or sometimes sooner
  • paying the account and then claiming the benefit from the department either online through myGov, using the Express Plus Medicare mobile app, by mail, in person at a service centre, or by phone
  • lodging the unpaid account with the department and receiving a cheque made payable in the health professional’s name that is given to the health professional along with any outstanding balance

Claims for in-hospital services received by patients can be made through simplified billing arrangements. This means claims are lodged by hospitals, billing agents, providers and day surgeries with the department and private health insurers-either through the Electronic Claim Lodgement Information Processing Service Environment (ECLIPSE), Simple Mail Transfer Protocol (SMTP) systems, or manually.

Table 8: Medicare services and benefits by claim type1
  2013-14 2014-15 2015-16 % change
Bulk billing 276.8 million 290.6 million 305.2 million +5.0
Patient claiming 53.9 million 53.3 million 53.3 million +0.2
Simplified billing 27.5 million 29.6 million 30.5 million +3.0
Total services
358.3 million 373.5 million 389.0 million +4.1
Bulk billing $13.0 billion $14.0 billion $14.8 billion +5.7
Patient claiming $4.2 billion $4.2 billion $4.2 billion +0.3
Simplified billing $2.1 billion $2.3 billion $2.4 billion +4.3
Total benefits
$19.3 billion $20.5 billion $21.4 billion +4.4
Average benefit
per service
$53.82 $54.90 $55.05 +0.3
Average period
(date of lodgement
to processing)
1.9 days 1.7 days 1.6 days -5.9

1. Numbers may differ due to rounding.

Table 9: Medicare services by payment type
  2013-14 million % 2014-15 million % 2015-16 million %
Cheque to claimant 3.3 0.9 3.0 0.8 2.7 0.7
EFT to claimant 36.6 10.2 35.6 9.5 35.3 9.1
EFTPOS payment to claimant 8.6 2.4 9.8 2.6 11.0 2.8
EFT to health professional 276.8 77.3 290.6 77.8 305.2 78.4
Pay doctor via claimant cheque 5.4 1.5 4.8 1.3 4.3 1.1
Payment to private health fund or billing agent 27.5 7.7 29.6 7.9 30.5 7.8
Total services1 358.3 100 373.4 100 389.1 100

1. Numbers may differ due to rounding.

Medicare electronic claiming

The 6 options for lodging Medicare claims electronically are:

  • Medicare Online-a secure internet connection for lodging claims from a health practice using practice management software
  • Medicare Express Plus Mobile app-provides consumers a digital means to claim on the go through their Mobile App for all MBS items providing a receipt is attached
  • Medicare Easyclaim-a secure EFTPOS terminal (stand-alone or integrated with practice management software) for lodging claims from a health practice
  • ECLIPSE-a secure connection for claiming services provided in hospitals used by providers, public and private hospitals, billing agents and private health insurers
  • Claiming Medicare Benefits Online-provides consumers a digital means to claim through Medicare online account via myGov for 23 of the most common MBS items. An image of the receipt is uploaded with the claim
  • SMTP-uses an electronic format similar to email for claiming bulk billing and simplified billing services
  • Health Professional Online Services (HPOS)-provides secure access for health professionals to bulk bill Medicare directly for any medical and some allied health services received by the patient and to submit Medicare patient claims on behalf of their patients-see also Online services for health professionals

Most health practitioners lodge bulk bill claims electronically, benefiting from streamlined processing and improved cash flow. At 30 June 2016, 98.3% of bulk billed claims were lodged electronically (see Figure 4) compared to 98% at 30 June 2015.

Electronic patient claiming continued to grow with 94% of general practitioner claims compared to 90.9% in 2014-15. Electronic specialist claims also increased, with 79.2% lodged electronically in 2015-16 compared to 70.9% in 2014-15.

At 30 June 2016, 99.5% of in-hospital services were processed electronically using simplified billing, of which 80% was processed using ECLIPSE compared to 74.1% at 30 June 2015. The balance of in-hospital services were processed electronically using the SMTP system.

