Annual Report 2016-17

Services to the community - Health and Aged Care

In 2016-17 the Medicare program continued to support quality healthcare services. Technology enhancements within the department promoted digital transactions including simplified claims processes and the Medicare Safety Net assisted people with higher medical expenses.

The Australian Childhood Immunisation Register transitioned to the Australian Immunisation Register which is a whole-of-life national register that records vaccines given to people of all ages.

The department continued to encourage people to undertake screening for the National Bowel Cancer Screening Program which aims to reduce the rate of bowel cancer.

Medical practices received benefits administered by the department for eligible services such as operating outside of major metropolitan areas, making earlier diagnosis of diabetes and delivering after-hours services.

The department administered the Pharmaceutical Benefits Scheme and the Repatriation Pharmaceutical Benefits Scheme which subsidises certain medicines.


Medicare is Australia’s health care system which provides eligible people access to medical, optometry, hospital care and other allied health services, as applicable.

In 2016-17, 24.9 million people were enrolled in Medicare and $22.4 billion was paid in benefits. The percentage of claims made digitally continues to grow, achieving a high result of 97.1 per cent. Approximately 46 per cent of all health practices digitally lodge 100 per cent of their Medicare claims at their practice.

Eligibility overview

To be eligible for services under Medicare a person must be one 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 criteria—restrictions and other requirements apply to people who have applied for a parent visa
  • a Resident Return visa holder residing in Australia
  • a resident or citizen of a country with which Australia has a reciprocal health care agreement—only for medically necessary treatment while visiting Australia (a person must meet the specific eligibility requirements set out in the agreement)
  • covered by a ministerial order.
Table: Medicare enrolments
  2014-15 2015-16 2016-17
People enrolled at 30 June 24.2 million 24.6 million 24.9 million
Active cards at 30 June 13.7 million 13.9 million 14.1 million
New enrolments 581,922 588,574 593,976

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. When a person lodges their income tax return and they apply for a Medicare levy exemption, the ATO requires the applicant to acknowledge that they have been issued with a Medicare Entitlement Statement.

Table: Medicare Entitlement Statements
  2014-15 2015-16 2016-17
Accepted applications 141,625 122,529 116,918
Rejected applications 3,699 2,452 2,503
Total applications 145,324 124,981 119,421

Medicare Safety Net

The Medicare Safety Net provides benefits to eligible individuals, couples and families who have high out-of-hospital medical expenses.

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

The Original Medicare Safety Net threshold for the 2017 calendar year is $453.20 and applies to all Medicare cardholders. The amount that counts towards this threshold is known as the gap amount, 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 two threshold levels for the 2017 calendar year - $656.30 for Commonwealth concession card holders and FTB Part A recipients, and a general threshold of $2,056.30 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 that the claimant has assigned their right for the Medicare benefit to be paid to the health professional.

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 Medicare benefit can be claimed by:

  • paying the account, and then, if the health professional or practice offers digital claiming, practice staff can lodge the claim digitally with the department
  • paying the account and then claiming the Medicare benefit from the department either by using the Express Plus Medicare mobile app, through their Medicare online account via myGov, by mail, phone or in person at a service centre
  • lodging the unpaid account with the department and receiving a cheque made payable in the health professional’s name which the patient gives to the health professional, along with any outstanding balance.

From 1 July 2016, all Medicare payments for fully paid accounts are paid into the claimant’s bank account, usually the next working day. Cheques to claimants ceased from 1 July 2016.

Claims for in hospital services provided to patients can be made through simplified billing arrangements, which streamlines the way patients pay their bills and claim benefits from the department and their private health insurer. Simplified billing claims can be 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), Electronic Data Interchange transmitted by Simple Mail Transfer Protocol (SMTP) systems, or manually.

