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Clarity: Understanding Private Patient Billing

The way Private Health Funds operate when it comes to claiming and setting rebates for services can be confusing.  Doctors can register for different Health Insurance Schemes, and each has its advantages. Hoxton MPM is here to simplify this process and provide guidance on the billing arrangements that would best suit your practice.

Traditionally Health Funds have operated under a set schedule of fees for in-hospital services. Under this arrangement Health Funds set the amount they will pay for each MBS item irrespective of what the doctor charges for their services. Over the last decade Health Funds have moved towards two different arrangements: No Gap Billing and Known Gap Billing Schemes. The rules and procedures for these schemes differ significantly.


No Gap Billing

No Gap Billing is where the doctor agrees to charge the amount for the service prescribed by the Health Fund Schedule of Fees. Under No Gap schemes the doctor is prohibited from charging a higher amount (the difference between the schedule fee and the higher fee is known as the gap or out-of-pocket fee).  If the doctor chooses charge a gap, this out of pocket expense is not covered by the Health Fund and must be recovered directly from the patient. Charging this higher fee may lead to penalties for the doctor from the Health Fund. These penalties might include suspension from claiming with that Health Fund or reduction in the rebate paid.

Some insurers who have this arrangement include NIB, Medibank Private, BUPA and HCF.


Known Gap Billing

Under the Known Gap scheme the doctor chooses to charge the patient a fee that is higher than the Health Fund Schedule of Fees. This gap must be recovered directly from the patient. With some Health Funds there is a limit set on the amount above the Health Fund rebate that can be charged without a penalty. With all Health Funds, the patient must be informed of the likely out of pocket expenses prior to the services being administered. This is known as Informed Financial Consent.

Some insurers who have this arrangement are Medibank Private, HCF and funds under AHSA.


Registering with Health Funds

By registering with the Private Health Funds the doctor is agreeing to their schedule of fees.  Fees are generally set at 125-50% of the full MBS fees and are indexed in line with the Medicare Schedule.  The advantage of these arrangements are: (1) the certainty of fees paid for services; and (2) the processing time for payment is quicker than billing directly to the patient.

You are still able to charge an amount appropriate for your services which may be above the limit set by the Health Fund under their schemes, however this will result in a decrease in the rebate paid by the Health Fund either to you or to your patient (if they have paid their account in full).


Practice Start-Up Service

As part of Hoxton MPM’s Practice Start-Up Service we can assist you in developing your approach to setting fees and understand billings.

Registration with all of the Health Providers can require more than 50 phone calls and requires at least 24 different forms to be signed. We can assist you by providing tools and services that allow doctors to take advantage of all of these billing arrangements.

You are always welcome to call our Billings team on 1300 HOXTON or email your query to


Hoxton MPM Billing Services

  • Hoxton MPM Smart Phone Billing App
  • Dedicated account manager
  • Advanced Computer Submission System
  • Efficient Processing
  • 99% Success Rate of Claims
  • Monthly Detailed Reconciliation
  • Follow-up of Unpaid Claims
  • Detailed Financial Reporting
  • Electronic Informed Financial Consent Forms
  • APP Compliant Database Management and Record Keeping


Hoxton MPM
Suite 6, 342-344 South Rd,
Hampton East, VIC 3188.
Phone: 03 8060 4277



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