BACKGROUND: Chronic illness is increasingly being recognised as a widespread, debilitating and costly burden. Most models of care used in the acute care setting are inappropriate for chronic illness and are costly. OBJECTIVE: This article examines the goals of chronic illness care in the Australian general practice context and related issues from a conceptual perspective. It describes developments in care planning in Australia, particularly Medicare payments for care planning, and discusses how such developments can assist general practitioners in patient care. A case study of an Aboriginal patient with chronic illness is described to illustrate the issues discussed. DISCUSSION: Care planning/management based on a partnership model can bring about some success in management, even with the most difficult cases. Illness support, management of rest of life conditions and treatment and self management of disease are required. Care planning/management items, as part of the Enhanced Primary Care program provide incentive payments to address key models of improving complex chronic care. This can result in improved system organisation and self management of chronic illness.