Table: Medicare services and benefits by claim type
  2014-15 2015-16 2016-17
Bulk billing 290.6 million 305.2 million 313.6 million
Patient claiming 53.3 million 53.3 million 52.9 million
Simplified billing 29.6 million 30.5 million 32.9 million
Total services processed 373.5 million 389.0 million 399.4 million
Bulk billing $14.0 billion $14.8 billion $15.6 billion
Patient claiming $4.2 billion $4.2 billion $4.3 billion
Simplified billing $2.3 billion $2.4 billion $2.5 billion
Total benefits paid $20.5 billion $21.4 billion $22.4 billion
Average benefit per service $54.90 $55.05 $56.08
Average period (date of lodgement to processing) 1.7 days 1.6 days 2.5 days
Table: Medicare services by payment type
  2014-15 million % 2015-16 million % 2016-17 million %
Cheque to claimant 3.0 0.8 2.7 0.7 n/a(b) n/a(b)
Electronic Funds Transfer (EFT) to claimant 35.6 9.5 35.3 9.1 38.0 9.5
EFTPOS payment to claimant 9.8 2.6 11.0 2.8 11.6 2.9
EFT to health professional 290.6 77.8 305.2 78.4 313.5 78.4
Pay doctor via claimant cheque 4.8 1.3 4.3 1.1 3.7 0.9
Payment to private health fund or billing agent 29.6 7.9 30.5 7.8 32.9 8.2
Total services(a) 373.4 100 389.0 100 399.7 100
  1. Totals take account of rounding.
  2. Cheques to claimants ceased from 1 July 2016.

Health professionals under Medicare

The department issues health professionals with a Medicare provider number so they can refer or request health services and claim benefits under the MBS and on behalf of DVA. A Medicare provider number uniquely identifies the health professional and the location from which a service is delivered. In 2016-17 the department issued 178,411 Medicare provider numbers. It is important to note that health professionals can be issued more than one provider number, if providing services at multiple locations.

Practices that have diagnostic imaging services, including radiation oncology, must be registered with the department and have a Location Specific Practice Number to claim Medicare benefits. The number of diagnostic imaging practices registered each year also continues to increase. In 2016-17 there were 5,026 diagnostic imaging practices registered with the department.

Health professionals who provide pathology services must have departmental approval to claim Medicare benefits. In 2016-17 there were 117 Approved Pathology Authorities, 507 Approved Pathology Practitioners, 750 Accredited Pathology Laboratories and 3,457 Approved Collection Centres registered with the department.

Table: Health Professionals under Medicare
  2014-15 2015-16 2016-17
Medicare provider numbers issued(a) 165,467 175,703 178,411
Diagnostic imaging practices registered 4,844 4,957 5,026
Approved Pathology Authorities 121 127 117
Approved Pathology Practitioners 593 541 507
Accredited Pathology Laboratories 743 743 750
Approved Collection Centres 3,563 3,513 3,457
  1. This figure does not equate to individual health professionals, as health professionals can be issued more than one provider number if providing services at multiple locations.

Medicare electronic claiming

Table: Volumes of services transmitted electronically
  2014-15 2015-16 2016-17
Medicare Online
Bulk billing 265.4 million 279.9 million 288.6 million
Patient claiming 30.0 million 32.2 million 33.8 million
Medicare Easyclaim
Bulk billing 19.1 million 19.9 million 20.1 million
Patient claiming 10.0 million 11.2 million 11.8 million
Simplified billing 21.9 million 24.4 million 28.0 million
Bulk billing 74 500 0 0
Simplified billing 7.5 million 5.9 million 4.8 million
Claiming Medicare Benefits Online
Patient claiming 352,400 208,200 130,500
Bulk Billing n/a 274,100 820,900(b)
Patient claiming n/a n/a 43,700
Total services 354.3 million 374.0 million 388.1 million
Percentage of overall claims lodged electronically 94.9 96.1 97.1
  1. 2016-17 is the first year that HPOS figures have been included in this table.
  2. The HPOS Webclaim bulk billing channel has shown strong growth since it was released in June 2015. In particular, this free claiming has been taken up by Allied Health Professionals, Dentists and some General Practitioners.

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: Compensation recovery
  2014-15 2015-16 2016-17
Cases finalised 50,268 87,504 62,867
Amount of benefits recovered $48.5 million $42.6 million $41.8 million

Health payments and services

Veterans’ Affairs processing

The department is responsible for making payments to health professionals for health services on behalf of 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.

The department and DVA continued to highlight the benefits of electronic claiming to providers by promotion of the DVA Webclaim channel. DVA Webclaim offers an alternative to manual claiming and delivers significantly faster payments and reconciliation for health professionals.

