At HotDoc, we’re committed to empowering you with simple, clear, and accurate information to navigate the complexities of running a healthcare practice. We understand the challenges you face in providing quality patient care whilst managing practice efficiency and costs. In this blog, we’ll delve into a pressing concern for Australian healthcare practices: how to engage doctors and minimise the risk of being found liable to pay payroll tax.
We’ve been actively advocating on behalf of practices and practitioners on this particular issue, and we’re also dedicated to ensuring our product supports you effectively. We’ve partnered again with Sarah Bartholomeusz, Founder & Principal from You Legal to discuss key considerations for effectively engaging with doctors as independent contractors and how HotDoc’s features can assist you to ensure that the doctors are truly independent.
Tactics for Engaging with Doctors as Independent Contractors
By Sarah Bartholomeusz
Practice owners and managers have the opportunity to review their current arrangements with doctors to ensure that their agreements, processes, and procedures accurately reflect the relationship between the doctors and their clinics.
Practices can consider engaging with doctors in one of three ways:
- As employees
- As independent contractors; or
- As business owners operating their own business from the premises of the practice.
What is right for a practice depends on several factors, and each may be considered differently by regulators, including State Revenue Offices, in relation to whether or not payroll tax is payable on the engagement with the doctor. This article focuses on one of these methods, engaging with doctors as independent contractors.
While there is no single solution for ensuring doctors are treated as independent contractors in regards to whether or not payroll tax will be payable by the medical practice, enacting independent operating processes is an important factor that aids in demonstrating the doctor’s independence from the clinic. This includes:
- The doctor receives payment from patients directly, instead of via the medical practice’s account. Read more about this here.
- If the doctor manages their patients without direct clinic involvement, they are more likely to be classified as independent contractors, as they are engaging with patients as their patients and not the clinic’s patients, in an independent manner.
A few other indicators include whether or not equipment and other tools are provided to the doctor (as an example, are they bringing their own doctor’s bag?), whether they are they restrained from practicing after they leave your clinic, whether they are required to wear a uniform and the way that they are referred to in marketing material.
The law in this area is complex, and there are many factors that are considered by the ATO and State Revenue Offices to establish whether someone is an independent contractor or employee, and these regulators will always look at the totality of the arrangement, not just the written Agreement between the parties. This article is intended to provide general advice. Always consider the need to consult a lawyer and/or accountant to discuss your unique clinic requirements.
HotDoc’s Functionality
HotDoc’s practice management solution readily addresses the two opportunities that Sarah has detailed above:
- Practitioners Receive Payments Directly
By using direct to practitioner payouts with HotDoc Payments, all funds collected from patients for Quick Consults and appointments (booked online or through reception) will be sent directly to the doctor’s bank account. Practice admins still have visibility into payments made for services at that practice, without the practice’s bank account being part of the flow of funds.
- Independent Patient Management
With the Practitioner Sidebar, doctors can receive Quick Consult requests directly (repeat prescriptions, repeat referrals, and more features coming soon), without practice intervention, emphasising the doctor’s independence from the clinic.
A Final Word
Navigating the complexities of doctor engagement is an ongoing challenge for medical practices. Staying informed and proactive is crucial to aid in mitigating risks and to maintain the financial health of your practice.
At HotDoc, we understand the importance of adapting to evolving regulatory landscapes. Our suite of features, including Direct to Practitioner Payouts and the Practitioner Sidebar, are designed to support your practice in engaging with doctors as independent contractors whilst streamlining operations and enhancing patient care.
We’re more than just a software provider. HotDoc is committed to supporting the healthcare community through our ongoing advocacy efforts, aimed at protecting the Australian healthcare sector and its medical practices. Read more about our Advocacy efforts here.
As you assess your practice’s needs in light of these changes, remember that HotDoc is here to help.
