Should your GP clinic go fully bulk billed? A worked example
The short answer
Going fully bulk billed pays off when your average private gap fee is lower than the extra income bulk billing brings in. In our worked example that break-even gap is about $34 a consult. Above it, mixed billing earns more. Below it, joining the Bulk Billing Practice Incentive Program usually wins, provided patient numbers hold.
From 1 November 2025 two things changed for general practice. The bulk billing incentive items were extended to every Medicare-eligible patient, not just children and concession card holders. And the government started the Bulk Billing Practice Incentive Program (BBPIP), which pays a 12.5% loading on MBS benefits to practices that bulk bill every eligible service for every patient.
Since then, practice owners have been asking the same question: should we switch? There isn’t a universal answer. But there is a way to work it out for your own clinic in an afternoon, and that is what this article walks through.
How does the Bulk Billing Practice Incentive Program work?
According to Services Australia, the main features are:
- The practice must bulk bill all eligible services for all Medicare-eligible patients. Privately billing an eligible service puts that quarter’s payment at risk.
- The loading is 12.5% of the MBS benefits paid for eligible services.
- It is split evenly: half goes to the GP and half to the practice.
- Payments are made quarterly in arrears.
- The practice needs to be registered with MyMedicare and enrolled in the program, with its GPs linked to it.
The loading sits on top of the normal MBS benefit and the bulk billing incentive item. Check the exact eligible items and current benefit amounts on MBS Online before you model anything.
What does the maths look like for one GP?
We’ll keep it to standard consults so the logic is clear. These assumptions are illustrative only. They are round numbers, not current MBS amounts.
- One full-time GP sees 1,500 standard consults a quarter.
- MBS benefit per consult: $43.
- Bulk billing incentive per consult: $21.
- Today the clinic bulk bills 60% of consults (900) and privately bills 40% (600) with an average gap fee of $45.
- Patient numbers stay the same either way.
| Line | Mixed billing today | Fully bulk billed with BBPIP |
|---|---|---|
| Bulk billed consults | 900 × ($43 + $21) = $57,600 | 1,500 × ($43 + $21) = $96,000 |
| Privately billed consults | 600 × ($43 + $45) = $52,800 | None |
| BBPIP loading (12.5% of $64,500 in benefits) | Not eligible | $8,062.50 |
| Total fee income | $110,400 | $104,062.50 |
On these numbers, mixed billing earns $6,337.50 more a quarter for this GP. That is about $25,000 a year. So in this example, switching would cost money.
What gap fee makes bulk billing the better choice?
The useful number is the break-even gap. Switching moves 600 private patients from $43 plus the gap to $43 plus the $21 incentive. Separately, the clinic picks up the BBPIP loading of $8,062.50 on all consults. The two options are equal when:
600 × (gap − $21) = $8,062.50, so the gap = $21 + $13.44 = about $34.44.
If your average gap is below about $34, going fully bulk billed earns more, even before any extra patients turn up. If it’s above, mixed billing earns more unless you lose private patients. Your own break-even will differ, because it depends on your private billing share and your actual MBS amounts. The formula is the same, though.
How does the practice’s share change?
Most clinics run on a service fee arrangement, where the practice keeps a percentage of what the GP bills. Assume a 30% service fee, and assume the practice doesn’t charge it on the GP’s half of the BBPIP loading. Check your own agreements, because they vary.
| Mixed billing | Fully bulk billed | |
|---|---|---|
| Practice: 30% service fee | $33,120 | $28,800 |
| Practice: half of BBPIP | $0 | $4,031.25 |
| Practice total | $33,120 | $32,831.25 |
| GP: 70% of fees plus half of BBPIP | $77,280 | $71,231.25 |
The practice’s income barely moves, because its half of the loading nearly makes up for the lower service fee. The GP carries most of the drop. That matters, because a switch your doctors don’t support is a switch that puts retention at risk.
What else should you weigh up before switching?
- Cash timing. Private fees arrive on the day. The BBPIP loading arrives quarterly in arrears, so the first months after switching put pressure on cash.
- Patient volume. A bulk billing sign can fill appointment books. If your GPs already have no spare capacity, extra demand doesn’t help income, it just lengthens wait times.
- Doctor sentiment. Some GPs like the simplicity of bulk billing. Others feel it undervalues longer, complex consults. Talk to them before the numbers are final.
- All-or-nothing risk. One privately billed eligible service can cost the quarter’s loading, so front desk processes need to be tight.
- Tax and payroll tax. Service fee arrangements have state payroll tax implications that differ by state. Speak to your registered tax agent about your structure.
How do you run this for your own clinic?
- Export last quarter’s billing by GP from your practice software: consult counts by item, bulk billed versus private, and gap fees charged.
- Look up current MBS benefits and incentive amounts for your location on MBS Online. The department also publishes a bulk billing incentives calculator.
- Build the two columns above for each GP, then add them up for the clinic.
- Work out the break-even gap. Compare it with your actual average gap.
- Test a downside case where you lose 10% of private patients and an upside case where bulk billing fills empty sessions.
If you would rather we build the model with you, send us a note. With clean billing data, it is usually a couple of weeks from export to decision.
Sources
- About the Bulk Billing Practice Incentive Program (Services Australia)
- Bulk billing incentives (Department of Health, Disability and Ageing)
- MBS Online: current item numbers and benefits
This article is general information, not financial or tax advice. Worked examples use illustrative figures. Check current program rules and speak to a registered tax agent about your own circumstances.