As a result of ongoing promotion of electronic claiming channels, DVA electronic claiming increased to 89.3 per cent in 2016-17, electronic claiming for allied health services increased to 74.7 per cent in 2016-17 and electronic claiming for medical services increased to 95 per cent in 2016-17.

Additionally, electronic claiming for hospitals increased to 82 per cent in 2016-17 and manual claiming for DVA decreased to 10.2 per cent in 2016-17.

Table: Department of Veterans’ Affairs processing
  2014-15 2015-16 2016-17
Cards produced 20,146 17,866 19,148
Services processed 19.0 million 18.4 million 17.8 million
Total benefits paid $2.1 billion $2.0 billion $2.0 billion

Australian Immunisation Register

On 30 September 2016 the Australian Childhood Immunisation Register became the Australian Immunisation Register (AIR), as announced in the government’s 2015-16 Budget. It expanded to a whole-of-life, national register that records all National Immunisation Program (NIP) vaccines, as well as most privately purchased vaccines, given to people of all ages in Australia. The AIR has over 25 million registrations, with increased functionality and enhanced reporting for state and territory health authorities and vaccination providers. Additional vaccines for vaccine-preventable diseases were added to the AIR and vaccination providers were targeted with increased education and support.

Adult vaccines, pneumococcal (pneumonia) for people over 65 years of age and zostavax (shingles) for people aged 70-79 years were added to the NIP in September 2017 and can now be recorded on the AIR.

Immunisation records, including Immunisation History Statements, can be accessed through the AIR by recognised vaccination providers, individuals aged 14 years or over, or a parent or guardian of a younger child. Individuals can easily download their own Immunisation History Statement through Medicare Online accounts in myGov or the Express Plus Medicare mobile app. These records are used as proof of immunisation for enrolment in school or child care and assist with determining eligibility for various family assistance payments. These records may be required for employment purposes where an individual is working with vulnerable people (such as employment in aged, health and child care industries).

Table: Australian Immunisation Register
  2014-15 2015-16 2016-17
Valid immunisation episodes(a) 4.8 million 4.1 million 10.2 million(b)
Total amount paid to immunisation providers(c) $9.7 million $9.7 million $10.0 million
  1. The AIR reports on the number of vaccination episodes. A single episode can administer one or more vaccination antigens. For example, the Measles Mumps Rubella vaccination given at 18 months under the National Immunisation Program schedule is only one injection but includes three vaccination antigens—measles, mumps and rubella. This would be recorded as a single episode on the register.
  2. The number of valid immunisation episodes for previous years related to those given to children aged less than seven. The 2016-17 figures include all valid immunisation episodes given to individuals of all ages and reflect the whole of life nature of the AIR from 30 September 2016.
  3. Payments are made on completion of the early childhood (aged less than seven years) National Immunisation Program schedule. Medical practitioners and other recognised vaccination providers are paid based on a completed schedule which may require more than one injection.

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 using Medicare Online accounts in myGov or the Express Plus Medicare mobile app on the department’s website which also has general information about organ and tissue donation for transplantation.

The department promotes and raises national awareness of the Australian Organ Donor Register by supporting DonateLife week and the annual Gift of Life Walk.

Table: Australian Organ Donor Register
  2014-15 2015-16 2016-17
Consent registrations(a) 1,833,085 1,958,925 2,150,789
Intent registrations(b) at 30 June 4,276,626 4,275,431 4,245,259
Total registrations(c) 6,109,711 6,234,356 6,396,048
Enquiry line calls received 17,998 19,301 13,495
  1. A legally valid consent registration occurs when a person aged 18 years or older registers on the Australian Organ Donor Register by providing a signed registration form or submits their registration using Medicare Online accounts in myGov or the Express Plus Medicare mobile app.
  2. Intent registrations occur when people register their decision to donate through channels that do not require a signature or electronic authentication, for example phone or email registrations. Whether registration is a consent or intent, approval will always be sought from the person’s family before proceeding with the donation process.
  3. This figure represents a cumulative total of the number of consent and intent registrations since the inception of the register.

External Breast Prostheses Reimbursement Program

The External Breast Prostheses Reimbursement Program provides reimbursement of up to $400 for each new or replacement external breast prosthesis for women who have had breast surgery as a result of breast cancer.

