A 12.5 per cent incentive that switches off at 99 per cent bulk billing
The Bulk Billing Practice Incentive Program pays an additional 12.5 per cent on every dollar of MBS benefit — but only to practices that bulk bill 100 per cent of eligible services. The marginal privately billed consultation costs the practice 12.5 per cent of everything.
Steps this would change
Rationale
From 1 November 2025 the Commonwealth expanded bulk billing incentives to all Medicare-eligible patients, not only children, pensioners and concession card holders. That is a substantial and welcome change and this proposal does not touch it.
Alongside it, the Bulk Billing Practice Incentive Program pays participating practices an additional 12.5 per cent on every dollar of MBS benefit earned from eligible services — conditional on the practice bulk billing 100 per cent of eligible services.
Not most. Not 90 per cent. All of them.
Why that shape matters. The loading is calculated on the practice's whole MBS income. So the single privately billed consultation that breaks the 100 per cent threshold does not cost the practice 12.5 per cent of that consultation — it costs 12.5 per cent of everything. The marginal decision is priced at the value of the entire program.
Every threshold produces a discontinuity, and this database has recorded several: the 30 hour DSP rule, the Rent Assistance sharers rate, the PBS Cabinet threshold. This is the steepest of them, because the cliff sits at the maximum rather than somewhere in the middle of the range.
Who it excludes. Practices with any mixed billing at all, which disproportionately means practices carrying a cohort whose care does not fit inside a bulk billed consultation — long consultations, complex chronic disease, some procedural work. A practice that bulk bills 95 per cent of its services and privately bills the remainder is behaving in a way the policy should want, and receives nothing.
The proposal. Taper the loading across a band — full rate at 100 per cent, declining to zero somewhere below it — so that a practice moving from 80 to 95 per cent is rewarded for the movement rather than only for arriving.
Who acts: the Commonwealth alone.
What is being traded away
A clean rule is worth something, and this proposal spends it. "We bulk bill everyone" is a claim a patient can rely on and a practice can advertise. A tapered loading produces practices that are 92 per cent bulk billing, which means nothing to a patient standing at a reception desk. The 100 per cent condition buys certainty for patients, and that is a real benefit this reform would trade away.
Tapers are gamed at the margin in a way cliffs are not. A banded incentive creates an interest in how "eligible services" are counted and classified, and the boundary between an eligible and ineligible service becomes worth money. A cliff at 100 per cent is brutally simple and largely ungameable, which is presumably why it was chosen.
It costs more. Extending the loading to practices below 100 per cent extends it to practices that would have bulk billed anyway, which is deadweight. The program is already a large commitment and a taper widens it without necessarily converting anyone.
And this database cannot say whether the cliff is actually binding. The program began on 1 November 2025 with first payments in January 2026. Whether practices sitting just below 100 per cent are choosing not to participate, or are converting, is an empirical question that a year of data would answer and that nobody has published. This proposal identifies a shape, not a measured failure, and should be treated as weaker than the clarity of the arithmetic suggests.
Precedent
The underlying per-service bulk billing incentive is already proportional: it is paid on each bulk billed service, so a practice bulk billing more receives more. The practice-level loading is the only part of the architecture built as a cliff.
Sources
- Services Australia, Bulk Billing Practice Incentive Program: additional 12.5 per cent on every dollar of MBS benefit for eligible services; practices must bulk bill 100 per cent of all eligible services; payments split 50/50 between practice and provider, quarterly in arrears from the first quarter of 2026
- From 1 November 2025 all Medicare-eligible patients are eligible for bulk billing incentives