[2020 entry and beyond] Guide to Bonded Medical Places

[B64]

I beg to differ. I have seen the personal cost it has had on the trainees and the fellows that emerge from this prolonged journey. Many have become cynical and frustrated. The difficulty getting into training has held many back working as junior doctors 'not accreditated' to be anything more than glorified clerks trying to navigate the bureaucratic obstacles in their daily grind. The cost is both financial and personal particularly for females. At the end of this process, you have fellows who feel entitled to make as much money as possible to pay off all the years of accumulated debts. Any feelings of being indebted to the public for their good fortune to get into medical school is long gone by this point. Time being money, they can't afford to spend too much of it or of themselves on any one patient. Most of medicine is learnt apprenticeship style post graduation. More theoretical knowledge does not help when it is not applied. I do not see that doctors from the UK, US or other systems produce any doctors that are inferior. Anyway what is the point of all these highly trained Australian doctors who only want to work in the cities and not for the benefit of the rural poor where the majority of the doctors are imported.

 

[drchp]

Hi everyone!

My friend who received a bonded medical place found this online -

Section 124ZH requires the repayment of education costs (plus interest) and section 124ZJ provides that Medicare benefits are not payable for services rendered by, or on behalf of, the medical practitioner for six years from the day of the breach (the Medicare benefits ban).

We thought that a bonded medical place can be "cancelled" with a payment to gov (the school fees + interest), but found this Section 124ZH. However, many gov sites don't state that this Medicare ban is part of the consequences of breaking a bonded medical return of service.

Does anyone know if this section is still standing??

 

[A1]

Section 124ZH requires the repayment of education costs (plus interest) and section 124ZJ provides that Medicare benefits are not payable for services rendered by, or on behalf of, the medical practitioner for six years from the day of the breach (the Medicare benefits ban).

My lawyer cousin has kindly provided the interpretation below:

- Whether you Breach the BMP (sect 124ZH) leading to sect 124ZJ
- Or you Withdraw from BMP (sect 124ZP) leading to sect 124ZQ

the 6-year Medicare ban applies to Bonded participants of the 124ZE(3) category i.e. those under the MRBS scholarship scheme who now have opted in to the present BMP scheme.

Refs:

https://www5.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s124zh.html

https://www5.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s124zj.html

https://classic.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s124zp.html

https://classic.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s124zq.html

https://classic.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s124ze.html

 

[B64]

My lawyer cousin has kindly provided the interpretation below:

- Whether you Breach the BMP (sect 124ZH) leading to sect 124ZJ
- Or you Withdraw from BMP (sect 124ZP) leading to sect 124ZQ

the 6-year Medicare ban applies to Bonded participants of the 124ZE(3) category i.e. those under the MRBS scholarship scheme who now have opted in to the present BMP scheme.

Refs:

https://www5.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s124zh.html

https://www5.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s124zj.html

https://classic.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s124zp.html

https://classic.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s124zq.html

https://classic.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s124ze.html

This section only applies to former Rural Bonded Scholarship Participants see s 124ZE (3)
Former Medical Rural Bonded Scholarship participants

(3) If:

(a) a person was a party to a contract with the Commonwealth (as represented by the Department) for a Medical Rural Bonded Scholarship, including a contract as varied; and

(b) the person advises the Department that the person wishes to opt in to the Bonded Medical Program under section 124ZU; and

(c) the Secretary agrees, in writing, to the person's participation in the Bonded Medical Program;

the person is a bonded participant in the Bonded Medical Program on and after the day after the day the Secretary agrees, in writing, to the person's participation in the Program until an event mentioned in subsection (4) applies in relation to the person.

In the past, participants had to sign a contract or deed or agreement. It has now been converted to a statutory scheme to which you opt into. This section has been challenged in court (albeit unsuccessfully in Edwards v Commonwealth, Dept of Health and Aging) and has been criticised as amounting to 'civil conscription' of doctors and unconstitutional. It is a fact that GPs and many in private practice would not be able to find a job without access to Medicare and certainly not in a city so it results in bond breakers only able to work in rural areas as even public hospitals make use of their doctors provider numbers to claim rebates for outpatient care.
As this section only applies to the MRBS who have opted into the BMP, it does not apply to the present day BMP entrants. Please feel free to run this by your cousin again.

 

[Crow]

As this section only applies to the MRBS who have opted into the BMP, it does not apply to the present day BMP entrants. Please feel free to run this by your cousin again.

the 6-year Medicare ban applies to Bonded participants of the 124ZE(3) category i.e. those under the MRBS scholarship scheme who now have opted in to the present BMP scheme.

Did A1 not state the same thing as you?

 

[B64]

Hello, if one finishes a bonded medical place away from their home state, are they able to complete their rural placements back in their homestate?

I believe you can do it anywhere is Australia.

 

[B64]

Thank you all so much for your input!

