Gaps & GapCover
What is the Gap?
The Gap is the difference between what the doctor charges and the amount you will receive in rebates from Medicare and/or your health fund.
Why is there a Gap?
Today Medicare rebates do not cover the full cost of providing you with medical care. This is because the rate at which successive governments have indexed the Medicare Schedule fees has been substantially lower than increases in the Consumer Price Index (CPI) and average weekly earnings. The Medicare Benefits Schedule was established in 1985. With year upon year of indexation that has been well below par and with no indexing at all since 2013, today there is now a very large disconnect between Medicare schedule fees and the realistic cost of providing medical services.
What if I have Private Insurance?
For in-hospital procedures, most health funds will pay the difference between the Medicare rebate and the Schedule Fee. This means that Medicare pays 75% of the Schedule Fee and your health fund pays 25% of the Schedule Fee. Your gap will be the difference between what the surgeon charges and the Schedule Fee.
What about Gap Cover?
Changes in legislation now allow the health funds to pay a higher rebate than 25% of the Schedule Fee. Each health fund has established its own set of fees it is willing to pay for specific procedures along with its own specific set of rules. This is called Gap Cover. Generally, in return for the surgeon accepting the health fund’s fee, the surgeon sends the account directly to the fund and is paid the amount the health fund has decided for that particular operation.
Most health funds allow the surgeon to charge more than the health fund gap cover rebate with the patient making up the difference with a co-payment or Known Gap. The Known Gap the surgeon can charge is limited by the health funds and does not generally make up the difference between the surgeon’s fee (as recommended by the AMA) and the health fund gap cover fee. Unless the surgeon agrees to accept the lower fee, the health fund will not pay more than 25% of the Schedule Fee.
What is the Fees policy of this Practice?
Dr South sets his fees at a level that allows him to look after you properly and offer a professional high quality service. For some procedures including ACL reconstruction and carpal tunnel decompression, the practice may use your health fund’s gap cover scheme with a Known Gap payable by you. This substantially reduces your out-of-pocket expense. However, for more major surgery such as joint replacement, the health funds’ gap cover fees are not set at a viable level and the practice will not generally offer gap cover billing for those procedures. If you proceed to surgery, there will be a gap not covered by Medicare and your health fund. More information on the costs associated with surgery is in the Financial Information section.