The Medicare Benefits Schedule (MBS) is a crucial component of the Australian healthcare system, outlines the services eligible for Medicare rebates, and is important for general practitioners (GPs) and practice managers. Understanding the MBS is not just a matter of compliance; it directly impacts billing accuracy, practice revenue, and patient financial accessibility.
Errors in MBS billing can lead to claim rejections, audits, and financial losses. On the other hand, proper application ensures that practitioners are fairly compensated for their services while remaining compliant with Medicare regulations. This guide provides an in-depth look at how the MBS works, how to correctly use MBS item numbers, and common pitfalls to avoid.
What Is the Medicare Benefits Schedule?
A common question you may encounter is ‘what is MBS?’
As a healthcare provider, you may already be familiar with the fact that the MBS is a government-maintained list of medical services subsidised by Medicare. It sets out the services practitioners can provide patients while receiving financial support from the Australian government.
The schedule applies to a wide range of healthcare professionals. It includes GPs, specialists, allied health providers, and diagnostic service providers. Each listed service has a corresponding item number, which, in turn, determines the associated Medicare rebate.
The MBS pricing or billing guide is integral to the healthcare system because it ensures that Australians have access to affordable medical services. It also provides a framework for healthcare providers to bill for their work, thus aligning public funding with the cost of delivering medical care.
How MBS Works: The Basics
Each service listed in the Medicare Benefits Schedule has a corresponding unique item number, which identifies what was provided and the corresponding rebate.
GPs and practice managers must understand how these MBS item numbers function to ensure they practise correct billing and reimbursement.
MBS Item Numbers Explained
The item numbers used in the MBS serve as codes for medical services. They cover everything— from standard consultations to complex procedures. Each number is associated with a set description outlining what’s included in the service, who can provide it, and any conditions that may apply.
The Relationship Between Services, Item Numbers, and Fees
When a general practitioner provides a service, they claim the relevant MBS item number. Based on this, Medicare reimburses a portion of the cost as a rebate. The level of rebate depends on the service and whether it is bulk billed or privately billed.
Schedule Fees vs. Benefits (Rebates)
Now, you may wonder: What is the Medicare benefits schedule fee?
Remember that the MBS pricing guide is designed to subsidise healthcare costs and includes specific government-set fees (known as ‘schedule fees’) for various services. The schedule fee is the amount set by Medicare for a given service.
The Medicare benefit schedule fee functions as a benchmark or reference fee for Medicare payments, but it’s not a mandatory charge that providers must adhere to. Providers can charge more or less than this fee. For example, the schedule fee for a GP consultation might be AUD 40, but the GP can charge a higher amount depending on their practice costs and discretion.
Meanwhile, the benefit or rebate is the amount Medicare actually pays towards the cost of the service, calculated as a percentage of the schedule fee. This varies depending on the type of service and the circumstances of the care provided:
- 100% for general practice services provided by GPs
- 85% for specialist services, such as pathology tests and medical imaging
- 75% for services provided to private patients admitted to hospitals
If a practice chooses to charge more than the Medicare rebate, the patient pays the difference (this is known as an out-of-pocket cost or gap).
Bulk Billing vs. Private Billing Under the MBS
To understand the bulk billing vs private billing comparison, note that the former is a system where healthcare providers (like you) directly bill Medicare for their services.
With bulk billing, your patients won’t have to pay out-of-pocket costs, since you, the provider, will accept the Medicare rebate as full payment. Bulk billing is available to all Medicare-eligible patients, but is commonly applied to children under the age of 16, concession card holders, and eligible patients in rural or remote areas.
For bulk billing to take effect, the patient needs to assign their right to the Medicare benefit to the provider, and the latter chooses to bulk bill so they can then receive the payment directly using their Medicare provider number.
As a healthcare provider, you also need to take note of the following:
If you choose to bulk bill a patient for an MBS service, you must accept the Medicare benefit as full payment for that service. You cannot charge the patient any additional fees related to that service. This prohibition explicitly includes fees for consumables (e.g., bandages, dressings, syringes), record keeping, booking, or administration.
The only exception is for vaccines provided from your own supply, which are not available free through government programs or the PBS. This applies only to GPs and non-specialists, and only for particular attendance items. In these cases, you may charge the patient solely for the cost of the vaccine itself, not for administration or other consumables.
Private Billing
If you do not bulk bill—meaning, you choose to bill your patient privately—you may charge additional fees, including for consumables. The total fee (including any consumables) can be less than, equal to, or greater than the Medicare rebate. The patient pays the full amount upfront and can then claim the Medicare rebate. Any amount above the rebate will be an out-of-pocket cost for them.
The advantage of private billing is that it lets providers charge fees that reflect the true cost of service delivery. When privately billing, charges for non-clinically relevant services or goods for home use (e.g., wheelchairs, home-use dressings) must be listed separately and not included in the Medicare item charge.
Why the Distinction Is Important
Bulk billing ensures that cost doesn’t become a barrier to people being able to access essential medical care, thereby supporting public health and equity. On the other hand, private billing allows practices to remain financially viable, especially when Medicare rebates don’t keep pace with rising operational costs.
