If you’re preparing for hospital treatment, your doctor or specialist is required to provide you with information about the expected cost of your treatment and any amount you’ll need to pay yourself. This is known as Informed Financial Consent.
Informed Financial Consent helps you understand the likely costs of your treatment before you agree to go ahead, including any medical fees that may not be fully covered by Medicare and your private health insurance.
It can involve information from your doctor, hospital and other healthcare providers involved in your treatment, which can sometimes make it difficult to understand who is responsible for each cost and who you should speak to if you have questions.
This article explains how Informed Financial Consent works, what information you should receive and who to speak to about the different costs involved in your hospital treatment.
Key Points
- You should be told about the expected costs of your hospital treatment before you agree to proceed.
- Your treatment can involve separate charges from your doctor, hospital and other medical specialists involved in your care.
- Medicare and your private health insurance may not cover the full amount charged, leaving you with an out-of-pocket cost.
- Your doctor, hospital and health fund can answer different questions about your treatment and expected costs.
What is Informed Financial Consent?
Informed Financial Consent (IFC) is the process of making sure you understand the expected costs of your treatment before you agree to proceed.
Your doctor or specialist should explain the fees they expect to charge, what you may receive back from Medicare and your health fund, and any out-of-pocket costs you’re expected to pay yourself.
It’s important to remember that your doctor isn’t necessarily the only healthcare provider involved in your treatment. Other specialists, such as an anaesthetist or assistant surgeon, may charge separately and should provide information about their own fees.
Informed Financial Consent gives you the opportunity to understand these costs and ask questions before your treatment takes place.
What should an IFC estimate tell me?
Your IFC estimate should clearly outline the fees your doctor or specialist expects to charge for your treatment and any amount you’re expected to pay yourself.
It should include information such as the MBS item numbers for your treatment, the fees being charged and the estimated benefits you’ll receive from Medicare and your health fund.
The estimate should also make it clear if you’re expected to have a medical gap and how much that gap is expected to be.
If other doctors or specialists will be involved in your treatment, such as an anaesthetist or assistant surgeon, their fees may be provided separately. It’s important to understand whether the estimate you’ve received covers everyone involved in your treatment or only the doctor who provided it.
Example of an Informed Financial Consent estimate
| Item number | Medical service | Doctor’s fee | MBS fee |
|---|---|---|---|
| 12345 | Medical service | $2,000 | $1,200 |
| 54321 | Medical service | $500 | $350 |
| Total doctor’s fees | $2,500 | ||
| Total MBS fees | $1,550 | ||
| Estimated out-of-pocket cost | $950 | ||
This is an example only. Your IFC should show your expected out-of-pocket cost based on the fees being charged and any medical gap arrangement your doctor has agreed to use. The information and format provided on an IFC estimate can vary between doctors and healthcare providers.
What is the Medicare Benefits Schedule fee?
The Medicare Benefits Schedule (MBS) lists medical services that Medicare provides a benefit towards and assigns an MBS fee to each service. You can search MBS item numbers and fees on the Australian Government’s MBS Online website.
The MBS fee is set by the Australian Government and is used to calculate how much Medicare and your health fund contribute towards eligible medical services when you’re treated as a private patient in hospital.
Importantly, the MBS fee isn’t a set price that your doctor has to charge. Doctors can set their own fees, which may be higher than the MBS fee.
If your doctor charges more than the combined benefits paid by Medicare and your health fund, you’ll have an amount left to pay yourself. This is known as a medical gap.
What will Medicare pay?
When you’re treated as a private patient in hospital, Medicare pays 75% of the MBS fee for eligible medical services.
For example, if the MBS fee for a medical service is $1,000, Medicare will pay $750. If you’re covered for the service under your Hospital cover, your health fund will pay at least the remaining $250.
The amount Medicare pays is based on the MBS fee, not what your doctor chooses to charge. If your doctor charges more than the MBS fee, Medicare doesn’t increase its benefit to match the higher fee.
What will my health fund pay?
If you’re covered for the treatment under your Hospital cover, your health fund pays at least 25% of the MBS fee for eligible medical services provided while you’re a private patient in hospital.
Using the earlier example, if the MBS fee is $1,000, Medicare pays $750 and your health fund pays at least $250. Together, this covers 100% of the MBS fee.
