Equipment, Medicare and diagnostic imaging

About capital sensitivity and guaranteeing quality diagnostic imaging services.

Page last updated: 07 June 2022

Background

Diagnostic imaging equipment is allocated life ages for Medicare benefits purposes. This is known as ‘capital sensitivity’ which is intended to encourage practices to regularly upgrade and replace, as appropriate, their equipment to help ensure patients have access to high quality diagnostic imaging services. Positron Emission Tomography (PET) equipment is excluded from the capital sensitivity arrangements.

There is one available exemption to the capital sensitivity arrangements. Practices in any location may apply for a three-month exemption where they demonstrate they have been unable to replace or upgrade the equipment before it has reached its effective life age or maximum extended life age due to circumstances beyond the control of the practice. The application must be submitted before the equipment reaches its relevant life age – equipment life ages and how to apply are below.

Only diagnostic imaging services performed on equipment within its effective life age or maximum extended life age will attract a Medicare rebate, irrespective of where the equipment is located.

Age of equipment

The effective life ages for new equipment and the maximum extended life ages for upgraded equipment are shown in the table below.

Modality Effective
Life Age
Maximum extended life
(including extension for upgrades)
Ultrasound 10 years 15 years
Computed Tomography (CT) 10 years 15 years
Other Diagnostic Radiology (X-ray) 15 years 20 years
Orthopantomogram (OPG) 15 years 20 years
Mammography 10 years 15 years
Fluoroscopy 15 years 20 years
Nuclear Medicine (excluding PET) 10 years 15 years
Magnetic Resonance Imaging (MRI) 10 years 20 years
Angiography 10 years 15 years

If previously used equipment was installed, the age is calculated from the date the equipment was first installed.

If previously used equipment was installed, the age is calculated from the date the:

  • equipment was first used in Australia (for equipment previously used in Australia); or
  • equipment's oldest component was manufactured (for equipment previously used outside Australia).

An equipment upgrade is an additional reasonable investment made by the service provider to improve the overall performance of the imaging system so the services provided are equivalent to new equipment supplied in Australia at the time of the upgrade.

Practices claiming the maximum extended life age must keep documentary evidence of the additional investment(s) made for potential compliance purposes. In the same way that records are kept for tax purposes the onus on maintaining and storing documentary evidence of upgrades and new equipment rests with the individual service provider.

Examples of documentation to substantiate upgrades and new equipment include:

  • suppliers’ technical brochures or quotes;
  • service installation reports;
  • purchase orders; or
  • invoices confirming that the relevant upgrade(s) have been completed.

Practices are required to keep their Location Specific Practice Number (LSPN) record up to date by informing Services Australia of any equipment changes within 28 days of the change occurring - see the LSPN section below.

How to apply for an exemption

Practices in any location can apply in writing to the Department of Health seeking an exemption from capital sensitivity requirements where:

  • the equipment has not yet reached its effective life age or maximum extended life age; and
  • due to circumstances beyond the control of the practice, the practice will be unable to replace or upgrade the equipment before it has reached its effective life age or maximum extended life age.

Circumstances where the Department may consider an exemption include unforeseen delays to building works or unforeseen delays in equipment deliveries.

Practices may apply for an exemption by filling out the application form below.

Unforeseen equipment replacement upgrade delay application form (PDF 201 KB)
Unforeseen equipment replacement upgrade delay application form (Word 88 KB)

The Department of Health will notify practices of its receipt of a valid application for an exemption. The Department will then make a decision within 28 days and during this period the practice may continue to claim Medicare benefits.

Appeals process where a decision is taken not to grant an exemption

Unsuccessful applicants for an exemption may apply for a reconsideration of the decision. The request for reconsideration must:

  • be submitted within 28 days of being notified of the decision to not grant an exemption,
  • be made in writing, and
  • set out the grounds for appealing the decision.

Applications for reconsideration should be sent to cap.sens@health.gov.au.

Practices will continue to have access to Medicare benefits from the date they first apply for the exemption.

Where the original decision to not grant the exemption is upheld, practices can apply to the Administrative Appeals Tribunal (AAT) for review. The application must be submitted within 28 days of the reconsideration decision. Medicare benefits will continue to be paid until the AAT makes its decision.

Keeping the Location Specific Practice Number records up to date

Practices are required to keep Services Australia LSPN records up to date, including when equipment is upgraded, in order to determine the life age of each piece of equipment. To update LSPN information, practices may access the relevant forms and contact details at the Services Australia website.

Contact Information

For general enquiries about capital sensitivity, email the Department of Health at cap.sens@health.gov.au.

For assistance with LSPN details, go to Services Australia’s Health professionals contact information page and scroll down the contact list to “Diagnostic imaging and radiation oncology practices - LSPN“.