Split billing and informed financial consent could be subject to more regulations in the near future.
A new consultation paper signals that informed financial consent – specifically the act of obfuscating the total fee by having it broken up into multiple components – will be the next area of interest for the Department of Health, Disability and Ageing.
Released last week, it forms part of a broader piece of reform work looking at affordability, transparency, and access to specialist medical care.
The other notable components to this are referral pathway reform and moves to rein in specialist fees.
The paper focussed specifically on split billing, where costs are fragmented across multiple invoices and payers.
Examples of these might be a provider bulk billing an appointment but charging patients a separate “subscription”, “administration”, or “booking” fee.
While cheaper for the patient – who is effectively just paying a gap fee – this directly contradicts the Health Insurance Act 1973, which decrees that, when bulk billing, a provider must accept the Medicare rebate as the whole fee.
The government has traditionally taken a dim view of such arrangements, although some clinics do appear to have been able to run such a model for a period of time.
But that was before the tripled bulk billing incentive came into play.
Under the previous settings, a clinic which was charging an administrative fee but then recording the consult as being bulk billed would have broken the law, but they were not causing the government to spend any additional money which would not have otherwise been spent; the patient’s Medicare benefit was always going to be dispersed.
Now, should a clinic charge an administrative fee and then record the consult as being bulk billed, they could potentially also claim a bulk billing incentive. Once again, this is breaking the law – but it is also causing the government to spend Medicare money which it ordinarily would not have done.
In that sense, the stakes are now higher.
One of the proposed reform options includes broadening the scope of the Professional Services Review, which would give the agency power to review the conduct of practitioners who have potentially engaged in inappropriate practice by failing to obtain informed financial consent from patients.
Related
The consultation paper notes that this would be a significant change in scope and would potentially result in doctors opting out of the MBS altogether.
Other options included in the paper were amending the Health Insurance Act 1973 to establish clearer obligations around informed consent and split billing, supported by the DoHDA’s internal audit team. This came with the same note that such a course of action would risk doctors opting out of the MBS.
Informed financial consent, by the consultation paper’s definition, is the process of making sure a patient is aware, understands, and agrees to the expected costs of their healthcare prior to receiving it.
“Most medical practitioners seek to do the right thing and are committed to providing their patients with information about costs before care is delivered,” the paper read.
“However, despite this strong professional endorsement of [informed financial consent], evidence suggests that patient awareness and understanding of costs prior to treatment is not always achieved. Consumer research indicates that a significant proportion of patients are not informed of specialist fees in advance, and many report experiencing unexpected or higher than anticipated charges after treatment (‘bill shock’), highlighting a gap between professional intent and patient experience.”
Research from Private Healthcare Australia indicates that one in three patients felt they lacked sufficient clarity to plan for specialist and hospital fees, while 55% said they received an unexpectedly large bill.
Specialist GPs tend to come off slightly better; a 2024 Commonwealth Bank report cited in the paper found that 16% of patients reported ‘bill shock’ after seeing a non-GP specialist, compared to 11% after seeing a GP.
