Activity 2 – Testing alternative billing arrangements and strategies

Activity 2 – Testing alternative billing arrangements and strategies

(3.0 hours RP)


Welcome to the reflection activity on testing alternative billing arrangements and strategies.

This activity will help GPs and practice owners to identify and test alternative billing arrangements and scenarios. Using fictional case studies developed by the RACGP, you will identify possible ways to introduce mixed billing in your practice.  

This activity is part of the Optimising your billing strategy CPD solution and can be completed as a standalone activity.  

To download all tasks and resources for this activity, click here. 

Claiming CPD hours   

We estimate that completion of this activity will amount to 3.0 RP hours, however this may depend on your personal circumstances.  
   
We recommend you use the following title: “Optimising your billing strategy - Activity 2 - Testing alternative billing arrangements and strategies Task 1,2”   

Ensure you keep adequate records of your activity as you may be audited by the RACGP or Medical Board of Australia (MBA). The MBA requires evidence of your annual CPD activities to be retained for three years. See evidence guide here.

As this is a self-directed activity, your workbook and audit activities will not be assessed or used against you in any way.

log your activity


The RACGP has developed fictional billing case studies that outline possible ways for GPs to introduce mixed billing in their practice. These are examples only and are intended to provide different options for GPs to consider.

Billing is a personal choice and there are many factors that may influence how a GP bills, including patient demographics, practice location, and desired income. Whether GPs are able to privately bill patients will depend on these factors.

Using the RACGP’s billing calculator, you can test various billing scenarios and see how your required billing changes.
 

Dr Smith works 32 hours per week, with 28 hours of clinical time (consulting with patients) in an MMM2 area. He sees an average of 115 patients a week. Dr Smith has been bulk billing every patient and decides to only bulk bill health care card holders (20% of patients) and charge all other patients a fee of $95 per standard consultation (Level B attendance). This change results in Dr Smith’s billings increasing from $316.90 to $375.52 per clinical hour.

This amounts to an additional $1,642.20 in billings per week and $78,825.60 per year. With an average of 40% of billings paid to the practice, Dr Smith earns $6,308.67 per week and $302,816.16 per year before tax.

*Scenario based on MBS item 23 (Level B attendance lasting less than 20 minutes), which has a rebate of $43.90, and the bulk billing incentive item 75871 which is $33.25 for MMM2. It is assumed the GP takes four weeks of annual leave per year.

Question: What percentage of your patients are health care card holders? How would introducing a fee for non-health care card holders impact your ability to run a sustainable business? 

Question: If you already bulk bill health care card holders, what would happen if you: 

  • introduced a fee for weekend or after-hours consultation for health care and pension card holders? 
  • increased the fee for non-health care card holders? 

Use the billing calculator and write your reflections below.

Download case study 1

Dr Le has been providing a mix of face-to-face and telehealth services since the start of the COVID-19 pandemic. She decides to adopt a mixed billing model to cover practice costs. Dr Le works in a practice in MMM4 area.

Dr Le works 38 hours per week. On average, 30.5 hours of this is clinical time and 7.5 hours is spent on non-clinical work (e.g. paperwork, following up on test results, arranging care for patients at home). She sees around four patients per hour – a total of 122 per week. Dr Le bulk bills all telehealth services (approximately 50% of her caseload) and privately bills face-to-face consultations (50% of services), charging an average fee of $98.
As a result of this change, Dr Le’s weekly billings increase from $9,741.60 to $10,809.20. This is an extra $1067.60 per week. Her annual billings increase by $51,244.80 from $467,596.80 to $518,841.60. Dr Le receives 65% of her billings, resulting in earnings totalling $337,247.04 before tax.

*Scenario based on MBS items 23 (Level B attendance lasting less than 20 minutes), 91891 (Level B phone consultation) and 91800 (Level B video consultation), which all have rebates of $43.90, and the bulk billing incentive item 75873 which is $35.30 for MMM4. It is assumed the GP takes four weeks of annual leave per year.

Question: What percentage of your services are provided via telehealth (video and telephone)? How would introducing a fee for all face-to-face services impact your ability to run a sustainable business?

Other strategies to test:

  • If you currently bulk bill telehealth consultations, what will happen if you privately billed phone consultation services?
  • If you already privately bill telehealth services, what will happen if you increased your fees for telehealth?
  • What would happen if you privately billed after-hours appointments?

Use the billing calculator and write your reflections below.

Download case study 2

Dr Jones is a practice owner in MMM6 who identifies that a certain number of his patients can afford to contribute to the costs of their healthcare (i.e. those who aren’t on any form of social support). He decides to charge $100 for the first consultation with these patients per financial year and bulk bill all subsequent consultations. This means a gap of $56.10 for patients who are privately billed. This allows Dr Jones to accrue enough income to cover expenses, while continuing to provide access to affordable care for patients who cannot afford practice fees.

This means that Dr Jones’ billings will increase as follows:

Scenario   Before   After 
Patient who attends two consultations  $167.10 $183.55
Patient who attends five consultations  $417.75 $434.20
Patient who attends 10 consultations  $835.50 $851.95

 

This concept can work in various ways. After the initial privately billed consultation, subsequent billing is at the GP’s discretion. For example, the GP may continue to privately bill patients who don’t qualify for the MBS bulk billing incentive and revert to bulk billing for those who are eligible.

*Scenario based on MBS item 23 (Level B attendance lasting less than 20 minutes), which has a rebate of $43.90 and the bulk billing incentive for MMM6 which is $39.65

Question: How would introducing a fee (or increasing the fee if you already privately bill) for the first consultation of the year impact your ability to run a viable business? 

Use the billing calculator and write your reflections below. 

Download case study 3

Download task 1


Using the information and your reflections above, consider other strategies that you could use to change your billing and achieve a more sustainable business. 

Question: What other billing strategies could you consider?  

  • Could you increase the proportion of patients who are privately billed? 
  • Could you introduce or increase a fee for certain services? 
  • Could you implement privately billed and bulk-billed sessional arrangements? (e.g. a fee for weekend or after-hours consultation) 

Download task 2

 

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