The government has confirmed that it will overhaul the aging health and aged care payments system.
The current system is three decades old.
A statement from health minister Sussan Ley and human services minister Alan Tudge said the government "has commenced today to identify solutions for this new payments system, which will be based on existing commercial technology".
A consultation on the design of the new system is expected to be finalised in January next year.
The Department of Health will lead the project. Health will be support by the Department of Human Services and Veterans' Affairs and the Digital Transformation Office.
Prime Minister Malcolm Turnbull earlier this year ruled out privatising the Medicare payment system.
“We will continue to improve the way in which Medicare interacts, interfaces with its customers, with citizens and patients — is delivered but it will all be done by government and within government,” Turnbull said in June.
The health department in September disbanded the team that had been examining the possibility of outsourcing the payments system.
The government is also undertaking an overhaul of the welfare payment system. In August the government revealed it had identified SAP as the preferred core software vendor for the Welfare Payment Infrastructure Transformation (WPIT) program.
The WPIT overhaul will see the replacement of Centrelink’s welfare payments system, which dates back to 1983 and is based on the Model 204 (M204) database for IBM mainframes. The total cost of the program is expected to be in the region of $1 billion.
The government in April last year announced it had given the go-ahead for the WPIT project. The 2015-16 budget earmarked $60.5 million for planning, scoping and design work.