Practice Incentives Program (PIP) payments and calculations

How payments are calculated

Payments through the PIP recognise specific aspects of general practice that contribute to quality care. The payment formula was developed in consultation with the General Practice Financing Group (GPFG), which also consulted many GPs and Divisions. The GPFG consists of GP representative organisations as well as the Australian Government.

The formula in brief

There are 13 broad elements to the payment formula, some with several tiers of payment. Practices may qualify for any or all payments, which are cumulative. The following table summarises how the formula works. 

Note: the average Full Time Equivalent General Practitioner (FTE GP) sees 1000 Standardised Whole Patient Equivalents (SWPE) annually.

Incentives	Aspect or activity	Payment amount
Quality stream
Quality Prescribing	Practice participation in quality use of medicines programs endorsed by the National Prescribing Service. Paid annually in May.	$1 per SWPE.
Diabetes Incentive	Sign-On Payment: one-off payment for notifying the Australian Government that the practice uses a diabetes register and recall/reminder system.	$1 per SWPE.
	Outcomes Payment: payment to practices that complete an annual cycle of care for a target proportion of their patients with diabetes.	$20 per HbA1c SWPE annually.
	Service Incentive Payment: payment for each annual cycle of care for a patient with diabetes, payable once per year per patient.	$40 per patient per annum.
Cervical Screening Incentive	Sign-on Payment: one-off payment to practices that engage with the state/territory cervical screening registers.	$0.25 per SWPE.
	Outcomes Payment: payment to practices where a specified proportion of women aged between 20 and 69 years have been screened in the last 30 months.	$3 per female WPE†† aged between 20 and 69.
	Service Incentive Payment: payment to practitioners for screening women between 20 and 69 years who have not had a cervical smear within the last four years.	$35 per patient per annum.
Asthma Incentive	Sign-on Payment: one-off payment to practices that implement a cycle of care for patients with moderate to severe asthma.	$0.25 per SWPE.
	Service Incentive Payment: payment to practitioners who complete an asthma cycle of care for patients with moderate to severe asthma, payable once per year per patient.	$100 per patient per annum
Indigenous Health Incentive	Sign-on Payment: one-off payment to practices that agree to undertake specified activities to improve the provision of care to their Aboriginal and/or Torres Strait Islander patients with a chronic disease.	$1000 per practice
	Patient Registration Payment: A payment to practices for each Aboriginal and/or Torres Strait Islander patient aged 15 years and over, registered with the practice for chronic disease management.	$250 per eligible patient per calendar year
	Outcomes Payment Tier 1: Payment to practices for each registered patient for whom a target level of care is provided by the practice in a calendar year.	Tier 1: $100 per eligible patient per calendar year
	Outcomes Payment Tier 2: Payment to practices for providing the majority of care for a registered patient in a calendar year.	Tier 2: $150 per eligible patient per calendar year
Capacity stream
eHealth Incentive	The PIP eHealth Incentive has three components. Practices must meet the requirements of each of component to qualify for payments through this incentive.	$6.50 per SWPE capped at $12 500 per practice, per quarter.
Practice Nurse Incentive	Payment to PIP practices that employ a practice nurse or allied health worker, for the minimum number of sessions per week over the payment quarter. Practices in urban areas of workforce shortage can employ allied health workers instead of, or in addition to practice nurses and/or Aboriginal health workers. Rural and remote practices are those located in Rural, Remote and Metropolitan Areas (RRMA) 3–7. Urban practices are those located in RRMA 1–2.	$7 (RRMA 3-7 only) Capped at $35000 per annum. $8 (RRMA 1-2 only) Capped at $40000 per annum.
After Hours Incentive	Tier 1—Practice patients have access to 24 hour care, seven days a week through specific external arrangements.	$2 per SWPE annually.
	Tier 2—(10 hours) practices with 2000 SWPEs or less Practice GPs provide practice patients with at least 10 hours per week, on average, of after hours cover. At all other times practice patients have access to after hours care through specific external arrangements. or Tier 2—(15 hours) practices with more than 2000 SWPEs Practice GPs provide practice patients with at least 15 hours per week, on average, of after hours cover. At all other times, practice patients have access to after hours care through specific external arrangements..	$2 per SWPE annually.
	Tier 3—Practice GPs provide practice patients with 24 hour care from within the practice	$2 per SWPE annually.
Teaching Incentive	Teaching of medical students. Maximum of two sessions per day. Only one student per teaching session.	$100 per session.
Aged Care Access Incentive	Tier 1—GPs must reach the Qualifying Service Level 1 (QSL) by providing at least 60 eligible services in Residential Aged Care Facilities (RACF) in the financial year.	$1000 per financial year. From 1 July 2010 payments will increase to $1500 per financial year.
	Tier 2—GPs must reach the QSL 2 by providing at least 140 eligible services in RACF in the financial year.	$1500 per financial year. From 1 July 2010 payments will increase to $3500 per financial year
Rural support stream**
Rural Loading	The practice's main location is outside metropolitan areas (increases with extent of remoteness) based on the RRMA 3–7 Classification. Once all incentive payments are added together the rural loading amount is applied.	RRMA 1–0 per cent loading RRMA 2–0 per cent loading RRMA 3–15 per cent loading RRMA 4–20 per cent loading RRMA 5–40 per cent loading RRMA 6–25 per cent loading RRMA 7–50 per cent loading.
Procedural GP Payment	Tier 1— A GP in a rural or remote practice provides at least one procedural service, which meets the definition of a procedural service, in the six month reference period.	$1000 per six month reference period.
	Tier 2— A GP in a rural or remote practice meets the Tier 1 requirement and provides after hours procedural services on a regular or rostered basis (15 hours per week on average) throughout the six month reference period.	$2000 per six month reference period.
	Tier 3— A GP in a rural or remote practice meets the Tier 2 requirements and provides 25 or more eligible surgical and/or anaesthetic and/or obstetric services in the six month reference period.	$5000 per six month reference period.
	Tier 4— A GP in a rural or remote practice meets the Tier 2 requirements and delivers 10 or more babies in the six month reference period or meets the obstetric needs of the community.	$8500 per six month reference period.
Domestic Violence Incentive	Payment to PIP practices located in a RRMA 3–7 location that employs an appropriately trained and qualified practice nurse or Aboriginal health worker that is available to act as a referral point for women experiencing domestic violence for the minimum number of sessions per week.	$1 per SWPE capped at $4000 per practice, per annum.

