2. About the Medicare Benefits Schedule (MBS) Review

2.1 Medicare and the MBS

What is Medicare?

Medicare is Australia’s universal health scheme which enables all Australian residents (and some overseas visitors) to have access to a wide range of health services and medicines at little or no cost.

Introduced in 1984, Medicare has three components:

  • ΔFree public hospital services for public patients;
  • ΔSubsidised drugs covered by the Pharmaceutical Benefits Scheme (PBS); and
  • ΔSubsidised health professional services listed on the MBS.

What is the MBS?

The MBS is a listing of the health professional services subsidised by the Australian Government. There are over 5,700 MBS items, which provide benefits to patients for a comprehensive range of services including consultations, diagnostic tests and operations.

2.2 The MBS Review Taskforce

What is the MBS Review Taskforce?

The Government established the MBS Review Taskforce (the Taskforce) as an advisory body to review all of the 5,700 MBS items to ensure they are aligned with contemporary clinical evidence and practice and improve health outcomes for patients. The Taskforce will also modernise the MBS by identifying any services that may be unnecessary, outdated or potentially unsafe. The Review is clinician-led, and there are no targets for savings attached to the Review.

What are the goals of the Taskforce?

The Taskforce is committed to providing recommendations to the Minister for Health that will allow the MBS to deliver on each of these four key goals:

  • ΔAffordable and universal access – the evidence demonstrates that the MBS supports very good access to primary care services for most Australians, particularly in urban Australia. However, despite increases in the specialist workforce over the last decade, access to many specialist services remains problematic with some rural patients being particularly under-serviced.
  • ΔBest-practice health services – one of the core objectives of the Review is to modernise the MBS, ensuring that individual items and their descriptors are consistent with contemporary best practice and the evidence base, where possible. Although the Medical Services Advisory Committee (MSAC) plays a crucial role in thoroughly evaluating new services, the vast majority of existing MBS items pre-date this process and have never been reviewed.
  • ΔValue for the individual patient – another core objective of the Review is to maintain an MBS that supports the delivery of services that are appropriate to the patient’s needs, provide real clinical value and do not expose the patient to unnecessary risk or expense.
  • ΔValue for the health system – achieving the above elements will go a long way towards achieving improved value for the health system overall. Reducing the volume of services that provide little or no clinical benefit will enable resources to be redirected to new and existing services that have proven benefits but are underused, particularly for patients who cannot readily access those services.

2.3 The Taskforce’s approach

The Taskforce is reviewing existing MBS items, with a primary focus on ensuring that individual items and usage meet the definition of best practice. Within the Taskforce’s brief, there is considerable scope to review and advise on all aspects that would contribute to a modern, transparent and responsive system. This includes not only making recommendations about adding new items or services to the MBS, but also about an MBS structure that could better accommodate changing health service models. The Taskforce has made a conscious decision to be ambitious in its approach, and to seize this unique opportunity to recommend changes to modernise the MBS at all levels, from the clinical detail of individual items, to administrative rules and mechanisms, to structural, whole-of-MBS issues. The Taskforce will also develop a mechanism for an on-going review of the MBS once the current Review has concluded.

As the MBS Review is to be clinician-led, the Taskforce decided that clinical committees should conduct the detailed review of MBS items. The committees are broad-based in their membership, and members have been appointed in their individual capacity, rather than as representatives of any organisation.

The Taskforce asked all committees in the second tranche of the review process to review MBS items using a framework based on Professor Adam Elshaug’s appropriate use criteria.[1] The framework used by the committees consists of seven steps:

  1. Develop an initial fact base for all items under consideration, drawing on the relevant data and literature.
  2. Identify items that are obsolete, are of questionable clinical value,4 are misused5 and/or pose a risk to patient safety. This step includes prioritising items as “priority 1,” “priority 2” or “priority 3,” using a prioritisation methodology (described in more detail below).
  3. Identify any issues, develop hypotheses for recommendations and create a work plan (including establishing working groups, when required) to arrive at recommendations for each item.
  4. Gather further data, clinical guidelines and relevant literature in order to make provisional recommendations and draft accompanying rationales, as per the work plan. This process begins with priority 1 items, continues with priority 2 items and concludes with priority 3 items. This step also involves consultation with relevant stakeholders within the Committee, working groups, and relevant colleagues or colleges. (For complex cases, full appropriate use criteria were developed for the item’s explanatory notes.)
  5. Review provisional recommendations and the accompanying rationales, and gather further evidence as required.
  6. Finalise recommendations in preparation for broader stakeholder consultation.
  7. Incorporate feedback gathered during stakeholder consultation and finalise the Review report, which provides recommendations for the Taskforce.

All MBS items were reviewed during the course of the MBS Review. However, given the breadth and timeframe for the Review, each clinical committee had to develop a work plan and assign priorities, keeping in mind the objectives of the Review. Committees used a robust prioritisation methodology to focus their attention and resources on the most important items requiring review. This was determined based on a combination of two standard metrics, derived from the appropriate use criteria:[1]

  • ΔService volume.
  • ΔThe likelihood that the item needed to be revised, determined by indicators such as identified safety concerns, geographic or temporal variation, delivery irregularity, the potential misuse of indications or other concerns raised by the Committee (such as inappropriate co-claiming).

For each item, these two metrics were ranked high, medium or low. These rankings were then combined to generate a priority ranking ranging from one to three (where priority 1 items are the highest priority and priority 3 items are the lowest priority for review), using a prioritisation matrix (Figure 1). Committees used this priority ranking to organise their review of item numbers and apportion the amount of time spent on each item.

Figure 1: Prioritisation matrix

Figure 1 shows the Prioritisation Matrix to show the ranking as high, medium, or low. The Y-axis depicts the magnitude of usage for the service volumes, while the X-axis shows the likelihood that the item needs revision. Each coordinate is assigned a value from 1 to 3, with 1 green high priority top right, 2 blue medium and 3 red low priority bottom left. 

Magnitude low, likelihood low = priority low
Magnitude medium, likelihood low = priority low
Magnitude high, likelihood low = priority medium
Magnitude low, likelihood medium = priority low
Magnitude medium, likelihood medium  = priority medium
Magnitude high, likelihood medium = priority high
Magnitude low, likelihood high  = priority medium
Magnitude medium, likelihood high = priority high
Magnitude high, likelihood high = priority high


4 The use of an intervention that evidence suggests confers no benefit or very little benefit on patients; or where the risk of harm exceeds the likely benefit; or, more broadly, where the added costs of the intervention do not provide proportional added benefits.

5 The use of MBS services for purposes other than those intended. This includes a range of behaviours ranging from failing to adhere to particular item descriptors or rules through to deliberate fraud.