The fees for anaesthesia have been determined in accordance with the Relative Value Guide (RVG) guidelines published by both the Australian Society of Anaesthetists (ASA) and the Australian Medical Association (AMA). The actual fee depends on several factors, including the age and underlying medical condition of the patient, the operation, the complexity, and duration of the anaesthetic, which is longer than the procedure itself. Invoices are rebated in part by Medicare and in part by some private health funds. It is important to understand that Gap Cover schemes vary between funds.
Known Gap is where the practitioner splits the bill into two components, one to the health fund, and one to the patient. The patient typically does not see the one sent to the health fund, as that is electronically processed. The patient is usually billed a known out-of-pocket component, hence the name Known Gap.
Fixed Fee is a model whereby the practitioner sends one single bill to the patient, for a fee covering the entire operation, based on the typical duration and complexity of a particular operation. After the operation, when the actual anaesthetic units have been determined, the patient receives an itemised receipt listing the item numbers utilised, and using that receipt they are able to put in a claim to the health fund and Medicare. For reasons aforementioned, the item numbers used often vary and can only be finalised after the episode has occurred. The Fixed Fee is set based on the average anticipated complexity and duration of the operation based on historical data for that operation and surgeon, and unless there are significant variations from the average, no adjustments are made postoperatively.
Since complexity tends to be front-loaded to the start of the operation as per the RVG, longer and more complex anaesthetics result in progressively less and less rebate per hour which elapses. This inherent bias of the RVG towards better compensation for shorter operations means that fewer practitioners may be naturally incentivised to provide services for patients who require longer or more complex operations, in favour of providing services for patients and surgeons who typically perform shorter or less complex operations. This unfairly discriminates against patients needing longer and more complex operations, and financially penalises anaesthetists who undertake this kind of work. It would result in practitioners preferring to performing complex work at the public hospital, while private patients would miss out. This is not ideal. Currently, the Known Gap model ceases to adequately compensate the practitioner’s time at around the 60-90 minute mark. Therefore, the majority of the time, for operations shorter than this the Known Gap model is used, and for operations longer than this the Fixed Fee model is used. Doing it this way allows me to continue to make my services at the private hospitals equally available to patients requiring surgery of all complexities and durations.
At the time of writing (August 2024) the Australian Medical Association (AMA) and the Australian Society of Anaesthetists (ASA) recommend a benchmark unit rate of $100/unit. The Known Gap for the majority of health funds is $500. Of course, this varies between funds and products.
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When your fund says you are "fully covered" for a procedure and its associated anaesthetic, it only means a rebate is applicable (as opposed to having no rebate applicable). How big that rebate is depends on many factors, but it is important to note that in most cases it does NOT mean it will cover the entirety of your surgical or anaesthetic fee. Likewise, “top cover” with a fund often means you are covered for a bigger range of operations, or have better extras cover (e.g. dental, optical, physio, etc), whereas the hospital component often is not necessarily any better. Generic terms like “fully covered” and “top cover” are not really helpful in giving you an idea in how much out of the total fee you are covered for. Please speak to my rooms if you require an estimate.
The complexity and duration of the anaesthetic determine the final number of anaesthetic “units” billed. Each unit of anaesthesia is then multiplied by the amount rebated per unit to determine the total rebate from Medicare and the health fund. There are dozens of funds, each with a variety of policies which all rebate different amounts and follow different rules. The one factor they generally have in common is that they have not indexed their rebates alongside inflation. Due to there being such a wide variety of funds and products, the rebated amount therefore varies. And since the rebated amount varies and cannot be determined until the episode of anaesthetic has already occurred, the out-of-pocket expense also cannot be calculated until that time.
Surgical item numbers work different from anaesthetic item numbers because they are based on the specific procedures being undertaken, and the item numbers for the longer and more complex operations reflect a higher rebate amount, so the duration is de facto baked into the assigned rebate for the surgical fee.
Here is a short explanation with an example. This applies to Fixed Fee accounts (not Known Gap accounts).
As at September 2024:
Therefore, since my fees are at or below the AMA/ASA recommended rate, you will receive a rebate of at least 22.55% of the total invoice.
That is, a minimum of $22.55 will be rebated to you for every $100 invoiced.
For example: If the total invoice is for $2000, then you can expect a minimum of $451 to be rebated to you when you make your claim.
However, since the majority of the time my fee will actually be below the AMA/ASA recommended benchmark rate, you will find that typically you will get closer to approximately 25-35% of the total invoice rebated to you.
If for any reason you find that my fee has exceeded the AMA/ASA recommended rate, please contact my room immediately for it to be rectified.