One possible implication from these recent decisions is that medical practices should consider whether healthcare practitioners should be owning and controlling the use of medical records of patients who may visit the practice from time to time. This would include practitioners having the right to remove such medical records when they depart the practice.
The suggestion is that, taking such an approach (among other considerations) to medical records could support the characterisation that practitioners are not ‘deemed employees’ for the purposes of payroll tax and therefore mean that practices would not be required to make the payroll tax contributions in this regard to the relevant revenue authorities. By way of example and in summary, the current initial threshold for payroll tax in New South Wales applicable from 1 July 2022 is $1.2 million, levied at 5.45% (so, approximately $65,000). But there are questions to consider, including:
Further,adopting the above approach to the ownership of medical records has broader implications for practices, especially those which may be accredited. For example, many large practices across the country (from where thousands of healthcare practitioners consult) are accredited against the RACGP Standards for general practices (5th edition) (Standards). One of the key principles underpinning the framework which supports the Standards is the prioritisation of “holistic, person-centred healthcare
Now, if medical practices were to take the view that healthcare practitioners who consult from their premises should be able to control the use of medical records (including removing those records on departure), a question will arise as to whether such a view could in fact result in a medical practice compromising its ability to meet the Standards for accreditation.
There are flow-on effects in this scenario. Notably (and as you many of you will already know), for medical practices must be accredited, or registered for accreditation, to participate in the Practice Incentives Program. Practice Incentive Payments remain a valuable and significant source of income to support the operation of accredited practices across the country.
In summary. Medical practices will need to carefully consider how any changes they make to their operations in light of the recent payroll tax decisions may impact the delivery of patient care and accreditation.
if you have questions, or would like more information about how these recent developments could affect your business, please call 1800 867 113 or to organise a confidential discussion with our data protection and privacy law specialists at a time that suits you, click here.
Justin Fung is a lawyer and the Head of Commercial and Corporate in our Avant Law team. Justin has over 15 years’ experience advising in commercial, corporate, risk, compliance, governance, regulatory enforcement and dispute resolution and advises clients in the private and public sectors.
He was previously General Counsel of a national allied health group of companies and held Group and Divisional Head of Legal roles in a major ASX-listed health company, whose operations covered medical and dental centres, allied health, pathology, diagnostic imaging, assisted reproductive technologies, day surgeries and hospitals. Prior to these in-house legal roles, Justin was an Executive Counsel with the global law firm Herbert Smith Free hills where he practiced for over 10 years.
Disclaimer: The information in this article is general in nature and is current to 15 July 2022. It does not take into account individual circumstances and is not professional legal, financial or taxation advice. Avant Law provides legal services. It does not provide taxation or financial advisory services.
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