RACGP redefines ‘GP’, ignores payroll tax elephant

5 minute read

Single-issue telehealth clinics will effectively be blocked from accessing the general practice PIP, but the college has ignored the payroll tax issue.

The RACGP has issued a new definition of general practice for accreditation purposes, in a move it promises will foster innovation while keeping low-quality care models at bay.

One thing it doesn’t touch is payroll tax, which pundits have labelled a “missed opportunity”.

Under the old definition, which had been in place since 2013, general practices seeking accreditation had to meet three requirements.

The service model had to align with the RACGP’s 10-point definition of general practice, at least 50% of services had to be of a general practice nature and the practice had to be capable of meeting all mandatory indicators in the college’s Standards for General Practices.

This third requirement has effectively blocked accreditation for clinics that operate without a bricks-and-mortar location, which cannot meet mandatory indicators related to practice facilities or equipment.

For the new version, the college simplified the first criteria to a four-point definition – care that is comprehensive, patient-centred, whole-person and continuous – and deleted the requirement on meeting mandatory indicators entirely.

A footnote to the new definition clarifies that “more than 50% of the practice’s general practitioners’ clinical time (ie collectively) and more than 50% of services for which Medicare benefits are claimed or could be claimed (from that practice) [must be] in general practice” to qualify for accreditation.

General practice accreditation is voluntary but heavily incentivised, as only accredited practices can access the Practice Incentives Program and Workforce Incentive Program payments.

It’s nothing to sniff at, either – the maximum incentive available under the WIP practice stream alone is $130,000 per practice per year.

Winner: innovative practice models

Until now, some disability and aged care outreach services have been unable to gain accreditation because of their inability to meet the bricks-and-mortar mandatory indicators on the Standards.

Telehealth-only operators have faced similar hurdles.

“We needed to move with the times and recognise that there are novel ways of doing comprehensive general practice that might include things like not even having a physical office,” RACGP vice president Dr Michael Clements told The Medical Republic.

The new definition, he said, was formulated with aged care outreach services in mind.

“We know that there are some GPs who provide aged care-only services, and this is a really important part of that workforce for our communities,” said Dr Clements.

“People that provide this kind of service can now get accredited … and access the incentive payments that the federal government supports.”

Loser: single-issue telehealth platforms

Crucially, because the college kept in the requirement that 50% of services be general practice in nature, single-issue telehealth-only platforms will continue to be blocked from receiving WIP and PIP payments.

“As a college, we certainly don’t support breaking up general practice into single-disease entities,” Dr Clements said.

Skin-cancer specific clinics and telehealth services that only cover weight loss, the Queensland doctor said, are not the intended recipients of government incentive payments.

Crafting the new definition to include holistic non-traditional GP services but exclude single-issue services was a fine line for the RACGP to walk.

“People disagree [on telehealth] – certainly, the telehealth companies argue that they’re providing an important service that is meeting a community need,” Dr Clements said.

“We don’t doubt that there are community members that are seeking these services, but as a college it’s our job to set what we believe are the standards for good, longitudinal relationships and holistic long-term care.

“Anything outside of that does risk profiteering and does risk people targeting patients for profit opportunities as opposed to whole-person care.”

Winner: state revenue offices

Back in April 2023, when the college put the new definition up for consultation, the AMA pointed out that the wording of the footnote – particularly the reference to “the practice’s general practitioners” – carries the implication that GPs are practice employees.

While seemingly minor, it does actually matter from a payroll tax perspective that practices not be seen as employing GPs.

The AMA advised the college to alter the wording, something the RACGP did not end up doing.

Dr Clements said that there were behind-the-scenes challenges in designing standards and policies while trying to take into account the state-by-state interpretations of tax rules.

“We have to be careful not to change general practice or change our standards and the way good general practice operates just because we’ve got one or two recalcitrant states that are still deciding that they want to tax patients for accessing healthcare,” he said.

The college ultimately did not make any changes to the definition of general practice that would help shield practices from payroll tax.

“We actually think the solution for payroll tax is not that the general practices stop doing what they do and working for the betterment of the patient,” Dr Clements said.

“The solution to payroll tax is the state governments keep their hands out of the patient-doctor interaction.”

Healthcare accountant David Dahm, a former AGPAL surveyor for 10 years, who took part in some of the early discussions around the new definition, said the college had missed an opportunity by failing to address payroll tax.

“It would have been useful and helpful if [the new definition] said, ‘a general practice can outsource to administrative entities and share facilities … not only the premises, but also support staff including nursing’,” Mr Dahm told TMR.

Ideally, he said, the new definition would have explicitly recognised that administrative entities can be an extension of a practitioner’s general practice and be collectively recognised as servicing more than one practitioner.

The danger in leaving the issue be is that the employee-employer relationship implications of accreditation could potentially be used against a practice by a state revenue office auditing it for payroll tax compliance.

“Accreditation tends to assume that the doctors are either employees are under some sort of control of the healthcare facility or the practice itself,” Mr Dahm said.

“And if an administrative service has been called a practice for the sake of accreditation … that is exactly what the tax office is sniffing for.”

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