Claimants must be eligible for Medicare, have had breast surgery as a result of breast cancer and not have made a claim under the program in the past two years unless there is a medical reason.

The department has received favourable feedback about the program in particular about the process for claim submission and timely reimbursement.

Table: External Breast Prostheses Reimbursement Program
  2014-15 2015-16 2016-17
Number of claims processed 15,200 14,986 14,880
Amount paid $6.1 million $6.2 million $6.1 million

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 in the program
  • makes payments to medical professionals for providing information on the register about consultations and medical procedures for people who have received positive test results
  • operates the information phone line for the general public and health professionals.

In 2016-17 the department invited eligible people who turned 50, 54, 55, 58, 60, 64, 65, 68, 70, 72 and 74 years in 2017 to undertake screening.

As part of the 2015-16 Budget the government announced the establishment of a National Cancer Screening Register. The register will combine the National Bowel Cancer Screening Register and the eight state and territory-based cervical screening registers, leading to a ‘single view’ for Australians participating in cervical and bowel cancer screening.

Table: National Bowel Cancer Screening Program
  2014-15 2015-16 2016-17
Invitations distributed(a) 1,331,711 1,585,211 2,082,916
Information line calls received 159,967 183,209 171,640
  1. Since the phased introduction of biennial screening, (screening every two years—instead of every five years from January 2015) there has been incremental increases in participation.

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: Continence Aids Payment Scheme
  2014-15 2015-16 2016-17
Number of applications processed 30,212 29,221 28,325
Total amount paid $74.1 million $80.2 million $84.5 million

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 two consecutive calendar years.

To be eligible children must:

  • be aged between two and 17 years on any one 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 one day of the calendar year, and
  • be eligible for Medicare.

In 2016-17 the department processed 5.2 million services and paid $319.3 million in benefits.

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 one of two ways:

  • as an upfront reduction in the cost of premiums—the Premiums Reduction Scheme (administered by the department)
  • as a tax offset in annual income tax returns (administered by the ATO).
Table: Private Health Insurance Rebate
  2014-15 2015-16 2016-17
Memberships registered 6.9 million 7.0 million 7.3 million
Total paid to private health funds $5.8 billion $5.9 billion $6.0 billion

Stoma Appliance Scheme

The Stoma Appliance Scheme is administered under the National Health Act 1953. The department administers the scheme on behalf of the Department of Health and provides subsidised access to stoma aids and appliances to patients following surgery. The products are distributed through 22 regional stoma associations across Australia with approximately 44,000 members accessing the products.

Hearing Services Program

The department administers the Hearing Services Program on behalf of the Department of Health, providing services to people who are assessed as eligible by the Department of Health. The department processes and pays claims via the Health Professional Online Services eClaims facility to accredited hearing service contractors for the Hearing Services Program.

Table: Hearing Services Program services and payments
  2014-15 2015-16 2016-17
Services processed(a) 1,320,763 1,394,933 1,434,052
Total amount paid(b) $378.0 million $404.6 million $419.0 million
  1. Services provided to individuals.
  2. Payments made to hearing service contractors.

Practice Incentives Program

The Practice Incentives Program (PIP) consists of 11 incentives. The incentives are paid to medical practices and individual providers to encourage improvements to general practice. The table below contains data on practice participation in the PIP.

In 2016-17 the department undertook a range of activities including publication of articles in quarterly Incentive News updates to raise awareness of the PIP Indigenous Health Incentive (IHI) that helps improve the health of Aboriginal and Torres Strait Islander people at risk of a chronic condition.

These activities have seen an increase in the participation of eligible practices in the PIP IHI and a rise in the number of outcome payments made.

