Thursday, November 16, 2017

Medicare Indexation in a Nutshell

Loryn Einstein, Medical Billing Experts outlines the long awaited indexation of the Medicare Benefits Schedule. The long awaited indexation of the Medicare Benefits Schedule commenced on 1 July 2017 as outlined in the 9 May 2017 budget announcements.

This was the first indexation of certain GP services since 1 July 2014. The Indexation of the Medicare Benefits Schedule was limited to three bulk billing incentives as follows:

The next phase of Medicare Indexation is scheduled for 1 July 2018. Specialist fees on the indexation schedule for 1 July 2018 have not been indexed since 1 November 2012. The item numbers to be indexed are GP Standard Attendances and Specialist consultations listed in the below table.

The indexation amounts will be similar to the 1 July 2017 1% indexation of the three bulk bill incentive item numbers. For example an initial consultation for a physician (item 110) has a current fee in the Medicare Benefits Schedule of $150.90. With an increase of 1%, the full fee as at 1 July 2018 would be expected to be $152.41 (with inpatient rebate amount increasing from $113.20 to $114.33 and the outpatient rebate amount increasing from $128.30 to $129.58).

The following round of indexation is scheduled for 1 July 2019 when more than 3,000 Specialist procedures and a number of Allied Health item numbers will be indexed. The final round of indexation of the Medicare Benefits Schedule is 1 July 2020 with the indexation of a range of diagnostic imaging item numbers including select items across Mammography, Fluoroscopy, Interventional Radiology and Computer Tomography.

It is worth noting that the indexation of the Medicare Benefits Schedule will be funded in part by a predicted $103.8 million in cost savings from improved compliance and debt recovery programs.

For those of you who have attended my Medical Billing Basics lecture at The Private Practice 3 day 'Comprehensive', you will have an understanding of how the Medicare compliance and debt recovery programs function.

The focus of the Department of Health under the new budget will be the enforcement of the provisions in the Health Insurance Act 1973; that health providers are responsible for the accuracy of all Medicare claims made against their provider number and consequently they are responsible for repaying funds owed back to the Commonwealth in the event of improper billing.

The 2018 Budget included a range of Health items that are well worth discussion. A consolidated list of the major budget items is below.

Whilst most of the line items in this table are self-explanatory, a few of the Budget proposals warrant further consideration.

The costs of the MBS are one third of all Commonwealth healthcare expenditure and 5% of overall Government Expenditure. Before the review of the MBS commenced in June 2015, the MBS items had not been reviewed for more than 30 years. So far, nearly 12% of the MBS items (approximately 600 items) have been reviewed and 45% of the MBS items (approximately 2,500 items) are currently under review.

This clinician-led review process is meant to support patient safety, modernise the MBS and reduce the use of services that have limited clinical benefit. The plan is to redirect the cost savings to new or existing services that have proven clinical benefits. $44.2 million has been allocated from 2017 to 2020 to complete the review of all items in the MBS.

The Government has established a Medicare Guarantee Fund (MGF) to be used to cover the costs of the Medicare Benefits Schedule and the Pharmaceutical Benefits Scheme. The funding for the MGF will be sourced from the Medicare levy (excluding amounts necessary to fund the National Disability Insurance Scheme) as well as a portion to be funded from personal income tax receipts. The Fund was established on 1 July 2017 with forecasted annual contributions to the MGF to be updated at every Budget update in line with the forecasted MBS and PBS expenditure. The MGF is to be used solely for funding the MBS and PBS.

As the Medicare Levy does not currently cover the costs of the MBS and PBS (and has not done so for years), this is simply a rebadging of the current funding process.

Per the Department of Health, the funding for new and amended MBS listings is expected to include:
•A new cardiac service to lower the risk of stroke for patients with non-valvular atrial fibrillation who are unable to take blood- thinning medications;
•A new mechanical thrombectomy service for the treatment of stroke due to large vessel occlusion;
•A new Vagus Nerve Stimulation therapy service;
•A new microwave ablation service for thermal ablative treatment of primary liver tumours; and
•Amendment to the combined position emission tomography/ computed tomography (PET/CT) item for lymphoma to include patients suffering from indolent non-Hodgkin lymphoma. $16.4 million has been allocated from 2017 to 2021 for these changes to the Medicare Benefits Schedule.

Health Care Homes is a program to coordinate the care of patients with chronic and complex health conditions. The program will pay a General Practice or Aboriginal Community Controlled Health Service (ACCHS) a monthly payment to care for a patient rather than receiving a payment each time the patient has an appointment. Whilst the Health Care Homes will be encouraged to bulk bill their enrolled patients, it will be up to each Health Care Home to decide if they will be charging a gap instead of bulk billing their enrolled patients.

Twenty practices will commence Health Care Home services on 1 October 2017 with an additional 180 practices to commence on 1 December 2017. The bulk of the program funding is expected to come from projected savings of $24.6 million with only $0.2 million in actual funding allocated to the program from 2017 to 2021.

PROTON BEAM THERAPY (PBT) FACILITY Proton Beam Therapy (PTB) is a type of radiation therapy that is used mainly for paediatric patients as well as being used for some adult patients with head and neck tumours or spinal tumours. PTB is not currently available in Australia and the Federal Government currently funds some patients to access this treatment overseas. $68 million dollars is to be provided to build a PTB Facility at the South Australian Health and Medical Research Institute in Adelaide. No funding has been provided for patients to travel interstate for treatment in Adelaide.

Keep an eye out for the next Medical Billing Experts article to make sure that you stay up to date with Medicare Indexation, medical billing news and updates

Loryn Einstein, Medical Billing Experts

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