Specialists’ revenue hit by Medicare freeze

Medical politics

By Michael Woodhead

16 Jan 2019

Specialists’ revenue has fallen by about $3 per standard consultation since the Medicare freeze started in 2012, a new analysis shows.

But specialists’ overall revenue from consultations has remained about the same because of increased use of higher fee items for longer complex consultations, according to researchers from the Centre for Health Policy at Melbourne University.

Their analysis focused on Medicare claims for by 12 medical specialities for Item 110 (fee $150.90 in 2015), which applies to a standard initial outpatient consultation.

They also looked at specialists’ use of the ‘complex’ consultation item 132 (fee $263.90), which is for a longer initial consultation of at least 45 minutes with a patient who has two or more morbidities to develop a treatment plan.

Between 2011 and 2015 the mean revenue per initial consultation (Item 110) decreased by $2.69, from $181.37 to $178.68, after accounting for bulk billing rates and inflation.

However, during the same period the proportion of consultations using item codes for complex patients increased from 19.3% to 24.8%. This meant that the average consultant Medicare revenue for all initial consultations (standard and complex items) increased by $1.10 from $201.65 to $203.95.

Proportion (%) of consultations using Item 132 (for patients with multiple comorbidities):

Speciality 2011 2015
Medical oncology 51.7 59.8
Rheumatology 35.5 44.7
Haematology 32.9 37.9
Endocrinology 32.2 38.5
Neurology 28.8 41.4
Respiratory medicine 19.6 28.9
Cardiology 8.3 12.4
Gastroenterology 3.6 5.6
Mean 19.3  24.8


The researchers, led by Professor Gary Freed, said the findings suggested that the government’s attempt to control Medicare expenditure with a freeze on fees may have had unintended consequences.

Consultation fees had not kept pace with inflation, and medical practice operating costs had risen by 23% more than the rate of inflation between 2011 and 2014, they noted.

“Changes in billing practices may or may not have been conscious decisions made by doctors to offset the effect of the Medicare freeze on revenue,” they wrote.

But the analysis contradicted predictions that the rebate freeze would lead to doctors offering fewer bulk billing consultations. Rates for specialists’ initial consultations increased slightly from 36.% to 38.0%, though there was significant variation between specialities.

The findings are published in the journal Australian Health Review.

Bulk billing rates (%) for initial consultation Item 110

Speciality 2011 2015
Haematology 52.9 59.7
Medical oncology 53.5 52.9
Cardiology 39.5 41.7
Endocrinology 37.8 40.7
Neurology 38.3 37.0
Gastroenterology 36.0 36.7
Respiratory medicine 34.2 35.7
Rheumatology 27.2 30.2
Mean 36.7  38.0


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