MBS freeze to thaw, MBS review to stay, Medicare levy to rise


By Mardi Chapman

10 May 2017

In last night’s Budget the Turnbull government confirmed it would lift the freeze on the indexation of bulk-billing incentives for general practitioners from 1 July.

Fees for GP and specialist consultations will be indexed from 1 July 2018 and specialist procedures and allied health services from 1 July 2019.

In other Medicare-related announcements:

  • Targeted diagnostic imaging items such as CT scans, mammography, fluoroscopy and interventional radiology will be indexed from 1 July 2020.
  • The Government will not proceed with proposed changes to bulk billing incentives for pathology and diagnostic imaging services.
  • $44.2 million over three years will continue to fund the clinician-led MBS Review to ensure all items represent best practice.

Medicare levy to rise

The Government announced they will fund big ticket items – the MBS, PBS and the National Disability Insurance Scheme (NDIS) – through an increase in the Medicare levy from 2.0 to 2.5% effective from 1 July 2019.

The levy will ensure the NDIS is fully funded with remaining monies flowing into a new Medicare Guarantee Fund to pay for future ‘essential health care’ provided under the MBS and PBS.


$1.2 billion will be provided for new and amended listings on the PBS, including more than $510 million for sacubitril with valsartan (Entresto) for chronic heart failure.

Saving will come from one-off price reductions for some medicines that have been on the PBS for 10 and 15 years, ongoing reductions in more PBS drug prices and support for the uptake of generic and biosimilar medicines.

Medical research

$65.9 million will be dispersed from the Medical Research Future Fund this year to support preventative health research ($20m), clinical trials ($33m) and other research ($12.9m).

An additional $5.8 million will be provided for research into childhood cancer including $1.4 million for brain cancer.

AMA response

The Federal AMA have largely welcomed the wind-back of the Medicare freeze saying it will provide GPs and specialists with certainty and security about their practices, and help address rising out-of-pocket costs for patients.

They also recognised a number of specific Budget initiatives including:

  • $350 million to help prevent suicide among war veterans
  • expansion of the Supporting Leave for Living Organ Donors Program,
  • measures to increase the vaccination rate,
  • a ban on gambling ads during live sporting broadcasts before30pm, and
  • $18.8 million to expand the Rheumatic Fever Strategy, in response to calls in the 2016 AMA Indigenous Health Report Card.

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