Figure 4: Medicare services by claim type-electronic and manual 2015-16
Figure 4: Medicare services by claim type-electronic and manual 2015-16

Figure 5: Practices transmitting electronically 2013-14 to 2015-16
Figure 5: Practices transmitting electronically 2013-14 to 2015-16

Table 10: Volumes of services transmitted electronically
  2013-14 2014-15 2015-16 % change
Medicare Online
Bulk billing 253.5 million 265.4 million 279.9 million +5.5
Patient claiming 27.5 million 30 million 32.2 million +7.3
Medicare Easyclaim
Bulk billing 16.3 million 19.1 million 19.9 million +4.2
Patient claiming 8.3 million 10 million 11.2 million +12.0
Simplified billing 19.2 million 21.9 million 24.4 million +11.4
Bulk billing 141,500 74,500 01 -100
Simplified billing 8.2 million 7.5 million 5.9 million -21.3
Claiming Medicare Benefits Online
Patient claiming 251,500 352,400 208,200 -40.9
Total services 333.5 million 354.4 million 373.7 million +5.4
Percentage of
overall claims lodged
93.1 94.9 96.1 +1.2

1. SMTP ceased as a Bulk Bill lodgement channel as at 1 July 2015.

Medicare Compensation Recovery

Medicare Compensation Recovery aims to recover any Medicare benefits, nursing home benefits, residential care or home care government subsidies paid to a claimant as a result of their compensable injury or illness. When a person receives a lump sum compensation payment of more than $5,000, they may have to pay the costs of these back to the Australian Government before they receive their compensation payment.

Table 11: Compensation Recovery
  2013-14 2014-15 2015-16 % change
Cases finalised 52,678 50,268 87,504 +74.1
Total amount of
benefits recovered
$51.4 million $48.5 million $42.6 million -12.2

Health payments and services

Veterans’ Affairs processing

The department is responsible for making payments to health professionals for health services on behalf of the Department of Veterans’ Affairs (DVA). The department assesses claims and processes payments for the treatment of eligible DVA clients for medical, specialist, diagnostic imaging, pathology, allied health and dental services, and for private hospital admissions and prostheses.

DVA’s gold cards (for all clinically necessary health care needs, and all health conditions whether they are related to war service or not), white cards (for care and treatment of war caused or service related specific conditions) and orange cards (for pharmaceuticals only) for eligible veterans are produced by the department on behalf of DVA.

In 2015-16 the department continued to develop and promote electronic service delivery by implementing DVA Webclaim for services in the DVA medical schedule. DVA Webclaim offers an alternative to manual claiming and delivers significantly faster payments and reconciliation for health professionals.

DVA electronic claiming increased from 79.3% in 2014-15 to 85.7% in 2015-16. Electronic claiming for allied health services increased from 46.4% in 2014-15 to 65.6% in 2015-16.

Electronic claiming for medical services increased from 90.7% in 2014-15 to 93.5% in 2015-16.

Electronic claiming for hospitals increased from 70.8% in 2014-15 to 77.9% in 2015-16. Manual claiming for DVA decreased from 19.7% in 2014-15 to 13.9% in 2015-16.

Table 12: Department of Veterans’ Affairs processing
  2013-14 2014-15 2015-16 % change
Cards produced 248,3751 20,146 17,866 -11.3
Services processed 19.9 million 19.0 million 18.4 million -3.2
Total benefits paid $2.2 billion $2.1 billion $2.0 billion -4.8

1. This number is considerably higher than other years due to the re-issue of new cards to all DVA cardholders.

Australian Childhood Immunisation Register

The Australian Childhood Immunisation Register records and maintains information about vaccinations given to children and young individuals under 20 years of age.

Recognised vaccination providers, young individuals or a child’s parent or guardian can access immunisation records. These records assist with determining eligibility for various family assistance payments. Parents and guardians can also obtain immunisation history statements for their children who are under 14 years of age. Young individuals aged 14 years or over can access their own immunisation history statements. They can be used as proof of immunisation for enrolment in school or child care.

Table 13: Australian Childhood Immunisation Register
  2013-14 2014-15 2015-16 % change
Valid immunisation
episodes recorded at
30 June
4.7 million 4.8 million 4.1 million -14.6
Children aged under
7 years registered at
30 June
2.2 million 2.2 million 2.3 million +4.5
Children and young
individuals aged under
20 years registered at
30 June1
NA NA 6.3 million NA
Total amount paid to
immunisation providers2
$9.3 million $9.7 million $9.7 million 0.0

1. The Australian Childhood Immunisation Register expanded from recording vaccinations given to children aged under 7 years to children and young individuals aged under 20 years after the commencement of the Australian Immunisation Register Act 2015 on 1 January 2016.

