Understanding out-of-pocket costs

What are out-of-pocket costs?
Medical out-of-pocket costs, also known as a gap, is the amount you may have to pay for treatment over and above what you may receive back from your private health insurer or Medicare.

How is it calculated?
The Australian Government sets a fee for every medical service in the Medicare Benefits Schedule.
hen you have hospital treatment as a private patient, Medicare will pay 75 per cent of the Medicare Benefit Schedule Fee while a health insurer will pay 25 per cent.
Gaps occur when your treating specialist or doctor charges more than the Medicare Benefits Schedule fee.
A health insurer can pay more than 25 per cent of the Medicare Benefits Schedule fee, if your doctor is prepared to use the insurer’s gap cover arrangement.
St.LukesHealth operates a Medical Gap Cover arrangement. We encourage you to ask your doctor and other treating specialists if they participate in our Medical Gap Cover arrangement before starting hospital treatment.

What is St.LukesHealth Medical Gap Cover?
Your doctor can participate as a “No Gap” provider or a “Known Gap” provider.
A “No Gap” provider agrees to charge no more than the St.LukesHealth Medical Gap Cover schedule fee, meaning you will have no out-of-pocket expense to pay.
A “Known Gap” provider agrees to charge no more than a specified gap for each medical service, meaning your out-of-pocket expense is reduced.
Doctors who charge a “Known Gap” under St.LukesHealth Medical Gap Cover are required to inform their patients of the out-of-pocket costs that applies to their treatment.

What is informed financial consent?
Before receiving treatment, you are entitled to know who will be treating you and the fee each doctor or specialist charges for their service.
There could be many doctors involved in your treatment including an anaesthetist and a surgeon.
Knowing the above information is called informed financial consent and this will save you the worry before you go to hospital.

It is reasonable for you to discuss fees with your medical provider and also if clinically appropriate, to seek quotes from other medical providers that are within that chosen field. It is smart to have this discussion with your GP if affordability is of concern to you.
Let's take a knee replacement for example. Below are three real-time examples of how knee replacements have been charged within the last six weeks with a "no" gap and "known" gap provider as well as a medical provider who does not participate in St.LukesHealth Medical Gap Cover. 

What is the difference between medical and hospital costs?
When you are admitted to hospital, the fees your doctor or specialist charges for your treatment is called a medical cost.
If you hold private hospital cover, St.LukesHealth will provide cover towards the hospital costs for your admission. Hospital costs include theatre and accommodation fees for treatment received in a contracted private hospital within Australia.

What questions should I ask those involved in my treatment?
Before you are admitted, you should ask your doctor or specialist:

  • What is the expected cost of treatment. Ask your doctor for a written quote that includes the Medicare Benefit Schedule item numbers.
  • Ask what other doctors will be involved in your treatment and ask how you can find out about their fees
  • Does your doctor participate in St.LukesHealth Medical Gap Cover?
  • If you require a surgically implanted prosthesis, ask if the prosthesis attracts a patient gap or whether there is the option to use a no-gap prosthesis.
Ask your hospital:
  • Are there other out-of-pocket costs you should be aware of that are associated with your hospital stay?
  • Will there be costs for items like newspapers and television?
  • Is this hospital contracted with St.LukesHealth? If not, what impact will this have on my hospital bill?
Ask St.LukesHealth:
  • If your treatment is covered under your current private health insurance policy
  • If all waiting periods have been served for the treatment you require
  • Ask if you have an overnight or same-day hospital excess and how much it is.
  • What are the expected out-of-pocket costs?

If you need help understanding your rights, hospital or medical bills, please contact St.LukesHealth on
1300 651 988.

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