† The average Full Time Equivalent GP (FTE GP) sees 1,000 Standardised Whole Patient Equivalents (SWPE) annually.
††Whole Patient Equivalent (WPE)

Medicare Australia will automatically calculate a practice’s entitlement for payments based on information provided in the application form and subsequent amendments. In some cases (such as teaching of medical students) practices need to supply additional information as it becomes available.

General Practice Immunisation Incentive (GPII)

The GPII provides financial incentives to general practices that monitor, promote and provide immunisation services to children under the age of seven.

The overall aim of the GPII is to encourage at least 90 per cent of practices to achieve 90 per cent proportions of full immunisation.

The GPII is made up of an outcomes payment administered by Medicare Australia and paid to practices that achieve 90 per cent or greater proportions of full immunisation, providing the practice attains 10 Whole Patient Equivalents (WPE).

Note: a practice does not have to participate in the PIP to receive these payments. More information is available from the General Practice Immunisation Incentive (GPII) webpage.

The payment formula in detail

Payments are calculated using Medicare and Department of Veterans' Affairs (DVA) data that are linked to the provider numbers specified on the practice's application form, and any subsequent amendments provided to Medicare Australia. If for example, you do not provide Medicare Australia with details of new providers, you will not receive payment. More information is provided in the Practice Changes section.

Data will be excluded if any of the GPs in a practice refuse consent to the use of their data for the purposes of calculating the practice's payment when completing 'Part F' or 'Part G' of the application. If GPs would like their data to be included at a later stage, they must advise Medicare Australia in writing. *It will then be included in the next quarter's payment calculation., however, no retrospective payments will be made.

Practice size

Most components of the PIP payments are proportional to practice size. Practice size is calculated using the SWPE, a measure of patient load at the practice that is independent of the number of services provided to patients.

The SWPE value for a practice is the sum of the fractions of care it provides to each of its patients, weighted for the age and sex of each patient. This value is calculated in three steps.

The WPE value of each individual patient attending the practice is calculated. This is the fraction of the care provided by the practice for each patient.

This fraction is based on the schedule fee value of non-referred consultations received by the patient at the practice within the 12 month reference period used to calculate the payment. The value of these consultations is then divided by the total schedule fee value of all non-referred consultations received by the patient within the reference period. Using the schedule fee value in the calculation, rather than the number of consultations allows greater weight to be given to longer consultations and out of surgery visits.

This fraction is multiplied by a weighting factor that varies according to the patient's age and sex. This adjustment recognises that, on average, people require different amounts of general practice care at different stages in their life, and that this amount of care also differs between males and females.

The following table gives the values used in weighting WPEs for age and sex for May 2010.

