Issue 11 - Medical & Allied Health Services: Special Budget Edition (May 2017)
The delivery of the Budget in 2017 will have underwhelmed most health professionals looking for the spark that will help to steady and reinvigorate the financial performance of their practices. It's what the Budget didn't say that perhaps matters the most. The business as usual approach of the Government has benignly reaffirmed the reform agenda while fiddling around the edges of the key platforms for change.
The much heralded reports of a thawing of the Medicare Freeze are somewhat premature in respect to the financial year ahead. While the Government have committed to a phased re-introduction of indexation, the full benefits will not be realised until 1 July 2019.
- Bulk-billing incentives for General Practitioners will be indexed from 1 July 2017.
- Standard consultations by General Practitioners and specialist attendances will be indexed from 1 July 2018.
- Specialist procedures and allied health services will be indexed from 1 July 2019.
- The initial indexation (based on 2.0%) of Bulk billing incentives from 1 July 2017 will see the Metro rebate (item 10990) increase by 13c from $6.15 to $6.28, and the regional, rural or remote rebate (Item 10991) increase by 19c from $9.25 to $9.44. The revenue from this measure is insignificant, in comparison to the losses practices are incurring as a result of the Medicare Freeze.
Practices are encouraged to carefully consider their fee setting strategy for the next financial year to ensure their profit margins do not continue to decline.
This is particularly crucial for allied health practices who won't receive any indexation until 1 July 2019.
The government are continuing to pursue greater cost effectiveness from their investment in Medicare.
- Continued funding for the Medical Services Advisory Committee and Medicare Benefits Schedule Review.
- Extended funding to increase Medicare Benefits Schedule compliance audit activity. Changes under this measure will enable compliance activities to better target unusual business billing and improve the consistency of administrative arrangements.
- Practices should apply due diligence to ensure that their Medicare claiming practices are compliant.
The Government will continue to invest millions of dollars to implement the My Health Record system.
- This will include the national implementation of opt-out arrangements over the next 2 years.
- Patient registration is one of the most significant barriers restricting utilisation of the My Health Record system.
- The national roll out of the opt-out model is crucial for getting a critical mass of providers to use the system.
The Government will continue to probe into the rental agreements between medical practices and Approved Pathology Collection Centres.
- The Government has committed $18.0 million over four years to strengthen compliance activities for Pathology Approved Collection Centres to ensure that the arrangements between doctors and Approved Collection Centres are in accordance with the existing provisions of the Health Insurance Act 1973.
- Practices should continue to be very wary about any reliance on rental income from the Pathology Collection Centres and seek to implement measures to improve their financial performance in other aspects of the business.
Primary Health Networks will receive further funding as the Government's vehicle for the commissioning of local services. Further funding has been allocated to;
- After-hours services; and
Mental Health continues to receive meagre increases in funding in comparison to the burden of mental illness on the health care system and the community.
- The introduction of access to psychological telehealth services for regional, rural and remote Australia is a very welcome initiative.
- $80.0 million has also been allocated to the provision of psychosocial support services for people with mental illness who do not qualify for the National Disability Insurance Scheme (NDIS).
- GP Practices and psychology providers will need to collaborate to develop effective avenues for referral, access and service delivery, to ensure that this limited funding makes a difference.
The budget for the trial phase of the Health Care Homes project has been adjusted to accommodate for the delayed implementation previously scheduled to commence on 1 July 2017.
- The trial will support up to 20 selected general practices and Aboriginal Community Controlled Health Services to commence services under the Health Care Homes model from 1 October 2017, with the remaining 180 Health Care Homes services to commence from 1 December 2017.
The Government has given its commitment to the redesign of the Practice Incentive Program that will see several incentives combined into a Quality Improvement Incentive.
- The new Quality Improvement Incentive will commence from 1 May 2018.
- The Indigenous health incentive and procedural general practitioner payment in their current form will now be retained and will not be absorbed into the quality improvement incentive.
- The modified arrangements will ensure that the implementation of the Quality Improvement Incentive does not affect care provided through Aboriginal Community Health Services and rural medical practices.
- The Quality Improvement Incentive will initially focus on the reporting of quality data. Many practices will need to improve the quality of their data management through correct coding of diagnoses and ensuring the data is recorded in the correct fields.
Some additional resources have been committed to Healthy Heart initiatives.
- $10.0 million for the Prime Minister's Walk for Life Challenge; and
- $5.0 million over four years from 2017-18 for General Practitioners to support Australians to achieve a healthy lifestyle through increased physical activity and better nutrition.
The Government will reverse the previous reduction of the cap on benefits available for eligible families under the Child Dental Benefits Schedule (CDBS).
- From 1 January 2017 the two year cap will increase from $700 to $1,000.
- The prices for items on the CDBS will be maintained for a further two years to 31 December 2020.
- While the increased cap will extend the eligibility for each person treated, there is no increase in the payment for each service under the CDBS. This measure may not result in any significant increase in revenue for the practices.
Small business entities (those with a grouped turnover under $10 million) are currently eligible to claim an immediate deduction for depreciation of assets costing less than $20,000 (GST exclusive).
This was due to reduce to $1,000 from 1 July 2017 but has been announced to continue until 30 June 2018.
Please contact us for more information or visit our Medical & Allied Health webpage
The information provided in this newsletter does not constitute advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances. Brentnalls is not a partnership or a joint venture. Instead, the business of Brentnalls SA is independently owned and operated and it is an independent member of the Brentnalls Affiliation of Accounting Firms. Individual member firms do not accept responsibility or liability for the actions or inactions of any other individual member firm