The rebates offered to doctors for medical services will be reviewed in a major overhaul of the Medicare system, the health minister has announced.

Sussan Ley said overwhelming feedback received during her wide-ranging consultations was Medicare’s structure no longer efficiently supported patients and practitioners to manage chronic conditions or the complex interactions between primary and acute care.

“Basically, there’s wide agreement the Medicare system in its current form is sluggish, bloated and at high risk of long-term chronic problems and continuing to patch it up with bandaids won’t fix it,” she said.

She announced a taskforce to examine the Medicare Benefits Schedule, an advisory group on primary health care, and an initiative to develop clearer rules for Medicare compliance.

MBS taskforce: Will be led by Professor Bruce Robinson, Dean of the Sydney Medical School, University of Sydney. The MBS had more than 5500 services listed and not all “reflect contemporary best clinical practice” Ley said.

Primary Health Care Advisory Group: Will be led by former AMA President Dr Steve Hambleton and will look at ways to provide better care for those with complex and chronic illnesses, innovative care and funding models, improved mental health care, and greater connection between primary health care and hospital care.

Medicare compliance rules and benchmarks:  The vast majority of medical practitioners provide quality health care, but a small number do not do the right thing in their use of Medicare, said Ms Ley. This group would work with clinical leaders, medical organisations and patient representatives on compliance rules and benchmarks.

The proposed reforms would be an ongoing process, with each taskforce expected to report back with key priority areas for action in late 2015.

Ms Ley said the pause on indexation of GP and specialist Medicare rebates would remain while the Government worked with health professionals and patients to reform the system and identify waste and inefficiencies.

The Government’s consultations did not include a co-payment policy – or proposal to examine one, she said.