2. Payments are made when a health professional notifies the department that they have completed an age-based immunisation schedule for a child. Each schedule includes a list of vaccinations needed against a number of diseases. Therefore the payment amount to health professionals does not reflect the number of valid immunisation episodes in a year.

Table 14: Percentage of children registered with appropriate immunisation coverage at 30 June
% change
Children aged 12-15 months 90.9 92.1 93.3 +1.3
Children aged 24-27 months 92.6 89.0 91.3 +2.6

Children aged 60-63 months

91.9 92.3 93.1 +0.9

Australian Organ Donor Register

The Australian Organ Donor Register is the national register for people to record their decision about becoming an organ and/or tissue donor for transplantation after death.

The register enables authorised medical personnel to verify a person’s decision about donating their organs and/or tissue for transplantation. People can register their donation decision online through myGov and on the department’s website, which also provides general information about organ and tissue donation for transplantation.

Table 15: Australian Organ Donor Register
  2013-14 2014-15 2015-16 % change
Consent registrations1
(including registrations
of people aged between
16-17 years) at 30 June
1,762,648 1,833,085 1,958,925 +6.9
Intent registrations2 at
30 June
4,258,713 4,276,626 4,275,431 -0.03
Total registrations 6,021,361 6,109,711 6,234,356 +2.0
Received calls to
enquiry line
18,652 17,998 19,301 +7.2

1. A legally valid consent registration occurs when someone provides a signed registration form to the Australian Organ Donor Register.

2. Intent registrations occur when people electronically register their decision to donate.

External Breast Prostheses Reimbursement Program

Under the External Breast Prostheses Reimbursement Program women who have had a partial or full mastectomy and/or lumpectomies as a result of breast cancer are reimbursed up to $400 for each new and replacement external breast prosthesis. Women can make a claim for new or replacement prostheses every 2 years.

Table 16: External Breast Prostheses Reimbursement Program
  2013-14 2014-15 2015-16 % change
Number of claims
16,078 15,200 14,986 -1.4
Total amount paid $6.4 million $6.1 million $6.2 million +1.6

National Bowel Cancer Screening Register

The National Bowel Cancer Screening Program aims to reduce the rate of bowel cancer and associated mortality.

The department’s role is to administer the National Bowel Cancer Screening Register which:

  • identifies and invites eligible people to participate
  • makes payments to medical professionals for providing information to the register about consultations and medical procedures for programme participants who have received positive test results
  • operates the information phone line for the general public and health professionals

In 2015-16 the department invited eligible people who turned 50, 55, 60, 64, 65, 70, 72 and 74 years in 2016 to undertake screening.

As part of the 2016 Budget the government announced the establishment of a National Cancer Screening Register from 1 May 2017. The National Cancer Screening Register, to be delivered by Telstra Health, will include state and territory administered cervical screening registers and the National Bowel Cancer Screening Register currently administered by the department.

Table 17: National Bowel Cancer Screening Program
  2013-14 2014-15 2015-16 % change
Invitations distributed 1,426,814 1,331,711 1,585,211 +19.0
Information line
calls received
100,591 159,967 183,209 +14.5

Continence Aids Payment Scheme

The Continence Aids Payment Scheme gives eligible people with severe and permanent incontinence yearly or twice-yearly payments to help buy continence aids products.

Table 18: Continence Aids Payment Scheme
  2013-14 2014-15 2015-16 % change
Number of applications
31,776 30,212 29,221 -3.3
Total amount paid $66.8 million $74.1 million $80.2 million +8.2

Child Dental Benefits Schedule

The Child Dental Benefits Schedule provides families, teenagers and approved care organisations with financial support for basic dental services for eligible children. Dental services include examinations, x-rays, cleaning, fissure sealing, fillings, root canals and extractions. Benefits for basic dental services are capped at $1,000 per child over 2 consecutive calendar years.

To be eligible children must:

  • be aged between 2 and 17 years on any 1 day of the calendar year
  • receive, or their family, guardian or carer receives, certain Australian Government benefits, such as FTB Part A, for at least part of the calendar year, and
  • be eligible for Medicare

In 2015-16 the department processed 5.1 million services and paid $312.7 million in benefits compared to 4.9 million services and $311.2 million in benefits in 2014-15.