Table: Practice Incentives Program payments
After hours Incentive payments to practices encourage general practitioners (GPs) to provide their patients with 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 aged between 20 and 69 years who have not had a cervical smear in the past four years, increasing overall screening rates.
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 digital health 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 PIP payments to 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 trained and have actual experience of general practice.
Table: Practice participation in the Practice Incentives Program
  2014-15 2015-16 2016-17
Total number of practices participating 5,392 5,550 5,811
Practices registered per incentive(a)
After hours n/a(b) 4,787 5,169
Asthma 3,575 3,799 4,134
Cervical screening 3,637 3,851 4,175
Diabetes 3,632 3,846 4,177
eHealth 4,876 5,037 4,557
Indigenous health 4,041 4,351 4,743
Practices receiving outcomes payments(c)
Cervical screening(d) 484 467 473
Diabetes(d) 1,091 1,168 1,219
Procedural GP(e) 373 367 349
Indigenous health(f) 5,691 6,186 6,958
Other information
Indigenous health incentive patient registration payments 64,780 76,360 87,053
Teaching session payments 211,196 223,894 220,125
SIP(g) (asthma, cervical, diabetes, aged care access incentive) 67,555 69,705 70,570
Total amount paid at 30 June $228.1 million $340.1 million $341.7 million
  1. Practices are automatically registered for the teaching, rural loading and quality prescribing incentives when approved for the program.
  2. After-hours incentives 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. This relates to the number of practices that received an outcome payment in the May quarter for the cervical screening and diabetes incentives.
  4. Cervical screening practices must screen at least 70 per cent of their eligible patients in a 30-month reference period. For diabetes, the outcome payment is made to the practice when at least 2 per cent of practice patients are diagnosed with diabetes, and GPs have completed a diabetes cycle of care for at least 50 per cent of these patients.
  5. The number of practices that received a Procedural GP payment.
  6. This relates to the number of outcome payments made to practices. This includes both Tier 1 and Tier 2 payments. Tier 1 is paid to practices for each registered Indigenous patient when the practice provides a target level of care in a calendar year. Tier 2 is paid to the practice for providing the majority of care for registered Indigenous patients in a calendar year.
  7. The total service incentive payments made for the asthma incentive, cervical screening incentive, diabetes incentive and the GP aged care access incentive.

Practice Nurse Incentive Program

The Practice Nurse Incentive Program makes incentive payments to practices to support an expanded and enhanced 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: Practice Nurse Incentive Program
  2014-15 2015-16 2016-17
Number of practices participating 4,338 4,594 4,910
Amount paid to practices $314.3 million $335.7 million $347.0 million

Rural health programs

There are two rural health programs administered by the department which offer incentives and support for medical practitioners providing services in rural areas.

General Practice Rural Incentives Program (including the Rural Relocation Incentive Grants Program)

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

Table: General Practice Rural Incentives Program
  2014-15 2015-16 2016-17
Medical practitioners paid (GPs and specialists) 12,630 17,243(a) 7,589
Payments made 14,600 21,051 7,589
Amount paid $157.8 million $110.8 million $111.9 million
  1. The large volume of GPRIP participants paid in 2015-16 was a result of the one off pro-rata payments made in December 2015. This finalised all outstanding payments under the old GPRIP program rules up to 30 June 2015.

2016-17 saw the first full year of payments after re-design of the GPRIP. The most significant change was the move to a new location classification system (the Modified Monash Model) which more effectively targeted financial incentives to doctors working in rural and remote areas.

Rural Procedural Grants Program

The Rural Procedural Grants Program (RPGP) assists GPs who deliver 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.

RPGP works closely with the Australian College of Rural and Remote Medicine and the Royal Australian College of General Practitioners to streamline the payment process to eligible providers.

In 2016-17, 1,728 GPs were paid a total of $16.4 million.

Medical indemnity

The 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 effect 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. In 2016-17 the ANAO conducted an audit of The Management, Administration and Monitoring of the Indemnity Insurance Fund which was tabled on 19 October 2016.

The audit assessed the Departments of Health and Human Services’ administration, including oversight and monitoring arrangements, for the Indemnity Insurance Fund. The audit made four recommendations, one of which was directed to the department. It recommended a review of administrative arrangements with respect to key performance indicators, guidance material and controls to improve data integrity. The department agreed with this recommendation and action has been undertaken to address it.

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 2016-17 no claims were submitted against this scheme.

High Cost Claims Indemnity Scheme

Under the High Cost Claims Indemnity Scheme the government funds 50 per cent 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: High Cost Claims Indemnity Scheme
  2014-15 2015-16 2016-17
Claims received 445 310 378
Total benefits paid $47.2 million $49.9 million $47.7 million

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.

