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16 May 2016

Pathology services will be quarantined from the Federal Government’s overhaul of Medicare in a major concession secured by the profession in exchange for dropping its campaign against the axing of bulk billing incentives.

The Government has opened the door to special deals regarding its MBS Review after agreeing to leave the Pathology Services Table, which lists the tests Medicare will cover and how much it will pay, untouched for the next three years.

Under the deal, the Government said it would “not change the Pathology Services Table, excluding those from the MBS Review, for the next three years, without consultation and agreement with the sector”.

Royal College of Pathologists of Australasia President, Dr Michael Harrison, said the arrangement meant “there will be a moratorium for the next three years on any further changes to [the] Pathology Services Table without agreement from the profession”.

As part the deal, the Government has also promised to hold off on axing pathology bulk billing incentives until measures to clamp down on the rents pathologists pay.

Prime Minister Malcom Turnbull announced the agreement during his first televised debate with Opposition leader Bill Shorten, declaring that it meant that “the concern that has been expressed about patients who go to have their blood tests done and so forth being charged extra, not being bulk billed, is… that concern is gone; the pathologists have agreed to continue bulk billing”

But AMA President Professor Brian Owler said the deal “doesn’t guarantee anything”.

“The cut to bulk billing incentives for pathology has merely been deferred. The cuts are still there, they’re still taking $650 million out of health over the next four years,” Professor Owler said.

Not only that, but there is no guarantee that pathologists will not abandon bulk billing.

Professor Owler said he had been in contact with Pathology Australia about the deal, and they had admitted there was no guarantee the pathologists would continue to bulk bill.

“They don’t have the ability to make that guarantee, and it will be up to the individual pathology companies to actually make that decision over time,” he said.

Under the deal struck with Pathology Australia, the Government has committed that, if it is re-elected, it will introduce provisions to the Health Insurance Act to clarify what is meant by ‘market value’ and link it with local commercial market rents.

This will be backed by “appropriate compliance mechanisms”, and those seeking to register collection centres will need to provide more information.

The Government’s announcement is at odds with Health Minister Sussan Ley’s earlier rejection of pathology sector calls for change to the definition of market value, and it is not clear exactly what Pathology Australia has been offered in the deal.

There are around 4000 collection centres across the country, and the Government will need to consult closely with general practice to ensure that the new regulations are not simply a form of price control that puts many existing leases into jeopardy.

The Government has declared there will be a moratorium on any new collection centre approvals until the new regulations are in place, and “the measure to remove bulk billing incentives will commence at the date that the changes to the regulatory framework take effect”.

But Professor Owler said that, even with the deal, there was no getting away from the fact that the Government was ripping hundreds of millions of dollars out of pathology services.

 “To suggest that somehow the concern is now gone I think overstates the results of the agreement that was reached between the Government and Pathology Australia,” he said. “There will be some easing of costs pressures through this change to rents, but at the end of the day they are still experiencing a very significant cut.”

Adrian Rollins

Published: 16 May 2016