The AoB compliance trap: why 99% is not enough, and why bulk billing will collapse within 12 months

The Assignment of Benefit changes commencing 1 July 2026 create a compliance regime that may be close to impossible to run perfectly. One patient complaint can trigger a full workflow audit. The practice, not the doctor, may carry the legal liability under standard service agreements. Software vendors and banks are overpromising. This article estimates the actual additional compliance cost, walks through the quarterly BBPIP exposure, gives four practical after-hours, aged-care, telehealth and scope-change vignettes, and lays out the steps a practice may take to eat well, sleep well, and stay out of the Federal Court. This is practical guidance for practice owners weighing their options, not scare-mongering.

By David Dahm  ·  Chartered Accountant and Registered Tax Agent  ·  Health and Life

Why this next prediction matters. My track record since 1997

I have been publishing on the structural risks facing Australian medical and healthcare practices for close to three decades.  I humbly submit, for my critics, which I welcome, that this section is context for the AoB prediction that follows, not credentialing. When I have called something serious, it has generally turned out to be so. I am happy to stand corrected and be called out as wrong. Seriously, nothing would make me happier. Skip this next section if you are a believer!

The point is that the pattern of practice-level structural change over 30 years has taught me to recognise the shape of a serious risk before the mainstream commentary catches up. AoB looks like one of those risks.

• 1997 · Managed care by stealth, plus “Super Clinic” and “clinic without walls”. In my maiden article, Managed care: a new threat to GP’s? (Medical Observer, 18 April 1997), I first warned about the corporatisation of general practice and the risk of insurance-company ownership. In the same piece I coined the phrase “Super Clinic” and the concept of the “clinic without walls”, and predicted the greater role third parties such as health insurers would play in primary care. Corporatisation happened at scale. The recent sales of large GP practice groups to Bupa and Medibank confirm the insurer-ownership prediction and introduce a new set of complexity and tension between corporate players in primary care. The government-backed 2000 Super Clinic program used my phrase directly. The Medicare Urgent Care Clinics (UCC) program that commenced in 2023 is, in effect, a variant of the same 2000 Super Clinic model with a walk-in bulk-billed structure. See the updated H&L blog article Managed Care by Stealth: Set Your Medical Fees the Right Way and When Patients Survive but Practices Die.

• 2007 · Service entity ruling submissions. After the Australian Taxation Office was investigated by the Federal Tax Ombudsman, the Federal Australian Medical Association approached me to make federal submissions on commercial service fees. Those submissions successfully argued the case for the GP service percentages that appear in the ATO Service Entity Ruling TR 2006/2. The framework has held for close to twenty years. The public submissions and commentary from that period ran in BRW in 2007 (cited on H&L). See H&L blog article New Tax Warnings for Doctors · Health Care Home Ruling and Excessive Income Splitting and Service Entities for the BRW citation and updated context, and the H&L Tenant Doctor™ framework at A Genuine Tenant Doctor™ Arrangement Attracts No Payroll Tax.

• 2009 · Pathology rent audits. I made federal submissions on pathology and radiology rent free-market pricing, including a successful constitutional challenge of the definition of market value that led to the national revaluation of pathology and radiology rents. The issue made the front page of The Australian in 2009. See H&L commentary at New Excessive Pathology Rent Red Book Alert.

• 2014 · Payroll tax and contractor super warnings. I warned in Frypan to fire: Tax traps for GPs (Medical Observer, 2014) about the structural risks of the practice trust and practice company model over a properly structured tenant doctor and service entity model. The Federal Tax Office confirmed those risks in September 2014. Deemed employee contractor superannuation audits are scheduled to commence from 1 March 2026. See H&L blog articles New Tax Office Warning, your practice could be facing a double risk?! and the 262-page ATO submission covered in The Medical Republic, Dahm the SROs (and the ATO), full speed ahead!.

• May to June 2026 · Assignment of Benefit exposed. I first published on the 1 July 2026 AoB reforms in May 2026, in No Captured Consent, No Bulk Bill From 1 July 2026. The companion piece The big AoB land grab followed on the H&L blog. Both were subsequently discussed in Holly Payne’s coverage in The Medical Republic of the 18 June 2026 DoHDA delay announcement, which is now cited throughout this article.

Why this AoB prediction may be equally serious.