For premium periods starting before 1 July 2012, the scheme subsidises 80 per cent of the cost of the premium beyond the 7.5 per cent threshold. For premium periods starting on or after 1 July 2012 and before 1 July 2013, the scheme subsidises 70 per cent of the cost of the premium beyond the 7.5 per cent threshold. For premium periods starting on or after 1 July 2013, the scheme subsidises 60 per cent of the cost of the premium beyond the 7.5 per cent threshold.

Table: Premium Support Scheme
  2014-15 2015-16 2016-17
Eligible practitioners 1,400 1,237 1,268
Amount paid $7.8 million $8.0 million $7.6 million(a)
Administration fees $1.3 million $1.4 million $1.4 million
  1. Figure reflects recovery undertaken for a previous financial year ($120,000).

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: Run-off Cover Scheme
  2014-15 2015-16 2016-17
Claims received 81 56 47
Total benefits paid $5.6 million $2.6 million $2.9 million

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 scheme.

Medical indemnity insurers are reimbursed for implementation and compliance costs. In 2016 - 17, $1.4 million in administration fees was paid. No implementation fees were paid.

Incurred-but-not-reported Indemnity Claims Scheme

Under the Incurred-But-Not-Reported (IBNR) 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. The department determines claims lodged under the scheme on their merits and claims can often take a number of years to finalise, hence the amount paid under the scheme could vary each year. The number of claims submitted for IBNR over time will decrease because the eligibility criteria under the Act requires the incident must have occurred on or before 30 June 2002.

Table: Incurred-but-not-reported Indemnity Claim Scheme
  2014-15 2015-16 2016-17
Claims received 65 54 23
Total benefits paid $2.3 million $5.9 million $1.1 million

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 2016-17, 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 2016-17, $150,000 in administration fees was paid.

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: Visiting medical practitioners
  2014-15 2015-16 2016-17
Number of services 264,834 257,136 239,812
Total value $78.4 million $77.9 million $74.3 million

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 program, 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 eight jurisdictions are successfully using the payments system. In 2016-17 payments of $41.4 billion were made.

Health Professional Education Services

The department provides high quality, accessible information and education resources and services to help health professionals to access programs. In 2016-17 the department:

  • engaged internal and external stakeholders to develop information and education resources for health professionals
  • developed and transferred face-to-face workshop material into an online eLearning program to support the National Intern Training Program for pharmacy interns.

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

  • an Online Australian Immunisation Register eLearning module
  • a secure upload of forms in the Health Professional Online Services eLearning module
  • a Family and Domestic Violence eLearning module
  • a Medicare Patient Webclaim video to help business development officers engage directly with health professionals.

In 2016-17 there were 145,746 website visits to eLearning resources for health professionals.

Delivering aged care payments

The department delivers subsidies and supplements to approved aged care providers on behalf of The Department of Health and DVA. This helps aged care providers deliver cost-effective, quality care for frail older people as well as support for their carers. The department’s role is to efficiently and effectively make timely and accurate payments.

Table: Aged care overview
  2014-15 2015-16 2016-17
Residential claims processed 32,146 32,128 32,227
Home Care Package claims processed 23,393 21,875 27,488
Flexible care (transition care) claims processed 1,095 941 997
Short-term restorative care claims processed n/a(b) n/a(b) 53
Total claims processed 59,183 54,944 60,765
Total amount paid(a) $12.1 billion $13.2 billion $13.7 billion
Residential aged care services (aged care homes) 2,683 2,672 2,703
Home Care Package services (facilities providing community-based packages) 2,132 2,107 2,202
Flexible care services (transition care) 83 83 83
Short-term restorative care services n/a(b) n/a(b) 17
Active services transmitting (online claiming) 2,947 3,805 4,557
  1. Includes $1.3 billion in 2014-15, $1.2 billion in 2015-16 and $1.1 billion in 2016-17 paid on behalf of DVA.
  2. Historical data unavailable.

Supporting Aged Care Reforms

In 2016 - 17 the department implemented the following Aged Care Reform measures:

  • improved targeting of the Viability Supplement which assists small, rural and remote aged care services to provide quality care to residents
  • removed the six-month limitation on Aged Care Funding Instrument (ACFI) reviews to strengthen compliance actions
  • adjusted the ACFI questionnaire to better align with contemporary care practices
  • introduced the Short Term Restorative Care program, which increases flexible care options available to older Australians and improves their capacity to stay independent and live in their homes longer.

