Practitioner Guide · Updated 18 May 2026
A plain-language guide to the seven claim rails an Australian practitioner deals with: Medicare, private health funds, HICAPS/Tyro, Easyclaim, DVA, WorkCover and CTP. Bulk vs gap billing, MBS item numbers, and the rules for compensable patients.
Section 1 — The Seven Claim Rails
The AU health-funding landscape is a stack of separate schemes with their own item numbers, eligibility rules, and settlement timelines. Knowing which rail applies to which patient is the foundation of clean billing.
Commonwealth scheme funded by Services Australia. Patients claim a rebate against a 5-digit MBS item number. Bulk billing assigns the rebate to the practitioner as full payment; gap billing leaves the patient with an out-of-pocket.
Benefits from registered private insurers (Bupa, Medibank, HCF, NIB, HBF and ~30 smaller funds). Extras cover handles most allied-health; hospital cover handles in-patient procedures.
Real-time terminal-based claim processing. The patient taps their health-fund card at point of service; the terminal returns the eligible benefit and the patient pays only the gap.
Submit a Medicare claim through a HICAPS or Tyro terminal directly to Services Australia at the time of consultation. Rebate is credited to the patient's bank account or applied as bulk-bill.
Department of Veterans' Affairs funds care for eligible veterans. Three card types — practitioners bill DVA directly using DVA item numbers (broadly aligned to MBS, with some uplifts).
State workers-compensation schemes. Each has its own approval workflow, gazetted fee schedule, and reporting templates. NEVER bill these patients to Medicare for the compensable injury.
Compulsory Third Party schemes fund rehab after road-traffic injury. Each state runs its own scheme with its own scheduled-fee book and case-management process.
References: servicesaustralia.gov.au, mbsonline.gov.au, dva.gov.au.
Section 2 — Bulk vs Gap Billing
Bulk billing: practitioner accepts the Medicare rebate as full payment — patient signs a DB4 and pays nothing on the day. Mixed (gap) billing: practitioner charges their own fee, patient pays upfront, Medicare rebates the patient. The gap is the practitioner's fee minus the Medicare benefit.
Choosing between them is a practice-economics decision. Bulk billing maximises booking conversion but caps revenue at the rebate. Gap billing protects margin but adds admin overhead and needs patients willing to pay upfront. Most practices run a hybrid — bulk for concession-card and CDM patients, gap for private appointments.
| Billing mode | Patient cost | How it works |
|---|---|---|
| Bulk billing | 100% of rebate | Practitioner accepts the Medicare benefit as full payment. Patient signs an assignment-of-benefit form (DB4). Zero out-of-pocket. Common in GP and parts of allied health. |
| Mixed (gap) billing | Fee − rebate | Practitioner charges their own fee. Patient pays upfront, then receives the Medicare rebate into their bank account (1–2 business days via Easyclaim). |
| No-gap (private fund) | $0 out-of-pocket | Practitioner accepts the fund's no-gap schedule. Patient pays nothing. Practice must be a fund-recognised provider in that fund's no-gap arrangement. |
| Known-gap (private fund) | Capped gap | Patient pays a known, capped gap on the day; the fund pays the balance up to its known-gap schedule. Caps vary by fund and category. |
| Member-elected | Patient claims | Patient pays the practice in full, then claims their fund benefit via the fund's app or member portal. Used when the practice isn't a recognised provider. |
| Compensable (full fee) | Gazetted rate | Care is funded by WorkCover, TAC, CTP or DVA. Practice bills the scheme directly at the gazetted rate — no Medicare or private-health involvement for the compensable condition. |
Considerations: admin overhead of mixed billing, patient willingness to pay upfront, the gap between your scheduled fee and the market rate, and whether you participate in fund no-gap schemes.
Section 3 — MBS Item Numbers
Every Medicare-funded service maps to a 5-digit MBS item. Each item carries: the schedule fee, the benefit (75% or 85% of schedule depending on setting), the restrictions (who can claim, how often), the eligible provider types, and the descriptor. Look items up at mbsonline.gov.au — the searchable register is updated monthly.
| Profession | Common items | Notes |
|---|---|---|
| GP | 23 / 36 / 44 | Standard consult, long consult, prolonged consult — by time bracket. |
| GP — CDM | 721 / 723 / 732 | GP Management Plan, Team Care Arrangement, Review of GPMP/TCA. |
| Physiotherapy (CDM) | 10960 | Allied-health service under a CDM referral — max 5 per calendar year across all eligible allied-health. |
| Psychology (Better Access) | 80000 / 80010 / 80020 | Clinical psychologist focussed psychological strategies — under a MHCP / MHTP from a GP, psychiatrist or paediatrician. |
| Dental (CDBS) | 011 / 012 / 088 | Comprehensive oral exam, periodic exam, restoration — Child Dental Benefits Schedule item numbers. |
| Speech / OT (CDM) | 10970 / 10958 | Allied-health service under a CDM referral, capped to combined 5-per-year limit. |
For out-of-hospital services (the typical GP, allied-health, and specialist rooms setting), Medicare pays a benefit of 85% of the MBS schedule fee. The remaining 15% is the practitioner's scheduled-fee shortfall — usually borne by the patient (or by the practice in bulk-billing).
For in-patient services delivered in a private hospital, Medicare pays a benefit of 75% of the schedule fee — the patient's hospital cover (or no-gap arrangement) typically fills the rest. Solo private-rooms practices rarely hit the 75% rule; in-patient surgeons regularly do.
