[WEBINAR] How to move your practice from bulk-billing to private billing

In this month’s webinar with our CEO Paul Elmslie, we introduced strategies on how to move from bulk-billing to private billing.

With Medicare rebates remaining low, how do you meet the increasing cost of providing medical care in your practice? Doctors are forced to take a pay-cut, see more patients, or charge more. Most GPs will be unable to afford the first two options if they wish to continue to provide safe, efficient care to their patients and avoid burnout. If you are currently bulk-billing all or a large proportion of your patients, you may need to introduce or increase out-of-pocket expenses to ensure the sustainability of your practice.

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Watch the full webinar recording now

Medicare billing guidelines

Questions and answers from the webinar

Q: I wonder why we are not allowed to charge patients only the out-of-pocket amount. Currently, we have to charge patients the whole fee and the bulk bill amount goes into their account via Medicare.
A: The government has never provided a reason why they have the rule in place. It is, however, detailed in the Medicare Act.

Q: I am starting my general practice soon and I don’t know much about business. In the lower Blue Mountains area, the majority of practices do private gap billing. Shall I start with bulk bill and switch to private later, or start with private? As I give long consultations to solve patients’ problems I should do private billing. However, I am worried it is going to slow down my patients pool build up. Over-servicing is not the medicine which I do. I give good quality care to all my patients. 
A: If you are in a community that is predominately private billing and the patients’ expectation is to pay for GP services, I would not open with bulk billing. Switching over to private billing is often more complex than starting as a private billed practice.

Q: Why isn’t the government allowing the private health insurers to fund primary care services with AMA rates so that it will at least help to off-set some losses to GPs looking after their uninsured patients?
A: When the government set up Medicare they entered into an agreement with private insurance companies that Medicare would exclusively insure primary healthcare and collect premiums via a Medicare levy of employees.

Q: In a practice with eight doctors, how do I motivate GPs to privately bill when the easy option is to bulk bill?
A: You could build an incentive program for those who privately bill. Also, you should show them the numbers so they can see the positive impact of private billing on their income. 

Q: What is the anticipated rate of patients leaving when you change to private billing? We are running a great set-up with waiting times for routine appointments for several GPs running two to four weeks out.
A: It will depend on the amount of alternatives. If nobody else in the area is bulk-billing, they won’t have an alternative and a higher number will remain. Unfortunately for some people it’s really about the cost. These may not be the best patients to have. Our most recent changeover was moving from bulk billing to private of a clinic that was predominantly made up of pensioners. We lost 8 per cent of our patients initially, but many came back when they realised the bulk billing service up the road wasn’t as good.

Q: Can you talk about the situation where a doctor bulk bills and the practice charges a separate facility fee of $20 or so?
A: According to the Medicare Act, this is technically allowed if there is no relationship between the practice and the doctor and the doctor does not receive any of the facility fee. However, Medicare have made it clear that this is not their interpretation of the Act and that it is illegal. Ask your insurance company if they will support you should Medicare challenge you. Most insurance companies say they will not support the doctor.

Q: Can you elaborate on how you bill for skin procedures? For example, bill the full amount and let the patient get a rebate, or build gap into the consult fee then bulk bill the procedure on a later date?
A: We charge the patient the full amount which includes the gap and the item numbers for the procedure, then the patient can claim back the rebate on the procedure item numbers. If we are unable to charge the item numbers on the day (due to not having the pathology from a biopsy), we try and charge the patient the gap on the day of the procedure and we then charge them the item numbers when they return to have their sutures removed. The patient would then receive 100 per cent of their second payment back. You can charge the gap with a consult item number instead of the procedure item number(s), however if you are charging a consult at the time of a procedure, that consult needs to be clinically relevant and can’t be related to the procedure. If you were charging a consult with every procedure, Medicare would quickly pick this up and question it.

Q: Can you start a practice as private billing rather than bulk bill?
A: Yes, absolutely but you need to be mindful of the local environment and determine what type of practice you want to become.

Q: What are your strategies on how to achieve agreement with doctors and prepare staff before institution? How did you put this proposition to the doctors, as many doctors are non-compliant and entrenched with the culture of bulk billing, and are hesitant and resistant to start charging. What strategies do you suggest for these doctors?
A: I think the first step is to get your doctors to understand their true value and then show them the impact on their income. Also, private billing should allow them to spend more time with the patient as they don’t need to deliver six-minute medicine to make a reasonable income.

Q: Please explain ‘out-of-pocket’ and ‘theatre/room fees’ versus Medicare rules.
A: Although we call them ‘theatre fees’ they are simply a gap payment by the patient, so according to Medicare rules, the doctors must charge the patient the gap and the item numbers, and the patient can claim back to the item number component from Medicare.

Q: Who explains the cost of procedures? The doctors or the staff? And suggested wording?
A: We get the staff to do this as our experience is that most doctors don’t like talking about money. We built a laminated sheet with the various procedures and prices which the staff can show and explain (“Our fees explained” + why we are different/better than other practices and hence charging more). It is also advisable to have prepared responses to patients who push back. 

Q: We are confused about how you bill surgical procedures based on time.
A: In our centres, we charge the theatre fees or gap on procedures based on 15-minute increments and all procedures are booked into the appointment book in 15-minute blocks. 

Q: It’ll be easy for me to switch from bulk-billing to private billing. But how will I encourage the patients to do the same?
A: You need to forewarn them and explain why you are doing it. You want to deliver the best medical care: list your points of distinction in comparison to other practices to justify the higher fees you charge. For example, have you completed specific training that sets you apart from other doctors? Do you use equipment that can’t be found in every other practice? 


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