Delivery fee and the no gap program

Dr Sykes is a ‘no gap’ doctor for your delivery. That means you will not have to make anyhealth funds1 gap payment to Dr Sykes for your delivery charge. Dr Sykes will invoice your health fund directly and accept their payment as total payment for delivery and inpatient postnatal care. Sometimes there are extra Medicare item numbers used in association with your in-hospital care. Dr Sykes will invoice your fund directly on these occasions, as relevant, and not bill you personally.

While all health funds now offer gap cover, the Government or health fund does not set doctors’ fees. Doctors are free to charge whatever they feel is appropriate. It is an obstetrician’s prerogative whether or not you will be charged a gap for your delivery. Dr Sykes has chosen to not charge you a gap.

Advantages of the no gap program

  • The patient pays nothing out of pocket to us for delivery.
  • The patient doesn’t have to go to Medicare or the health fund to be reimbursed.
  • It is easy and prompt for the obstetrician to get payment.
  • There are no bad debts.

Disadvantages of the no gap program

  • The obstetrician has no say in what the delivery payment is. Your Medicare delivery item number of 19619 or 16522 is submitted to your health fund. The health fund is not invoiced a certain amount. A doctor has no say in how much the health fund will pay for the Medicare item submitted.
  • There is no consistency between funds as to the amount reimbursed. The amount paid is decided by the individual health fund. As a consequence, there is a considerable variation in the amount received for the same Medicare item number. The variation between the five most popular health funds used by our patients is:
    • 47% for Medicare item number 16519 (most deliveries).
    • 14% for Medicare item number 16522 (delivery where there are certain specified pregnancy or delivery complications).
  • Minimal increase in amount paid. Between 2011 and 2015, while the average annual premium increase for all health funds has been 5.72%, the average annual delivery reimbursement increase for the five most popular funds used by our patients has been only:
    • 1.02% for Medicare item 16519
    • 0.60% for Medicare item 16522
  • The amounts paid by even the most generous funds are considered inadequate with consideration of the high overhead costs of running a private obstetric practice, responsibilities of pregnancy and childbirth care, the many years of training, the skills required, the clinical experience required, and being available 24 hours a day, seven days a week.

 Need for management fee

In view of the above, a private obstetrician is dependent on income from the management fee to maintain the viability of a private obstetric medical practice.

Other doctors and service providers

Other doctors and service providers who are involved in your and your baby’s care while you are in hospital do not send their accounts to your health fund but rather invoice you personally. It is up to you to pay the account personally, knowing that you can be reimbursed in part through Medicare and your health fund.

Posted by Dr Gary Sykes on - Fees

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