Australian Government Policy  Regarding MRI Services

Updated by Greg Brown November 15th 2002

 This page iwill cover issues of MRI funding policy in Australia, practical matters related to the current funding method, and the specific requirements of the Health Insurance Commission (HIC) as they become apparent through administering the system.
Australian MR funding policy offers an excellent model as it has used almost all funding methods in succession.  Political history suggests we are likely to see more change.
All opinions are those of the cited authors.
Medicare MBS Schedule Fees MRI Funding History MRI funding references in Australian Parliament 1992 - 1998 Health Programme Grants 1998. MRI on the CMB again
May 2001 Tender for new MRI Sites


Medicare is a universal system of health insurance.  It the primary funding mechanism for health services in Australia.  The scheme is administered by the health Insurance Commission (HIC) under the control of the Commonwealth Department of Health and Family Services .
In Australia discussions of health policy are frequently dominated by issues of funding.  CMB codes and conditions are used to administer issues of service delivery.  While there is a clear division between publicly and privately funded health service units (hospitals, clinics, medical practices) services in all of these are covered by Medicare payments, so even a cursory examination shows that there is virtually no privately funded medicine in Australia.
The relationship between the public payer and the privately operating practitioners remains strained and at time adversarial.

The Australian Healthcare System. An Outline 2001
Medicare Explained
Medicare Statistics

Medicare Benefits Schedule (CMB)

Through negotiation with practitioners a schedule of agreed fees is established for a wide range of services.   Practitioners are free to charge what they like for services but benefits are paid on the basis of the CMB.   The Australian Medical Association (AMA) produces a schedule of recommended fees that mirrors the MBS.
If the patient is billed personally, they apply to Medicare for the appropriate benefit (or rebate), which they forward to the practitioner along with any gap between the benefit and the amount charged,   Practitioners (providers) may elect to bill Medicare directly in a process called bulk billing, in which case they must accept the Medicare benefit as full payment for the service.

The Historical View

The NHTAP years 1986-1992

Australian MRI services commenced with the installation of a privately owned and funded GE SIGNA in Sydney in 1986.  The Federal government announced a programme of 5 sites to be installed in major public hospitals to conduct an evaluation of the new imaging technology under the control of the National Health technology Advisory Panel (NHTAP)   Each site received an initial capital grant and most were provided with additional capital after 8 years of operation.  Scans were funded through a restricted Medicare fee of $280 per scan.  NHTAP instituted a system of data collection to analyse the applications of MRI and its effectiveness in altering patient outcomes.  A number of sites were added to the programme each obliged to produce 3 years of the prescribed NHTAP data.  NHTAP consisted of a panel of Radiologists, a medical physicist, health administrators and officers of the Department of Health.  They produced several reports and the study period was wound up in 1992 when a block grant method (HPG) was used to fund the 18 sites set up under that regime.

 1992 to 1998 Health Programme Grant Funding

These notes from the federal Department of Health, explain the funding arrangements for MRI in Australia operating from 1992 to September 1998.   During that period recognised public sites were paid on the basis of the number of examinations performed with no limitations on the applications or indications attracting funding.   The funding conditions were dictated in a Health Programme Grant (HPG) contract between the State and Federal governments.   Each site received approximately $1.3 milllion for performing in exccess of 3600 examinations per annum.
DIL.1 Non payment of Medicare Benefits for Magnetic Resonance Imaging (MRI)

Magnetic Resonance Imaging (MRI) does not attract a Medicare benefit. Although a Medicare benefit for MRI services was payable in respect of services rendered at certain hospitals during the evaluation period of the technology, the benefit was withdrawn from 29 July 1992.

By agreement with the States, the Commonwealth contributes to the funding of MRI in the form of grants to the States. These grants enable the establishment of 18 publicly funded machines attached to neurosurgical units at major public hospitals, and the payment of radiologists to treat eligible private (non-compensible) patients. The grants were effective from 1 February 1992, rendering the Medicare benefit item superfluous.