The balance between bulk and private billing shapes healthcare affordability and sustainability in Australia, and influences both patient experience and the structure of primary care delivery.
Recent policy changes, such as the expansion of bulk billing incentives from November 2025, aim to encourage more providers to bulk bill all Medicare-eligible patients, especially in rural and remote areas, by increasing incentive payments.
The choice between bulk and private billing affects both healthcare equity and practice economics in Australia. This is why practices must determine the right balance between bulk billing and private billing to maintain financial viability while ensuring accessible healthcare for Australians.
Using MBS Codes Correctly
Here, we need to stress that the correct use of Medicare Benefits Schedule (MBS) codes is important for Australian healthcare providers for several critical reasons:
- Legal and Financial Compliance: Each MBS item has a specific descriptor outlining the requirements for billing that specific service. Providers must ensure the service delivered matches the item descriptor, including the clinical content, time, and any other stipulations. The improper or erroneous use of MBS codes can result in Medicare benefits not being payable, and providers may be required to repay any monies incorrectly received. The incorrect use of MBS codes can also expose providers to penalties and sanctions following audits or investigations by Medicare Australia or the Professional Services Review.
- Audit and Oversight: Medicare Australia employs sophisticated monitoring, including data analysis and artificial intelligence, to identify anomalies or the potential misuse of MBS items. Providers whose claiming patterns diverge from expected norms may be subject to audit or investigation. Therefore, accurate coding and documentation are crucial for practitioners to withstand scrutiny and demonstrate that services charged to Medicare are clinically appropriate and billed correctly.
- Professional Standards and Patient Care: Using the correct MBS code ensures that the service provided is clinically relevant and generally accepted as appropriate by peers in the profession. This helps ensure high standards of patient care are maintained and supports the integrity of the healthcare system.
- Sustainability of the Medicare System: Proper, correct coding helps prevent the incidence of inappropriate claims and the misuse of public funds. With this, the sustainability and fairness of Australia’s universal healthcare system are preserved. Precise coding ensures that Medicare resources are directed to services that are genuinely needed and delivered according to legislative requirements.
- Provider Responsibility: It is the individual provider’s responsibility—not the practice’s—to familiarise themselves with the requirements of each MBS item and to maintain accurate records for each service billed. This is essential for both Medicare compliance and quality assurance.
If you’re having trouble mastering or navigating MBS codes, we offer the Intro to MBS Codes course at Alecto so you can gain confidence in your billing practices and stay compliant with legal requirements.
Understanding MBS Descriptors and Restrictions
Each MBS item has a descriptor that specifies the following:
- The scope of the service
- Who can provide it
- Any restrictions (e.g., patient eligibility, time requirements, frequency limits)
Misinterpreting these descriptors can lead to incorrect claims and possible penalties.
Multiple Services and Co-Claiming Rules
GPs often provide multiple services in a single consultation, but not all can be claimed together.
Medicare has strict co-claiming rules that determine which services can be billed together or simultaneously. Providers must understand these rules to avoid making incorrect claims and experiencing unnecessary rejections.
Common Mistakes in Coding and How to Avoid Them
There are several MBS coding mistakes that healthcare providers in Australia can commit, and these often lead to rejected claims, delayed payments, or compliance issues.
To avoid these errors, we put together some common coding errors below and how to avoid them to ensure smooth billing and maintain Medicare compliance.
- Incorrect Item Number Used: Claiming a service under the wrong MBS item number frequently happens. This error usually occurs if the service doesn’t meet the specific criteria of the item or if a similar but incorrect code is selected. This can result in Medicare paying a lower benefit, rejecting the claim, or requiring repayment.
- Missing or Invalid Referral Details: Many specialist or allied health services require a valid referral. Claims without a referral or with expired or incorrectly dated referrals are commonly rejected.
- Incorrect Patient or Provider Details: Errors in patient identification (e.g., the wrong Medicare card number, expired card, or mismatched names) or provider details can cause claim rejection.
- Service Date Errors: Claiming for a future date, a date before the patient’s Medicare eligibility, or a date too far in the past (over 2 years) typically leads to claim denial.
- Inappropriate Bulk Billing or Private Billing Practices: Charging additional fees when bulk billing or incorrectly applying bulk billing can cause compliance issues. Providers must not charge extra fees for consumables under bulk billing except in specific circumstances.
- Claiming for Services Not Provided or Not Covered: Submitting claims for services not actually rendered, or for services not covered by Medicare, is a serious error.
- Incorrect Use of Multiple or Associated Items: Some items require associated procedures or have limits on the number of services that can be claimed on the same day. Failure to comply leads to partial or full claim rejection.
To avoid making these mistakes:
- Thoroughly Understand Item Descriptors: Read and apply the detailed MBS item descriptors carefully to ensure the service meets all criteria before claiming.
- Verify Referral Validity: Always check referral dates and details before billing specialist or allied health services.
- Ensure Accurate Data Entry: Double-check patient Medicare card numbers, names, dates of birth, and provider registration details.
- Double Check the Correctness of Service Dates: Confirm the date of service is valid, not in the future, and within Medicare’s claim period.