One of the reasons why I wanted to go into med was to make a difference in the world of neonatology and families with neonates in the NICU, but I can do this in so many specialties (e.g. paeds, cardiology, public health). Seeing as I haven't even been exposed to many specialties, I think I might accept a BMP and see where life takes me, should I receive one. Depends on what I get! Maybe I'll get a CSP who knows. Or maybe even ERC...

But really, is the bonded scheme actually making a difference in rural health outcomes? There aren't too many concrete incentives - one major one being you still have to pay off the CSP amount of HECS debt.

Neonatology is a subspeciality of Paediatrics. I am sure that you could work that is the rural area. I am sure you need not work in the capacity that you qualified in after your Fellowship. Any work over 20 h a week part time is sufficient so even fly in an fly out, locum work also counts 2 weeks or more.

If you have ever lived in a rural area, you will know the crying need for doctors. The tyranny of distance has made it impossible for sick elderly people to travel to the city (consider a 10 h round trip on a train at the age of 70 or 80 while feeling sick, nauseous or just having to pee every half an hour) to see a specialist for 15 mins at a major hospital. Many just allow their conditions to worsen to the point it becomes more difficult and more expensive to treat.

Many folks both city and rural find it mystifying that the health services are so supportive of foreign medical graduates. This is because the majority of the staff in rural hospitals are from overseas. Each of these staff take a year or more and a lot of money to recruit. In the case of a consultant at least $50 K goes to the recruitment agency for someone who stays at least a year. Not to mention the risk of getting another Dr Patel and others who have wreck havoc in various parts of the country. There has even been a rurmour that a remote health service paid a million dollars to a surgeon to work there for one year. The people want local graduates and there is no shortage of students wanting to study medicine. Despite the bond breaking, the scheme has resulted in more junior doctors in the rural areas. Most if not all will work off at least part of the bond and more will do so in the years to come. Where before one could count on the fingers of one hand, the number of senior Australian doctors in a rural town, there are definitely more of them now. It generally takes up to 10 years post graduate to fully qualify, longer even in very competitive areas so it is not possible to gauge the exact percentage that wil do most of if not all their RoS.

There is no need to take trips to Africa to help the 'poor and sick' which underlie many a student's motivation to study medicine, they are right in your own backyard and you are actually under an obligation to help them.

 

[user_5429942023]

To confirm, if a bonded student decides to withdraw by paying off their remaining RoSO, they'll "just" have to pay the interest-fee sum of the Commonwealth contribution to their degree right?

I was reading the 2019 BMP reform act which mentions an additional "administrative fee" of $10,000, and also the 2020 BMP rule which mentions 15% interest from the "day that payment is due". Together these would probably quintuple my repayment amount if I ever decide to go that route.

Health Insurance Amendment (Bonded Medical Programs Reform) Act 2019:

(1) A person is liable for an administrative penalty if:
(a) the person is a bonded participant; and (b) the person breaches a condition mentioned in paragraph 124ZG(1)(d) or (e).

(2) The amount of the administrative penalty is $10,000.

Health Insurance (Bonded Medical Program) Rule 2020:

18 Interest payable on overdue payments

(1) This section is made for the purposes of paragraph 124ZT(3)(f) and
subsection 124ZQ(1) of the Act and applies if:

(a) an amount (the principal sum) is recoverable as a debt due to the
Commonwealth from a person or estate under sections 124ZH or 124ZQ of
the Act; and
....
(4) Interest under subsection (2):
(a) is payable at a rate of 15% per annum; and
(b) is calculated on a daily basis; and
(c) is not compounded; and
(d) is recoverable as a debt due to the Commonwealth from the person or
estate.

My interpretation of these is that they only apply if you breach a condition (for example not completing the RoSO within 18 years), and not if you voluntarily withdraw from the program, both of which I am not planning to do. But it would be great to have clarification from a current BMP student about how this payment system works before I sign the contract. Thank you very much in advance.

 

[dotwingz]

interest-fee sum of the Commonwealth contribution to their degree right?

My thought is that it was indexed, but there is nothing in the legislation which suggests that.

You definetely don't pay an administrative penalty on any interest.

That legislation you cite is for overdue payments (as in, if I withdraw from the program, or am excluded in any other way, and then don't pay them, then they can use debt recovery services and charge me interest in doing so). The only time that interest/index is referenced in the student guide swell as legislation is when talking about this 'payment recovery' situation.

https://www.health.gov.au/sites/default/files/documents/2021/12/the-bonded-medical-program-prospective-student-information-booklet.pdf

I think you may be right it may be interest free. Which means that if you wait it out you reduce your payment significantly.

 

[user_5429942023]

Okay got it, thanks so much for the info. I was worried that interest would be added from the day that we left medical school but I'm glad that doesn't seem to be the case.

On the other hand, doesn't it seem a little too good to be true? The government would basically lose ~35% of the value of the CSP "loan" if we were able to pay without interest. I mean, even HECS loans have indexation. I think I will try to find some method of lodging an inquiry with them to get an official answer as I really don't want to get caught unawares with my repayment obligations.