Private Health Insurance Rebate

The rebate on private health insurance reimburses or discounts the cost of private health insurance cover. It is available to all people who are eligible for Medicare and have a complying health insurance policy.

The rebate is income-tested. The level of rebate that people are entitled to claim depends on their age and income.

The rebate can be claimed in 1 of 2 ways:

  • an upfront reduction in the cost of premiums-the Premiums Reduction Scheme (administered by the department)
  • a tax offset in annual income tax returns (administered by the ATO)
Table 19: Private Health Insurance Rebate
  2013-14 2014-15 2015-16 % change
Memberships registered 6.6 million 6.9 million 7.0 million +1.45
Total paid to private
health funds
$5.6 billion $5.8 billion $5.9 billion +1.7

Hearing Services Program

The Australian Government provides hearing services to people who are assessed as eligible by the Office of Hearing Services within the Department of Health. The department processes and pays claims via the HPOS eClaim facility to accredited hearing service contractors for the Hearing Services Program. The department administers the programme on behalf of the Department of Health.

Table 20: Hearing Services Program services and payments
  2013-14 2014-15 2015-16 % change
Services processed1 1,265,890 1,320,763 1,394,933 +5.6
Total amount paid2 $337.0 million $378.0 million $404.6 million +7.0

1. Services provided to individuals.

2. Payments made to hearing service contractors.

Practice Incentives Program

The Practice Incentives Program (PIP) consists of 11 incentives-see Table 21 below. The incentives are paid to medical practices and individual providers to encourage improvements to general practice. See Table 22 for data on practice participation in the program.

Table 21: Practice Incentives Program payments
After hours Incentive payments to practices encourage general practitioners (GPs) to provide their patients with appropriate access to after hours care.
Aged care access Service Incentive Payments (SIPs) to GPs encourage increased and continuing services in Australian Government funded residential aged care facilities.
Asthma Sign-on payments to practices encourage GPs to better manage the clinical care of people with moderate to severe asthma. SIPs are available to GPs for each asthma cycle of care completed for a patient with moderate to severe asthma.
Cervical screening Sign-on and outcomes payments to practices encourage GPs to screen women who have not had a cervical smear in the past 4 years, increasing overall screening rates. SIPs are available to GPs for each cervical smear taken on a woman aged between 20 and 69 years who has not had a cervical smear in the past 4 years.
Diabetes Sign-on and outcomes payments to practices encourage GPs to provide earlier diagnosis and effective management of people with established diabetes mellitus. SIPs are available to GPs for completing an annual diabetes cycle of care.
eHealth Incentive payments encourage practices to adopt new eHealth technology as it becomes available, to improve administration processes and the quality of care provided to patients.
Indigenous health Payments to practices encourage GPs to provide better health care for Aboriginal and Torres Strait Islander patients, including best practice management of chronic disease.
Procedural GP payment Incentive payments to practices encourage rural GPs to provide procedural services.
Quality prescribing Payments to practices encourage GPs to keep up to date with information on the quality use of medicines by taking part in activities recognised or provided by the National Prescribing Service.
Rural loading A rural loading is applied to the PIP payments of practices where the main location is outside a major metropolitan area.
Teaching Incentive payments to practices encourage GPs to provide teaching sessions to undergraduate medical students, to ensure the practitioners of tomorrow are appropriately trained and have actual experience of general practice.
Table 22: Practice participation in the Practice Incentives Program
  2013-14 2014-15 2015-16 % change
Total number
of practices
5,250 5,392 5,550 +2.9
Practices registered per incentive1
After hours2 NA NA 4 787 NA
Asthma 3,346 3,575 3,799 +6.3
Cervical screening 3,418 3,637 3,851 +5.9
Diabetes 3,410 3,632 3,846 +5.9
eHealth 4,618 4,876 5,037 +3.3
Indigenous health 3,763 4,041 4,351 +7.7
Practices receiving outcomes payments3
Procedural GP4 375 373 367 -1.6
Cervical screening 516 484 467 -3.5
Diabetes 1,001 1,091 1,168 +7.1
Indigenous health 5,086 5,691 6,186 +8.7
Other information
Indigenous health
incentive patient
62,266 64,780 76,360 +17.9
Teaching session
230,662 211,196 223,894 +6.0
Service Incentive
(asthma, cervical,
diabetes, aged care access
62,978 67,555 69,705 +3.2
Total amount
paid at 30 June
$218.6 million $228.1 million $340.1 million +49.1

1. Practices are automatically registered for the teaching, rural loading and quality prescribing incentives when approved for the program.

