Everything you need to know about private health insurance before your upcoming surgery: part three

Ok so you have some insurance, it’s the right kind of insurance, you’ve waited the necessary length of time, and you’ve found and consulted with a surgeon! Let’s go (into the world of explanations about what to do next)!

So there’s basically two distinct parts to surgical bills in the private system — the place you’re going to have the surgery done, and the people who are going to be doing the surgery to you.

The first part involves the hospital. Doctors have agreements to perform their surgeries in particular hospitals, and insurance companies have agreements to fund surgeries in particular hospitals. The first thing you’ll want to check is that the hospital your doctor has an agreement with is also a hospital your insurance company has an agreement with. It’ll probably be fine, but if it’s not fine it’s pretty much a disaster so this is definitely the first thing to check. If your hospital, doctor, and insurance all line up, that means your insurance will cover your accommodation and theatre fees — the renting of the hospital rooms. Hospitals are expensive places and even five minutes there can cost you hundreds of dollars, so this is mostly where insurance helps out. The hospital will also send the bill directly to your insurance company, and they’ll pay the hospital directly, so it all happens in paper bags and trenchcoats behind the scenes and you won’t have to worry your pretty little head about anything except…

…the excess. As discussed in Part One, an excess is the first part of the hospital bill you agree to pay in return for cheaper premiums the rest of the year. You usually need to pay your excess to the hospital reception on the day you go into surgery.

Even though you’re in hospital, your insurance won’t pay for everything. If they give you prescriptions to fill on your way out, if they sell you things like crutches or wheelchairs, if you pay for parking, or if your partner buys a coffee in the waiting room, you’ll have to pay for those yourself.

That’s the first part of the bill over! That was the easy part! Doctors is where it can get complicated.

The second part of the bill involves your surgeon, anaesthetist and any assisting surgeons. They charge according to Medicare Item Numbers, the hero of this story. Basically everything that happens in a hospital has an Item Number associated with it, which is like the name of the procedure. All of these numbers have standard prices set by Medicare, called the Medicare Benefit Schedule Fee. It’s what doctors in the public system get paid for doing that procedure, and it’s how much surgeons will pay your doctors. In the private system, doctors can decide to charge more than the standard price for a procedure, and if that do, that extra bit is the bit you have to pay. For example, if the Medicare Benefit Schedule Fee for procedure 66669 is $1, and your private doctor actually charges $1.50, your insurance will pay the doctor $1 and you have to pay the doctor $0.50 (please multiply these figures by ten thousand for a more accurate metaphor). Doctors call the bit you have to pay the “gap fee” or “out of pocket fee”, so keep a sharp ear when doctors say these words.

Doctors legally have to give you informed financial consent before they come at your with knives, so all your costs should be clear to you before the surgery. However, doctors can also be really terrible at explaining things and they can also try to obscure how expensive they are. If they give you an invoice with a “total fee” and a “rebate”, usually you have to pay the difference between those two figures. It’s best to ask them about “gap fees” directly to get a straight answer as to how much you’ll have to pay. Keep in mind that insurers will only pay up to the Medicare Benefit Schedule Fee unless they come to a special deal with your doctor called:

A Gap Scheme. All insurers offer their own kinds of Gap Scheme, which can maybe save their customers some money sometimes. In a Gap Scheme, insurers pay doctors a bit more than that standard Medicare Benefit Schedule Fee. In return, doctors agree to charge that company’s customers less. It means that if you go to that doctor, you don’t have to pay them as much money as you would if they didn’t have an agreement with your insurance company. If your doctor and insurance company really get along with each other, sometimes you can get away with paying your doctor nothing at all.

Now multiple that process three times, because the surgeon, anaesthetist and assistant surgeon are all going to be billing you separately (though sometimes an assistant’s fees just get lumped in with the main surgeon’s fees). There’s a standard price for the surgery, the anaesthetic, and the assisting. All these doctors can charge more than that standard price, and they’ll all be sending you bills for their gap fees. You’ll need to ask them all individually about whether they’ll use your insurer’s Gap Scheme.

Finally, the claiming process for your doctors’ bills. This all depends on how your doctors organise their piggybanks. Usually it’s like the hospital — they send most of the bill directly to your insurance company, and you just have to pay them a gap fee. But sometimes, not often, doctors can ask you to pay for the entire cost of the surgery (or anaesthetic) all up front, and then do all the paperwork yourself to get reimbursed from Medicare and your insurer after the surgery. This is a huge hassle, and means you have to pony up a lot of dough quickly and wait for it to get back to you slowly. However, there’s not a lot you can do about it besides go to another doctor who’s more organised. If this happens to you, get your receipt, a Medicare Claim Form, and a Medicare Two-Way Claim form. Fill them all out and then hand them into Medicare, who will then liaise with your insurance company to pay you the Medicare Benefit Schedule Fee into your bank account eventually.

And that’s it! That’s Australia’s wonderful private healthcare system! Enjoy!