Evaluation of the COAG Section 19(2) Exemptions Initiative – Improving Access to Primary Care in Rural and Remote Areas

Evaluation of the COAG Section 19(2) Exemptions Initiative – Improving Access to Primary Care in Rural and Remote Areas, Australian Government Department of Health and Aged Care

In 2006–2007 the Council of Australian Governments (COAG) introduced the Section 19(2) Exemptions Initiative – Improving Access to Primary Care in Rural and Remote Areas Initiative (the Section 19(2) Initiative), which enabled non-admitted and non-referred professional services at specified locations to be claimed under Medicare when also funded through a State or Territory.

The Australian Government Department of Health and Aged Care engaged HMA in association with KBC Australia to undertake a robust review of the Section 19(2) Initiative to determine how well the Initiative achieved its objectives. The evaluation assessed program design and administration, appropriateness, effectiveness and efficiency, and was undertaken from December 2020 to August 2021.

Program design and administration

HMA found that there was strong support for the single eligibility criterion that public health services must be based in areas 5 to 7 of the Modified Monash Model geographical classification. There was also support for: review mechanisms for sites that are no longer eligible under this criterion; clearer program objectives; and greater transparency in program operations, including publication of MOUs and formalised and regular engagement of site service providers with local stakeholders.


HMA observed that funding contributions to different sites resulting from the Initiative can be internally inequitable – larger sites with more salaried doctors have a greater ability to undertake MBS billing. There was limited capacity to address this program characteristic – the foundation of the Initiative is primarily a top-up funding stream that enables access to MBS billing. Communities and health service providers need to access other funding sources to address local healthcare needs in a more targeted way, including programs administered or commissioned by Primary Health Networks (PHNs), Rural Workforce Agencies (RWAs), the National Disability Insurance Scheme (NDIS), aged care funding, and locally based services delivered by local providers such as local government and local health networks (LHNs).


HMA found that the Initiative influenced access to urgent medical care and after-hours services at a large proportion of participating sites. The Initiative also contributed to increased availability of primary care services in many locations. Much of the MBS revenue reinvestment was allocated to medical officer remuneration to support and/or provide acute hospital emergency services.

Although the revenues provided under the Initiative are reasonably significant, the evaluation observed that the program is not a guarantee of an individual health service’s long-term viability. Historical service delivery arrangements, industrial arrangements, gradual population decline in rural areas, and the sudden resignation of a key manager or clinician can all interact to threaten the sustainability of health services and compromise the models of clinical care available to some small communities.

Based on the evaluation findings, HMA presented several options for program refinement including:

  • Clearer principles and objectives to guide the development and implementation of the Initiative in jurisdictions at sites.
  • Revised program governance arrangements that expand formalised and required engagement.
  • Establishing mechanisms to maximise benefit to communities through collaborative planning and co-investment by exploring the relationship with other Commonwealth and jurisdiction program investments in the town and its surrounding community.
  • Administrative refinement to program processes (including formalised jurisdiction-level reporting on reinvestment and a mid-cycle review process for all plans).

The findings of the evaluation will inform development of the next MOUs with jurisdictions.


Download the report here.

Tags: Rural and Remote Health, General Practice, Evaluation, Funding arrangements