Medicare Billing Reconciliation for GP Clinics

Two Payment Streams, One Reconciliation Headache

A GP clinic typically has two distinct income streams running side by side — bulk-billed Medicare payments arriving as batched daily settlements, and privately billed patient payments arriving via EFTPOS or HICAPS. Without a deliberate system to track both against actual consultations, clinics lose visibility on what's been billed versus what's actually landed in the bank.

Setting Up Separate Tracking

The fix is structural: separate income accounts in Xero for bulk-billed Medicare income and privately billed income, with a dedicated clearing account for Medicare batch settlements. Each day's Medicare batch gets matched against the billing report from your practice management software, so the clearing account nets to zero once reconciled.

GST Treatment of Medicare Income

Medicare-rebated medical services are GST-free. This needs correct coding in Xero from the outset — applying GST to Medicare income by mistake overstates what the clinic owes on its BAS, while missing the GST-free coding on taxable services (like some cosmetic procedures) understates it.

Rejected and Pending Claims

Not every Medicare claim is accepted on first submission. A proper reconciliation system flags rejected or pending claims so they can be resubmitted, rather than disappearing from view because the batch total looked roughly right.

If Reconciliation Has Already Fallen Behind

This is a common clean-up project for GP clinics — working back through batched settlements against billing records, identifying anything unreconciled or rejected, and setting up a clearing account system so it doesn't build up again.