This is not scaremongering. It is not a controversial article for its own sake. It is a base-case reading of what may happen to bulk billing practices between 1 July 2026 and 30 June 2027, informed by primary source material from Services Australia, DoHDA, ADHA, Tyro Health’s published guidance, and thirty years of watching practice-level structural change. I have a personal interest in getting this right. Every practitioner supports me, my family, my friends, and every reader of this article as patients. We all should have a say in this conversation, and I am happy to stand corrected on any point in this article that a colleague, practitioner or regulator can show me. My self-interest and the interest of every reader are aligned. Nobody in this space wins if the compliance regime collapses viable practices that just wanted to keep doing good work.

The Assignment of Benefit reforms commencing 1 July 2026 have been discussed as if they were a software problem. They are not. 

They are a legal, operational, cultural, and reputational problem that lands squarely on the practice entity, while the doctor keeps clinical autonomy and expects the same take-home billing pool. The 12-month verbal-consent moratorium buys practices time to think, not time to sit on their hands. 

This article walks through the live examples nobody is talking about, the legal liability trap hidden in most service agreements, the Medicare fraud exposure, the doctor lawsuit risk, and the strategy that makes the whole thing manageable. That strategy is private billing. Here is why.

The live examples nobody is talking about

Every practice management article discusses the rules in the abstract. The reality is much messier. Below are eight vignettes taken from H&L client conversations in the past four weeks. Names and details are changed. The compliance failure in each case is not hypothetical.

Why 99% AoB compliance is not enough

The compliance rate that matters is not the average. It is the exception rate on the specific patient whose complaint triggers the audit. A practice that captures AoB correctly on 99% of consultations is running 1% of consultations without defensible consent. Over a year, at 50,000 consultations for a 10 FTE doctor clinic, that is 500 defective AoBs. Any one of them is enough for an audit finding.

Services Australia and the Department of Health, Disability and Ageing have both signalled a graduated enforcement approach, starting with education not enforcement. That posture will not survive an actual complaint from a patient who says they never agreed to bulk billing. Once a complaint is filed, the audit is not graduated. The audit examines whether the workflow could plausibly have failed on other consultations. If it can, the finding extends across the audit period.

“The service agreement trap that shifts the risk to the practice”

Most standard Tenant Doctor (sometimes mistakenly referred to as “contractor” agreements) and service entity service agreements contain a version of the following clause: the practice will provide administrative services, including patient billing, fee collection, reconciliation, and issuance of receipts. This clause was drafted for a world where the practice provided routine administrative support to a doctor who made their own billing decisions. It has not been rewritten for a world in which the practice entity is legally accountable for how Medicare consent is captured.

Read that clause against the new AoB rules. The practice is responsible for capturing the AoB. The practice is responsible for retaining the AoB for two years. The practice is responsible for the audit trail. The practice is responsible for the documentation of exceptions. The practice, in short, is running a Medicare office on behalf of every doctor at the practice. If the Medicare office fails, the practice is the party accused of failure, not the doctor whose provider number appears on the claim.

This is where the doctor-lawsuit risk comes in. If a doctor’s Medicare claim is rejected because reception did not capture the AoB properly, the doctor’s take-home income drops. The doctor’s service agreement gives the doctor a claim against the practice, because the practice contractually undertook to run billing, collection and reconciliation on the doctor’s behalf. The practice cannot pass the exposure back to the doctor by pointing at the doctor’s provider number, because the service agreement locked the practice into the administrative role.

The implications of being accused of Medicare fraud

Being accused of Medicare fraud is not the same as being convicted of Medicare fraud. That distinction is legally important but reputationally almost irrelevant. Once an accusation is on the record, the following consequences follow before any court has made a determination.

• Practitioner Review Program (PRP) referral. Services Australia and the Department of Health can refer the practice or the doctor to the PRP for practitioner-level review. A referral is public in the sense that the doctor’s records are subject to detailed examination.
• Medicare benefit recovery. The Commonwealth may recover benefits paid over the audit period. For a medium practice, this exposure is $2.5 million to $3.5 million per year of audit period.
• Civil penalty proceedings. Under the Health Insurance Act 1973, civil penalties for Medicare fraud reach $220,000 per instance for a body corporate. Multiple instances stack.
• AHPRA notification. If Medicare refers the matter to AHPRA, the doctor’s registration is subject to conditions or suspension pending investigation. AHPRA notification is discoverable in most professional indemnity applications for the rest of the doctor’s career.
• Reputational damage in the local market. Patient advocacy groups and the local media do not wait for a court finding. The accusation itself circulates. Patient bookings drop. Doctor recruitment becomes harder. Doctor retention drops as the incumbents’ income falls.
• Professional indemnity implications. The practice’s professional indemnity insurer must be notified. Premium increases and possible refusal of renewal follow.
• Bank and finance implications. Practice loans typically have covenants around regulatory action. A civil penalty proceeding triggers those covenants.

