All services listed in the Diagnostic Imaging Services Table of the Medicare Benefits Schedule (MBS) excluding Positron Emission Tomography (PET) services, have two different rebates: K items (100% of the MBS Fee) and NK items (50% of the MBS Fee).
The rebate amount is determined by the age of the equipment used to provide the service. This rule, known as Capital Sensitivity
, is currently in place for computed tomography (CT) and angiography services and is expected to be extended.
The Capital Sensitivity
measure encourages service providers to upgrade and replace (as appropriate) aged equipment with the aim of improving the delivery of quality of diagnostic imaging services.
What is the relevant age of my equipment?
Equipment that has not been upgraded, as defined in the Diagnostic Imaging Services Table (see Category 5 of the Medicare Benefits Schedule (MBS)
), is classified by the effective life age of the equipment. Equipment that has been upgraded is classified by the maximum extended life age of the equipment. An upgrade is an additional reasonable investment made by the service provider to improve the overall performance of the imaging system so the services provided are equivalent to new equipment supplied in Australia at the time of the upgrade.
Effective life age and maximum extended life age by modality (as at 27 November 2013)
As part of the 2014-15 Federal Budget the Government announced the ‘Medicare Benefits Schedule – revised Capital Sensitivity provisions for diagnostic imaging equipment’
measure, which will strengthen the quality and safety of MBS diagnostic imaging services through alignment and consistency of the Capital Sensitivity measure across all modalities (except PET). This measure includes:
- the extension of the Capital Sensitivity measure to all angiography services, including the previously excluded MBS items 60000 to 60078;
- introduction of a ‘maximum extended life age’ of 15 years for CT and angiography services; and
- increasing the ‘maximum extended life age’ for MRI (Magnetic Resonance Imaging) services to 20 years.
Effective life age and maximum extended life age by modality (from 1 January 2015)
During the transitional arrangements, angiography and CT equipment that have not been upgraded in the ‘new effective life age period’ (ie. the first 10 year period) will be eligible for the new ‘maximum extended life age’ provisions after equipment has been upgraded commencing 1 January 2015. This will allow providers with equipment that has not been previously upgraded in the ‘new effective life age’ period, but have been upgraded any time before 1 January 2016, to be eligible for the ‘maximum extended life age’ provisions for angiography and CT equipment.
How do I calculate the age of my equipment?
If the equipment was installed new, age is calculated from the date the equipment was first installed.
If the equipment was installed used, age is calculated from the date the:
- equipment was first used in Australia (for equipment previously used in Australia); or
- equipment's oldest component was manufactured (for equipment previously used outside Australia).
What is the location based exemption?
If equipment that has not been upgraded is older than the effective life age, or if equipment that has been upgraded is older than the maximum extended life age, practices may be eligible for an exemption depending on the practice location.
There are two types of exemption:
1) automatic exemptions based on the location of the practice
2) exemptions granted upon application to the Department of Health based on a number of factors.
1) Automatic exemptions
This exemption will automatically apply to practices located in Remoteness Area (RA) categories of outer regional, remote and very remote. Practices in these RAs are exempt from the Capital Sensitivity
measure and do not need to apply to the Department for a remote area exemption.
Practices can identify what RA they fall under at the Department of Health’s DoctorConnect website
Note: automatic exemption applies to areas classified as Remoteness Areas 3, 4 and 5.
2) Exemptions granted by the Department of Health
To grant an exemption for inner regional locations, the Department of Health must be satisfied that the practice is located in the RA category inner regional area, Note, this area was previously under the Rural, Remote and Metropolitan Area (RRMA) classification system as, RRMA4 or RRMA5, and:
- the diagnostic imaging equipment does not exceed the maximum extended life age by three years or more;
- the equipment is operated on a rare and sporadic basis
- the equipment provides crucial patient access to diagnostic imaging services.
Eligible practices may apply for an exemption by filling out the
Practices will be notified by the Department of Health after receiving a valid application. The Department will make a decision within 28 days and during this period the practice may continue to claim schedule K items.
Keeping the Location Specific Practice Number records up to date
Practices are required to keep the Department of Human Services’(DHS) Location Specific Practice Number (LSPN) records up to date including the age of each piece of equipment. To update LSPN information, practices may access the relevant forms and contact details at the Medicare website
and practices must inform the Department of Human Services when equipment is upgraded.
For further information on what constitutes an upgrade see Diagnostic imaging equipment (Capital Sensitivity) FAQ
For general enquiries about capital sensitivity email the Department of Health at the Capital Sensitivity team
For assistance with LSPN details, contact the Department of Human Services (Medicare) toll free on 1800 620 589 Monday to Friday, 07.30am to 5.00pm Western Standard Times.
Alternatively email Medicare