Plain-English guide: when and how to use the Rule 3 Exemption so chronically or seriously ill patients can get multiple Medicare-rebated pathology tests without coning. Pick a scenario below.
The problem: Medicare's Multiple Services Rule (Rule 3) limits the rebate when multiple pathology services are claimed for the same patient — only the most expensive item gets the full benefit, others get coned.
The solution: The Rule 3 Exemption lets specific tests be repeated up to 6 times in 6 months for chronically/seriously ill patients on listed therapies (warfarin INR, lithium, MTX, clozapine, dialysis, vitamin D, etc.) — with full rebate each time.
How to use it: Endorse the pathology request form with the words "Rule 3 Exemption". The request is then valid for 6 months OR 6 episodes (whichever comes first). INR is the exception — unlimited repeats within 6 months.
| Test / Item | For patients on… | Common interval |
|---|---|---|
| INR (prothrombin time) | Anticoagulant therapy (warfarin) | Variable — unlimited within 6 mo |
| Lithium quantitative | Lithium therapy | 3–6 monthly (stable) |
| FBC (item 65070) | Chemotherapy or immunosuppressant therapy | Per treatment cycle |
| FBC (item 65070) | Clozapine, ticlopidine, methotrexate, gold, sulfasalazine, penicillamine | Initially weekly–monthly, then 3-monthly |
| LFTs (items 66500–66512) | Methotrexate or leflunomide therapy | 2–3 monthly when stable |
| UEC (urea, creatinine, electrolytes) | Cisplatin or ciclosporin therapy, OR chronic renal failure on dialysis | Per protocol |
| Calcium & albumin | Vitamin D, metabolites or analogues | 3–6 monthly |
| Troponin (item 65109) | Inpatients — serial cardiac markers | Up to 5× in 24h (inpatient only) |
| D-dimer (item 65110) | Inpatients | Up to 2× in 24h (inpatient only) |
Three options that all work:
Best practice: also state the number of tests and the interval (e.g. "INR weekly × 6 months — Rule 3 Exemption"). The form is then valid for 6 months OR 6 episodes, whichever comes first.
If the lab questions the request, the endorsement should be visible on the form itself, not inferred from the diagnosis.
Coning happens when multiple tests are ordered in a single episode and Rule 3 (Multiple Services Rule) applies. Without an exemption endorsement, only the highest-fee item gets the full benefit; everything else is rebated at a reduced rate.
Common pitfalls:
No. Rule 3 and S4B(3) exemptions cannot be used to override time-based restrictions inside an individual item descriptor — e.g. items that are payable only a certain number of times per 12 months.
Examples of items with their own per-year caps (Rule 3 won't override these):
If a test is outside its own item limit, Rule 3 doesn't help — and the lab will bill the patient privately for the additional test if clinically requested.
Use an S4B(3) endorsement instead. This is the general exemption under section 4B(3) of the Health Insurance Act for patients who don't fit a listed scenario but still need repeated testing.
Write "S4B(3)" on the form along with the clinical details. The claim is passed to the Minister's delegate, who considers:
S4B(3) assessment is slower than Rule 3 — use Rule 3 wherever applicable.
No. One properly endorsed request is valid for 6 months OR 6 episodes, whichever comes first. The patient takes the same form back to the lab on each visit.
Practical workflow: at the patient's next routine visit, write the Rule 3 request to cover the next 6 months of expected testing. Reminder: once 6 episodes or 6 months are reached, write a fresh request.
INR exception: for anticoagulated patients, INR has no episode limit within the 6-month period.
No — the Rule 3 Exemption is purely about how the lab claims Medicare; it doesn't affect the patient's experience. Most major pathology providers bulk-bill Medicare-rebated tests for eligible patients, so the patient pays nothing.
If the test is ordered outside what Rule 3 allows (e.g. clinically appropriate but outside the legal limit), the lab may bill the patient privately. That's a clinical decision, not a Rule 3 issue.