BB 2020/068
Answer
In our opinion yes, provided certain conditions are met.
Context
Annual enrolment or membership fees have become a controversial feature of bulk billing GP practices in recent years. In particular, the National Health Co-op in the ACT publicly charges a $100 per year membership fee and a $30 sign up fee in return for bulk billed services, and has even been awarded State based grants to support this business model.
However, there is debate around the legalities of these arrangements with the Federal Government expressing the view that such arrangements breach the bulk billing law.
Relevant legislative provisions
Health Insurance Act 1973, Section 20A
Other relevant materials
1. Article published in Australian Doctor: RACGP takes aim at Co-op membership fees in return for bulk-billed services available at this link.
2. Academic journal article published in the Journal of Law and Medicine, with detailed analysis of bulk billing arrangements: Medicare Billing Law and Practice: Complex, Incomprehensible and Beginning to Unravel. https://www.ncbi.nlm.nih.gov/pubmed/31682343
Case law
Dalima Pty Ltd v Commonwealth of Australia (New South Wales Supreme Court, Unreported, 22 October 1987)
Suman SOOD v Regina [2006] NSWCCA 114
Departmental interpretation
mbsonline.gov.au (accessed 28 June 2020)
“GN.1.2 Medicare – an outline
Medicare benefits are claimable only for ‘clinically relevant’ services rendered by an appropriate health practitioner. A ‘clinically relevant’ service is one which is generally accepted by the relevant profession as necessary for the appropriate treatment of the patient.
When a service is not clinically relevant, the fee and payment arrangements are a private matter between the practitioner and the patient.“
Services Australia (accessed 28 June 2020)
“Additional charges and bulk billing
If you bulk bill a patient, you can’t make additional charges for that service. This includes, but isn’t limited to:
- any consumables used, including bandages and dressings
- record keeping fees
- a booking fee to be paid before each service
- an annual administration or registration fee.”
Detailed reasoning
Three basic principles of medical billing law to begin:
1. It is settled law in Australia that the relationship between a doctor in private practice and a patient is a contract, governed by general principles of contract law. You can read about this in the above cited journal article. This effectively enshrines the small business nature of private medical practice in Australia.
2. Medicare benefits are only payable for clinically relevant services. A clinically relevant service is defined as being necessary for the treatment of the patient, judged by peers.
3. Whilst Medicare benefits are only available for clinically relevant services, as private business owners, doctors can provide non-clinically relevant services and charge for those things, subject to certain restrictions. This is specifically confirmed by Medicare in the MBS book, the relevant section of which is copied above. A common example seen in general practice is the provision of cosmetic botox injections and fillers, which are not clinically relevant because they are not necessary to treat a patient – they are purely cosmetic. A country GP once asked whether it was legal to sell jars of honey in his practice. He and his wife kept bees and made their own delicious honey, which was very popular with the local community, and the most practical place to sell it was at the reception desk in the practice!
So now to the law.
Section 20A(1) of the Health Insurance Act describes the bulk billing process whereby an eligible person (a patient) may assign their Medicare benefit to a doctor and in return, the doctor must accept the government rebate ‘in full payment’ ‘in respect of’ the clinically relevant service provided. This means the doctor cannot charge any extra amount for anything that is ‘in respect of’ the bulk billed service. The only exception in the law is for certain vaccines that only GPs can provide.
So the central question is – what can be properly categorised as being ‘in respect of’ each bulk billed service? This begs the question, what are the elements of each item and what comes within its scope? Where does each service begin and end? When does a service start? Is it when a patient registers at reception or only once they are in the room with the doctor? I was once asked – can we charge for parking? Parking is obviously not clinically relevant but is it a fee ‘in respect of’ the bulk billed service the patient will shortly receive? This is by no means clear or straightforward.
In the Sood case, the court of criminal appeal considered the meaning of the three ubiquitous words in the Medicare scheme – ‘in respect of’. Dr Sood charged counselling and theatre fees on the same day that she also bulk billed a separate service. She maintained that the counselling and theatre fees were not fees ‘in respect of’ the procedure she performed but were separate fees for separate services. One of the three appeal court judges agreed with her and said that requiring her to have known in advance the legal meaning of ‘in respect of’ amounted to requiring her to provide an opinion concerning the interpretation of the law and its application to the facts which, as a medical practitioner, she had neither the skills nor the qualifications to do. More than any other case, this case highlighted the complexity of what should be a basic, simple and clear threshold billing decision, and the serious consequences that can result.
In the Dalima case, Dr Edelsten was a GP who was convicted of the same offence. In his case, the additional fee, which he called an administration fee, was charged by a separate legal entity (Dalima Pty Limited), not the individual bulk billing doctors, but the court held this still breached Section 20A.
It cannot be denied that our courts have adopted an unfathomably wide interpretation (particularly the Sood decision) of what is ‘in respect of’ a Medicare service, including bringing non-clinically relevant services within scope (an enrolment/administration fee can never be clinically relevant). However, all current case law has dealt with the scenario where the additional fees were charged on the same day as a bulk-billed service.
It therefore follows that the question of whether annual or one-off fees, charged on a different day to a bulk billed service, could be categorised as fees ‘in respect of’ ongoing bulk-billed services, remains open, having escaped specific judicial attention.
Further, whilst some of the inclusions of a doctor’s consultation with a patient remain unclear, there is no legal support for any suggestion that a consultation continues indefinitely and into the next day. Being a fee-for-service scheme, each Medicare service must begin and end somewhere, and common sense dictates that at the very least, the end point of a consultation must be before the next day commences.
The problem of what is ‘in respect of’ a medical service is deeply structural and at some point in the evolution of our health system, it will need to be properly addressed by the legislature, rather than the judiciary. However, until that happens, as things currently stand, on balance and in our view, if an enrolment or membership fee (the title of the fee is irrelevant) is charged on the same day as a bulk billed service, it would likely breach Section 20A, however, if it is charged on a different day it probably would not.
Examples and other relevant information
As a rule of thumb, and subject to the above, if you are providing a single bulk billed service, your patient should leave your practice not having handed over a cent to anyone for anything.
Who this applies to
Everyone when bulk billing.
When this applies
Since the Dalima decision in 1987