Changes to the capital sensitivity arrangements for diagnostic imaging equipment


Background

The capital sensitivity arrangements were originally implemented to improve the quality and safety of diagnostic imaging by encouraging the use of newer, better quality equipment and reducing the exposure to unnecessary radiation. The arrangement has been applied to almost all diagnostic imaging items on the MBS excluding positron emission tomography (PET) items.

Currently, items on the MBS have two different schedule fees (i.e. 'mirror items') known as schedule K and schedule NK items. Schedule K items refer to services performed on newer/upgraded equipment and schedule NK items refer to services performed on older/aged equipment. NK items have a lesser Medicare fee than K items.

From 1 May 2020, subject to the passage of legislation, all NK items will be removed from the MBS. This means Medicare benefits will no longer be payable for services provided on diagnostic imaging equipment that exceeds its effective life age or maximum extended life except for those practices with a current approved exemption.

From 1 May 2021 all exemptions that allow for Medicare benefits to be paid for services provided using aged equipment will no longer apply. From this time, only diagnostic imaging services performed on equipment within its effective life age or maximum extended life will attract a Medicare benefit.

These changes aim to ensure the provision of images of diagnostic quality, and in relation to ionising equipment, reduce patients' exposure to unnecessary radiation by encouraging providers of diagnostic imaging services to upgrade their equipment. This will ensure the same level of care for all patients, regardless of location or provider.

Action required

To ensure that Medicare benefits continue to be payable from 1 May 2020, all diagnostic imaging equipment (except for those with a current exemption) must be within its effective life age or maximum extended life and listed as such on the Department of Human Services (OHS) location specific practice number (LSPN) register.

Details of equipment currently registered for each LSPN are displayed on the register including the type, serial number, date manufactured and whether it has been upgraded. It is essential that this equipment information is updated in readiness for the 1 May 2020 commencement of the new rule. It is the responsibility of practices to ensure OHS has the correct and most up-to-date information on equipment date of manufacture and upgrade details.

For those practices with a current exemption, which ceases for all practices on 1 May 2021, the diagnostic imaging equipment will need to meet the effective life age or maximum extended life for the services to continue to attract Medicare benefits from 1 May 2021. The LSPN equipment register will need to be updated before 1 May 2021 to reflect any upgrade of equipment. This change applies to all practices including rural, remote and Aboriginal Health Services.

Effective equipment age

Equipment that has not been upgraded is classified by the 'effective life age' of the equipment. Equipment that has been upgraded is classified by the 'maximum extended life age' of the equipment. An upgrade is an additional reasonable investment made by the service provider to improve the overall performance of the imaging system so that it is equivalent to new equipment supplied in Australia at the time of the upgrade.

Effective life age and maximum extended life age

Modality

MBS ltems

Effective Life Age

Maximum extended life
(including extension for upgrades)

Ultrasound

55005-55855

10 years

15 years

Computed Tomography (CT)

56001-57363 

10 years

15 years

X-ray

59903-60078
58102-59104
59504-60101

15 years

20 years

Orthopantomogram (OPG)

57911-57968

15 years

20 years

Mammography

59301-59319

10 years

15 years

Fluoroscopy

60501-61110

15 years

20 years

Nuclear Medicine (excluding PET)

61651-61729 

10 years

15 years

Magnetic Resonance Imaging (MRI)

63013-63523

10 years

20 years

Angiography

59903-60078

10 years

15 years

How to calculate the age of your equipment

If the equipment was installed new, age is calculated from the date the equipment was first installed. If the equipment was installed used, age is calculated from the date that the:

  • Equipment was first used in Australia (for equipment previously used in Australia); or
  • Equipment’s oldest component was manufactured (for equipment previously used outside Australia).

More information

Further details about the capital sensitivity arrangements can be found on the Department's website here.


Enquiries

Any enquiries in relation to these changes should be directed to:

 cap.sens@health.gov.au 

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