The federal government disagrees that its $436 million plan aimed at improving diabetic care will encourage doctors to pocket the funds.

Health Minister Nicola Roxon says that the system is not flawed, it however needs to be fully worked.

She said, "There is no incentive, I don't think, for a doctor to pocket the money and not provide the care to the patient. Because then the patient's results won't be as stable as they could be."

She added that under the government scheme the average GP stands to be $10,000 better off as the scheme plans to overhaul the way chronic disease is managed.

To get diabetics signed up with a ‘home’ GP to ensure care is yet another aspect of the government's big health reform.

The announcement however attracted flak as the Australian Medical Association termed it as a policy on the run and criticising the lack of consultation with doctors.

Roxon further added, "Certainly there are implementation details we intend to work through those with the AMA and others. I think when people do work through the detail, they will be quite supportive."