A bureaucratic impasse has meant people on the Upper Eyre Peninsula have been unable to access Medicare rebates for allied health care, including mental health services, for the past six months.

A mental-health care provider says clients who have been seeking mental health treatment have had to cancel appointments because they are unable to afford it.

Typically, patients pay for appointments with an allied healthcare professional before claiming a portion of the total cost back in the form of a Medicare debate.

However, as much of the Upper Eyre Peninsula is serviced by locum doctors — which are paid for the state government — patients in the region aren't eligible for further government support without an exemption.

The stalemate has meant individuals in Cleve, Cowell, Kimba, Elliston and Coober Pedy have not been able to access the same Medicare services that the rest of Australia has access to.

Cleve-based psychologist Amanda Rogers first became aware of the issue when her patients contacted her post-appointment in May, saying their Medicare rebates had been blocked.

"This is postcode discrimination," Dr Rogers said.

"It's placing people at risk. It's causing people to feel marginalised, and even like they've been targeted."

Since October, Dr Rogers has written to politicians including SA Health Minister Chris Picton, Premier Peter Malinauskas, and Federal Minister for Health and Aged Care Mark Butler, lobbying for urgent action on behalf of her clients.

Exemption required

Much of the Upper Eyre Peninsula is serviced by locum doctors, paid for by SA Health.

Under the Health Insurance Act (1973), an exemption is required for government-supported practitioners to bulk-bill their services like the rest of Australia.

Practitioners in five South Australian locations had the exemption: Ceduna, Lameroo, Karoonda, Pinnaroo and Wallaroo.

There are 129 locations across the country which have the exemption.

An approval of the exemption was confirmed in a letter from Mr Butler to Mr Picton on Thursday which means residents in the Upper Eyre Peninsula should be able to receive the same rebates going forward.

"The Department is now undertaking the required updates to legislation, and I have asked the department to expedite this process," Mr Butler said in the letter.

In Cleve, where Dr Rogers is located, residents have been required to see a GP in a different area to receive a mental health care plan, in order to receive a rebate.

"Every other Australian gets to see their regular GP that they trust.

"It's increased the risk of a population that already has an elevated risk."

An issue for both governments

The Eyre and Far North Local Health Network (EFNLHN) ceased Medicare billing at its practices earlier this year while it worked with the Federal Government to find a resolution.

"It was a bit of an unintended consequence when we stopped billing Medicare that it affected things like chronic condition, care planning and mental health care planning," said EFNLHN chief executive Julie Marron.

Ms Marron was unsure if patients affected would retrospectively receive rebates.

"We are continuing to work with the Commonwealth government to look at retrospective rebates, but that is a Federal issue and the people that were affected will have to contact them directly to try and resolve that."

In a statement, Mr Picton placed the onus on the federal government and said he wrote to Mr Butler in August to raise the issue.

"The laws and policies regarding the Medicare system are solely within the power of the federal government," he said.

State Shadow Minister for Mental and Regional Health Services Penny Pratt said she was disappointed with the lack of action and accused Labor of playing "dodgeball" with regional South Australia's mental health.

"It should not take an overworked rural psychologist to spend her working hours pleading for government to listen," she said.