Medicare patient claims: who gets the rebate

A Medicare patient claim looks like a bulk bill claim on the claiming screen and behaves quite differently in the books. The practice charges the patient, lodges the claim on the patient's behalf, and Services Australia pays the benefit to whoever the claim names as the claimant. Where that money ends up turns on one thing: whether the invoice was settled before the claim went out.

Only the third ending leaves anything outstanding in the practice's books, and it is the ending the claiming documentation stops short of.

The reconciliation error this page exists to prevent is treating a patient claim the way a bulk bill run is treated. A Medicare bulk bill claim is assigned to the practice and paid to the practice, which is why it earns a clearing account that holds approved claims until the payment run lands. A patient claim earns nothing of the kind. Put one through the clearing account and the balance sits there with nothing coming to clear it.

The tell is a Medicare clearing balance that grows by the rebate portion of every privately billed appointment and gets written back at month end for a reason nobody can name. The fix sits upstream of the bank feed. The invoice was closed by the patient's payment on the day it was made, and the practice's revenue is the full fee rather than the schedule benefit.

Pay doctor via claimant is the gap only version of a patient claim, and it is why a Medicare receivable can stay open for months. Best Practice's knowledge base sets out the mechanics: the cheque is issued in the provider's name and sent to the patient's last known address as recorded by Medicare, and those cheques cannot be sent to providers or to a patient at a provider's address. There is a scheme that cancels an unbanked cheque after 90 days and pays the practitioner the Medicare schedule fee by electronic transfer, and Services Australia names allied health professionals, optometrists and dentists as ineligible for it. For those practices the money comes through the cheque itself.

Most patients just put the cheques in the bin and the doctor waits the 90 days for Medicare to send the rebate, but we have seen situations where some patients successfully bank those cheques into their own bank accounts and that is quite a big problem.⁶

That report is written about doctors, who do have the 90 day fallback, and the majority of the practitioners using the scheme were believed to be GPs. Across the 2017 to 2018 financial year it puts scheme expenditure at 322 million dollars, covering 1.2 million patients and 3.2 million services provided by more than 39,000 practitioners, and separately puts the mailing at more than 1.2 million paper cheques totalling 320 million dollars. The scale matters more than the figure. An allied health practice billing gap only is carrying a receivable that a patient's kitchen drawer controls, with no fallback behind it.

The payer does not decide the treatment. The ATO puts the recipient of the supply at whoever engages the practitioner to provide the service, which on a patient claim is the person treated, so the service itself decides it. A service a Medicare benefit is payable for is a medical service, and medical services are GST free, which covers the appointment the claim was lodged against. Where no Medicare benefit is payable, s38-10 does the work instead: the supply is GST free where it is a listed health service, performed by a recognised health professional in that listed service, and generally accepted in that profession as necessary for the appropriate treatment of the recipient of the supply.

In the canonical allied health template that is account 401, Clinical services, Medicare, at the GST free income rate, and the psychology template posts it the same way. That account carries patient claim invoices alongside bulk billed ones, because the revenue treatment is the same either way and only the settlement rail differs. The NDIS provider template spells out no Medicare row, so a Medicare line there falls through to its practice default account and belongs in the questions queue rather than posted silently. That same template gives a report written for a third party, a supervision session and a product the patient takes home a row each at the taxable rate, which is why the standing map holds a row per service category instead of one row per funder. The ATO's own examples run the same way: a report written for an insurer is not GST free where no Medicare benefit is payable for it and it is not a natural part of the treatment, and the extra dressings a patient takes home after a consultation are not GST free even though the consultation was.

Ledger Map keeps one approved map per practice and reads every line through it. A privately billed appointment resolves to its own account and tax rate, the patient's payment posts as one balanced document set, and the bank feed is left holding a single exact match for a person to accept. Where a gap only claim is involved, the rebate portion is raised as a question with the options laid out, because the invoice on its own cannot say whether a cheque has changed hands.

None of the treatments above was chosen by the product. Each is read from the canonical template the practice picked at setup, and the practice signs off the map before an invoice syncs. How it works walks through that map and the approval step in front of it.