Chronic disease represents a significant challenge to the design and reform of the Australian healthcare system. The Medicare Benefits Schedule (MBS) provides a framework of numerous chronic disease management programs; however, their use at the patient level is complex. This analysis of the MBS chronic disease framework uses a hypothetical case study of a diabetic patient (with disease-related complications and a complex psychosocial background) to illustrate the difficulties in delivering appropriate multidisciplinary chronic disease care under the MBS. The complexities at each step - from care planning, service provision, and monitoring and review - are described, as are the intricacies involved in providing patient care under different MBS programs as well as those in the broader health and community care system. As demonstrated by this case study, under certain circumstances the provision of truly integrated care to this hypothetical patient would constitute an 'exceptional circumstance' under the MBS. Although quality improvement efforts can improve functioning within the limitations of the current system, system-wide reforms are necessary to overcome complexity and fragmentation.