'I can't afford to bulk bill people': GPs say state taxes are taking Medicare funding from them
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The federal government's $3.5 billion attempt to revive bulk billing rates is being "killed off" by states pocketing the money instead, doctors have warned. The government in November tripled the payment GPs receive to bulk bill patients in an effort to reverse falling rates of bulk billing — where practices accept a fee from Medicare as full payment and charge nothing to patients. But at almost the same time, a number of state governments determined a new interpretation of payroll tax laws that meant GPs would now be counted as employees rather than contractors for tax purposes, increasing the tax take by states from medical practices. The Royal Australian College of General Practitioners said states were pocketing the billions tipped into practices by the federal government, and preventing GPs from reducing their patient's fees. "Unfortunately, those reforms are not going to be able to have any significant impact because the money that is being put into general practice is going to be taken out by the states through the application of payroll tax on Medicare," RACGP president Dr Nicole Higgins said. "We can't bulk bill somebody and pass on a charge, because the law doesn't allow us, so if each consultation attracts payroll tax, who pays for that? Is it the patient, is it the practice? "What we're hearing [from GPs] is, 'I can't afford to bulk bill people who really need it because I have got to pay this state tax.'" RACGP president Dr Nicole Higgins said bulk billing was being undermined by the states increasing their tax take from medical practices.(Hannah Walsh) The states have argued GPs should be counted for the purposes of the tax, and special carve outs would undermine the broader regime. Health Minister Mark Butler has expressed his fears that the state tax take could undo efforts to improve bulk billing. And the changes have caused alarm among GPs. A Victorian clinic received an $800,000 tax bill dating back several years, with others warning they faced bills worth millions of dollars. In Canberra, several clinics have already increased their fees, with some like East Canberra GP directly attributing fee increases to payroll tax. And in South Australia, Dr Daniel Byrne, a former RACGP chair, said his two practices were on the hook for an estimated $140,000 in additional costs, which he would be forced to pass on to patients. Dr Higgins said while some GPs had already raised fees in response or in anticipation of higher taxes, the RACGP was encouraging doctors to hold off in the hope payroll tax concerns could be resolved. The federal government has celebrated early data for the first two months after its tripling of incentive payments, which showed a 2.1 per cent increase in bulk billing rates. But preliminary data released by the Australian Institute of Health and Welfare suggests any improvements to the bulk-billing rate have so far failed to translate into reduced overall costs for patients. While it is subject to change pending any late-arriving Medicare claims, early results for 2024 suggest the share of GP fees covered by Medicare has not improved since November, when the tripled incentive payment scheme began. Despite tipping in $3.5 billion more over five years, quarterly data suggests the share of GP fees being covered by Medicare has so far been static, and has shrunk by 7 per cent since two years ago. Noting the data was preliminary, Shadow Health Minister Anne Ruston said overall affordability had not improved for Australians who were not being bulk-billed. "This data shows that any benefit to affordability has just been eaten up by higher costs that have been paid by people that are not bulk billed," Senator Ruston said. "It is very disturbing data because the trend is quite significant." Mr Butler has expressed his concern the federal government's efforts to improve bulk billing will be "lost" unless states back away from their tax changes. "Payroll tax is a matter for the states but I am very worried that our historic investments we've put into Medicare, in response to calls from state governments, will be lost to increased payroll tax obligations by general practices," Mr Butler said. "I've strongly urged state treasurers, premiers and health ministers to listen closely to general practice organisations like the College of GPs in their states about ways in which they can work through this." Mark Butler has expressed fears billions spent by the federal government to improve bulk billing will be lost to state taxes.(ABC News: Nick Haggarty) His opposition counterpart, Senator Ruston, said the federal government must stand up to the states, or else it will have only paid to help their bottom lines. "This is a classic case of Peter robbing Paul," Senator Ruston said. "Any benefits whatsoever that could have been achieved by increased revenues for GP practices was immediately taken away by the states and territories through this payroll tax. "So the federal government really does need to stand up and force the states and territories to actually take a reasonable approach, otherwise it is just a case of cost shifting." Since their decision to harmonise state tax codes, the states and territories have taken different approaches on how they will apply the new rules. Jurisdiction Payroll tax changes QLD Medical centres not required to pay tax on payments to GPs until 30 June 2025 NSW Auditing paused until September as government consults, with no interest accrued in that time ACT GPs who bulk bill more than 65 per cent of patients exempted until 30 June 2025 VIC No tax amnesty period, but GPs can request full or partial ex gratia relief TAS No changes to tax code SA Tax payable on payments to GPs from July this year WA No changes to tax code NT No changes to tax code The RACGP president urged Mr Butler to continue pursuing the issue with the states. "We would love to see him speak out more and really put the pressure on those Labor premiers that are really going to kill off his bulk billing incentive," Dr Higgins said. Dr Higgins said she hoped states would use their common sense and change their rules to more closely follow Queensland's "workable solution", which delays the introduction of the new system and frees practices from paying the additional tax for previous years, so long as they hand over financial data. Dr Higgins said as a last resort, Mr Butler could use a review of National Health Reform Agreements, which is used to set federal health funding for the states, as a cudgel for states who refused to yield. "That gets renegotiated next year, that's certainly one option, but one would think at this time common sense would prevail." But some states and territories have argued GPs should have been included in payroll tax calculations for decades, and leaving them out now would open the tax system to others seeking a carve out. A spokesperson for the Victorian government said the state would continue to meet with industry and local GPs to ensure they were supported following the tax change. We know our GPs are under pressure after a decade of neglect by successive former federal Coalition governments - that is why we have stepped into primary care delivering $32 million to support graduate GPs, establishing 29 Priority Primary Care Centres and rolling out the community pharmacy pilot," the spokesperson said. The Victorian treasurer has also invited GPs to write to him for consideration of full or partial relief of new payroll tax bills if payment arrangements cannot be made. NSW Finance Minister Courtney Houssos told the ABC the NSW government would also continue to meet with GPs, and took encouragement from early data showing an improvement to bulk-billing rates. An ACT government spokesperson said the territory Labor government did not agree with Mr Butler's concerns that state tax changes could undermine the federal government's health investments. "The level of the Medicare rebate and incentives to bulk bill are the essential elements to improve GP access and affordability," the spokesperson said. They said there was limited evidence the payroll tax changes had led to doctors increasing their fees. The ACT is not proposing any further exemptions to its payroll tax laws beyond a transitory two-year exemption for clinics who bulk bill more than 65 per cent of their patients. The South Australian treasurer has been contacted for comment. Posted 21 Apr 202421 Apr 2024Sun 21 Apr 2024 at 7:17pm, updated 21 Apr 202421 Apr 2024Sun 21 Apr 2024 at 11:54pmEarly indicators bulk-billing benefits being eroded
Butler and Ruston share concern states are undermining federal efforts
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