Caps, nudge letters and sanctions all on the table for specialists with excessive fees

It's just one of the measures listed in a consultation paper released by the Australian government as it looks to improve access to affordable healthcare.

Out of pocket costs for healthcare increased by more than 75% between 2019 and 2025, according to the consultation paper. It reported more than 1.9 million Australians delayed or did not see a specialist doctor because of cost in 2024-25.

Data within the paper show hundreds of thousands of patients were charged excessive fees more than five times the median price.

As part of the consultation process, views are being sought on possible interventions including capping fees for certain Medicare items and offering incentives for specialists to bulk bill or charge lower out of pocket fees.

The idea of publishing those who charge excessive fees is also floated in the document, as well as identifying providers who regularly charge excessive fees, sanctioning those found to be routinely charging excessive fees and strengthening informed financial consent.

Also on the table is the sending of targeted ‘nudge’ letters to high-fee providers showing how their charges compare with their peers, while referring potentially excessive billing to independent peer assessment with consequences where fees are found to be unreasonable is also being considered.

Private Healthcare Australia (PHA) chief executive Dr Rachel David welcomed the move to address excessive fees.

“All of these options deserve serious consideration, with safeguards to ensure patients are never punished through the loss of their Medicare benefit and to prevent fee caps becoming price targets,” Dr David said.

She wants to see the government go further to address the broader rise in all specialist doctors’ fees, not just the extreme outliers. She said rising specialist fees were blocking Australians from the care they needed, including treatment in private hospitals.

“Excessive fees are the sharpest edge of a much broader affordability problem: specialist fees and gaps across the market have been creeping up much faster than inflation for years.

“Private health insurance cannot protect patients from every medical bill. Health funds are legally limited in what they can cover outside hospital, and no-gap and known-gap arrangements depend on doctors choosing to participate. When specialists charge well above those arrangements, the extra cost falls directly on patients."

Dr David said if Australians could not afford the specialist consultation, diagnostic work or medical gap needed to access private treatment, they may delay care or fall back on already stretched public hospitals.

When contacted by Medical Forum for comment, the AMA confirmed it was working on a submission to the consultation and would provide further detail about its position in the coming weeks.

Medical Cost Finder website

The consultation comes at the same time legislation was passed to allow the federal government to publish the specific fees charged by individual specialists online in a bid to improve transparency for patients.

Health Minister Mark Butler said the ability for the Medical Cost Finder website to publish such detail addressed long-standing information gaps that contribute to cost uncertainty.

“It gives Australians better transparency and choice with their health care,” he said.

The AMA said while most of its concerns about the website had been addressed it would be closely watching how the expanded ability to publish such detail was implemented.

AMA National President Dr Danielle McMullen said amendments included in the final legislation established a clear legal basis for information published on the Medical Costs Finder to be corrected, updated or removed where necessary.

“This addresses our longstanding concern that inaccurate or misleading information could otherwise remain publicly available," she said.

“The amendments also enable the minister to establish a formal review process for decisions to publish information on the website, including decisions to correct, alter or remove information.”

Dr McMullen said while the details of that review process were yet to be determined, the changes created a framework for practitioners to challenge published information.

“In another important improvement, practitioners, hospitals and insurers seeking review of published information will be able to access information about how the published figures were calculated, providing greater transparency and procedural fairness,” she said.

The upgraded website will include Medicare data and data from private health insurers showing their financial arrangements with specialists and how often patients pay out of pocket for services that aren’t fully covered by their insurance policy.

“Private health insurers have been extremely reluctant to upload their information, which also created a significant disincentive for doctors to upload their own billing data,” Dr McMullen said.

“Access to insurer data is crucial for patients, alongside clear information on Medicare rebates, which have failed to keep pace with inflation for decades and remain a major driver of out-of-pocket costs.”