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Understanding surgery fees

Schedule of Fees

There are essentially two fee structures in Australia on which all medical fees are based.

The first is the schedule of fees recommended by the Australian Medical Association (AMA). This fee structure has been in place for many years and takes consideration of not only the Consumer Price Index, but also the additional costs associated with the running of a medical or surgical practice. These costs include employment costs for secretarial staff, Medical Defence insurance costs, continuing medical education costs, office maintenance and software costs.

The second schedule of fees is the ‘Medicare Benefits Schedule’ (MBS), the fees prescribed by the Federal Government. This fee schedule is approximately half of that recommended by the AMA. These fees have been tightly linked to the Consumer Price Index, but have not taken into consideration the very rapid escalation of associated costs encountered in maintaining a high quality medical practice.

Most medical practitioners in Australia will charge a rate somewhere between these two fee schedules.

What is a Gap Fee?

If you have full private health insurance this will generally cover the entire cost of your hospital bed fee, operating theatre costs and most associated pathology and radiology fees, unless you have a prescribed excess on your policy.

Your health insurance will cover the cost of consultation and operating fees by your surgeon, only up to the MBS prescribed fee, the level prescribed by the government, or to a higher fee under direct billing arrangements, if these are in place. Health insurance will not cover your medical costs up to the level of the fee recommended by the AMA, even using ‘Gap Cover’ or ‘Direct Billing’ arrangements.

The difference between the fee paid by your health insurance and the fee charged by your surgeon, is the so called ‘GAP’.

Please note that this practice generally charges a fee between the MBS schedule fee and the AMA recommended fee.

Why is there a Gap Fee?

This practice aims at providing quality care of the highest standard, rather than 'cut price' care. In the last five years, there has been an enormous escalation in the running cost of a surgical practice. Medical Indemnity Insurance has risen approximately six-fold in the last five years. In addition, as with most 'small businesses', running costs generally have markedly outstripped the Consumer Price Index, on which MBS schedule is based.

Mr Choi participates in ongoing clinical audit at both Epworth Hospital and Western Health and fulfills the requirements of the Royal Australasian College of Surgeons, for quality assurance within this practice. Mr Choi offers an extensive website, providing detailed educational information and links to National Health & Medical Research Council. For patients who do not have access to the internet, these information sheets are available as printed hard copies.

In addition, Mr Choi is available to see private patients for most of the year. On occasions when he is unavailable, coverage is provided by one of his senior colleagues at Epworth Richmond.

What does Mr Choi's surgical fee include?

The fee charged by Mr Choi includes the cost of your operation, management and reviews during your inpatient stay in hospital and postoperative consultation after discharge from hospital. Once you are established as a patient of this practice, Mr Choi is also available for emergency consultation at any time in the future, should further health problems arise.