Practice payments

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The Health Care Homes funding model is based on bundled payments, which are tiered according to the level of patient complexity and risk.

Level Criteria Annual Payment
Tier 3 High risk chronic and complex needs $1,795
Tier 2 Multi-morbidity and moderate needs $1,267
Tier 1 Multiple chronic conditions, self managing $ 591

Practices will receive monthly payments, according to the number of patients and the tiers they're in.

Practices in stage one will receive an additional $10,000 incentive payment.

The stage one rollout will test the modelling and help to determine how many patients are eligible, how many patients will enrol, and their tier levels.

Funding rules

  • Patients can contribute payments for HCH services or be bulk billed. Services provided by members of a patient's care team (eg. nurse practitioner/GP) will be included in the bundled payment.
  • Fee for service payments (MBS) are still available for routine non-chronic disease related care.
  • Existing MBS items for allied health services will remain. Pathology services are not included in the bundled payment, and will continue to be funded through the MBS.
  • If diagnostic services are provided in house by a Health Care Home practice, they should be funded through the bundled payment.  
  • The MBS items associated with the GP - Mental Health Treatment Plan, the completion of the Annual Diabetes Cycle of Care and the completion of the Asthma Cycle of Care will be included in the bundled payment. Solutions to enable the incentive payments associated with these cycles of care to include interactions with Health Care Home patients will be implemented.
  • Bundled payments will not impact on Practice Incentive Payments (PIPs). Where incentive payments depend on MBS billing, The Department of Health will provide solutions to enable these payments to include interactions with Health Care Home patients.
  • Bundled payments should not be claimed for a patient whose medical treatment is currently covered by an alternative funding source which is not Medicare, such as the Transport Accident Commission; this could be considered duplicate funding.
  • Out-of-pocket contributions for Health Care Home services will not count towards patient's annual Original Medicare Safety Net (OMSN) or Extended Medicare Safety Net (EMSN) threshold.  

Financial modelling

The fundamental difference between the HCH bundled payments and the MBS fee for service payments is that the bundled payments are paid to the practice. It is up to the practice to determine the means of managing these funds internally.

The average fees claimed for the current cohort of patients accessing chronic disease items is $862.

Around 70 patients are anticipated to enrol per full-time GP.

Of the population participating in stage one, it is estimated that approximately:

  • 9.5% will be tier 3
  • 45% will be tier 2
  • 46% will be tier 1

So, for a practice with five (5) full-time GPs:

Anticipated cohort 350
Payment % Patients Revenue Average ($862) Variation
Tier 3 $1,795 9.5% 33 $59,235
Tier 2 $1,267 45% 158 $200,186
Tier 1 $591 46% 161 $95,151
352 $354,572 $303,242 +$51,148