Despite a significant funding package being announced, a proposed Federal Government reform of all rural classifications for health funding may yet have far reaching implications for the practice of medicine in Ararat, including the inability to attract new doctors.

This reform includes the Rural, Remote and Metropolitan Area Index upon which many current allied health services, Divisions of General Practice and General Practitioner incentive payments are based.

Ararat may still be under threat of being reclassified as `inner regional', affecting the Ararat Hospital, doctors and the medical practice.

Partner at the Ararat Medical Centre, Dr Graeme Bertuch, said while parts of the budget announcement addressed a number of the issues of reclassification, the full announcement of the reclassification of towns such as Ararat will not be made until the end of this month.

If the reclassification reforms are approved practices and health services would no longer be eligible for programs such as:

Rural incentive grants worth up to $30,000 per GP.

Practice nurse incentive payments.

Victorian Overseas Doctors Rural Retention Scheme (VORRS).

Medicare loadings for bulk billing patients with health care cards.

Practice incentive payments.

Regional Health Services Program (small rural hospitals).

More Allied Health Services Program (Division of General Practice).

Workforce Support for Rural General Practice Program (Division).

The government's Rural Incentive Package announced in the budget offers doctors up to $120,000 to move from major centres to very remote areas, with retention benefits of up to $47,000 after five years of services.

The package also has benefits for overseas trained doctors, meaning doctors will now be able to halve their obligation to work in an area of workforce shortage depending on how remotely they practice.

However, if Ararat is reclassified as `inner regional' doctors at the Ararat Medical Centre will not qualify for these incentives.

Sixty per cent of the doctors in the region are overseas trained, many practising in Ararat through the Victorian Overseas Doctors Rural Retention Scheme.

Dr Bertuch said the retention grant will maintain the doctors in areas such as this, but may have far reaching implications for the attraction of new doctors.

''I'm not sure about new doctors in relation to retention grants and the time they will have to spend here,'' he said.

In regions classified as `inner regional' overseas trained doctors would need to practice for 10 years compared with five years (as in rural areas at present) before they could obtain an unrestricted provider number, enabling them to work anywhere in Australia.

''I spoke to one of our doctors here and he said that had he been told he had to stay 10 years he would not have come here,'' Dr Bertuch said.

Ararat Medical Centre currently has five partners, one of which is overseas trained.

The practice also has seven other overseas trained doctors working in Ararat.

If reclassified, this will affect more than 50 percent of doctors in the practice.

While the funding announcements are welcome, Dr Bertuch believes they will mean nothing if Ararat is reclassified as `inner regional'.

''In terms of remoteness, it may not have any benefit because we won't be remote enough,'' he said.