No Gap, Known Gap and Private Gap Billing
For eligible private inpatient medical services, Medicare and private health insurance can contribute to the doctor's account. If the doctor's fee is above the combined benefit, the patient may otherwise face an out-of-pocket gap. Insurer gap-cover arrangements can reduce or remove that gap.
No-gap billing
Under an applicable no-gap arrangement, the provider agrees to the insurer's conditions and the eligible patient has no medical out-of-pocket gap for that service.
Known-gap billing
A known-gap arrangement can allow a limited patient gap within the insurer's rules. The permitted amount and provider requirements vary by fund and arrangement.
Private gap billing
If a service is not billed under an applicable gap-cover arrangement, the doctor's fee may exceed the combined Medicare and insurer benefits. The remaining amount may be payable by the patient.
Medicare and health fund contribution
For eligible in-hospital doctor and specialist services, Medicare generally covers 75% of the MBS fee and private health insurance covers at least 25% of the MBS fee. This is not necessarily 100% of the doctor's actual fee. Read the Medicare vs private health fund guide.
Informed financial consent
Patients should be given information about expected fees and likely out-of-pocket costs before private treatment. Informed Financial Consent.
Eligibility and ECLIPSE
ECLIPSE eligibility checking can help verify Medicare/private insurer information and can provide information relevant to anticipated out-of-pocket costs, but it does not guarantee final payment. ECLIPSE guide.
Three billing examples: why the gap can change
These are illustrations, not insurer quotes. Assume an eligible admitted patient, a hypothetical MBS schedule fee of $400 and a doctor’s private fee of $600. The actual benefit and permissible fee depend on the fund, practitioner, service, patient cover and applicable scheme.
Patient medical gap: $0
If a participating provider charges a permitted no-gap fee under the applicable fund arrangement, eligible Medicare and insurer benefits cover that agreed fee and the patient has no medical gap for that service.
Patient pays an agreed amount
Where an insurer permits a known gap, the doctor may charge a patient amount within the insurer’s limit and other conditions. The doctor should disclose the anticipated amount and obtain appropriate financial consent.
Fees may exceed benefits
For example, if the actual doctor fee were $600 and total eligible Medicare/insurer benefits were $400, the remaining $200 may be patient payable, subject to applicable rules. This is a mathematical example only.
How the inpatient claim is handled
- Confirm the patient’s admission status, provider details and eligible inpatient service information.
- Check the relevant Medicare and fund claiming pathway and applicable gap-cover registration, participation and fee requirements.
- Use the doctor's supplied or authorised item numbers, dates of service and fees. Clarify incomplete information before lodgement.
- Lodge claims through the applicable pathway and monitor responses for rejections, fund queries and reconciliation.
- Identify unresolved items for appropriate follow-up, with direct claim payments to the doctor’s nominated account.
Frequently asked questions
Does a known-gap arrangement automatically apply at every hospital?
No. Practitioner agreements, fund eligibility, provider locations, service-specific rules and patient cover can all affect participation.
Can ECLIPSE guarantee the amount that will be paid?
No. It supports claiming and some eligibility enquiries, but the eventual outcome depends on information supplied and assessment by the relevant payer.
Does DEVZ determine my clinical item numbers?
The treating practitioner is responsible for clinical services and supplying or authorising accurate billing information. DEVZ handles administrative claim preparation, lodgement and follow-up according to that information and the applicable rules.
Related official information: Australian Government: gap cover · MBS Online · Services Australia: ECLIPSE.
Need help with private inpatient billing?
DEVZ manages no-gap, known-gap and other private inpatient claiming workflows according to the doctor's billing instructions and applicable insurer rules.
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