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Navigating Australian Medicare Claims in 2021

Navigating Medicare claims seems to be getting ever-more complicated and confusing. At Power Diary, we’re often asked Medicare claims questions by clients trying to negotiate this administrative minefield. These questions range from how to submit claims and the types of claims that can be submitted to age classifications for minors, and even patient eligibility.

If you’re a healthcare practice in Australia looking to improve your understanding of Medicare and how you can get the best benefits for your clients, or how to make it work for your practice, then read on. We’ve collected the most common Medicare claims questions and answered each one fully, without any jargon, to make your life just a little bit easier.

How Medicare Works

Let’s start with a brief introduction to Medicare, Australia’s national public health insurance scheme. The purpose of Medicare is to provide free or subsidised healthcare to all Australians (and some overseas visitors) and was introduced in February 1984. The scheme covers the cost of treatment in public hospitals and subsidises the cost of a range of health services. There is a Medicare levy that helps fund the costs of providing Medicare which is 2% of Australian taxpayer’s taxable income.

The Most Frequently Asked Medicare Claims Questions

Ok, so Medicare is Australia’s public health insurance, that’s a good place to start. Now it’s time to tackle some of those all-important questions that practice owners are asking…

Medicare Online

What is PRODA?

Provider Digital Access (PRODA) is a system that gives you access to a number of online government systems, including HPOS (discussed below) and NDIS (National Disability Insurance Scheme). If you want access to HPOS, you will need a PRODA account which will require your first name, additional names, surname, gender, date of birth and supporting documentation.

What is HPOS? And who can access it?

HPOS, Health Professional Online Services, makes it easy for practices to do business with Medicare. HPOS can be accessed with an individual PRODA account, or through an organisation in PRODA. To get set up, you can register for PRODA online and follow the steps to access HPOS.

Medicare Claims Process

What are the different ways that Medicare can be claimed?

Medicare claims can be submitted via a variety of different methods:

  • Medicare Online – This is the system used to process claims using a software program or practice management system (such as Power Diary). You are required to register for online claiming before you can submit bulk bill claims through a practice management system that offers Medicare Online claiming. The benefit of submitting claims via Medicare Online is that you can do this through your existing system without having to purchase an additional terminal. Using Medicare Online through a practice management system is a great way for a new provider to get started as you can have all of your client management and Medicare claiming done through one system.
  • PRODA – This is Medicare’s online portal and allows providers to submit claims and manage them if they have a PRODA account. A PRODA account is free and can be accessed anywhere as long as you have an internet connection. PRODA doesn’t have the ability to integrate with any practice management systems so would need to be handled separately.
  • Medicare Service Centre – If you provide the client with an invoice that includes the required details of the client, provider, and referral, the client is able to go into a Medicare Service Centre to claim their rebate. These claims are paid directly into the bank account the client has recorded with Medicare and can take up to 28 days to be paid. This claiming method often takes much longer as it requires a lot of additional manual work.
  • Medicare Easyclaim – This method supports processing claims via a physical terminal such as HICAPS or Tyro. The benefit of using a terminal solution such as HICAPS or Tyro to submit Medicare claims is that client payments can be processed directly through the terminal. When you submit a patient claim, the client receives the rebate amount almost instantly into their bank account.

What are the types of claims that can be submitted?

  • Patient ClaimThis is where the client pays for their session and the practice can either submit a claim on the client’s behalf, or the client can submit the claim online or at a Medicare Service Centre. Medicare then rebates a portion of the service fee directly into the client’s bank account that is on record with Medicare. The claiming method you use will determine how quickly the client will receive their rebate. This means that in some cases, the client might be left out of pocket for a period of time while the rebate is being processed by Medicare. The final amount that the client ends up paying for the session after they receive their rebate is referred to as the “gap fee”.
  • Bulk Bill This is where the provider bills Medicare directly and the Medicare benefit is accepted as full payment for the service. The rebate is then deposited directly into the provider’s bank account. The benefit of submitting a bulk bill claim is that the client is not out of pocket for the service provided. The rebate amount is determined by Medicare based on the item code that is being claimed and cannot be altered by the practice.

What information does Medicare need to be included in the claim?

Of all the Medicare claims questions we get asked, this is probably the most popular. In order to get a claim approved you need to have all the right information including your servicing provider number, item code, referral information, client details, and your client’s Medicare card number. The consequences of not including the right data might mean that your claim will be rejected outright, or there could be long delays in receiving payment while the disputed claim is resolved. It’s best to get detail-orientated here and make sure you have your i’s dotted and your t’s crossed.

  • Service provider number – This is a unique number assigned to eligible health professionals for Medicare claiming purposes. The provider number is made up of 6 digits and 2 other characters that identify the provider’s practice location, as an example a provider number might look like this 1234562A. You can find some more detailed information on what a provider number does on Medicare’s website here.
  • Item code – Each service within the Medicare Benefits Schedule is assigned a unique item number. When submitting a claim, this number is what Medicare uses to determine what type of service you’re claiming. You can find the Medicare Benefits Schedule containing these codes here.
  • Referral – The referral is a written request (usually a letter) from a General Practitioner (GP) to another health practitioner requesting them to treat a client needing their specialised health services. When a practice receives a referral, they’ll be required to add the referral details including the referring doctor’s full name and provider number to the Medicare claim in order to claim the rebate from Medicare. Clients can still see the health practitioner without a referral, however the cost would not be covered by Medicare.
  • Client Details – The client’s real first and last name (as recorded with Medicare) and their date of birth will be required on the claim.
  • Client’s Medicare Card Number – All Australian citizens enrolled with Medicare are given a Medicare Card with a unique number. The Medicare number is 10 digits and will have a reference number and expiry date. If a Medicare card has multiple family members listed, each member will have their own reference number. This unique number, also referred to as an IRN number, is used to identify whuch family member the service is being claimed for. The Medicare card number including the reference number and expiry date will need to be shown on the claim so that Medicare can confirm the client is eligible for Medicare claiming. It will also allow Medicare to identify which bank account the rebate amount needs to be deposited into if a patient claim is submitted.

