Bulk billing is again a major focus of Australian health policy. Recent reforms give practices and GPs greater incentives to bulk bill, but owners need to look past the headlines and ask a more fundamental question: does the funding model support a sustainable general practice? This isn’t simply a question of whether bulk billing is good or bad; it plays an important role in access for vulnerable patients. The challenge is ensuring funding reflects the true cost of modern general practice care.
Medicare is not the cost of the service practices offer
The Medicare Benefits Schedule (MBS) sets the benefits payable for eligible services, but this should not be read as the commercial cost of providing them.
A practice must fund far more than the consultation itself, including staff, rent, IT, accreditation, insurance and compliance, costs that continue regardless of whether a patient is bulk billed or privately billed. When billed privately, the gap between the rebate and the practitioner’s fee funds both wages and infrastructure; when bulk billed, the benefit is accepted as full payment, so viability depends on the MBS benefit and incentives being sufficient for both.
The changing economics of bulk billing
From 1 November 2025, bulk billing incentives, previously targeted mainly at children under 16 and concession card holders, were expanded to all Medicare-eligible patients. The Government also introduced the Bulk Billing Practice Incentive Program (BBPIP): participating practices must bulk bill all eligible services, in return for a payment equal to 12.5% of the MBS benefit, split equally:
- 6.25% to the practitioner
- 6.25% to the practice
These measures clearly improve the proposition of bulk billing, but that is not necessarily a sustainable one.
But does the practice’s 6.25% cover the real cost of running it? That needs to be weighed against the cost of the infrastructure supporting GPs. The right question isn’t how much additional BBPIP income a practice will receive, but whether it is better or worse off than under its existing model, with a margin sufficient to sustain it. The answer will differ for each practice, depending on demographics, billing patterns, overheads, and practice overall positioning and strategy
The remaining 6.25% goes to the practitioner, but practices also need to ask whether total remuneration is enough to attract and retain GPs in a competitive market. When revenue per consultation is constrained, there’s a temptation to compensate through volume, which carries risk given general practices increasingly deal with chronic disease and an ageing population, neither suited to a high-volume model.
Cash flow must also be a consideration, because unlike standard Medicare benefits, BBPIP is paid quarterly, creating a gap between income earned and cash received. This means a practice can be profitable on paper yet still face working-capital pressure that needs to be forecast, not just the annual budget.
Practices have different cost structures and patient populations, and for some, 100% bulk billing under BBPIP may now be attractive, whereas for others, mixed billing, i.e. bulk billing some services while private fees elsewhere bridge the gap, remains more sustainable. Practices outside the BBPIP can still access standard incentives, so the choice needn’t be patient access versus a sustainable business.
What might this look like in practice?
Consider a metropolitan practice with the following assumptions:
| Assumption | Value |
| Average private fee | $100 |
| Bulk billed / private split | 60% / 40% |
| Practice service fee | 35% of billings |
| Level B consultation (Item 23) MBS benefit | $45.05 |
| Metropolitan bulk billing incentive | $21.85 |
| BBPIP payment | 12.5% of MBS benefit, split 6.25% practice / 6.25% practitioner |
For 100 standard consultations:
| Existing mixed billing | 100% bulk billing with BBPIP | |
| Bulk billed consultations | 60 × $66.90 = $4,014 | 100 × $66.90 = $6,690 |
| Private consultations | 40 × $100 = $4,000 | — |
| Total underlying billings | $8,014 | $6,690 |
| Practice service fee (35%) | $2,805 | $2,342 |
| BBPIP practice share | — | $282 |
| Total practice revenue | $2,805 | $2,623 (–$182 / –6.5%) |
| Practitioner income (before BBPIP) | $5,209 | $4,349 |
| BBPIP practitioner share | — | $282 |
| Total practitioner income | $5,209 | $4,630 (–$579 / –11%) |
Both figures are before tax and superannuation.
To hold revenue steady under full bulk billing, volume would need to rise by roughly 7% for the practice and 12.5% for the practitioner, meaning a GP seeing 24 patients a day might need to see around 27.
Scaled across a five-GP practice doing around 23,000 consultations a year:
| Per 100 consultations | Annual (5 GPs, ~23,000 consultations) | |
| Practice revenue gap | $182 | ~$41,900 |
| Practitioner income gap | $5.79 per consultation | ~$26,600 per GP (~$133,000 total) |
These figures are illustrative; however, they show that an additional incentive doesn’t automatically mean additional profitability. It depends on a practice’s existing fees, billing mix and location and should be assessed from both perspectives, aiming for a model that works for practice and practitioner alike.
What should practice owners be reviewing?
Practice owners should consider modelling their own data rather than
relying on industry averages, and understand:
- current bulk billing percentage and private fee income;
- MBS revenue by practitioner and item number;
- estimated practitioner and practice BBPIP payments;
- private fee income forgone under 100% bulk billing;
- consultation volumes and patients seen per hour;
- actual operating costs and the break-even point; and
- the working-capital impact of quarterly BBPIP payments.
The incentives have changed the equation but personalised modelling can help maximise practice profitability. Modelling two to three years ahead, allowing for inflation and cost growth may also help practice owners test whether their billing model still holds up if Medicare rebates stay flat.
Personalised modelling can also help build sustainable practices. While sustainability can’t be measured by the bulk billing rate alone, and it isn’t in conflict with affordability, a sustainable practice is one that can invest in staff, technology and facilities, retain good practitioners and keep serving its community long term.
BBPIP is significant, but its 6.25% splits shouldn’t automatically be assumed to close the gap. For some, 100% bulk billing may now make commercial sense, while for others, mixed billing will continue to offer the better balance. The right answer depends on your own numbers, not industry averages. Contact your local William Buck advisor if you need help understanding where your practice stands.