None of these consequences requires a finding of actual fraud. They follow from the accusation and the subsequent investigation. The compliance regime that produces the accusation is the AoB capture workflow. Getting it 99% right does not protect against the 1% that triggers the complaint.

Software vendors and banks are overpromising, not lying

Tyro Health, Best Practice, MedicalDirector, Cliniko, Genie, ZedMed, HICAPS, Medipass and the other major vendors have all published guidance on their 1 July 2026 readiness. The published guidance is mostly accurate. The problem is not what the vendors are saying. The problem is what practices infer from what the vendors are saying, and the workflow scenarios the vendor guidance has not been administratively tested against. This is outside their scope.

The industry has been on notice since 2023

Health and Life first published concerns about the Assignment of Benefit reform pipeline in 2023, well before the 1 July 2026 commencement was locked in. The concerns were operational, not policy. The per-service written-consent capture rule as originally proposed was administratively unworkable for any practice doing more than a handful of bulk-billed services per day, and the Medicare exposure of getting it wrong sat with the practice, not the doctor.

The industry response over the intervening three years has been to promise digital solutions. Every major software vendor and every major payment terminal provider has released roadmap updates. What may not have been done, at least publicly, is comprehensive administrative testing of those solutions against real practice workflows, with the human elements at the front desk and in the consulting room factored in. The result may be a set of technically-compliant products that solve the identifier and signature capture problem in isolation, without addressing whether the surrounding workflow can actually be run at production volume by real reception staff and real doctors.

Six workflow scenarios that may not have been administratively tested

Below are six real practice scenarios where the vendor solutions may not yet integrate with the human elements at the front desk or in the consulting room. Each has been raised with H&L by client practices in the last six months. None has a clean vendor answer available to date.

Why administrative testing may matter more than technical compliance

Technical compliance means the software or terminal can capture, retain, and produce an AoB that meets regulation 65C. Administrative testing means the software or terminal can be run at production volume by real reception and clinical staff, with real patients, under real workflow conditions, over real time periods, without failure rates exceeding the acceptable threshold for a compliance workflow. These are different tests.

To H&L’s knowledge, no software or banking vendor has published administrative test results for their AoB workflows. Vendor case studies exist. Marketing videos exist. Webinars exist. What may not exist is a comparable published finding of the form “we ran this workflow at Practice X for six months, at Y consultations per day, and the workflow failure rate was Z per thousand, comprising the following identified failure modes”. Without that data, practices are relying on the vendor’s optimism, not the vendor’s evidence.

The practice’s realistic response. 

Vendors have promised solutions. Some solutions are ready. Others are not. 

None have been administratively tested at production volume against the real workflow variability of Australian general practice. The practice’s job is to model its own workflow honestly, identify the specific failure modes above that apply to its patient mix, and decide whether the workflow is defensible without vendor help or whether the compliance risk suggests a different billing strategy. Vendor readiness is a necessary condition. It may not be a sufficient one.

The gap between what the vendors published and what practices infer is where the compliance failures may happen. The vendor is not the fraud risk. The practice’s own reception and consulting-room workflows are the fraud risk. No amount of vendor investment can eliminate the requirement for the practice to run the workflow correctly in every consultation. The workflow is where the audit lands.

Getting patients onto MyMedicare may be harder than the vendor demos suggest

Enduring AoB is available only to MyMedicare-registered patients (plus RACF residents and ACCHO/AMS patients). Practices reading the vendor material may reasonably assume MyMedicare registration is a form the patient fills out at the front desk in three minutes. In our experience with H&L client practices, it may not be. Only around 10 per cent of Australian patients have registered with MyMedicare to date, and the reasons are practical, not resistant. Three live examples below.

How to describe services in an Enduring AoB consent

A related question that vendors and consent-form templates rarely answer well is how the services should be described inside the Enduring AoB document itself. The two AoB modes take different approaches. The MBS Category, Group and Subgroup structure referenced below is set out authoritatively on MBS Online (the Australian Government’s Medicare Benefits Schedule website, published by the Department of Health, Disability and Ageing).