(Weightings are subject to quarterly adjustments)

Weighting factors for age and sex of patients
Sex	Patient age (years)
	<1	1 - 4	5 - 14	15 - 24	25 - 44	45 - 64	65 - 74	75 +
Female	0.5243	0.8577	0.5206	0.809	0.9963	1.1049	1.5393	2.4382
Male	0.5618	0.9288	0.5318	0.5281	0.6629	0.8951	1.3783	2.2772

The values in the table above are calculated from consultations received by age and sex group, using Medicare and DVA data and will updated as required.

These weighted fractions of patient care are then added together, giving the SWPE value for the practice.

The calculation relates to a 12 month reference period that ends four months before the start of the payment quarter. For example, payments received in the May quarter of 2010 were calculated using practice size data from the year ending 31 December 2009.

The four month gap between the end of the reference period and the payment calculation allows time for consultations conducted within the reference period to be registered in the Medicare and DVA systems.

The practice size calculation only uses general practitioner and other non-referred consultation items (including antenatal and Enhanced Primary Care (EPC) items). It does not include other MBS items, such as procedures.

Case study:

The Sampletown Medical Clinic is located in Dubbo, a large rural centre, attracting a 15 per cent Rurality loading. The practice is operated by five doctors (three of whom are full time). Between them, they perform 26,000 consultations (an amount equating to four full time equivalent GPs), and have a stable patient load of 4000 SWPEs (practice size).

The Practice is open from 9.00 am to 8.00 pm each weekday and 9.00 am to 12.00 pm on Saturday and Sunday. At other times, an accredited deputising service has been engaged to cover these periods. Comparing this operating profile against the definition of "after hours" for the purposes of the PIP After-Hours Incentive, (being hours outside 8.00 am to 6.00 pm weekdays and 8.00 am to 12.00 noon on Saturday) and all day on Sundays and public holidays we calculate a total of 13 hours (e.g. 10 hours for Monday to Friday plus three hours for Sunday).

Four of the GPs have undertaken quality use of medicine activities recognised by the PIP, however the fifth GP has decided not to undertake these activities. The GPs have done four clinical audits and nine case studies for a total of 13 activities. This outcome has resulted in meeting the minimum requirement for the Quality Prescribing Incentive (QPI) of an average of three activities per FTE GP, one being a clinical-audit.

The practice is eligible for the eHealth Incentive.

The table below summaries the practice outcomes for the case study.

Incentives	Payment method	Payment received by
Quality stream
Quality Prescribing (paid annually in May)	$1 per SWPE	$4000
Diabetes (one payment at sign on only)	$1 per SWPE	$0
Diabetes Outcomes	$20 per HbA1c SWPE	$0
Cervical Screening (one payment at sign on only)	$0.25 per SWPE	$0
Cervical Screening Outcomes	$3 per WPE of females aged 20 to 69 years annually	$0
Asthma (one payment only)	$0.25 per SWPE	$0
Indigenous Health (one payment at sign on only)	$1000 per sign on payment	$0
Indigenous Health Patient Registration (one payment per patient per year)	$250 per eligible patient per year	$0
Indigenous Health Tier 1	$100 per eligible patient per year	$0
Indigenous Health Tier 2	$150 per eligible patient per year	$0
Capacity Stream
eHealth (capped at $12500 per quarter)	$6.50 per SWPE annually	$12500
Practice Nurses / Allied Health Workers* (capped at $40000 or $35000 depending on practice rural, remote and metropolitan area)	$8 per SWPE annually based on 2 sessions	$0
After Hours Tier 1 Makes sure after-hours care for patients is provided	$2 per SWPE annually	$2000
After Hours Tier 2	$2 per SWPE annually	$0
After Hours Tier 3 Provide all after hours care in the practice	$2 per SWPE annually	$0
Teaching	$100 per session	$0
Rural support stream**
Rural Loading	15 per cent loading (of payments for this quarter)	$2775
Procedural GP	Tier 1: $1000 per six month reference period Tier 2: $2000 per six month reference period Tier 3: $5000 per six month reference period Tier 4: $8500 per six month reference period	$0
Domestic Violence (capped at $1000 per quarter)	$1 per SWPE annually	$0
Total		$21275

* Available to all practices in rural, remote and metropolitan area 3-7 locations and those practices in rural, remote and metropolitan area 1-2 locations that are in an urban area of workforce shortage.

** For practices in rural, remote and metropolitan areas 3-7 only.

Total combined quarterly PIP payment including loading for the case study is $21275.

Last updated: 25 June, 2010