President writes to Minister over Medicare processing costs

Australian Medical Association/AusMed

AMA President Dr Tony Bartone has written to Government Services Minister Stuart Robert to express the AMA’s concerns over medical practices being burdened with more costs of processing Medicare claims. The potential for further costs to be shifted on to these practices is simply unacceptable, Dr Bartone wrote.

Health Minister Greg Hunt was copied into the correspondence.

The full to Minister Robert is here below:

Dear Minister

I am writing with respect to the ‘Medicare Easyclaim’ tender that was issued earlier this year by Services Australia.

The AMA has strongly supported the uptake of Medicare electronic claiming within medical practices and was instrumental in pushing for the 2007 introduction of Easyclaim, complementing other Medicare electronic claiming channels. Easyclaim is convenient for patients and avoids the costs and delays involved in visiting a Medicare office or submitting claims via the post.

Similarly, we know that Easyclaim has delivered savings to Government in comparison to the manual processing of claims. In its report titled “Administration of Medicare Electronic Claiming Arrangements”, the Australian National Audit Office (ANAO) concluded that Easyclaim had significantly lower costs per service than the cost per service for processing a claim manually. Data included in the ANAO report showed savings to the Department of Human Services in the vicinity of $3.00 to $10.00 per transaction – depending on the type of claim and the lodgement channel.

In the move away from manual processing by the Department of Human Service to patients being able to submit Medicare claims via a doctor’s practice, much of the cost of the processing of Medicare claims has been shifted on to medical practices. These include the costs of claiming infrastructure and the staff time associated with lodging claims on behalf of patients. There is no reimbursement for this work and practices are required to pay all of the usual EFTPOS merchant fees.

The five financial institutions that are currently contracted by the DHS to provide Easyclaim service are paid $0.23 per successful transaction. Beyond the standard EFTPOS charges, there are no additional bank transaction fees for practices or patients using Medicare Easyclaim. In reviewing the Easyclaim tender, not only do financial institutions lose this funding, they are also explicitly permitted to levy additional fees on practices in order to cover their costs.

In circumstances where the Commonwealth is reaping significant savings from having medical practices process Medicare claims at the point of service, the potential for further costs to be shifted on to these practices is simply unacceptable. Providing funding support for patients to access health care, including the related transaction costs, is a core responsibility for the Commonwealth.

It is also important to remind you that, in real terms, the Commonwealth has cut Medicare rebates. These were frozen for several years and it is only recently that GPs and other specialists have seen indexation restored. It is not inconceivable that financial institutions could levy fees for Easyclaim services that significantly erode or completely offset the rate of indexation applied on 1 July this year.

Services Australia is now in the process of reviewing the tenders for the provision of Easyclaim services that it has received from financial institutions. While I understand that it is hopeful that they will not propose imposing any new charges on medical practices, this does not give me sufficient comfort and I am writing to seek your guarantee that the Government will not approve any tenders that propose in any way to increase the costs to medical practices of submitting Medicare claims via Easyclaim. The view that ‘competition’ will keep fees down is unduly optimistic and also ignores the costs that will be involved if practices are forced to shift providers due to fee increases.

The criteria for the Easyclaim tender must be about more than being good value for Government. It is important that patients continue to benefit from the convenience of electronic claiming and that practices are supported to offer this for their patients, as opposed to being financially penalized.

Yours Sincerely,

Dr Tony Bartone


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