Episodic (pre-service) AoB: the legislation prescribes the Basic Service Description (BSD) taxonomy for describing services. Practices may have no discretion on how they describe services here.

Enduring AoB: the legislation does not prescribe a taxonomy. It only requires that the actual item numbers billed can be unambiguously derived from the description. The Explanatory Statement gives a “big thumbs-up” to using the MBS Category, Group and Subheading structure, but does not require it. That leaves practices with three options in an Enduring AoB: (a) use the BSD terms; (b) use the MBS Heading language; or (c) draft a bespoke description, provided the item numbers can be reasoned back from what is written.

The choice matters, because the description determines the scope of the assignment. A description that is too narrow may not cover a scope-change mid-consultation. A description that is too broad may look strategic to an audit reviewer. From the H&L client mapping work informed by community-shared analysis of BSD coverage across MBS Categories, three practical observations emerge.

• GP consult items (Category 1) may map cleanly to BSD terms. Standard consults, care planning, mental health and chronic disease items all sit under “GP · Short/Standard/Long/Care Planning and Health Assessments/Other”. A GP-only practice writing an Enduring AoB using BSD terms may be well covered.
• Diagnostic imaging (Category 5) and most of Pathology (Category 6) may not be covered by BSD. Practices offering these under enduring consent may need to use MBS Heading language or a bespoke description. Pathology has one BSD-covered exception (Simple Pathology Services).
• Mixed practices may need a hybrid description. BSD for consult items, MBS Heading for diagnostics, with tight cross-references so the item derivation remains unambiguous.

A simple worked example. Same patient, two consent modes.

Meet Mrs Nguyen. She is 68, MyMedicare-registered at your practice, and presents for a routine chronic disease review.

AoB.Episodic (pre-service) AoB. Reception captures her consent before the consult. The description on the form must use the prescribed BSD taxonomy: “I assign my Medicare benefit for GP Standard consultation.” The doctor performs an item 23. All good. If the doctor decides mid-consult that a GP chronic condition management plan is clinically warranted, the consult may bill as item 965 (the GP-billed GPCCMP item introduced on 1 July 2025 that replaced the discontinued item 721) instead of item 23. Items 965 and 23 may not be co-claimed on the same day, so the doctor is choosing one or the other. The captured AoB for “GP Standard consultation” may no longer match the item billed. Reception may need to capture a fresh episodic consent for “GP Care Planning and Health Assessment” before the claim is lodged. One claim, but two AoBs, two file notes.

Enduring AoB. Mrs Nguyen signs one enduring AoB when she registers with the practice. The description is drafted by the practice. Three options.

Option A. Narrow, BSD terms: “I assign my Medicare benefit for GP Short, GP Standard, GP Long, and GP Care Planning and Health Assessment items.” Covers today’s consult whether it bills as item 23 or item 965. Clean. But if she also has a skin lesion excised (Category 3, Any Provider Procedure), that may fall outside scope and reception may need to capture a new consent.

Option B. Broader, MBS Heading language: “I assign my Medicare benefit for services described under MBS Category 1, Groups A1 to A48.” Covers everything a GP might reasonably do in the consult. A scope change from item 23 to item 965 during the visit is no longer a workflow trigger. But an audit reviewer may ask whether Mrs Nguyen understood what she was consenting to when she signed.

Option C. Bespoke, item-listed: “I assign my Medicare benefit for all bulk-billed consultations and care planning services provided by any GP at [Practice Name] under Medicare items 3, 4, 23, 24, 36, 37, 44, 47, 965.” Unambiguous item derivation and clear to the patient, but the practice may need to rewrite the form every time the MBS item numbers change. Note that item 965 is the current GP chronic condition management plan item introduced on 1 July 2025 that replaced the older items 721, 723 and 732. Item 392 is the equivalent item for participating multidisciplinary practices (PMPs) and may not be billed by standard GPs.

Option A produces the tightest consent but the most reconfirmations. Option B produces the fewest reconfirmations but the highest audit-scrutiny risk on informed consent. Option C is arguably safest legally but highest maintenance. Practice principals may choose based on patient mix, scope-change frequency, and tolerance for reconfirmation friction at reception.

