Whether you are a VR doctor, a non-VR doctor, or a registrar on an approved training pathway, understanding Medicare billing rates is essential to your career and income in Australian general practice. This guide breaks down every key concept you need to know.
Every GP consultation in Australia is linked to the Medicare Benefits Schedule (MBS). When a patient visits their GP, the service is classified under a specific MBS item number, and Medicare assigns a schedule fee to that item. The percentage of that schedule fee that Medicare actually pays back (the rebate) depends on the doctor's billing rate category.
The three billing rate categories that matter most for GPs are A1, A7, and A2. These are not based on a doctor's skill or experience — they are determined by two factors: whether the doctor holds Vocational Registration (VR), and the Modified Monash Model (MMM) classification of the location where they practise.
Getting the rate wrong has a direct impact on income. An A2-rated doctor in a metropolitan area receives only 60% of the MBS schedule fee as a rebate, while an A1-rated doctor receives 100%. For a busy GP seeing 30 to 40 patients per day, that difference adds up to tens of thousands of dollars every year.
The table below summarises the three main billing rate categories and what each means for the Medicare rebate a doctor can claim.
| Rate | Who Qualifies | Rebate Level | Location Requirement |
|---|---|---|---|
| A1 | VR doctor (FRACGP or FACRRM fellowship), or a registrar on an approved training pathway (FSP, AGPT, PEP, EAP, ACRRM IP, or RVTS) | 100% MBS | Any location (MM1-7) |
| A7 | Non-VR doctor without an approved training pathway, practising in a rural or remote area | 80% MBS | MM2-7 (rural/remote only) |
| A2 | Non-VR doctor without an approved training pathway, practising in a metropolitan area | 60% MBS | MM1 (metropolitan only) |
The A1 rate is the full Medicare rebate — 100% of the MBS schedule fee for each item number billed. This is the rate every GP aims to achieve, and it is available to two groups of doctors:
For registrars, it is essential to note that simply studying for fellowship is not enough — you must be formally enrolled in an approved pathway program and have that status reflected on your Medicare provider number. If you leave a pathway or your enrolment lapses, your billing rate reverts to A7 or A2 depending on your location.
The A7 rate provides 80% of the MBS schedule fee as the Medicare rebate. It applies to non-VR doctors who do not hold an approved training pathway placement but who practise in a Modified Monash Model category 2 to 7 location — that is, regional, rural, or remote Australia.
The A7 rate exists as a middle ground: it recognises that non-VR doctors in rural areas are providing essential services where workforce shortages are most acute, so they receive a higher rebate than their metropolitan counterparts (80% vs 60%). However, it still represents a 20% reduction compared to VR doctors, which creates a significant financial incentive to pursue fellowship.
For a non-VR doctor considering where to practise, the difference between A7 (80%) and A2 (60%) is substantial. On a standard Level B consultation (item 23), the gap between 80% and 60% of the schedule fee can amount to over $15 per consultation. Across a full day of 30 patients, that is an extra $450 or more in rebates simply from choosing a rural location.
The A2 rate is the lowest billing category, providing only 60% of the MBS schedule fee. It applies to non-VR doctors without an approved training pathway who practise in MM1 (metropolitan) areas — the major capital cities and large regional centres classified as MM1.
At the A2 rate, bulk billing becomes financially challenging for most practices. The rebate received from Medicare is so low that many clinics either require A2 doctors to only see private-billing patients, or they restrict A2 doctors to shorter, higher-volume consultations to maintain viability. Some metropolitan practices choose not to hire non-VR, non-pathway doctors at all because the economics simply do not work.
Under bulk billing, the patient pays nothing out of pocket. The clinic claims 100% of the Medicare rebate directly from Medicare, and the patient is not charged any additional fee. Bulk billing is the simplest model for patients, but it means the clinic's total revenue per consultation is capped at the rebate amount.
For an A1 doctor, the rebate is 100% of the schedule fee, so bulk billing is financially viable at most practices. For A2 doctors at 60% of the schedule fee, bulk billing may not cover the cost of running the consultation, which is why many metro clinics with non-VR doctors prefer private billing.
Under private billing, the clinic charges the patient a fee that is above the Medicare rebate. The patient pays the full fee upfront (or the clinic charges their card), and then the patient claims the rebate portion back from Medicare. The difference between the clinic's fee and the rebate is called the gap, and it is paid entirely by the patient.
Private billing allows clinics to set their own fees and is particularly important for practices employing non-VR doctors, where the Medicare rebate alone may not sustain the practice financially. Typical private billing fees for a standard Level B consultation range from $80 to $120 or more, depending on the location and practice.
Most GP practices in Australia operate on a mixed billing model, where some patients are bulk billed and others are privately billed. A common approach is to bulk bill concession card holders, children under 16, and pensioners, while privately billing other patients. The exact mix varies from practice to practice and is typically set as a clinic-wide policy.
The Bulk Billing Incentive (BBI) is one of the most commonly misunderstood aspects of GP billing in Australia. It is not a rate modifier — it does not change the percentage of the MBS schedule fee you receive as a rebate. Instead, the BBI is a separate, per-consultation co-billed item that is claimed alongside your standard consultation item.
