$7 co-payment proposal – how it will work

15 May 2014

Based on early advice from the Department of Health, this is a summary of how the AMA understands the $7 co-payment will be implemented by the Government.

The  co-payment will be introduced from 1 July 2015 and will apply to A1, A2, A11, A22 and A23 GP consultation items. It will not be applied to Chronic Disease Management items, health assessments and mental health items. Other key features of the co-payment proposal are:

  • It will not be mandatory for GPs to charge the co-payment;
  • The Medicare rebate for the relevant GP consultation items will be cut by $5. For those GPs that currently bulk bill patients and decide to charge the $7 co-payment, this would see a small net fee increase of $2 for general patients compared to current arrangements;
  • Privately billed GP patients will have their rebate cut by $5 in relation to the above items and thus face an increase in out of pocket costs;
  • Patients of GPs that waive the copayment will only be eligible for the new lower rebate and the GP will not be eligible for low gap incentive discussed later;
  • The $7 co-payment will also apply to out-of-hospital pathology and imaging services;
  • For concession card holders and children under 16, the co-payment will be limited to 10 visits per year (NB: only those visits where the $7 co-payment is applied count towards this threshold. Those visits where no co-payment is charged, or a smaller/larger co-payment is applied don't count towards this threshold);
  • The 10 visit threshold includes pathology and imaging visits, i.e. the total co-payment exposure for concession card holders and children is $70 per year;
  • The current bulk-billing incentive items will be renamed “low-gap incentives” and will only be payable where a GP only charges concession card holders and children under 16 the co-payment for any visits within the above threshold. Taking into account the lower rebate, $7 co-payment, and the low gap incentive, this would see a small net fee increase to the GP of $2 for these patients compared to current bulk billed arrangements;
  • The same low-gap incentive relating to concession card holders and children under 16 will apply beyond the above threshold if no patient contribution is charged by the GP, with the relevant MBS rebate also being lifted by $5. This means, in relation to GP visits beyond the threshold, the fee charged to the patient will be effectively be the same as it is now if the patient were bulk billed (ie the net fee increase of $2 to the GP does not apply);
  • Medicare rebates – except GP items – will be frozen for 2 years;
  • The co-payment does not count towards the Medicare Safety Net. 
  • Department of Veterans’ Affairs arrangements are not impacted by the co-payment. 

There are a number of issues to still to be worked out in implementing these changes. In particular how GPs will identify in real time the number of co-paid services a patient has had. The AMA will keep you updated on this and more as information comes to hand.