The drafting implication. Where an MBS Heading covers multiple BSDs (for example, GP · Short plus GP · Standard plus GP · Long under a single heading), an Enduring AoB using the MBS Heading may capture a broader item range than a BSD approach. That may reduce the need to reconfirm consent when clinical scope shifts mid-consultation, which was a live workflow risk raised earlier in this article. 

It may also invite closer audit scrutiny on whether the broad description was properly explained to the patient at the time of consent. As with all AoB drafting, tighter definitions may protect the patient’s informed consent; broader definitions may protect the practice’s workflow flexibility. The correct balance may depend on the practice’s patient mix and clinical scope, and should be reviewed with independent legal advice.

Software compliance is not enough. The whole workflow must be reviewed

The vendor issue is only half the story. Even with a fully compliant clinical software system, a fully compliant payment terminal, and a fully redrafted service agreement, the workflow around those systems may determine whether the practice actually captures a defensible AoB on every consultation. Software may capture the data. The workflow may capture the risk.

Every touchpoint in the AoB workflow may need to be reviewed against three questions. If any of the three is undefined, or defined but not enforced by someone who owns it, the workflow may fail regardless of how compliant the software is on paper.

Six live workflow examples where the software was compliant, and the workflow was not

Each of the vignettes below is a real practice scenario in which the software or terminal met the regulatory specification, but the workflow around it failed in one or more of the three dimensions. Each has been raised with H&L by client practices this year. In each case, an audit reviewer would find the software vendor is not at fault, and the practice may carry the exposure.

The practical implication for practice principals. Compliant software may be a necessary condition. A workflow that defines what needs to be done, by whom, and when, at every touchpoint from booking to Medicare claim submission to post-claim reconciliation, may be the sufficient condition. A practice that has invested in compliant software but not in a workflow review may have the same exposure as a practice that did neither. Both may fail on the audit. The workflow review is where the actual compliance lives, and it is the part no vendor can do for you. 

Estimating the actual additional compliance cost

Practices ask us whether there is a technology solution, a training solution, a workflow solution, or a service agreement solution that makes bulk billing after 1 July 2026 cost-effective. There may not be one at current BBPIP loading rates. Here is what each cost line comes to for a 10 FTE doctor clinic running approximately 50,000 consultations per year at 70% bulk billing.

The BBPIP loading this cost may be protecting is approximately $230,000 per year at 100% bulk billing for a 10 FTE clinic. Under most Tenant Doctor service agreements the loading is split 50:50 between the practice and the treating doctors, so the practice’s share is around $115,000 per year. The additional compliance cost of $107,000 to $200,000 per year may equal or exceed the practice’s share of the BBPIP loading it is protecting.

Practices at 70% bulk billing today may never have captured BBPIP because BBPIP requires 100% of eligible services to be bulk billed. Moving to 100% bulk billing to capture BBPIP requires the practice to stop privately billing the roughly 30% of eligible patients currently paying a gap. The trade may be a $230,000 BBPIP loading in exchange for potentially $300,000 to $600,000 of gap fee revenue foregone, plus $107,000 to $200,000 of additional compliance cost. The numbers may not support the move for a 10 FTE clinic.

The one-quarter BBPIP loss if a private bill slips through

The BBPIP loading is an all-or-nothing quarterly measure. If the practice targets 100% bulk billing and one Medicare-eligible patient is privately billed inside a quarter (whether by choice, workflow failure, or misunderstanding), the practice may forfeit the entire BBPIP loading for that quarter.

Culture. The biggest hurdle

The point above matters. The technical compliance work, the software configuration, the workflow redesign and the service agreement redraft are all necessary. They are not the hardest part. The hardest part is the cultural change inside the practice and the expectation reset with patients. Practices that get the compliance settings right but leave the culture unaddressed may still fail on the workflow, because the workflow is executed by human beings under stress.

The compliance cost above assumes the practice can actually retain the staff to run the workflow. This is unlikely without cultural investment. Reception staff at bulk billing practices are the front-line customer service for patients who are typically anxious, elderly, or non-native English speakers. Adding a conversation about identifiable auditable electronic consent capture to every visit changes the reception role from patient care into paperwork chase. This is not what reception staff signed up for. Staff turnover at Australian medical practices is already elevated post-pandemic. The AoB compliance workload may accelerate it.

