From time to time patients ask why they need to pay the ‘Pregnancy care management fee’ (Medicare item 16590) when they pay for each antenatal visit.
The Medicare management fee item number was introduced by the Federal Government when the Government realised many obstetricians did not make enough income from antenatal visits and delivery to cover the high overheads of running an obstetric medical practice. As well as all the usual costs associated with running a small business but there large extra costs such medical indemnity insurance.
As well, the management fee facilitates personalised pregnancy care. Personalised pregnancy care includes consideration of a patient’s personal delivery preferences and also prompt quality management of any complications of pregnancy that occur. Such complications can have considerable impact on the wellbeing of a patient and her baby.
The management fee also allows us to run our practice efficiently with patient minimal waiting time and inconvenience and with opportunity to see a patient whenever there is a problem between scheduled visits (such as if bleeding occurs).
The management fee is payable at 20 weeks pregnancy
The management fee is payable at 20 weeks pregnancy. You are expected to pay it in full at your first visit after 19 weeks. You can make instalment payments before 20 weeks. Please check with my staff for details.
It you have not paid the full amount at your first visit after 19 weeks, then you are expected to complete payment before you are 30 weeks pregnant. Otherwise I will not be able to continue your pregnancy care.
The longer it takes you to pay your management the more your pregnancy care will cost you personally. That is because after you have paid the management fee you will have reached the Medicare Safety Net threshold. You will then get a greater rebate from Medicare for your antenatal visits. Instead of antenatal visits costing you $49.90 out for pocket they will only cost you $9.98 out of pocket.
The management fee (Medicare item 16590) is independent of the delivery fee (Medicare item 16519 or 16522). The Government expects the management fee to be paid once in a pregnancy. The management fee amount is the same irrespective of the type delivery, the number of week gestation you are when you deliver, and whether or not you before 34 weeks pregnancy.
Early preterm delivery
Less than 3% of patients will deliver before 34 weeks pregnancy. If it is likely you will delivery before 34 weeks I will arrange for you to be transferred to a teaching hospital where you will be under the care of another obstetrician See Q&A topic What if my baby delivers prematurely? The obstetrician at the teaching hospital who takes over your care will not charge you a management fee, but will charge you for pregnancy care after you are transferred and for delivery. You are not entitled to a refund in full or part of your management fee paid to Dr Sykes if this unlikely scenario happens.
History of the pregnancy management fee
In April 2002 there were spiralling obstetric practice costs especially due to medical indemnity insurance premiums.
In April 2002 on a panel discussion on the 7.30 report on the ABC about obstetric practice costs Dr Michael Kaye, an obstetrician in Sydney commentated: “In 1982 when Medicare came in, I had to deliver one baby to pay for my insurance. I now have to deliver 100 babies to pay for my insurance” Also on the panel was John Howard the Prime Minister at the time, Simon Crean, Opposition Leader at the time and Dr Kerryn Phelps, the President of the AMA at the time.
Fees charged to patient were increasing as a consequence and so private obstetrics was becoming very expensive for pregnant women. A number of obstetricians had to cease working as the overheads in running an obstetric practice were greater than income. Most private obstetrics in country areas ceased. In April 2002 Australia’s biggest medical indemnity insurer, United Medical Protection (UMP), announced it was became non-viable and appointed a provisional liquidator. That meant most doctors were exposed and were not protected personally from what could be massive payouts (in obstetrics it could be millions of dollars) if sued. I remember those times well and personally know of obstetrician colleagues who ceased practice. That meant unless there was a solution urgently found most private obstetricians would have to cease practice as the potential risks if sued were too great.
There were multiple reasons for the spirally insurance costs including a largely unregulated legal system which results in an increasing incidence of litigation and huge payouts. As well there were other factors such as in September 2001 the demise of HIH Insurance, which was Australia’s second largest insurance company and was the re-insurer for UMP.
The Howard Federal Government addressed this huge crisis a number of ways:
- The Federal Government gave United a $35 million lifeline to prop up UMP.
- John Howard made a pledge that the Government would not allow doctors to be unprotected.
- The legal system was overhauled in relation to medical litigation.
- The Medicare Safety Net was introduced in March 2004
- The Medicare Management Fee item number was introduced
It is my understanding the Government introduced the Medicare Safety Net and management fee to protect patients from the huge out of pocket costs of private obstetrics, to make private obstetrics affordable and to make being an obstetrician a viable career.
The Federal Government introduced the ‘Planning and Management of a Pregnancy’ item (16590). (pregnancy management fee) is a fee that is to be charged only once the pregnancy and only when the pregnancy had reached 20 weeks gestation.
Combined with the Medicare Safety Net higher rebate it meant that 80% of gap (out of pocket) payments in that calendar year above the Medicare rebate would paid by Medicare once the Medicare Safety Net threshold had been reached. That meant the patient only paid 20% of the management fee gap and only 20% of the gap for subsequent antenatal visits that calendar year. This combined with the ‘no gap’ for delivery concept meant that private obstetrics was in much better place and was very affordable for the public.
In January 2010 the Rudd Federal Government determined there would no longer be an unlimited 80% gap payment in obstetric care. Medicare pregnancy care item numbers payment was capped, this included for the management fee and antenatal visits. To get this extra capped Medicare payment the Medicare Safety Net threshold still had to be reached. The capped payout for the management fee continues to be in force today.
How this works in regards to the pregnancy management fee:
The Rudd Federal Government changes have meant that private pregnancy care has become much more expensive than was the case. When this happened I recall I reduced my fees considerably to try to absorb the extra patient cost, but even so patients were out of pocket far more than had been the case.