In 2016 - 17 the department supported the Department of Health in implementing Increasing Choice in Home Care reforms. The first stage was implemented on 27 February 2017. It reforms the way consumers access Home Care Packages by:

  • giving eligible people the right to choose from any approved service provider
  • changing payment arrangements so that funding for the package (subsidy and supplements) is paid to the provider chosen by the consumer
  • ceasing to allocate a specific number of Home Care Packages to individual providers, accounting for the 4.5 per cent increase in Home Care Package Services in 2016 - 17 reflected in the Aged care overview Table above.
  • continuing to cap the total number of packages available nationally.

The Increasing Choice in Home Care reforms impacted positively on home care package uptake rates and partially accounts for the 25.7 per cent increase in Home Care Package claims processed in 2016-17 reported in the Aged care overview Table above.

Aged Care Education and Training Incentive Program

The Aged Care Education and Training Incentive Program closed to new applicants on 31 March 2016 and will cease completely on 30 June 2020. The program provides incentive payments to eligible aged care workers employed by approved facilities undertaking specified education and training programs. The program helps aged care workers to improve their qualifications as a personal care worker, enrolled nurse or registered nurse within the aged care sector. Eligible aged care workers currently participating in the program who successfully complete a course can apply for an incentive payment on completion of their study. The incentive payment amount depends on the level of study.

Table: Aged Care Education and Training Incentive Program
  2014-15 2015-16 2016-17
Participants in vocational education and training 9,253 5,857 1,810
Participants in enrolled nurse training 1,899 1,267 592
Participants in registered nurse training 1,366 905 911
Total amount paid $10.4 million $6.5 million $3.1 million

Income and assets assessments for people entering aged care

During the year the department continued to perform means testing assessments for people entering aged care. The means test for those entering residential aged care is based on a combined assets and income-based assessment and calculation. The means test for those accessing a Home Care Package is based on an income-based assessment only.

Pharmaceutical Benefits Scheme

The Pharmaceutical Benefits Scheme (PBS) provides subsidised access to a wide range of medicines for Australian residents and eligible overseas visitors.

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 the schemes the department processes requests for approval from prescribers for medicines that require prior authority to access the PBS subsidy, and processes pharmacy claims for the supply of PBS and RPBS medicines to eligible patients.

Table: PBS and RPBS expenditure
  2014-15 2015-16 2016-17
PBS benefits paid(b) $9.2 billion $10.9 billion $12.1 billion
RPBS benefits paid(a)(b) $0.4 billion $0.3 billion $0.3 billion
Total benefits paid $9.5 billion $11.2 billion $12.4 billion
PBS services processed(b) 213.9 million 210.1 million 198.5 million
RPBS services processed(a)(b) 11.6 million 10.5 million 9.4 million
Total services processed 225.6 million 220.6 million 207.9 million
  1. Payments/services processed on behalf of DVA.
  2. Excludes: services for under co-payment prescriptions, services and benefits for prescriptions with a zero claim benefit amount (i.e. only an incentive was paid), Patient Refund claims, Aboriginal Health Service claims and claims that are yet to be closed by approved suppliers.

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 two levels of eligibility are the general rate and the concession rate. See also PBS Safety Net below.

The patient contribution at the general rate from 1 January 2017 is $38.80. 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 $6.30.

These amounts 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 high number of prescription medicines in a calendar year.

The PBS Safety Net thresholds were adjusted from 1 January 2017 in line with the consumer price index. The 2017 general threshold is $1,494.90 and for concession card holders the threshold is $378.00. 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 calendar year will then be:

  • $6.30 for general patients
  • nil for concession card holders.

Patients may pay extra for more expensive brands of medicines or if prescription repeats are filled too close together.

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 services at no cost. A medical practitioner or an Aboriginal Health Worker or nurse working under the supervision of a medical practitioner, can supply these medicines to patients.

In 2016-17, the Department of Health approved two additional Aboriginal Health Services to participate in these special PBS arrangements. At 30 June 2017 there were 166 approved Aboriginal Health Services around the country.

