Does accreditation make you a payroll tax target?

5 minute read

The RACGP says confidently no, but we don’t think it’s checked with the Queensland Revenue Office.

Can your practice qualify for accreditation without also qualifying for payroll tax?

The RACGP has stated categorically no, its practice accreditation standard will not create any payroll tax issues.

It said this today in response to some college member practice owners querying whether the wording of the accreditation standards creates friction with specific clauses of the recent payroll tax ruling by the Queensland Revenue Office.

Chair of the RACGP Expert Committee on Standards for General Practice Dr Louise Acland told Medical Republic that: “The 5th edition does not impact whether or not any accredited practice is compliant with new or existing payroll tax obligations. 

“The RACGP Standards for general practices 5th edition concerns clinical governance, and applies to all practices regardless of the status of the GPs working there.

“So, the standards apply to practices where GPs are working as employees as well as those that contract tenant GPs, or a combination of the two.”

Dr Acland added that the same would all be true of the 6th edition of the standards which the college is taking feedback on now.

But it’s apparent that the college has not formally asked the QRO or any other SRO whether they agree with this assessment.

One industry observer close to the matter told TMR that “it’s the sort of question you don’t want to ask a state revenue office because you might not like the answer you’re going to get”.

The issue being identified by some practice owners is that Accreditation Standards Edition 5 is replete with wording in most of its core standards that seem to be in conflict with how the QRO ruling determines payroll tax compliance.

This is particularly in respect to the standards a practice must ensure a GP is working to within a particular practice in order to comply. 

An example, the standards are very directive and specific on how a GP working within an accredited practice must record and store a patient’s medical record (Core Standard 7).

This standard is so directive and specific in its requirements of a GP working within an accredited practice that it could be taken by a state revenue office as the practice exerting direction and control over an individual GP to the extent that the relationship is that of employer, not a services provider to that GP.

Here is just some of the wording from this part of the standards:

Patient health records must be updated as soon as practicable during or after consultations and home and other visits. The record must identify the person in the clinical team making the entry. All patient health records, including scans of external reports, must be legible so that another practitioner could take over the care of the patient.

Consultation notes must contain the following information:

• Date of consultation

• Who conducted the consultation (eg by initials in the notes, or by audit trail in an electronic record)

• Method of communication (eg face to face, email, telephone or other electronic means)

• Patient’s reason for consultation

• Relevant clinical findings including history, examinations and investigations

(Our emphasis on must.)

Throughout standards 1-4 the wording regularly refers to the need for a GP within a practice to carry out activities on behalf of the practice which meet standards in order to gain compliance.

While the standards are attempting to set a broad standard for general practice that is acceptable to the college and accreditation bodies, the wording of the standard is often such that a GP who works within a practice must conduct themselves in the manner the practice requires.

The word must, is often used specifically referring to how a GP will work within a given practice.

For example in Core Standard 4:

C4.1A Our patients receive appropriately tailored information about health promotion, illness prevention, and preventive care. You must:

• document in the patient’s health record discussions or activities relating to preventive health.

Again, seemingly providing evidence to a state revenue office that the GP is not in control and being directed to the point of being an employee.

(Our emphasis again.)

David Dahm, payroll tax commentator and principal at healthcare advisory firm HealthAndLife, told TMR that practice owners were right to be worried about how the accreditation standards are currently worded.

“There are a lot of problems with how the standards have been worded,” he said.

“They need to be tweaked to only accredit the infrastructure support and not refer to or direct how doctors work within a practice.”

Dahm said that given how important the accreditation standards were to a practice in terms of income and reputation, he was advising all his clients to draft very specific qualifications for how their practices operate with their contract doctors which address these issues in the current accreditation standards, when submitting their paperwork to the college.

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