2. Practice Incentive Program-After Hours commenced 1 July 2015.

3. Outcome payments are made to practices that have reached the target level required to receive the incentive under the program. For the cervical screening and diabetes incentives, this is the number of practices that received an outcomes payment in the May quarter. For the Indigenous health incentive, this is the total number of outcomes payments.

4. This is the number of practices that received a procedural GP payment.

5. This is the total number of service incentive payments which includes the asthma incentive, cervical screening incentive, diabetes incentive and the GP aged care access incentive.

Practice Nurse Incentive Program

The Practice Nurse Incentive Program provides incentive payments to practices that support an expanded role for nurses working in general practice.

General practices across Australia, including those in urban areas, as well as Aboriginal Medical Services and Aboriginal Community Controlled Health Services, may be eligible for an incentive to help with the costs of employing a practice nurse. To be eligible, the practice must be accredited under the Royal Australian College of General Practitioners Standards for general practices.

Table 23: Practice Nurse Incentive Program
  2013-14 2014-15 2015-16 % change
Practices approved 4,252 4,338 4,594 +5.9
Payments made1 $295.8 million $314.3 million $335.7 million1 +6.8

1. Payments made in 2014-15 and 2015-16 includes the incentive paid and the DVA loading.

Mental Health Nurse Incentive Program

The Mental Health Nurse Incentive Program funds community-based general practices, private psychiatric practices and other appropriate organisations so they can employ mental health nurses to help provide coordinated clinical care for people with severe mental disorders. Following the Australian Government’s response to the Review of Mental Health Programs and Services, funding for the Mental Health Nurse Incentive Program transitioned to Primary Health Networks from 1 July 2016.

Table 24: Mental Health Nurse Incentive Program
  2013-14 2014-15 2015-16 % change
Organisations registered 381 341 333 -2.3
Payments made1 $31.7 million $32.7 million $30.5 million -6.7

1. Payments made by the department ceased in May 2016 as part of the transition of the Mental Health Nurse Incentive Program funding to Primary Health Networks from 1 July 2016.

Rural health programmes

Three rural health programmes administered by the department offer incentives and support for medical practitioners providing services in rural areas.

General Practice Rural Incentives Program

The General Practice Rural Incentives Program aims to encourage medical practitioners to practice in rural and remote communities and to promote careers in rural medicine.

Table 25: General Practice Rural Incentives Program
  2013-14 2014-15 2015-16 % change
practitioners paid
11,529 12,630 17,243 +36.5
Payments made 12,688 14,600 21,051 +44.2
Total amount paid $137.6 million $157.8 million $110.8 million -29.8

Rural Procedural Grants Program

The Rural Procedural Grants Program assists GPs who provide procedural or emergency medicine services in rural and remote areas to attend training courses in maintaining and improving skills, with up to $20,000 paid per GP a year.

In 2015-16, 2,054 GPs were paid a total of $19.3 million compared to 2014-15 when 1,992 GPs were paid a total of $18.9 million.

Rural Locum Education Assistance Program

The Rural Locum Education Assistance Program provides financial assistance to urban GPs who undertake emergency medicine training. They must commit to a four-week general practice locum placement in a rural locality within 2 years of finishing their training.

In 2015-16, 20 GPs were paid a total of $96,000 compared to 2014-15, when 20 GPs were paid a total of $90,000.

Medical indemnity

The Australian Government’s medical indemnity framework consists of a number of schemes to strengthen the longer-term viability and success of the medical insurance industry. To achieve this, the government provides financial support to reduce the impact of large claims and makes medical indemnity insurance more affordable for medical practitioners. The department administers the schemes under the Medical Indemnity Act 2002 and associated legislation.

Exceptional Claims Indemnity Scheme

Under the Exceptional Claims Indemnity Scheme medical practitioners are protected against personal liability for eligible claims that exceed the level of their insurance cover. In 2015-16 no claims were submitted against this scheme.

High Cost Claims Indemnity Scheme

Under the High Cost Claims Indemnity Scheme the government funds 50% of the cost of medical indemnity insurance payouts that are greater than the threshold amount, up to the limit of a medical practitioner’s insurance cover.

