Medicare payments system gets $107m cash splash

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Medicare payments system gets $107m cash splash

Budget 2018: Plus upgrades to e-prescribing software.

The federal government will spend a further $106.8 million on a replacement for its 30-year-old Medicare payments system, bringing the total cost of the project to more than $170 million.

The project to replace health and aged care payments systems has been progressing since early 2016.

The additional funding will be used to further the modernisation effort and ensure that the IT platform continues to be owned and operated by the public sector, the government said in 2018-19 federal budget papers.

It builds on $67.3 million in initial funding provided in last year’s budget for market engagement, procurement and design work.

The bulk of the new funding will fall to the Department of Human Services, which is conducting the procurement on behalf of the Department of Health. 

Funding will also be used to replace and decommission ageing IT systems, as well as to upgrade cyber security and introduce “user experience improvement for consumers and providers of health and aged care".

DHS is continuing to look for suppliers to deliver the cloud-based digital replacement for the current Medicare payment system, which it hopes to source before the end of this year.

Industry feedback has already suggested the department proceed with a modular architecture and incremental build for the new system.

The Department of Health was handed $16.6 million in last year’s mid-year economic and fiscal outlook (MYEFO) to remediate and maintain the current system, which has suffered an increasing number of outages over the past year.

The existing system currently delivers 600 million payments worth $50 billion each year across Medicare, the pharmaceutical benefits scheme, and to veterans and aged care recipients.

It is expected to reach end of life in under two years’ time.


The government has also provided funding “to upgrade the e-prescribing software system used by clinicians to prescribe medicines”.

A little over $28 million has been handed to the Department of Health for the software upgrade, which will make the system more user-friendly and enable prescribers to better identify options that best meet the needs of their patients, budget documents state.

“This measure supports a national electronic prescribing system that will contribute to pharmaceutical benefits scheme efficiency, compliance, drug safety and data collection,” the budget documents state.

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