Navigating the healthcare system can be a daunting task, especially when it comes to understanding the intricacies of Medicare and the associated costs of treatment. For the elderly, who often require more frequent medical care, the complexities of Medicare referrals could be particularly concerning.
Recent warnings from health experts suggest that Medicare’s current referral process may be leading to unnecessary out-of-pocket expenses for patients, and it’s time to delve into the issue to protect your hard-earned savings.
The referral runaround: A costly loop
When you’re under the care of a specialist for a condition like skin cancer or diabetes, you might expect your medical bills to be straightforward. However, the reality is that the referral system can lead to a cycle of additional charges that hit your wallet unexpectedly.
The problem reportedly starts when a referral from your general practitioner to a specialist expires after 12 months. To continue receiving Medicare rebates, you need a fresh referral, but this can sometimes trigger a new round of ‘initial attendance’ fees, even if you’re returning for ongoing treatment.
Dagmara’s dilemma: A referral issue
Take the case of Dagmara, a skin cancer patient who discovered that her clinic was billing her incorrectly.
Each year for five years, she was reportedly charged as a new patient, with costs ranging from $260 to $342 per visit. After Medicare rebates, she still faced a $200 gap for these annual appointments, not to mention the additional costs for follow-up visits.
‘Everything is extra, so you can easily get out with a $1,000 bill,’ she said.
‘It’s not only me, it’s thousands of people every year who have basically been treated as a cash cow. I felt really ripped off and feel really misled.’
The legal landscape: What’s allowed and what’s not
According to Dr Margaret Faux, a lawyer who did a PhD on Medicare, billing Medicare for a new initial attendance when a patient is part of a ‘single course of treatment’ is against the law.
‘I’d say there’s a fairly significant amount of overcharging, price gouging, gaming, because if you do have a new referral in your hand as a specialist, the temptation is strong,’ she claimed.
The Deeble Institute’s report supports Dr. Faux’s concerns, estimating that repeat referrals for continuing care cost Medicare $220 million and patients $74 million annually.
The report’s co-author, Samantha Prime, highlights that this ‘gaming’ of the system is contrary to patient-centred care and may cause patients to delay treatment due to cost concerns.

The confusion of indefinite referrals
Adding to the confusion, ‘indefinite referrals’ from general practitioners, which are meant to last without a set expiry, are sometimes randomly rejected by the Medicare computer system, per Dr Faux. This leaves patients facing large out-of-pocket costs without warning.
The ambiguity of Medicare’s rules around referrals is a source of frustration for both patients and medical practitioners.
The path forward: Seeking clarity and care
‘It’s confusing for patients and practices as well. We would be open to working with the government to improve rules and make it less complicated,’ said Dr Julian Rait, vice president of the Australian Medical Association.
Meanwhile, the Department of Health and Aged Care has stated that an initial attendance should only be rebated once in a ‘single course of treatment.’ They have also established a task force to implement an independent review of Medicare integrity.
The Consumers Health Forum of Australia is advocating for ‘longer and more flexible specialist referrals,’ which could alleviate some of the financial and emotional stress patients face.
‘We still want to see more unnamed referrals happening. This will increase flexibility and enable consumers to more easily use a referral for a specialist of their choosing,’ said a spokesperson.
For patients like Dagmara, the hope is to be seen ‘as a patient,’ not a customer.
The takeaway: Stay informed and advocate for yourself
If you suspect you’re being overcharged, don’t hesitate to raise the issue with Medicare or seek a second opinion. Remember, your health and financial well-being are paramount, and you have the right to question and understand the charges you incur.
We encourage you to share your experiences with Medicare referrals in the comments below. Have you faced similar billing issues? How have you navigated the referral process? Your insights could help others in our YourLifeChoices community avoid the shock of unexpected medical bills.
Also read: 2025 brings key adjustments to Medicare and Centrelink services
Medicare what a joke. My doctor advised me to have a MRI scan asap. So on ringing for appointment I was told the cost would be $480 and medicare has $0 as a rebate for this procedure. If my referral had come from a specialist not my GP the cost would be $0. I find it hard to understand why the cost is so different for the exact imaging request. As a pensioner $480 is a sizeable amount and this is just the beginning of my treatment.