Table 26: High Cost Claims Indemnity Scheme
  2013-14 2014-15 2015-16 % change
Claims received 231 445 310 -30.3
Total benefits paid $30.1 million $47.2 million $49.9 million +5.7

Premium Support Scheme

Under the Premium Support Scheme eligible medical practitioners receive a subsidised reduction in their insurance premiums. Insurers are then reimbursed the subsidised amount. The scheme subsidises 60% of the cost of the premium beyond the 7.5% threshold.

Table 27: Premium Support Scheme
  2013-14 2014-15 2015-16 % change
Eligible practitioners 1,671 1,400 1,237 -11.6
Amount paid $9.3 million $7.8 million $8.0 million +2.6
Administration fees $1.4 million $1.3 million $1.4 million +7.7

Run-off Cover Scheme for doctors

Under the Run-off Cover Scheme, the government covers the cost of claims for eligible medical practitioners who have left the private medical workforce. The government uses funds paid into the scheme by medical indemnity insurers to cover incidents that occur in connection with a medical practitioner’s practice. Indemnity cover for eligible medical practitioners reflects the last claims arrangement they had with their insurer.

Table 28: Run-off Cover Scheme
  2013-14 2014-15 2015-16 % change
Claims received 60 81 56 -30.9
Total benefits paid $2.0 million $5.6 million $2.6 million -53.6

The Run-off Cover Support Payment is imposed as a tax on each medical indemnity insurer for each contribution year. This is used to fund eligible claims made under the Run-off Cover Scheme.

Medical indemnity insurers are reimbursed for implementation and compliance costs. In 2015-16, $1.6 million in administration fees was paid compared to $1.8 million in 2014-15. No implementation fees were paid.

Incurred-But-Not-Reported Indemnity Claims Scheme

Under the Incurred-But-Not-Reported Indemnity Claims Scheme the government covers the costs of claims from medical defence organisations that do not have adequate reserves to cover their liabilities. United Medical Protection-now known as Avant Insurance Limited-is the only medical defence organisation actively participating in the scheme.

Ongoing costs associated with the scheme are partly funded through a contribution payment called the United Medical Protection Support Payment which is imposed on people who were members of United Medical Protection on 30 June 2000. To be eligible, incidents that led to claims must have occurred before 30 June 2002.

Table 29: Incurred But-Not-Reported Indemnity Claim Scheme
  2013-14 2014-15 2015-16 % change
Claims received 65 65 54 -16.9
Total benefits paid $7.8 million $2.3 million $5.9 million +156.5

Midwife Professional Indemnity Scheme

The Midwife Professional Indemnity Scheme gives financial help to eligible insurers who provide indemnity to eligible midwives. The scheme includes a government contribution to assist with claims made against midwives. It benefits private independent midwives by providing indemnity insurance policies. In 2015-16 no claims were made under this scheme.

Administration fees are paid to midwife professional indemnity insurers to compensate for the work they undertake to administer the scheme.

In 2015-16, $150,000 in administration fees was paid compared to $175,000 in 2014-15.

Visiting medical practitioners

The department administers a payment and information system for hospital staff on behalf of the Western Australian Government. The payment is for claims processing from visiting health professionals who treat public hospital patients under individual contracts with participating public hospitals in Western Australia.

Table 30: Visiting medical practitioners
  2013-14 2014-15 2015-16 % change
Number of services 292,216 264,834 257,136 -2.9
Total value $78.9 million $78.4 million $77.9 million -0.7

National Health Funding Administrator Payments System

The National Health Funding Administrator Payments System facilitates payments from the Australian Government to states and territories for public hospital services through the National Health Funding Pool, as required under the National Health Reform Agreement.

The department provides programme, corporate and support services to the National Health Funding Body and the Administrator of the National Health Funding Pool to carry out their functions. All 8 jurisdictions are successfully using the payments system. In 2015-16 payments of $37.8 billion were made compared to $35.2 billion in 2014-15.

