Reform too close to the sun, and patient out-of-pockets will get a whole lot worse.
It might not look like it from the outside, but federal health minister Mark Butler is walking a tightrope when it comes to specialist fees.
For reasons outlined below, the odds of Mr Butler throwing up his hands, calling it a day and deciding not to do anything about specialist doctor fees are low.
At the same time, some of the reforms under consideration could very easily backfire, creating an even bigger mess.
The inquiries
Untangling this particular mess starts with understanding that there are quite a few separate bills, inquiries and reforms related to specialist doctor fees.
Because nothing is ever easy, these disparate pieces are not only happening at the same time, but also have very similar names.
Here’s a non-exhaustive recap:
- Medical Cost Finder changes. The Health Legislation Amendment (Improving Choice and Transparency for Private Health Consumers) Bill 2026 passed this week and will allow government to start publishing the fees and likely out-of-pocket costs of individual medical practitioners online.
- Referrals. The push to modernise referral pathways – including a proposal to force GPs to include a link to the new-and-improved Medical Costs Finder site on referrals – is technically part of the wider specialist affordability inquiry.
- Transparency and informed financial consent. In June, the Department of Health, Disability and Ageing released a consultation paper titled Fee Transparency in Health Care: Informed Financial Consent and Split Billing Practices. This looked at several different options to support better informed financial consent. Continuing to promote Medical Costs Finder in its new and improved form was just one option among many. It is under the banner of the specialist affordability inquiry.
- Private health reforms (misc.). In July, the department put out another consultation paper, simply titled Private Health Reforms – Consultation Paper 1; this one is under the private hospitals reform banner. The paper itself looked at prioritising contemporary models of care for mental health, maternity and hospital in the home. It also looked at improving access to regional private hospitals.
- Specialist affordability. This one is also a consultation paper released by DoHDA, titled Specialist Affordability: Options to Address Excessive Fees. It is technically under the same specialist affordability umbrella that the referral paper and the transparency and informed consent paper are under, but it takes a wider scope. In fact, one of the intervention options is to strengthen fee transparency. Put a pin in this one.
- Private Health Insurance rebate. The conversation around axing of the age-based private health insurance rebate uplift for Australians over 65 has been largely separate from the other private health discussions. However, there are around 1.2 million Australians who currently claim the higher rebate and are also on the old-age pension.
- Time-tiered item review. The review of MBS time-tiered items for primary care, which has been in the works for several years, just so happens to also be wrapping up in the next few months. This one will only apply to GP items.
The pressure to act
During the Albanese government’s first term, it famously commissioned about 70 different reviews. Of these, there were about four major ones related to primary care funding and governance, all born out of the Strengthening Medicare Review.
The end result was the Department of Health, Disability and Ageing needing to conduct a review of all of its reviews in the middle of 2025.
While the GP bulk-billing reforms – specifically the expanded bulk-billing incentive and the bulk-billing PIP – were not a direct recommendation from these reviews, it seems likely that the reviews at least formed the basis for the change.
At the start of Mr Butler’s second term as health minister, DoHDA head honcho Blair Comley even explicitly encouraged the minister to take an “even more doing, less reviewing” approach.
Evidently, that message got lost in translation.
But with this many pieces of work in motion, all looking at specialist doctor fees in some way, it’s hard to envision a scenario in which nothing changes at all.
Then there’s the fact that Mr Butler is an ambitious, young(ish) minister rumoured to have party leadership potential.
While not a reason for action in itself, it adds weight to the likelihood that he will take some sort of action on specialist fees; especially given his strong rhetoric on the subject.
On balance, the scales are tipping toward the something-will-happen direction.
The worst-case scenario
Remember that specialist affordability consultation paper?
It puts forward six different options to rein in specialist fees, one of which is to introduce a fee cap for Medicare items.
There are a few different ways the government could approach this, and the paper presents two methods: introducing a theoretical gap fee cap for each MBS item or reviewing provider billing over the course of a year.
The fee ceiling could be determined as, say, a multiple of the MBS schedule fee for that time or by identifying the amounts currently being charged as a gap fee by doctors in the top percentile of billers.
Astute readers may note that, section 51 xxiiiA of the Commonwealth Constitution gives the government power to provide benefits for pharmaceuticals, medical services and dental services – but not so as to authorise any form of civil conscription.
At times, it has been argued that because Medicare is the dominant funding mechanism for healthcare in Australia, changes to it could be interpreted as attempts to control the earnings of doctors and thus count as civil conscription.
This argument has been tested in court several times – the conclusion has generally been that even though there is a compulsion for doctors to participate in Medicare, there was no compulsion to provide particular services or to work for the Commonwealth.
At the heart of the matter is that participation in Medicare is voluntary.
Ergo, it’s likely that the cap on gap fees would be seen more as a condition of participating in Medicare than ‘civil conscription’.
This is where the government’s big risk actually lurks.
Because, if they take this too far, doctors could choose to opt out of Medicare entirely.
And DoHDA is aware of this, too. The section of the specialist fee paper which discussed instituting a fee cap based on an average fee ratio (i.e. a calculation of whether a doctor is billing high out-of-pockets over a longer period of time, rather than on a per-item basis) also foresaw ways that doctors may seek to game the system.
“To mitigate this risk when using aggregate or average billings, a lower cap may be required to generate a greater effect for more individual patients,” the paper read.
“This may, however, increase the risk of providers charging excessive fees completely outside of Medicare.”
To be clear, doctors leaving Medicare entirely would be a disaster. Not just for patients, who would no longer be able to access their Medicare rebates to offset the cost of care, but also for any government which would have the misfortune to let that happen on their watch.
Where does this leave us?
Technically, nothing has happened yet; the only guaranteed change is the Medical Costs Finder update.
All signs point toward the government switching up the mix of carrots and sticks to try and lower specialist doctor fees.
But push too far, and it risks medical fees going even higher.
One sure hopes that Mr Butler is good at balancing.
