A backlash by doctors has forced the military to extend the handover time for the $1.3 billion privatisation of medical treatment for Australian troops.

Medibank Health Solutions - an offshoot of insurance giant Medibank Private - had been due to take complete control of Defence health services this week, including a promised list of "preferred" civilian specialists signed on to the new system.

But many surgeons have flatly rejected the new arrangements, prompting concern military personnel will end up with sub-standard care.

Military doctors have now been permitted to refer patients to doctors outside the privatised network for at least six weeks.

Some regions where there is a heavy concentration of military personnel - including in Canberra - has seen doctors overwhelmingly refuse to sign a contract with Medibank.

Doctors have expressed concern over substantial cuts to fees under the new system and resent the intrusion into their practises, with Medibank to decide which specialists are referred to.

Defence personnel - army, navy and airforce - are all entitled to free health care as a condition of service.

The Defence department said in a statement the health and well-being of personnel was its highest priority.

"In coming weeks, there could be cases where an ADF member in a particular geographic area requires a specific service, and MHS remains in negotiation with service providers in that location.

In these situations, there is provision for ADF members to access medical specialists who are not within the MHS network, to ensure personnel continue to receive quality and timely care."

Two areas that might face particular shortages of medical professionals' signing up are Canberra and Darwin both of which have large defence populations.

Peter Beaumont, the Northern Territory president of the Australian Medical Association, said Medibank was "just not paying anywhere near market rates".

He said military personnel would end up being treated in the public system, which the ADF tended to avoid because of delays.

"The department wants people to be treated by the private system so that people can get back to serving ... and get back to their jobs," he said. "The most practical effect will be the delay in treatment and post-op care. They will not bounce back as quickly."

Terry Gavaghan, a Canberra gastroenterologist who does endoscopies and colonoscopies for defence, said: "As far as I'm aware in the ACT, nobody has signed up to provide any services for defence force members. It's been a complete debacle. The whole thing has been a disaster."