Health professional education services

The department provides high quality, accessible information and education resources and services to help health professionals access programmes. In 2015-16 the department:

  • engaged internal and external stakeholders to develop information and education resources for health professionals
  • facilitated 45 training workshops with 1,436 attendees under the national training programme for pharmacy interns

The department also developed targeted resources to assist health professionals in understanding Medicare and the PBS. These new resources include:

  • an Online PBS Authorities eLearning module
  • a Provider Digital Access eLearning module
  • Billing Medicare in Public Hospitals eLearning programme
  • a Practice Incentives Program eHealth Incentive eLearning module

Additionally a new ‘gateway’ into the eLearning programs via profession or topic was implemented.

In 2015-16 more than 60,700 educational products were downloaded from the department’s website and there were more than 128,000 visits to its education pages. This compares to 17,600 product downloads and 196,000 website visits in 2014-15.

Pharmaceutical Benefits Scheme

The Pharmaceutical Benefits Scheme (PBS) provides timely, reliable and affordable access to necessary medicines for Australian residents and eligible overseas visitors. Under the PBS the government subsidises the cost of medicine for most medical conditions.

Under the Repatriation Pharmaceutical Benefits Scheme (RPBS) eligible veterans, war widows and widowers can access some additional medicines and dressings at concession rates and, if clinically justified, items not listed in either the PBS or RPBS schedules.

In administering both schemes the department processes pharmacy claims, approves authority prescriptions, approves pharmacies and certain doctors to supply PBS medicines, and approves private hospitals and participating public hospitals to supply PBS medicines to eligible patients.

Table 31: PBS and RPBS expenditure
  2013-14 2014-15 2015-16 % change
PBS benefits
$9.3 billion $9.2 billion $10.9 billion +18.5
RPBS benefits
$0.4 billion $0.4 billion $0.3 billion -25.0
Total benefits
$9.6 billion $9.5 billion $11.2 billion +16.7
PBS services
211.8 million 213.9 million 210.1 million -1.8
RPBS services
12.3 million 11.6 million 10.5 million -9.5
Total services
224.1 million 225.6 million 220.6 million -2.2

1. Payments/services processed on behalf of DVA.

PBS eligibility

The price paid for PBS medicines depends on a person’s level of eligibility, and whether the approved supplier provides up to the optional maximum $1 co-payment discount that took effect from 1 January 2016. The 2 levels of eligibility are the general rate and the concession rate. See also PBS Safety Net below.

The patient contribution at the general rate rose to $38.30 from 1 January 2016. All Australian residents and eligible overseas visitors can access PBS medicines at the general rate.

Patients and their families with a valid concession card from the department or DVA are eligible for the concession rate of $6.20.

These figures are adjusted on 1 January each year in line with the consumer price index. Patients may pay extra for more expensive brands of medicines.

PBS Safety Net

The PBS Safety Net helps patients with the cost of their medicines when they or their families require a lot of prescription medicines in a calendar year.

The PBS Safety Net thresholds were adjusted from 1 January 2016, in line with the consumer price index. The 2016 general threshold is $1,475.70 and the concession threshold is $372 for concession card holders. After patients reach the relevant threshold, a pharmacist can issue them and their family members covered by the scheme a PBS Safety Net card. Their contribution for PBS medicines for the rest of the year will then be:

  • $6.20 for general patients
  • free for concession card holders

Patients may pay extra for more expensive brands of medicines.

Indigenous people’s access to the PBS

The department administers special PBS arrangements in remote Indigenous communities through Aboriginal Health Services and some state and territory-funded health services. Patients of approved remote area Aboriginal Health Services can access PBS medicines directly from the Health Service at no cost. Supply of these medicines to patients can be made by either a medical practitioner or an Aboriginal Health Worker or nurse working under the supervision of a medical practitioner, where consistent with State or Territory law.

At 30 June 2016 there were 164 approved Aboriginal Health Services around the country compared to 173 services at 30 June 2015.

The Closing the Gap PBS Co-Payment helps Aboriginal and Torres Strait Islander peoples living with chronic disease, or at risk of it, with the cost of PBS medicines. Since 1 July 2010 eligible patients have received PBS medicines free of charge or at the concession patient contribution rate.

Travelling with Pharmaceutical Benefits Scheme medicines

Under the National Health Act 1953 it is illegal to take or send PBS subsidised medicines out of Australia for reasons other than for the personal use of the exporter or another person, such as a child or elderly relative accompanying the exporter.

The Travelling with PBS Medicines Enquiry Line provides information and advice to people about their responsibilities and rights when travelling overseas with PBS medicines.