Once again, thank you very much for your reply, I greatly appreciate it.

 

[A1]

On the other hand, doesn't it seem a little too good to be true? The government would basically lose ~35% of the value of the CSP "loan" if we were able to pay without interest. I mean, even HECS loans have indexation.

Ref > [2020 entry and beyond] Guide to Bonded Medical Places

In the 2019 doc Health Dept mentioned "repay the amounts the Commonwealth has paid the University for Your Bonded Medical Place plus Interest". I don't know whether the 2020 BMP Scheme has purposely removed this.

(Btw you might view it as the gov loses ~35% of the value. Otoh the gov might view it as good you repay your CSP subsidy the gov will use the money to fund a new med student).

 

[dotwingz]

Here is the Health Insurance Act 1973, those on the new program are defined under subsections 124ZE(1)

Spoiler: 124ZE(1)

Note: The current program is called the 'Bonded Medical Program', while the old one is called the 'Bonded Medical Places Scheme'

Later on in the act it defines the breach conditions for those classified under 124ZE(1) -- which includes interest

Spoiler: 124ZH(2)

However Interested is Calculated under the BMP rules section 18,
"Interest payable from the day after the due date of the invoice" -- as in not payable until after you don't complete your RoS in time.

Spoiler: BMP rules - 18

The BMP rules which references it as for purpose 124ZT(3)(f)

Spoiler: 124ZT3f

Which loops you back to 124ZG(1)(a) or (c) -- which if you look down is applicable to not completing RoS obligations (specifically part c)

Spoiler: 124ZG

BUT, it also says under the BMP rules that interest is only payable from the day after the invoice is received, in a scenario where the commonwealth have served and interest claiming the principal amount against a person

IN SUMMARY: As it stands, the loop around of legislation allows the government to charge interest, but under every possible place where they could define interest, they haven't, and under the BMP rules of 2020 currently they have only defined interest as payable after you receive an invoice for the BMP repayments after not completing your RoS at a rate of 15% p.a. charged daily. I would get a lawyer to read over it because the BMP office can say one thing but realistically the law and the terms of the contract is the only thing that matters.

 

[user_5429942023]

I've been looking through this as well for the past few days and identified the same "loop" that you did. However, one small thing I'd like to note is that the Health Insurance Act 1973 Section 124ZQ.1.a.ii actually mentions some interest payable in the context of voluntary withdrawal as well, instead of only during a breach of the contract. But, you are totally correct that neither pieces of legislation actually say what the interest is if you've abided by the rules of the contract.

This is super confusing so I've sent an email to the BMP department and if they don't reply I'll consult a legal practitioner afterwards. Either way, I'll try to post the authoritative answer here once I get it. Thanks so much for your reply and have a great day.

 

[dotwingz]

Sorry could you clarify what you mean. Do you mean where it says in accordance with the bonded medical program rules? Because then the same applies that the only reference of interest payable in the BMP rules is the 15%pa for overdue payments.

But yes get back to us id be keen to know.

 

[user_5429942023]

I just got a reply, which explicitly states "Inflation is not taken into account in the calculation of the repayment sum". So it does seem like the repayment amount gets significantly lower if one just waits out the 18-year post-graduation time limit.

 

[A1]

it does seem like the repayment amount gets significantly lower if one just waits out the 18-year post-graduation time limit.

Take care to allow the time lapse for the RoS 3 years.

Say you have not served any RoS, you'd be in breach by the 16th year since the remaining time to 18th year won't be enough to serve the 3 years. So, if you are to withdraw rather than be in breach you should give notice in the 15th year.

 

[ucatboy]

I just got a reply, which explicitly states "Inflation is not taken into account in the calculation of the repayment sum". So it does seem like the repayment amount gets significantly lower if one just waits out the 18-year post-graduation time limit.

A decade and a half of hyperinflation and you'll be set

 

[rv123]

Take care to allow the time lapse for the RoS 3 years.

Say you have not served any RoS, you'd be in breach by the 16th year since the remaining time to 18th year won't be enough to serve the 3 years. So, if you are to withdraw rather than be in breach you should give notice in the 15th year.

I don't think they'll count it as a breach until the 18 years are up.

Correct me if I'm wrong, but the penalty for a breach and a withdrawal is the same right? If so, you're better off breaching after 18 years, rather than withdrawing in the 15th year because you'll have more time to save and the repayment amount will be "worth less" since it isn't indexed to inflation.

 

[A1]

I don't think they'll count it as a breach until the 18 years are up.

I remember reading somewhere you are considered in breach from when your remaining time is short of your RoS due, because even if you serve the remaining time it's still a breach of 1-2 months (although the repayment would be pro-rata down to 1-2 months).

Correct me if I'm wrong, but the penalty for a breach and a withdrawal is the same right?

Sure, if you don't mind the stigma of being in breach rather than you yourself "legally" withdrawing.

 

[sean_]

Hi guys, is it 'easier' to get into medicine if I choose BMP?