What Is Medicare and How to Use It for Billing in Your Practice

Whether you’re opening a new medical practice, onboarding new staff, or modernising your billing processes, understanding Medicare and how to bill through it is essential. This guide is designed to walk you through everything you need to know about Medicare billing—from the basics of what Medicare is, to how item numbers work, and finally how to do it all seamlessly using Zedmed practice management software.

What Is Medicare?

Medicare is Australia’s universal health insurance scheme. Established in 1984, it provides all Australians and permanent residents with access to a range of healthcare services at little or no cost. The program is funded by taxpayers through the Medicare levy.

Through Medicare, eligible patients can receive subsidised treatment from GPs, specialists, and allied health professionals. For medical practitioners and practices, Medicare allows you to bill the government for services provided to patients—either fully (bulk billing) or partially (patient pays a gap).

Key Medicare Billing Concepts You Need to Know

Before diving into billing in Zedmed, it’s important to understand several key Medicare concepts:

1. Medicare Benefits Schedule (MBS)

The MBS is a comprehensive listing of medical services subsidised by the Australian Government. Each item on the schedule is assigned:

An item number
A description of the service
A schedule fee
Specific rules and conditions for use

You can view the MBS at: mbsonline.gov.au

For example:

Item 23: A standard consultation lasting less than 20 minutes with a GP.
Item 36: A consultation lasting more than 20 minutes.

2. Bulk Billing vs Patient Billing

Bulk Billing: You bill Medicare directly, and the patient pays nothing. You accept the Medicare rebate as full payment.
Patient Billing (Private Billing): You charge the patient your full fee. They pay upfront, and Medicare reimburses them a portion of the cost.

3. Provider Numbers

To bill Medicare, each doctor must have an individual Medicare provider number linked to each location where they work. This number must be registered with Medicare and your practice management system.

4. Eligibility Checks

Before billing, you should confirm the patient is eligible for Medicare and that their details (e.g., name, DOB, Medicare number) match exactly with Medicare’s records.

How Medicare Billing Works in a Medical Practice

Here’s a simple overview of how the Medicare billing process works:

The patient receives a consultation or service.
The clinician records the appropriate item number(s) for the services rendered.
The billing team or receptionist submits the claim—either directly to Medicare (bulk billing) or gives the patient a receipt to claim (private billing).
Medicare processes the claim and deposits the rebate to the provider’s nominated bank account (for bulk billing) or to the patient (for private billing).

How to Do Medicare Billing in Zedmed

Zedmed is purpose-built to simplify Medicare billing and is fully integrated with Medicare Web Services. Here’s how to go from consultation to payment—all within Zedmed.

Step 1: Configure Zedmed for Medicare Billing

Before you can start billing:

Register your practice and providers with Medicare.
Set up each provider number correctly in Zedmed under the ‘Staff Details’ section.
Ensure Medicare Web Services is activated in your Zedmed installation.

Zedmed has detailed guides on setting up Medicare Web Services in the Zedmed Knowledge Base.

Tip: You only need to set up Web Services once, and Zedmed will handle secure authentication for all Medicare transactions moving forward.

Step 2: Create a Patient Invoice

After the consultation:

Open the Billing Module in Zedmed.
Search for or select the patient.
Choose the practitioner, consultation type, and location.
Add the item number (e.g., 23 for a standard consult).
Zedmed will automatically display the schedule fee and rebate.

Zedmed’s integrated search makes it easy to look up MBS item numbers and their fees right in the interface.

Step 3: Choose a Billing Type

Zedmed supports all Medicare claim types:

Bulk Bill: Submit directly to Medicare. No money is collected from the patient.
Patient Claim: Patient pays, and Zedmed submits the claim for their rebate.
DVA: For Department of Veterans’ Affairs patients.
ECLIPSE: For specialist billing and in-hospital claims.

Choose the appropriate billing type, and Zedmed will validate the claim based on MBS rules.

Step 4: Submit the Claim

Click Submit Claim. Zedmed will:

Check patient eligibility
Ensure item numbers match MBS rules
Send the claim securely to Medicare
Log the claim status in the patient’s record

You’ll see instant feedback for successful claims, and any rejections or errors will be flagged for easy correction.

Step 5: Track and Manage Claims

Zedmed’s Accounts and Receipts module includes:

A full list of submitted claims
Real-time status updates
Rejection codes and descriptions
Batch and reconciliation reports

You can filter by claim type, date, provider, or status to manage outstanding issues or re-submit corrected claims quickly.

Zedmed also supports batch claims—perfect for high-volume clinics that want to streamline end-of-day processing.

How to Know Which Medicare Item Numbers to Use

Choosing the correct item number is vital to ensure compliance and avoid Medicare audits. Here’s a quick guide to help:

Item Number	Description	When to Use
23	Standard GP consult (≤20 mins)	General check-ups, cold/flu, minor issues
36	Long GP consult (>20 mins)	Complex cases, mental health plans
721	GP Management Plan	For patients with chronic conditions
723	Team Care Arrangement	When coordinating care with other providers
2715	Mental Health Treatment Plan	Initial mental health support
2712	Review of Mental Health Plan	At 4-week to 6-month review

Zedmed integrates with the latest MBS so you can look up item descriptions and conditions directly within the billing screen.

Common Medicare Pitfalls and How Zedmed Helps Avoid Them

Invalid Medicare Number

Zedmed checks the patient’s Medicare details against Web Services in real-time, reducing rejections.

Wrong Item Number

The built-in MBS lookup ensures only valid item numbers and combinations are used.

Missed Rebates

Automated claim submission ensures that claims are processed promptly and tracked until finalised.

Forgotten Expiry of Care Plans or Referrals

Zedmed tracks care plan and referral dates so your team gets reminders before expiry.

Training Your Team

Zedmed provides access to a wide range of training resources, including:

Medicare Billing Training Videos
Practice Manager Guides
The Zedmed Knowledge Base
Free webinars and onboarding support

Zedmed’s support team is also available to guide you through complex claims or Medicare updates.

Why Use Zedmed for Medicare Billing?

Medicare Web Services integration
Real-time eligibility checks
Automatic claim validation
Batch billing and claim tracking
Up-to-date MBS integration
Comprehensive reporting tools

Zedmed simplifies Medicare billing so your practice can focus on what matters—delivering excellent patient care.

Wrapping Up

Mastering Medicare billing might seem complex at first, but with the right understanding and tools, it becomes a natural part of your daily workflow. By combining your knowledge of the MBS with Zedmed’s powerful billing tools, your practice can:

Bill Medicare confidently and compliantly
Reduce rejections and delays
Track income efficiently
Stay focused on patient outcomes

Whether you’re bulk billing, submitting patient claims, or managing chronic disease care plans, Zedmed makes it easy to do it all in one place.

Ready to simplify Medicare billing in your practice? Contact Zedmed today for a demo or support.