*If the client is minor then the claim will need to include the claimant’s details: full name, date of birth, Medicare card number, Medicare IRN number and expiry date.

Medicare-Approved Providers

Which types of health providers can bill Medicare?

Health providers that fulfil the requirements set out by Medicare can provide services under the benefits schedule. This includes:

Am I eligible to work as a health professional in Australia?

If you meet the eligibility requirements for your profession, you can apply for a Medicare provider number (one for each practice location). This number allows you to refer patients to specialists, request imaging or pathology services as well as claiming or billing Medicare services.

Your eligibility to access Medicare benefits for the services you provide to eligible patients is determined by the Health Insurance Act 1973 and related regulations.

Medicare Eligibility

Do you need a referral for all Medicare claims?

Yes, in order to process a Medicare claim and receive the rebate the client will need a referral from their GP. This applies to both patient claims and bulk bill claims.

At what age does a client no longer classify as a minor?

At 15 the client is no longer a minor and can choose to apply for their own Medicare card. Below 15, the client will need to have a claimant, either a parent or guardian, who will receive the rebate in place of the client. This is applicable when the client is paying for the session and receiving the rebate.

Who is eligible for Medicare claiming?

All Australian citizens are automatically eligible for Medicare. Medicare is also available to most permanent residents of Australia.

How do you verify if a client is eligible for Medicare?

HPOS offers a Find a Patient service which allows you to search and confirm patient Medicare numbers, concessional eligibility and patient details.

In order to access the service, you need a PRODA account (or PKI site certificate but this is being phased out in favour of PRODA).

Medicare Payments

Can I take payment from the client if I am submitting a bulk bill claim?

Practice owners take note – this is one of those Medicare claims questions that needs your full attention! Medicare will not allow you to submit a bulk bill claim if a client has made any payment contribution to the session. When you submit a bulk bill, you accept the Medicare benefit as full payment for the service. When providers submit the claim to Medicare, the service price should reflect the approved rate by Medicare and the correct item code for that service. You can find the Medicare Fee Schedule here.

What does Medicare cover?

Medicare covers a variety of health care costs including:

  • Seeing a GP or medical specialist.
  • Diagnostic tests and scans, like x-rays or blood tests.
  • Most surgery and medical procedures performed by doctors.
  • Eye tests by optometrists.
  • Allied health services such as psychology, speech pathology etc.

Is Medicare an instant rebate?

When your client pays in cash, in full with either cash, EFTPOS, cheque or credit card, you can swipe their Medicare card and the rebate will be paid directly into the bank account, almost instantaneously.

What if I work from multiple locations?

You will need an additional provider number for each location that you practice from. You can do this through HPOS (more information on this here) or you can fill out the Application for a Medicare provider number and, or prescriber number for a medical practitioner form.

Are there any changes with COVID?

According to MBS (Medicare Benefits Schedule) online, there are temporary MBS telehealth items available to GPs, medical practitioners, specialists, consultant physicians, nurse practitioners, participating midwives, allied health providers and dental practitioners in the practice of oral and maxillofacial surgery. Commencing 13 March 2020, and extending until 31 December 2021, these items are available for out-of-hospital patients only and are intended to allow clients access to essential health services in their homes in order to reduce the risk of exposure to COVID-19. The MBS fact sheet is available here.

Medicare and Power Diary

How do I submit a Medicare Claim using Power Diary?

Power Diary is directly integrated with Medicare Online so providers can submit both patient claims and bulk bill claims through the system. Power Diary is one of the only Practice Management Systems (PMS) to have a native integration with Medicare. There are some other PMS systems that integrate via a third party such as Medipass. The benefit of having a native integration is that providers won’t need to sign up for an additional Medipass account and will avoid additional fees, making it a more affordable option.

Power Diary has an extensive support section here which contains steps on how to get started with Medicare claiming through Power Diary and how the claiming process works.


If you’ve been struggling with how best to integrate Medicare into your practice, hopefully, you’ve found the answers to your Medicare claims questions here. Power Diary’s powerful practice management software has gone a long way to making the national insurance scheme more accessible for smaller practice owners with its native Medicare integration.

There are different claims options, and the best choice may depend on the type of practice you have, and the healthcare services that you offer. At Power Diary, our aim is to take the stress out of the claims process (as well as answering all of your Medicare claims questions), so that you can focus on the most important aspects of your business such as finding and servicing your clients.

When it comes to Medicare, there are a few hoops to jump through, and some areas that aren’t clear, so if you still have questions about Medicare and how it can work for your practice, we’d love to help. Please chat with our support or send a message to [email protected], and we’ll get back to you with a comprehensive answer.

*This article, originally published in 2020, has been updated for comprehensiveness and accuracy.


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