Medicare’s $7.9 billion shake-up: what practice owners need to know before 1 November 2025

Published: 24 October 2025
Updated: 27 November 2025

Medicare reform special – A Veri Health series covering the $7.9B transformation reshaping Australian primary care.

From November 2025, a $7.9 billion Medicare overhaul will reshape how Australian clinics bill, earn and operate. In this Veri Health feature, we break down what practice owners need to know, and how GPs can prepare financially.

For further context across the reform landscape, you may also want to read:

• Medicare’s $7.9B shake-up: what GPs need to know about tax and cashflow
• Bulk-bill benefit reforms delayed: what the 2026 pushback means for practices

The funding shake-up and what it means for clinics

General practice is about to undergo the biggest funding reset in decades.

The Australian Government’s $7.9 billion Medicare reform, taking effect on 1 November 2025, will transform how clinics bill, charge and compete for patients.

Designed to strengthen access to bulk billing, the reform introduces expanded Bulk Billing Incentives (BBIs) for every Medicare-eligible patient, and a new Bulk Billing Practice Incentive Program (BBPIP) that rewards clinics that commit to bulk bill everyone.

In plain terms, it is a double-up of rewards for practices that commit to bulk billing everyone, with the goal to make “no gap” care financially realistic again.

Together, these reforms aim to make bulk billing more appealing, and more achievable, for practices.

The catch: clinics need to decide if full bulk billing aligns with their business model or if it could stretch resources and shift their identity in ways they are not ready for.

Related Medicare update: The Federal Government has now delayed the new Assignment of Benefit (AOB) requirements — including the transition to digital consent – until July 2026. This change affects how claims will be authorised and how cashflow will flow through practices next year. For a detailed breakdown, read Bulk-bill benefit reforms delayed: what the 2026 pushback means for practices.

How the new incentive works

If a practice signs up for the BBPIP, it has to bulk bill every eligible service for every Medicare-eligible patient. In return, the government will sweeten the pot with a quarterly 12.5% bonus on total MBS payments, split evenly between the GP and the practice. Think of it as a quarterly thank-you bonus from Medicare, only this one comes in cash, not compliments.

This payment sits on top of regular Medicare benefits and existing BBI payments, so for some clinics, it could be a healthy boost. In fact, around 4,800 practices are tipped to earn more through Medicare than they currently do from gap fees. 

For others, though, the maths might not add up quite as neatly. RACGP President Dr Michael Wright said the bulk-billing incentive program may not be financially sustainable for every GP or practice.

“The college will continue to support all GPs, regardless of whether they take up the current incentives, and continue to fight for increased Medicare rebates, particularly for longer consultations,” Dr Wright said.  

Prime Minister, Anthony Albanese said, “It will make Medicare even stronger, help with cost of living pressures and ensure every Australian receives the best health care that they deserve.”

The fine print: risks and realities

On paper, bulk billing everyone sounds like a no-brainer. More patients, more business, right?

In reality, it is a balancing act. There are staff wages to cover, waiting rooms to manage, and the question of whether that extra 12.5% will truly replace lost gap fees.

Then there’s capacity. More patients might look good on paper, but can your team handle the extra load without burning out or compromising care?

And finally, the brand question. Does going all in on bulk billing align with who you are as a clinic? Some practices thrive on volume; others build their reputation on time, care, and premium service.

The key is knowing which camp you belong to and whether full bulk billing supports your long-term goals or simply stretches your resources thinner.

Considering the BBPIP? Here’s your next step

Before you opt in, take a strategic approach

Practice leaders should: 

• Use the Bulk Billing Incentives Calculator to model financial impact.
• Confirm MyMedicare registration and NGPA accreditation.
• Communicate changes transparently to patients.
• Review workflows and staffing capacity to manage potential increases in patient volume.
• Monitor compliance updates on signage, billing and directory listings.

The choice is in your hands

Bulk billing might be making a comeback, but that doesn’t mean it’s right for every clinic. The best model is one that balances patient access with business sustainability. Run the numbers, test your capacity, and choose the path that keeps both your patients and your practice in good health.

Further reading in Veri Health’s Medicare Shake-Up series

• Medicare’s $7.9B shake-up: what GPs need to know about tax and cashflow
• Bulk-bill benefit reforms delayed: what the 2026 pushback means for practices