Medicare payment system upgrade gets big funding boost

Services Australia has secured additional funds in the 2022-23 budget to continue its upgrade of the critical payments systems that support the day-to-day operation of Medicare and the Pharmaceutical Benefits Scheme.

Budget papers reveal an additional $96.8 million for phase three of the government’s health delivery modernisation program, which has been progressively modernising health and aged care payments systems since 2016.

Hundreds of millions of dollars have flowed towards the uplift in that time, which rapidly altered course when the government ditched its planned procurement of a new Medicare payments system in 2018.

The new funding – which will be provided over a period of four years, with additional funding at the conclusion – will be used to “reduce manual processing and improve claim timeframes for patients and medical providers”.

According to budget papers, Services Australia – which operates the systems on behalf of the Department of Health – will receive $88 million towards the upgrade, while Health will get $3 million.

Services Australia is expected to “achieve departmental efficiencies” in the order of $24.9 million over the next four years, as well as $13.3 million in ongoing efficiencies, as a result of the IT improvements.

Digital health support

The government has also provided $35.2 million to support two digital health programs over the next four years.

A little over $32 million of this funding will continue the intergovernmental agreement on digital health with state and territory governments for another year.

According to budget documents, the intergovernmental agreement supports the My Health Record and Health Care Identifiers Service.

The remaining $2.9 million will allow the Australian Institute of Health and Welfare to “migrate its data holdings to cloud-based services and offsite data centres”.