Patient satisfaction follows the same pattern. Patients present at a bulk billing practice because they cannot afford or do not want a gap payment. They are the most price-sensitive patient population in Australian primary care. Asking them to sign electronic consent forms every visit, or to explain why they are being bulk billed and whether they agree, adds friction to a workflow they experienced as frictionless for the previous decade. Google reviews may reflect this. So may patient complaints.

Practice culture follows staff satisfaction and patient satisfaction. A reception team that resents the workload and a patient population that resents the friction may produce a workplace where reception staff leave, patient loyalty erodes, and doctors notice. Doctor retention may become harder because doctors at bulk billing practices see the same billing drop as their peers at private billing practices, but experience worse workplace culture and worse patient interactions.

Why private billing is the defensible strategy after 30 June 2027

The 12-month verbal-consent moratorium ends on 30 June 2027. From 1 July 2027, verbal consent is no longer defensible for any patient outside the three enduring AoB cohorts (MyMedicare-registered, RACF residents, ACCHO/AMS patients). Every bulk-billed consultation requires an individually captured written or electronic consent per service.

Private billing removes the AoB requirement entirely. When the practice does not assign the Medicare benefit to itself, the patient pays the fee up front, the patient claims the Medicare benefit from Services Australia, and there is no assignment of benefit to capture, retain, or defend. The practice’s Medicare compliance workload drops to nearly zero. Reception focuses on care, not compliance. The audit exposure drops to nearly zero. The Medicare fraud accusation risk drops to nearly zero. The doctor lawsuit risk drops to nearly zero, because the practice no longer runs the billing workflow that the service agreement made it responsible for.

The counter-argument is that patients will not accept a gap fee. This is where H&L’s clients have consistently found the reality is different from the perception. A well-designed gap fee is smaller and clearer than most owners expect. A gap of $20 to $35 per consultation covers the workflow cost, restores practice margin, and remains substantially cheaper for the patient than the alternative of losing bulk billing access altogether when the practice closes because the compliance cost cannot be sustained.

Points many practices may not have noticed yet in the DoHDA FAQ

For the die-hard readers who got to this point – well done! This is an additional bonus round of items you may need to take into consideration.

The Department of Health, Disability and Ageing published an updated FAQ (dated 26 June 2026) that contains a number of operational details many practices may not have noticed. Ten worth highlighting.

1. Verbal AoB during the transition period may be heavier, not lighter. The 12-month verbal-consent transition running to 30 June 2027 does not remove the paperwork. It reshapes it. The practice may still need to (a) present the assignor with the details that support informed consent, (b) have the medical professional enter “assignor verbally agreed” in the signature field, (c) store the completed agreement electronically or in hard copy for 2 years, and (d) send the completed agreement to the patient electronically. Verbal consent may be a workflow variation, not a workflow reduction.
2. DoHDA has published template forms. The Department has published templates for Episodic Pre-Assignment (all MBS services and diagnostic imaging), and for Enduring Agreements (MyMedicare, RACF, and ACCHO/AMS). Services Australia has also published updated DB4E (electronically transmitted claims) and DB020 (Medicare bulk bill Webclaim) forms for post-assignment. Use of the templates is optional. Practices may develop their own forms provided the required data set is captured. See references section for links.
3. Employed persons may not be assignors. The FAQ confirms that persons employed by the medical practitioner rendering the service cannot be the assignor (perceived financial conflict of interest). Exception: where those persons are the patient’s parents or carers, they may act on the child’s behalf.
4. Multi-service AoB on the same day works differently by scenario. Three cases from the FAQ:
   • Multiple services, same practitioner, same day: one AoB may cover all listed services.
   • Multiple practitioners, different practices, same day: separate AoBs may be required.
   • Multiple practitioners, same practice, same day: separate AoBs may be required per practitioner.

   Practices may want to review their reception workflow against these three cases specifically.

