Billing Private Health Insurance

As an anaesthetist in private practice the private health insurance funds will play a significant role in the income that you receive, so how does the system work?

When a patient is admitted to a hospital as a private patient each health care provider is able to charge a fee. These fees are generally managed and collected by individual service providers, hospitals, surgeons, assistant surgeons, anaesthetists, pathologists, etc.

Members of private health funds are entitled to a minimum rebate equal to the Medicare Benefit Schedule (MBS) rate. Medicare pays 75% of the MBS rate, and the private health fund must pay a minimum of 25% of the MBS rate. So if you charge a patient a total fee based on the MBS rate that equals $1000, Medicare will rebate $750, and their insurance will rebate $250. (see MBS Online for MBS rates)

Where you bill directly to the fund, you will find that most of them will pay above the MBS rate provided that you are registered with them and abide by the terms and conditions under their various schemes. Generally, these terms and conditions are not too difficult to follow, and aside from NIB’s GapSure scheme, you are able to opt out on a patient-by-patient basis.

The main conditions set by the health funds are that you provide written Informed Financial Consent (IFC) to your patients before the procedure and cap any out-of-pocket expense (known gap or gap) amounts at the maximum set by the fund, in most cases this is $500. There are a few funds that have significantly different rules to these, and these are usually outlined where you register with each fund.

If you are content to accept the health funds schedule fee (MBS plus whatever health fund contributes) then you can send bills directly to the fund and they will deposit funds into your account once the invoice has been accepted and processed, usually within 14 days.

However, if you want to charge above the health fund schedule fee or your patient is uninsured then you will need to provide them with Informed Financial Consent (IFC). You can either charge the patient a total fee where they will only be able to claim back the MBS rate (75% from Medicare and 25% from their fund) after their procedure or you can simply charge a gap amount to the patient. In this case, you would invoice the health fund for the amount they will pay (including Medicare’s portion of the MBS rate) and issue a separate invoice to the patient for the gap amount.

At My Anaesthetic Billing, we can assist with providing the IFC. We would recommend collecting prepayment of any patient fees to minimise the stress of chasing patients for payment post-operatively.