Patients eligible for Medicare and private (non-compensible) patients are not charged for MRI services at the recognised (public) hospitals specified hereunder:
Westmead Hospital Parramatta (Outer Sydney) New South Wales
Royal North Shore Hospital St. Leonards (Sydney) New South Wales
Royal Prince Alfred Hospital Camperdown (Sydney) New South Wales
John Hunter Hospital New Lambton (Newcastle) New South Wales
Prince of Wales Hospital Randwick (Sydney) New South Wales
Austin Hospital Heidelberg (Melbourne) Victoria
Royal Melbourne Hospital Parkville (Melbourne) Victoria
Alfred Group of Hospitals Prahran (Melbourne) Victoria
St. Vincents Hospital Fitzroy (Melbourne) Victoria
Princess Alexandra Hospital Woolloongabba (Brisbane) Queensland
Royal Brisbane Hospital Herston Queensland
Townsville Hospital Townsville Queensland
Royal Adelaide Hospital Adelaide South Australia
Flinders Medical Centre Bedford Park (Adelaide) South Australia
Sir Charles Gairdner Hospital Nedlands (Perth) Western Australia
Royal Perth Hospital Perth Western Australia
Royal Hobart Hospital Hobart Tasmania
Canberra Hospital  Woden Australian Capital territory
 Details of referral requirements should be obtained from the hospital concerned.
Government policy on MRI is based on the advice of an independent expert committee that access to MRI be improved through the establishment of the publicly funded machines listed above. The policy is concerned to ensure that access to publicly funded MRI is based on demonstrated needs and health outcomes, and that inappropriate diffusion of this expensive health technology does not occur.

The 1998 Budget Changes

Medi-leak is the term coined in a piece  published in The West Australian newspaper February 11 1999 page 42.
The article is typed below

Medi-leak Probe ordered
By Carlina Tan-Van Baren

The Health Insurance Commission is investigating a possible Budget leak that could see a $22.5 million blow-out in the cost of Medicare rebates for radiology services.
A Senate estimates committee has been told of Health Department concerns of inside knowledge over the signing of 15 contracts to buy magnetic resonance imaging units between the printing of budget papers and their release on May 12 last year.
On Budget night, Health Minister Michael Wooldridge announced the extension of Medicare rebates for diagnostic services using MRI equipment.  Department officials have told the committee that, after the printing of the Budget papers, Dr. Wooldridge took the decision to backdate eligibility for new MRI units which were not yet in service but had been bought on contracts signed before the Budget was released.
In the light of fears about a possible leak, Opposition health spokeswoman Jenny Macklin asked Dr Wooldridge who he had discussed the backdating with before Budget night and whether any of those people were involved in the contracts under investigation.
Dr Wooldridge said he could not answer the question because he was not aware of who was under investigation.   But he had sought the investigation in which each of the 15 radiology services would be asked to sign a statutory declaration of their knowledge relating to the Medicare rebate changes.
He said the HIC audit would be "very robust".  Anyone who perjured themselves by signing a statutory declaration would be dealt with by the full effect of the law, Dr Wooldridge said.
Ms Macklin later called for Dr Wooldridge to explain his role in deciding to backdate eligibility.
"There is no medical need for Australia to have these additional 15 machines and the circumstances under which these contracts were written must be publicly disclosed," she said.

May 2001 Tender for Six new MRI services

Following the recommendations of the Blanford report, the Australian Government requested tenders for 6 MRI scanners to provide services with access to the MEdicare Schedule benefit to service specific regional areas. The evaluation of tenders is controlled by the "MRI Monitoring & Evaluation Group" chaired by Professor John Blanford.  there is good and continuing evidence that beyond the Quality Assurance programme requirements, the Federal Department intends to keep the RANZCR at a long arm's length.  Their history with the 1999 budget negotiations, and the failed agreement to control radiology CMB  spending seems to have precipitated this approach.
The Request for Tender document was issued on May 19th 2001 and available on-line (RFT 157/001 Medicare Benefits Scheme: Magnetic Resonance Imaging - Additional Units in Areas of Need.)
Schedule 1 provides an overview of the legislative regime covering Medicare funded MRI services in Australia as of June 2001.
The Tenders opened , a public meeting was held on June 1 2001, the Minutes are available and make interesting reading.
The 6 areas of need are explicitly described in the RFT clause 12.4 (b) (i) and are basically,
1.    South west Sydney (Fairfield, Liverpool, outer south west.)
2.    Nepean area (NSW) (Blacktown Baulkum Hills)
3.    Dubbo, Orange, Bathurst (North western & central western NSW)
4.    Mornington Peninsula, outer eastern suburban Melbourne, Gippsland (Victoria)
5.    North of Brisbane to Gladstone (Queensland)
6.    Gold Coast (Queensland)
The RFT includes an overview of the legislative arrangements concerning MRI on the MBS, and is well worth reading.

Press Release announcing sites awarded new Medicare support
Click Me to Mail to Me
If you  have comments or suggestions, please contact the author by e-mail by clicking on the picture.
Top of page
  Back to Greg's MRI Page