- Use Practice Management Software Effectively: Employ updated software with built-in Medicare compliance checks to reduce manual errors.
- Conduct Regular Staff Training: Train billing staff regularly on MBS updates, common errors, and compliance requirements.
- Keep Clear Clinical Documentation: Maintain detailed records supporting the service provided to justify the item claimed, especially if audited.
- Always Consult Official Resources: Use Services Australia’s lookup tools and official MBS guides to verify item numbers and billing rules.
Examples of Commonly Used MBS Items in General Practice
Some of the most frequently used MBS items in general practice clinics include:
- 23 – Standard consultation (less than 20 minutes)
- 36 – Long consultation (20–40 minutes)
- 721 – GP Management Plan for chronic disease patients
- 732 – Review of a GP Management Plan
- 2713 – Mental health consultation
Familiarising yourself with these item numbers and their correct application can help greatly in streamlining your billing practices and improving cash flow.
Claiming and Billing
Submitting claims correctly ensures you get timely reimbursements and helps you avoid rejections. Medicare claims can be lodged electronically through systems like PRODA, HPOS, or practice management software integrated with Medicare. These platforms streamline the billing process and reduce administrative burdens.
MBS item numbers can be time-based (e.g., standard consultations) or procedural.
Time-based services must meet the minimum time thresholds specified in the MBS to be valid. If a claim is rejected, you must review the reason code provided by Medicare. Common causes include incorrect item numbers, missing details, or services not being eligible for a rebate.
Practices should have protocols in place to review and resubmit rejected claims promptly.
MBS Updates and Staying Compliant
The MBS is updated regularly, with new item numbers introduced and existing ones modified or removed. Staying informed about these changes is crucial to ensure correct billing. The best sources for updates include the MBS Online website, Medicare bulletins, and industry associations, such as the RACGP.
To stay compliant, clinics should conduct regular audits of their billing practices, provide staff training, and keep detailed records of all claims. Non-compliance can result in financial penalties, the repayment of incorrectly claimed benefits, or even Medicare audits.
Keeping up to date with MBS changes protects the financial health of practices and ensures they observe ethical billing practices.
MBS Billing Optimisation Tips
Optimising billing involves accurate documentation and the appropriate use of item numbers. Detailed clinical notes should support all MBS claims, so they align with the descriptors and eligibility criteria.
GPs can maximise revenue by correctly claiming chronic disease management plans, health assessments, and mental health services. Practices should also utilise item numbers that allow for collaboration with allied health professionals and nurses.
Recent Changes and Trends in the MBS
Recent updates include changes to telehealth services, new incentive programs, and a stronger focus on aged care and mental health.
Temporary items, such as those introduced during COVID-19, have shifted the way practices approach Medicare billing. Clinics must stay informed about these changing policies to ensure they only make accurate claims and enjoy continued eligibility for Medicare-funded services.
Useful Tools and Resources
The following key MBS tools and resources for Australian healthcare providers are meant to support the understanding of changes and updates, and maintain compliance with Medicare billing requirements.
MBS Online
MBS Online is the official and most up-to-date online repository of the Medicare Benefits Schedule. It is managed by the Australian Government Department of Health and Aged Care and administered by Services Australia.
It is regularly updated to reflect legislative changes, new item numbers, fee adjustments, and policy reforms, so providers can prepare in advance. Providers can access full item descriptors, explanatory notes, and fee schedules on MBS Online.
MBS Explanatory Notes
Explanatory notes (e.g., GN.1.1, GN.10.26, etc.) accompany MBS items and categories. These provide detailed guidance on how to interpret and apply item numbers correctly. They clarify complex billing rules, eligibility criteria, and service definitions to help healthcare practitioners avoid common billing mistakes and support compliance by ensuring providers understand all legal and clinical requirements linked to each item.
Clinical Software Integrations
Clinical and practice management software systems integrate MBS item numbers, billing rules, and claim submission processes directly into the provider’s workflow. These are important for reducing errors, streamlining billing, keeping the system current, and ensuring audit preparedness.
Choose reputable software certified for Medicare claiming, keep it updated regularly, and train staff on its billing functionalities and compliance features.
Training and Education Platforms for Billing
Formal and informal educational resources, including workshops, webinars, online courses, and provider handbooks, are designed to improve understanding of Medicare billing and compliance.
These resources help providers and administrative staff stay current with changing MBS policies and billing best practices. Training, in particular, reduces the risk of incorrect claims, audits, and financial penalties.
At Alecto, for example, we offer Mastering Medicare Billing training that’s designed to help practices avoid making billing errors, optimise claims approval, and prepare them for audits.
Stay Updated and Compliant With the MBS
A strong understanding of the MBS is essential for the financial sustainability and regulatory compliance of practices and healthcare providers in general.
Regular team reviews, ongoing education, and the proactive use of available tools all help practices optimise their billing while avoiding common pitfalls.
At Alecto, we provide MBS training courses, such as Mastering Medicare Billing and Intro to MBS Codes.
Get in touch with us if you have any questions or are interested in our MBS training courses.