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Budget 2009: More support for bulk billing pathology and diagnostic imaging tests.

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Minister for Health and Ageing


12 May 2009

More Support for Bulk Billing Pathology and Diagnostic Imaging Tests

In this year’s Budget, the Rudd Government ensures all Australians will have access to essential pathology and diagnostic imaging tests by introducing bulk billing incentives.

This vital initiative is a key component of the Rudd Government’s commitment to reform and modernise the health and hospitals system so that it provides better health outcomes for all Australians.

The initiative will also adjust collection fees for some pathology collections, provide new measures to improve the quality of services, and boost the pathology and diagnostic imaging workforce.

New bulk billing incentives

From 1 November 2009, the Government will protect patient access to services by introducing new bulk billing incentives for diagnostic imaging services and pathology episodes, at a cost of $600.7 million for diagnostic imaging and $348.0 million for pathology over four years:

• The bulk billing incentive for out-of-hospital services for diagnostic imaging is an increased rebate of 10 per cent of the Medicare schedule fee; and • For pathology, the bulk billing incentive will be between $1.60 and $4.00 an episode, depending on the type of test and where it is collected.

This measure will provide a strong incentive for providers to maintain or increase bulk billing rates, providing tests at no cost to patients.

Pathology collection fees

To help fund these reforms, the Government will also adjust collection fees for certain types of pathology collections. Pathology providers have benefited from increasing automation of pathology tests which have provided cost efficiencies and enabled providers to maintain high operating profit margins, averaging 18.5 per cent before tax from 2003-04 to 2005-06. The Rudd Government considers that it is reasonable for Australian taxpayers to also benefit from these efficiencies.

These rebate adjustments only apply to fees paid for collecting pathology specimens - not for actual pathology tests. This will generate savings for taxpayers of $763.3 million over four years. On average, the Medicare benefits per pathology episode, including both collection and test fees, will decrease from $69.17 to $66.26, a difference of $2.91 per episode.

Modernising the Medicare Benefits Schedule

At the request of pathologists, a number of other small changes have been made to Medicare fees for some anatomical pathology tests. These tests are required for the diagnosis of cancer, cannot be automated and require a high level of professional expertise to perform.

The Medicare rebate for these specific services will be increased by an average of $53.27, ranging from $16.70 to $126.15. To fund these increases, the profession recommended the rebates for some automated pathology tests will be decreased. These adjustments will yield net savings to Medicare of $4.1 million over four years.

Improving the quality of services

The Government will also introduce a number of initiatives to improve the quality of pathology and diagnostic imaging services. The Government will establish a national diagnostic requesting service, run by the National Prescribing Service, to promote high quality and appropriate requests for tests from doctors. The Government will invest $9.4 million in the service to achieve net savings to Medicare of $16.2 million over four years.

To encourage diagnostic imaging services to upgrade ageing equipment, the Government will reduce from 1 July 2011 the Medicare fee for diagnostic imaging services provided on older, fully depreciated equipment. As a result of this measure, patients will be more likely to have services provided on newer, better quality equipment, reducing their exposure to unnecessary radiation. Savings of $135.8 million will be generated over four years.

Supporting the workforce

There are currently significant workforce shortages affecting both pathology and diagnostic imaging. To help address this, the Government will fund:

• an increase in pathology training places from 30 to 50 places, at a cost of $10.8 million over four years; and • an additional 15 diagnostic imaging training positions, on top of an existing six places for radiologists, at a cost of $5.7 million over four years.

The Government will also introduce a mentoring and academic support initiative for rural pathologists at a cost of $6.2 million over four years.

The Government will no longer maintain a Memorandum of Understanding with the pathology and diagnostic imaging sectors. However the Government will enter into close discussions with both sectors to consider structural reform, industry costs, and

possible long term funding arrangements that maintain patient access and affordability.

For all inquiries please contact the Minister's office - 02 6277 7220