In 2015-16 the enquiry line received almost 2,500 calls which was the same as 2014-15. There were 43,875 website visits compared to 35,000 website visits in 2014-15.

Online claiming for PBS

Online claiming for PBS allows approved suppliers to lodge prescription claims with the department each time a PBS or RPBS medicine is dispensed. At 30 June 2016, 99.9% of approved suppliers of PBS or RPBS medicines used online claiming, maintaining the same percentage as at 30 June 2015.

Authority-required prescriptions

The Schedule of Pharmaceutical Benefits lists authority-required PBS prescriptions for the treatment of specific conditions which may require approval from the department before they can be prescribed to patients. An authority prescription also provides the option of seeking an increased quantity or repeat prescriptions of PBS or RPBS medicines. In 2015-16 the department received 6.8 million authority requests compared to 6.9 million in 2014-15.

On 7 May 2016, the department commenced a limited trial of the new Online PBS Authorities system, accessed via Health Professional Online Services. Approved prescribers participating in the trial were able to apply for PBS authority approvals online rather than telephoning the department.

Approving suppliers of PBS medicines

Under the National Health Act 1953, and with agreement from the Australian Community Pharmacy Authority (ACPA), the department can grant approvals to community pharmacies to supply PBS medicines. The number of applications referred to ACPA increased from 349 in 2014-15 to 441 in 2015-16:

  • 100% of applications were referred to ACPA within 9 working days of registration
  • 100% of applications recommended by ACPA were advised within 5 working days of the decision
Table 32: Approved PBS suppliers at 30 June
  2013-14 2014-15 2015-16 % change
Approved pharmacies 5,457 5,511 5,588 +1.4
Approved medical
23 21 19 -9.5
Approved hospital
104 116 122 +5.2
Approved hospital
hospitals participating in
pharmaceutical reforms
159 161 161 0.0
Approved hospital
specialised drugs only
78 77 79 +2.6

Digital eHealth

The department delivers core components of the National eHealth strategy including:

  • the Healthcare Identifiers Service
  • the My Health Record programme
  • the National Authentication Service for Health

Healthcare Identifiers Service

The Healthcare Identifiers Service (the HI Service) is the national system for uniquely identifying individuals and healthcare providers and organisations. Healthcare identifiers help to ensure that patients and their healthcare providers can have confidence that the right information is assigned to the right patient at the point of care. Healthcare identifiers are not health records and are not necessary to receive or claim healthcare benefits.

As the HI Service Operator (as defined in the Healthcare Identifiers Act 2010), the department assigns, collects, stores and maintains healthcare identifiers.

In 2015-16 the department:

  • assigned 591,597 identifiers to individuals (585,330 in 2014-15)
  • collected or assigned 35,806 identifiers to healthcare providers (33,387 in 2014-15)
  • assigned 796 identifiers to healthcare organisations, such as hospitals and pharmacies (531 in 2014-15)

The department continued to make improvements for matching of individual healthcare identifiers to improve usability of the HI Service for healthcare providers and organisations.

The HI Service annual report contains full details of HI Service operations and is tabled in Parliament each year.

My Health Record

The department delivers registration, enquiry services and some technical services for the My Health Record programme, previously called the Personally Controlled Electronic Health Record programme. The department delivers My Health Record services on behalf of the Department of Health.

In 2015-16 the department assisted the Department of Health to implement changes as part of the government’s 2015 Budget measure My Health Record-A New Direction for Electronic Health Records in Australia. This included supporting the My Health Record opt-out participation trial by:

  • notifying almost 1 million individuals in north Queensland and the Nepean and Blue Mountains areas of New South Wales about the trial
  • delivering face-to-face and phone services to support individuals located in the trial areas

National Authentication Service for Health

The National Authentication Service for Health (NASH) delivers authentication services to health-care providers and supporting organisations through the provision of Public Key Infrastructure (PKI) certificates and associated services.

Health-care providers and supporting organisations can use NASH PKI certificates to access the My Health Record system and send messages securely to other health-care provider organisations.

In 2015-16 the department issued:

  • 3,079 certificates to health-care provider organisations
  • 3,953 certificates to health-care provider individuals
  • 6 certificates to supporting organisations
This information was printed Monday 27 May 2019 from It may not include all of the relevant information on this topic. Please consider any relevant site notices at when using this material.

Page last updated: 5 July 2018