5. Pre-service episodic AoB may cover planned treatments for up to 6 months. Where a patient is scheduled for regular care (dialysis, cancer treatment, palliative care) provided by the same medical professional on specified dates, a single pre-service episodic AoB may cover the block of appointments. If any specified detail changes (date changes, different professional, item change), a new episodic or post-service AoB may be required.
6. Pathology transitional arrangements are different. Where an AoB agreement exists on a pathology request form issued before 1 July 2026, it may remain valid for up to 12 months from date of issue. Requests issued after 1 July 2026 may need to comply with the new AoB requirements. The pathology data set differs slightly from other services (includes date of specimen collection and pathologist-determinable services statement rather than description of service or MBS item).
7. Public patients in public hospitals do not require an AoB. Services provided to public patients under the National Health Reform Agreement may not require an AoB because no Medicare claim is lodged. Private-election patients in public hospitals may still require the standard AoB process.
8. The 90-day pay doctor cheque scheme may be a middle path. Where a patient declines to assign their Medicare benefit and the account is unpaid or partly paid, the patient may request Services Australia issue a cheque for the Medicare benefit to be sent to the patient to forward to the provider. This may be a compromise between full bulk billing and full private billing, particularly useful during the transition period. See the Services Australia 90 Day Pay Doctor Cheque Scheme.
9. Basic Service Description data is updated quarterly on MBS Online. The Basic Service Description document is published on MBS Online (Downloads page) as both XML and CSV, and may be updated quarterly aligned to the XML fee file. Practices using the BSD taxonomy in their AoB forms may need a quarterly review process to keep descriptions current.
10. Post-service AoB requires actual MBS item numbers. The data set for a post-service (episodic) AoB may include the actual MBS item numbers billed. This differs from a pre-service AoB, which uses the Basic Service Description. Practices using post-service AoB in their standard workflow may need to build MBS-item capture into the reception close-of-business step, not just into the doctor’s billing screen.

Why these matter together. Individually, each of these points is a small operational detail. Together, they may materially shift the practice’s view of which AoB pathway is cheapest to run. Enduring AoB is not the free lunch the vendor material sometimes implies. Post-service AoB is not just a fallback for missed pre-service consent. Verbal AoB is not a workflow shortcut. The practice principal who models each pathway against actual patient volume and staff time may find that private billing with a small transparent gap remains the simplest defensible option for many settings.

What to do this quarter

1. Get an independent read of your service agreement. Not a redraft yet. Just a read. Does the practice have contractual responsibility for billing, collection, reconciliation and receipts? If yes, you are exposed. Cost of the read: $500 to $1,500 with an experienced practice lawyer.
2. Model your AoB workflow economics. Take your consultation volume, multiply by 2 to 5 minutes of additional reception time per consult, and cost it out in extra reception FTE. Compare against your BBPIP loading revenue at 100% bulk billing. If the cost exceeds the revenue, the arithmetic is telling you something.
3. Rewrite the service agreement. If the read confirms the exposure, redraft. Allocate the AoB workflow responsibility to the doctor as the person clinically involved in the consultation, and ensure the practice’s role is limited to providing the software and reception infrastructure to support that. Cost: $8,000 to $18,000.
4. Model a private billing conversion. Assume $20 to $35 gap. Model patient volume drop of 5% to 15% in the first six months. Compare net practice revenue against the bulk-billing base case, factoring in the savings from compliance. In most cases, the private billing model outperforms after month 6.
5. Have the conversation with your doctors now. This is not a decision you announce. It is a decision you consult on. Doctors need to understand that keeping bulk billing while the practice absorbs the compliance cost is not a viable long-term arrangement, and that the private billing conversion protects everyone including the doctor’s take-home. If the doctor conversation cannot be had, that itself is data about the practice’s leadership team.
6. Train reception on the transitional verbal-consent file-note workflow for the next 12 months so the practice is defensible during the moratorium. This is not a permanent workflow. It is a bridge while the strategic decision is being made and the private billing transition is being executed.
7. Document everything. Every AoB decision, every exception, every file note, every training session. The documentation is what protects the practice against the complaint that triggers the audit.
8. Run a compliance self-assessment. Health and Life publishes a downloadable Medical and Health Contractors Compliance Checklist covering the payroll tax, superannuation, contractor classification and AoB dimensions in one document. Ask your accountant and lawyer to work through it with you in writing. If they cannot, that itself may be a signal about the quality of adviser you have.

The prediction, restated with the arithmetic

The estimated additional AoB compliance cost may equal or exceed the practice’s share of BBPIP revenue for many bulk-billing clinics at the 10-FTE scale. The Medicare fraud accusation risk may not be reducible below 1% of consultations without eliminating human error from a workflow that runs 50,000 times per year. The doctor lawsuit risk may be baked into the standard service agreement. Staff turnover may accelerate as the reception role morphs into compliance chase. Patient satisfaction may erode as bulk billing patients face a workflow they experienced as frictionless for a decade.

