The medical fee rebate system in Australia is complex. The Federal Government and Medicare run the Medicare Benefits Schedule (MBS). The MBS determines a specific fee for a particular service or procedure. This is coded with an item number.
The fee we charge is usually less than the AMA recommended fee. There is however a gap (co-payment) which arises because Medicare and the health fund pay less than the true cost of the procedure. Medicare will pay 75% of the MBS fee. Your health fund will pay 25% of the MBS fee. The remaining discrepancy is what forms the 'gap' and the patient is personally responsible for this payment.
For example, say the cost of an operation is $1200. The Medicare (MBS) fee may be only $800.
- Medicare will pay 75% of the MBS fee, i.e. $600.
- The health fund pays 25% of the MBS fee, i.e. $200.
So $800 is paid for by both Medicare and the health fund.
The gap is the remaining difference $1200 - $800 = $400.
You will be advised of both the cost of the procedure and the calculated expected rebate you will get from Medicare and your health fund prior to surgery.