Your health fund may pay more than 25% of the MBS fee where your doctor participates in the fund’s medical gap arrangement. This can reduce or, in some cases, remove the amount you need to pay yourself.
The amount your health fund pays doesn’t determine what your doctor can charge, which is why it’s important to understand the fees outlined in your IFC estimate before treatment.
What is a medical gap?
A medical gap is the difference between what your doctor charges and the combined benefits paid by Medicare and your health fund.
For example, if your doctor charges $1,500 for a service with an MBS fee of $1,000, Medicare and your health fund will cover at least the $1,000 MBS fee. Without any additional benefit from your health fund, you’ll have a $500 medical gap to pay yourself.
Health funds can have medical gap arrangements that allow them to pay benefits above the MBS fee when participating doctors agree to charge within certain limits. This can reduce or remove your medical gap.
Doctors can choose whether they participate in these arrangements, so it’s important to ask your doctor whether they will use your health fund’s medical gap arrangement for your treatment.
How does Phoenix Health Access Gap Cover help?
Phoenix Health members with Hospital cover have access to Access Gap Cover, which is designed to reduce or eliminate medical gaps when your doctor agrees to participate in the scheme for your treatment.
It’s your doctor’s choice whether they participate in Access Gap Cover for your treatment. Phoenix Health doesn’t make this decision, so it’s important to ask your doctor if they’ll use Access Gap Cover for your procedure.
Learn more about Phoenix Health Access Gap Cover, including how it works and what to ask your doctor before treatment.
Who do I ask about costs: my doctor, hospital or health fund?
Understanding who to speak to can make it much easier to get a clear picture of your expected costs. Your doctor, hospital and health fund each have different information about your treatment and cover.
| Who to ask | What they can help you with |
|---|---|
| Your doctor or specialist | The fees they’ll charge, your expected medical gap, whether they’ll participate in your health fund’s medical gap arrangement and whether other doctors are likely to be involved in your treatment. |
| Your hospital | Hospital charges associated with your admission and any costs for services or items that may not be covered as part of your admission. |
| Your health fund | Whether you’re covered for the treatment, whether you’ve served your waiting periods, any excess or co-payments that apply, whether your hospital has an agreement with the fund and the benefits your cover provides. |
If you’re unsure about a fee or cost shown on your IFC estimate, start with the healthcare provider who is charging that fee. Your health fund can explain how your cover and benefits apply, but it doesn’t set the fees charged by your doctor or hospital.
What other costs might not appear on my IFC estimate?
Your IFC estimate may only cover the fees charged by the doctor or specialist who provided it. There can be other costs associated with your treatment that aren’t included on that estimate.
Depending on your treatment, these could include:
- Fees from other doctors involved in your care, such as an anaesthetist or assistant surgeon
- Your hospital excess or co-payment
- Hospital charges or items that aren’t covered under your policy or the hospital’s agreement with your health fund
- Diagnostic services such as pathology or medical imaging
- Pharmacy or medications provided during your admission that aren’t covered
Before your treatment, check what is and isn’t included in each estimate you’ve received and whether you should expect separate accounts from other providers involved in your care.
What should I ask before agreeing to treatment?
Before agreeing to treatment, make sure you understand the expected costs and who may charge you. Some useful questions to ask include:
- What will you charge for my treatment?
- What are the MBS item numbers for my procedure?
- How much will Medicare and my health fund pay?
- Will I have a medical gap and, if so, how much will it be?
- Will you participate in my health fund’s medical gap arrangement for my treatment?
- Will any other doctors or specialists be involved and will they charge me separately?
- Are there any hospital costs, excesses or other charges I should expect?
- Are there any other costs that aren’t included in the estimates I’ve received?
If anything about your expected costs isn’t clear, ask for more information before agreeing to treatment. Knowing what you’ll be charged and what your cover will pay can help avoid unexpected costs afterwards.
Going to hospital with Phoenix Health?
Before your treatment, contact us and we can help you understand how your Hospital cover applies, including your waiting periods, excess, hospital agreement and the benefits Phoenix Health will pay towards your treatment.
Call our team on 1800 028 817 and we’ll help you understand what to expect before you go to hospital.