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

Travelling with PBS 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 2016-17 the enquiry line received almost 2,000 calls and 39,624 website visits.

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 2017, 99.9 per cent of approved suppliers of PBS or RPBS medicines used online claiming.

Authority-required prescriptions

The Schedule of Pharmaceutical Benefits lists authority required PBS medicines which may need approval from the department before they can be prescribed to patients. These medicines are for the treatment of specific conditions. An authority prescription also offers the option of asking for an increased quantity or increased repeat prescriptions of PBS medicines. In 2016-17 6.5 million authority approval requests were received. (Note: Figures include RPBS authority approval requests administered by DVA of 0.4 million in 2016-17).

From 1 July 2016 the department expanded its online capability to enable approved prescribers to get a PBS authority approval online.

This removes the need for prescribers to phone the department for most authority approvals.

Approving suppliers of PBS medicines

Under the National Health Act 1953 the department approves private hospitals, participating public hospitals and medical practitioners to supply PBS medicines.

Table: Approved PBS suppliers at 30 June
  2014-15 2015-16 2016-17
Approved pharmacies 5,511 5,588 5,665
Approved medical practitioners 21 19 13
Approved hospital authorities—private hospitals 116 122 129
Approved hospital authorities—public hospitals participating in pharmaceutical reforms 161 161 164
Approved hospital authorities—highly specialised drugs only 77 79 79

Prescription Shopping Program

The Prescription Shopping Program is administered on behalf of the Department of Health in accordance with the Human Services (Medicare) Regulations 1975. The program helps prescribers identify patients who get more PBS subsidised medicines than they medically need and provides information to assist prescribers to make informed prescribing decisions and better manage the health outcomes of their patient.

The program has a Prescription Shopping Alert Service and a 24 hour Prescription Shopping Information Service enquiry line available to prescribers and approved suppliers.

Digital Health

From 1 July 2016, the governance arrangements for digital health services changed and the department now delivers these services on behalf of the newly established Australian Digital Health Agency (ADHA). Before 2016-17, the department delivered digital health services on behalf of the Department of Health and the former National eHealth Transition Authority.

The department is continuing to work closely with ADHA to improve processes for healthcare providers registering and participating in digital health. The digital health services the department provides are:

  • the Healthcare Identifiers Service (HI Service)
  • components of the My Health Record program
  • the National Authentication Service for Health.

Healthcare Identifiers Service

The HI Service is a 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.

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

Table: Healthcare identifiers
  2014-15 2015-16 2016-17
Assigned to individuals 585,330 591,597 597,008
Collected or assigned to healthcare providers 33,387 35,806 37,527
Assigned to healthcare organisations 531 796 943

Tabled in Parliament each year, the HI Service annual report contains full details of HI Service operations.

My Health Record

The department supports the My Health Record program by delivering registration and enquiry services and some technical services.

Table: Registrations processed for My Health Record
  2014-15 2015-16 2016-17
Consumer 356,028 337,318 278,573
Provider organisations 367 839 1,114

In line with the 2016-17 Budget measure: My Health Record—continuation and expansion, the department will transfer support services for My Health Record to ADHA during 2017-18.

National Authentication Service for Health

The National Authentication Service for Health (NASH) delivers authentication services to healthcare providers and supporting organisations by providing Public Key Infrastructure (PKI) certificates and associated services.

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

Table: NASH PKI Certificates issued
  2014-15 2015-16 2016-17
Healthcare provider organisations 5,559 3,079 6,469
Healthcare provider individuals 687 3,953 1,198
Supporting organisations 12 6 21

Reporting under the Human Services (Medicare) ACT 1973

As mentioned in Part 1.2, the Minister for Human Services is responsible for administering the Human Services (Medicare) Act 1973, except to the extent that it is administered by the Minister for Health.

Part IID of the Human Services (Medicare) Act 1973 gives the Chief Executive Medicare certain powers for the purpose of investigating whether civil or criminal offences have been committed in relation to health programs which the department delivers. Section 42 of the Act requires the department to report on the use of particular investigative powers. During 2016-17 the department did not exercise powers under Part IID of the Human Services (Medicare) Act 1973.

This information was printed Monday 20 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: 11 July 2018