Practice owners will work through this arithmetic during the 12-month moratorium. Some already have. A private billing conversion may happen not because doctors want it, and not because patients want it, but because the maths and the risk profile may make bulk billing marginal at current BBPIP loading rates. The practices that lead a considered conversion may preserve their doctors, protect their reception teams, keep their reputational standing, and continue to make care affordable through a modest transparent gap. The practices that wait for the moratorium to end may end up reacting to a crisis instead of managing a transition.

My prediction is that a significant number of currently bulk billing practices may move toward private billing within 12 months, with the acceleration potentially occurring in Q1 and Q2 of 2027. The trigger may not be a policy change. The trigger may be the first Medicare fraud accusation against a well-known local practice, followed by the doctor lawsuit that may follow the practice’s revenue drop. Every practice owner in Australia will read that story and reconsider.

Bulk billing under the 2026 compliance regime is a story about which practice may be first. There may be options to avoid being first. This article has laid them out. The choice is yours.

Eat well, sleep well.

References

1. Health Insurance Amendment (Assignment of Medicare Benefits and Other Measures) Regulations 2025, regulation 65C
2. Health Insurance Amendment (Episodic Agreements and Simplified Billing Assignments) Regulations 2026 (28 May 2026)
3. Health Insurance Amendment (Enduring Agreements) Regulations 2026 (25 June 2026)
4. Department of Health, Disability and Ageing, Assignment of Medicare Benefits for Bulk Billing · Frequently Asked Questions (last updated 26 June 2026), available via the DoHDA AoB page
5. Department of Health, Disability and Ageing, Update to Assignment of Medicare Benefit requirements (downloadable templates)
6. Services Australia, Bulk bill voucher electronically transmitted claims form (DB4E)
7. Services Australia, Assignment of benefit Medicare bulk bill Webclaim form (DB020)
8. Services Australia, 90 Day Pay Doctor Cheque Scheme
9. Health Insurance Act 1973 (Cth), civil penalty provisions
10. Services Australia, Assignment of benefit for bulk bill claims
11. Department of Health, Disability and Ageing, Improving the assignment of benefit process
12. Department of Health, Disability and Ageing, MBS Online (Medicare Benefits Schedule authoritative source, including Category, Group and Subgroup structure)
13. Department of Health, Disability and Ageing, Information for MyMedicare patients
14. Department of Health, Disability and Ageing, MyMedicare (voluntary enrolment framework)
15. Western NSW PHN, MyMedicare is voluntary, and patients can continue receiving care as usual whether they choose to register or not
16. Electronic Transactions Act 1999 (Cth), section 10
17. Companion Health and Life article, The big AoB land grab: is freedom of choice really freedom, or freedom based on your cost of living?, at healthandlife.com.au/blog
18. Health and Life article, No Captured Consent, No Bulk Bill From 1 July 2026
19. Health and Life Practice Checklist, 1 July 2026 AoB Changes, available at healthandlife.com.au/blog
20. Tyro Health, Medicare Assignment of Benefit changes for bulk billing: a guide for practices (updated late June 2026)
21. Tyro Health webinar, Webinar: Assignment of Benefit (AoB) Changes: What You Need to Know
22. The Medical Republic, Assignment of benefit changes delayed (Holly Payne, 18 June 2026)
23. The Medical Republic, Dahm the SROs (and the ATO), full speed ahead!
24. Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWSC (upheld on appeal), on medical centre workflow control triggering deemed wages under payroll tax
25. Commissioner of State Revenue v The Optical Superstore Pty Ltd [2019] VSCA, on payment-flow analysis for relevant contracts
26. Dental Corporation Pty Ltd v Moffet [2020] FCAFC, on contractor superannuation guarantee exposure
27. ATO Practical Compliance Guideline PCG 2023/2, Classifying workers as employees or independent contractors · ATO compliance approach
28. Health and Life article, Tenant Doctor vs Independent Contractor
29. Health and Life article, A Genuine Tenant Doctor™ Arrangement Attracts No Payroll Tax
30. Health and Life article, When Patients Survive but Practices Die
31. Health and Life downloadable, Medical and Health Contractors Compliance Checklist

Acknowledgment

Thank you to Lukasz Wyszynski, Hamilton Bailey Lawyers, for his assistance with the legal review of this article and the underlying service agreement analysis. Any errors that remain are mine alone.