Section 4 — Compensable Patients
Care is “compensable” when funded by a workers-comp insurer (iCare, WorkSafe, WorkCover QLD, ICWA, Comcare), a motor-accident scheme (SIRA CTP Care, TAC, MAIC), DVA, or the NDIS. These are not Medicare top-ups — they are separate funding rails with their own item numbers, gazetted fees, approval processes and reporting requirements.
Under Section 19(2) of the Health Insurance Act 1973, a Medicare benefit is NOT payable for a service for which someone else (a workers-comp insurer, a CTP insurer, DVA, an employer) is liable. Billing Medicare for a compensable injury is a fraud finding — not an admin error. An unrelated condition seen for the same patient can still be Medicare-billed; the compensable condition cannot.
Compensable schemes work on pre-approval. The case manager approves a defined number of sessions for a defined scope. Adding visits, modalities, or changing diagnosis needs a new approval before delivery — billing first and asking later is the fastest way to write off uncollectible fees.
Each scheme publishes a fee book — WA ICWA rates, NSW SIRA Allied Health order, TAC Fee Schedules, DVA fee notes. These rates are typically higher than the MBS rebate but lower than full private fees. You can't charge a gap on top — the gazetted rate is the full fee.
Schemes mandate progress reports, treatment plans, and discharge summaries at set intervals. The gazetted fee assumes you'll deliver these — late reports delay settlement and can void approvals retroactively. Most schemes have report-writing item numbers separate from clinical items.
NDIS, CTP and WorkCover plans pre-authorise a bounded number of sessions (e.g., 10 physio visits over 12 weeks). Hitting the cap triggers a clinical-review request, not an automatic extension. Build PMS reminders around the cap so you don't treat an out-of-plan session.
Medicare cards expire, DVA cards get reissued, and private-fund memberships lapse for non-payment. A 30-second card check at booking saves a rejected claim a week later.
Compensable patients (WorkCover, TAC, CTP) are pre-approved for a specific number of visits in a specific treatment scope. Adding modalities, increasing visit count, or changing primary diagnosis needs a new case-manager approval before you treat — not after.
Medicare, HICAPS, Tyro and each private fund settle on different schedules. Monthly reconciliation lets small rejects pile up past their re-submission window. Weekly is small enough to investigate, current enough to fix and re-lodge.
The top Services Australia reject is a wrong or expired MBS item number — usually a copy-paste from a prior consult that didn't match the actual service. A pre-claim item-validation pass eliminates most of these.
Bulk billing is a Medicare concept: the practitioner accepts the Medicare rebate as full payment for a Medicare-funded service. No-gap is a private health fund concept: the practitioner accepts the fund's scheduled benefit as full payment for an extras-funded service. Both result in zero out-of-pocket, but they sit on different claim rails. A practice can be bulk-billing for Medicare items and known-gap for private items at the same time.
A Chronic Disease Management (CDM) referral is issued by a GP under a GP Management Plan or Team Care Arrangement. It gives the patient access to up to 5 Medicare-rebatable allied-health visits per calendar year (combined across physio, OT, podiatry, speech, exercise physiology, etc. — not 5 per discipline). The referral nominates eligible providers; the allied-health professional bills MBS item 10960 (or discipline-equivalent) per visit and writes back to the referring GP after the initial and final consult.
No — not for the same service. Section 19(2) of the Health Insurance Act prevents claiming a Medicare benefit and a private-fund benefit on the same item. A patient with a CDM referral can claim either the Medicare rebate OR their fund's physio extras — not both. Some practices structure longer visits to bill Medicare for the first portion (under the CDM item) and a private extras item for an extended modality afterwards, but each item must be separately documented and clinically distinct.
HICAPS typically charges a monthly terminal-rental fee plus a per-transaction processing fee. Tyro's pricing is structured similarly. The exact figures vary by terminal model, expected transaction volume and bank relationship — always request a current quote rather than relying on third-party guides. The terminal cost is usually offset many times over by the reduction in patient-side claim friction (and the lift in book-rate from no-gap arrangements).
For Easyclaim bulk-bill submissions, payment to the practice bank account is typically next-business-day. For paper or batch claims, allow 5–10 business days. Private health no-gap settlements via HICAPS are usually next-business-day as well. WorkCover and CTP remittance is far slower — 14 to 60 days depending on the scheme and whether the invoice attached the required treatment notes.
Services Australia returns a rejection code (the most common categories are: wrong item number, invalid Medicare card, item-restriction breach, duplicate claim, missing referral). The practice can correct and re-lodge within 2 years of the date of service. Don't write off rejects without investigating — about 80% of rejections are fixable with a corrected re-lodge. Keep a rejection log and review monthly to identify recurring patterns (e.g., a particular item being mis-keyed).
OneBookPlus connects Medicare Easyclaim, HICAPS/Tyro, and your clinical notes so item-number errors get caught at the point of service — not at month-end reconciliation.
Last reviewed and updated: by Bishal Shrestha
About the author
Founder & CEO, OneBookPlus
Bishal has over a decade of experience in digital marketing, web development, and small business consulting across Australia. Bishal has helped Australian allied-health and medical practices wire up Medicare bulk-billing, HICAPS/Tyro terminals, and private-fund claim rails.
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