When a GP bulk bills an eligible patient (such as a concession card holder or a child under 16), the practice can claim the BBI item in addition to the standard consultation item. This effectively adds a supplementary payment on top of the normal rebate for that consultation. The BBI amount varies depending on the location of the practice (higher in rural and remote areas) and the patient category.
The BBI was significantly expanded in recent years as part of the Australian Government's efforts to support bulk billing practices. It is available to all practices that bulk bill eligible patients, regardless of the doctor's VR status or billing rate category.
The Bulk Billing Practice Payment (BBPIP) is a quarterly payment made to the practice (not to the individual doctor). It rewards practices that maintain a high proportion of bulk-billed services. Unlike the BBI, BBPIP is not claimed per consultation — it is calculated and paid automatically based on the practice's overall bulk billing rate over the quarter.
BBPIP is paid directly to the practice's nominated bank account and is intended to support the operational costs of running a bulk billing clinic. The amount depends on the practice's total bulk billing volume, its location (rural practices receive higher payments), and the proportion of bulk-billed services relative to total services.
The Workforce Incentive Program (WIP) is a quarterly payment made directly to the doctor, not to the practice. It is designed to incentivise doctors to work in areas of workforce need, particularly rural and remote Australia. An important distinction is that WIP classification is based on the Remoteness Area (RA) classification of the practice location, not the Modified Monash Model. This means the WIP eligibility zones differ from the MM-based billing rate zones.
WIP payments can be a significant supplement to a doctor's income, particularly in RA2 to RA5 locations. The program has both a Doctor Stream (for GPs) and a Practice Stream (for allied health), and doctors must meet minimum hours thresholds to qualify.
Medicare consultation items for GPs are grouped by the complexity and duration of the consultation. The four standard consultation levels and their item numbers are:
| Level | Item Number | Description | Typical Duration |
|---|---|---|---|
| Level A | Item 3 | Brief consultation — straightforward presenting problems requiring limited examination and management | Less than 5 minutes |
| Level B | Item 23 | Standard consultation — the most commonly billed GP item, covering history, examination, and management of one or more problems | 6-20 minutes |
| Level C | Item 36 | Long consultation — complex presentations requiring detailed history and examination, multiple problems, or significant management planning | 20-40 minutes |
| Level D | Item 44 | Prolonged consultation — highly complex cases requiring extensive examination, multiple diagnoses, and comprehensive management | Over 40 minutes |
Item 23 (Level B) accounts for the majority of GP billing across Australia. It is the standard bread-and-butter consultation item. The schedule fee for item 23, combined with your billing rate (A1, A7, or A2), determines the rebate for a typical patient visit. Understanding these item numbers and billing them accurately is fundamental to both compliance and income maximisation.
There are also after-hours item numbers (such as items 5000-5067), chronic disease management items (items 721, 723, 732), mental health items (items 2700-2717), and procedural items that GPs may bill depending on the services they provide. Each has its own schedule fee and rules.
In most Australian GP practices, the total revenue from a consultation is split between the doctor and the clinic. The billing split refers to the percentage of the consultation revenue (whether from Medicare rebates, gap fees, or both) that goes to the doctor versus what is retained by the clinic as a service fee.
The typical billing split in Australian general practice is 65-70% to the doctor and 30-35% to the clinic as a service fee. This means for every $100 in consultation revenue, the doctor receives $65-$70 and the clinic retains $30-$35 to cover rent, staff wages, medical supplies, software, insurance, and other operational costs.
However, billing splits can vary significantly depending on several factors:
When working as a locum GP in Australia, you need to understand how provider numbers work. A Medicare provider number is location-specific — it is tied to the practice address where you provide services. If you work at multiple locations, you need a separate provider number for each.
Locum provider numbers and after-hours provider numbers are separate applications. A standard provider number allows you to bill for in-hours services at a specific practice. If you also need to provide after-hours services (for example, at a medical deputising service or an after-hours clinic), you must apply for a separate after-hours provider number. These are not automatically granted with your standard provider number.
Locum doctors who work across multiple practices need to plan ahead. Provider number applications can take several weeks to process, so it is important to apply well in advance of starting at a new location. Some clinics will assist with this process as part of onboarding, but ultimately the responsibility lies with the doctor.
Understanding billing rates, item numbers, incentive payments, and provider number requirements can be overwhelming — especially if you are new to Australian general practice, arriving from overseas, or transitioning between training pathways.
Lumi GP is a free AI assistant built specifically for doctors navigating the Australian GP system. You can ask Lumi about your specific billing rate based on your VR status and practice location, get guidance on fellowship pathways, understand moratorium rules, learn about Medicare claiming, and much more.
Lumi draws on a verified knowledge base covering MBS Online data, Medicare rules, Department of Health guidelines, RACGP and ACRRM policies, and immigration requirements. It is designed to give you accurate, up-to-date information tailored to your circumstances — instantly and for free.
Ask Lumi GP for free — instant answers on billing rates, item numbers, Medicare, and more.
Ask Lumi NowIn the spirit of reconciliation, Heart Bridge acknowledges the Traditional Custodians of country throughout Australia and their connections to land, sea and community. We pay our respect to their Elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples today.