What is a hospital out-of-pocket cost?

Out-of-pocket costs

A ‘gap’ is the most common type of hospital out-of-pocket. Gaps happen when the total cost of your treatment is more than the combined amount Medicare and HBF pays towards treatment. When you go to hospital, gaps can happen in two ways:

Medical gap

You might have heard of the Medicare Benefit Schedule (MBS). This is a list of the medical procedures Medicare covers, as well as what they’ll pay towards treatment.

When you are admitted to hospital as a private patient, your specialist’s bills will be covered up to the MBS fee, Medicare will cover 75% of the MBS fee, while we will cover the remaining 25%. An out-of-pocket cost occurs when there is a difference between your specialist’s fees and the combined benefit provided from Medicare and HBF.

To help eliminate or reduce these out-of-pocket expenses for you, HBF participates in the Australian Health Service Alliance (AHSA) Access Gap Cover (AGC) arrangement for all states outside of Western Australia.

If your specialist participates in the AGC arrangement, they have the option to opt-in or opt-out of the arrangement on a case by case basis. When your specialist chooses to opt-in to AGC they have the option of billing one of two ways:

1. No agreement / Opt out
   If your specialist chooses to opt-out of the Access Gap Cover arrangement or are not registered to participate in an arrangement, their in-patient services will be covered up to the MBS fee. You will need to pay the difference between the MBS fee and the specialist’s fees (this is your out-of-pocket cost).
2. Access Gap Cover
   If your specialist chooses to charge a “known gap” under the AGC agreement, you will charge up to the maximum agreed fee. HBF will pay an additional amount above the MBS, leaving you with a maximum out-of-pocket cost of $500 (or $800 for obstetric services).
3. No Gap
   Your specialist will charge up to the AGC schedule fee and we will pay an additional amount above the MBS, leaving you with no out-of- pocket cost for your inpatient services.

Hospital Gap

A hospital gap happens when the cost of your stay in hospital (e.g. accommodation and theatre fees) is more than the amount your health fund covers. To help members avoid hospital gaps, many health funds, including HBF, have arrangements with hospitals to fully or partially cover costs relating to hospital accommodation.

It’s important to note that even if your health fund has an arrangement with a hospital to cover costs, you will still need to pay any excess or co-payment you’ve agreed to on your policy.

HBF has special arrangements with a large network of Member Plus hospitals across Australia. These arrangements help our members avoid hospital gaps.