Bulk billing switch

The worked example

A six doctor practice in a metropolitan suburb sees about 30,000 standard consultations a year. Seven in ten are already bulk billed and the rest pay a $100 fee. Doctors keep 65 per cent of their billings and pay the practice a 35 per cent service fee.

Modelled on the standard consultation benefit of $45.05 and the $22.40 metropolitan bulk billing incentive that apply from 1 July 2026, switching lowers the practice's revenue by $18,064 a year, or 2.2 per cent, and its doctors' income by $105,949 between them, 7.0 per cent, about $17,658 each. The practice needs 2.3 per cent more consultations to stand still and each doctor 7.6 per cent more, about 1.8 extra patients a day for a doctor seeing 24. The practice's share of the program payment is about $21,117 a quarter, paid in arrears.

Run the same model for a practice already bulk billing 85 per cent of consultations at an $85 fee and it points the other way: practice revenue rises 7.7 per cent and doctor income 2.4 per cent.

Illustrative example, modelled on standard consultations using public Medicare figures from 1 July 2026 and typical settings for a practice of this size. Not a client engagement.

How to read the result

Both the practice and its doctors lose at today's volumes

The program payment does not replace the private fees given up. Switching works only if the doctors can add the consultations shown without longer waits for patients.

The practice gains and its doctors lose

Private fees are shared in the doctors' favour and the program payment is split evenly, so the practice can come out ahead while its doctors fall behind. Agree any switch, and any change to the service fee, with the doctors first.

The doctors gain and the practice loses

This happens only where the service fee is above half of billings, so the practice carries most of the private fees given up.

Both the practice and its doctors gain

Most consultations are already bulk billed, or private fees sit close to the Medicare benefit and incentive, so the program payment outweighs what is given up. Check the eligible services list against your own item mix before you commit.

Questions owners ask

Does the program pay on every consultation?

It pays on eligible services when the practice bulk bills every eligible service for every Medicare eligible patient and is registered with MyMedicare. This calculator models standard consultations only, so check your own item mix against the eligible services list.

When does the money arrive?

Program payments arrive quarterly in arrears. The first months after a switch carry the private fees given up before the first payment lands, so plan the cash for that gap.

Why do the doctors lose more than the practice?

At a 35 per cent service fee, each dollar of private fees given up costs a doctor 65 cents and the practice 35 cents, while each dollar of program payment returns 50 cents to each.

Is my Modified Monash category right?

From 1 November 2026 Medicare uses the 2023 Modified Monash categories. Confirm your practice's category, and the incentive item that goes with it, before relying on the result.

What about payroll tax?

How state revenue offices treat payments between a practice and its contracted doctors differs by state and changes often. Talk to your tax adviser about your own arrangements before you change your billing model.

Typical results

For a metropolitan practice with a 35 per cent service fee and a $100 private fee, the model breaks even for the practice at about 75 per cent of standard consultations already bulk billed, and for its doctors at about 87 per cent. At an $85 fee those points fall to about 54 and 75 per cent. Below them, switching costs money at today's volumes; above them, the program payment outweighs the private fees given up. Higher Modified Monash categories carry a larger incentive and move both points down.