Bringing Psychologists & other Allied Health Practitioners into your Medical Practice

If you are looking for a Practitioner Services Agreement (for allied health professionals), click here.

If you are interested in learning about the benefits of a licence agreement when bringing in allied health professionals to your medical practice, read on…

It is now quite common to have physical therapists, osteopaths, chiropractors, massage therapists, and increasingly psychologists, operating within a medical practice’s walls. In specialty practices such as a paediatrician or an obstetrician, they may consider adding a lactation specialist to their practice for their nursing mothers or other additional care opportunities for their patients. 

Bringing in an allied health professional also enables an increase in income, which can help cover various business expenses. Particularly if you are unable to find a GP to fill a room, it can utilise a space for the period of time that it would otherwise not be income-producing.

The pandemic caused anxiety and other mental health issues to bubble to the surface, putting psychologists in high demand within practices. Unlike some other allied health care professionals, psychology is what some might call a ‘voice’ profession. They do not require special equipment to be stored onsite like other allied health professionals may need. 

These are only a few examples of a patient need that practices can help meet through the offering of space to a professional for a rental fee. If you are considering bringing a psychologist or any other type of allied health practitioner into your practice, there are some considerations to keep in mind. 

As you bring in valuable services for patients, and additional income for the practice, it’s important to ensure that it will be a positive transition and experience for everyone involved.

The Arrangement

One of the most common ways to bring in allied health professionals is for them to rent a space. 

The main difference between a GP and an allied health professional is that generally, instead of a percentage of billables, an allied health professional would pay a room rental fee. Although sometimes they do both depending on the support they need from your practice.

They will rent a room in the practice, but they do not necessarily use the services of the practice. They may book their own appointment and do their own billing, for example. It is possible they will not even have patients wait in the practice waiting room.

Avoiding Common Issues

There are a few key issues that can create problems for medical practices when they bring allied health practitioners into a practice.

One is that many practices don’t foresee that bringing in an allied health practitioner might ruffle some feathers. This can sometimes jeopardise the relationship you have with existing tenants, or independent contractors.

Another is when practices use an existing contract or agreement to save money. If you intend to bring allied health professionals into your practice, you will require an agreement that sufficiently takes into account the nuances of this type of arrangement. 

And finally, there are some additional issues that can arise in relation to renting out a room if you do not own the premises your practice operates from.

Let’s start by taking a look at the terms of your arrangement with an allied health professional…

Considerations when bringing Allied Health Professionals into the Practice

A licence agreement is what is used in a medical practice to contract with an allied health professional who is using a room in the practice to assist patients from time to time. 

If you are looking to bring in an allied health professional who rents a room at the practice, they pay a set rate, so there is no service fee, just a rental fee. It is a set-up that works well for many professionals, especially psychologists. 

This is a different arrangement to bringing in an independent contractor who pays a service fee to accommodate for admin support, consumables and other expenses. In those instances you would instead be looking at a Practitioner Services Agreement.

Termination Period

However, if renting a room is your preferred option, as a practice, you may wish to offer them a month-to-month rental or opt for something longer, like 1 or 2 years. Where they are only using a room in the practice from time to time, as with most rental arrangements, the agreement needs to set some limits such as ongoing termination rights for both parties (e.g. 30 day or 3 month termination). The flexibility is a real benefit to this arrangement. 

In your Licence Agreement, it should be documented that your practice and the tenant will have the right to terminate the Agreement at certain junctures.

Fees Considerations 

They will use utilities such as power, internet and shared spaces like restrooms or break areas, which should be a consideration when determining the rental rate.

Exclusive or Non-Exclusive Use

A Licence Agreement will provide the tenant with permission to enter or use the property. This right can be either exclusive or non-exclusive. For example, it could be an exclusive right to use one or two rooms with shared use of the bathrooms and the kitchen. A massage therapist might not want to have to move their tables every time so they may wish to have exclusive use of the space.

Or, instead, your practice may wish to split the rental schedule between multiple professionals and charge each for the time they use. For example, the psychologist uses the room in the evenings, and another allied health professional has that space during the day, such as a massage therapist with portable tables using the space during the day.

It is a flexible option that can lead to multiple revenue streams. That being said, if you do not own the premises, you will need to ensure you have permission from the landlord to do this, under the head lease. 

Lease Considerations

Even if subleasing is permitted, depending on the terms of your lease agreement, you may have to notify the landlord that you are adding allied health professionals within your practice.

It is critical to have an expert examine your lease agreement to determine the options for your practice.

Final Considerations

It is vital that you do not rush into any agreement until the terms of your lease have been reviewed, and if all is okay on that front, ensure your licence agreement meets the needs of your practice.

There is a lot to consider if you want to bring an allied health professional into your practice. We advise practices regularly on critical areas like subleases and insurance to make informed choices that will benefit your patients and the practice. 

If bringing an allied health professional into your practice in this way is something you are interested in pursuing, our fast track solution, Licence Agreement for Allied Health Professionals will cover everything you need, to maximise the benefits from this arrangement and minimise the risk to your practice. 

Alternatively, if you instead want to bring allied health practitioners in as independent contractors, you will benefit from taking a look at our Allied Health Contractor Agreement (Practitioner Services Agreement) fast track solution.

Related Articles: Pathology Leases - What practice owners need to know before signing a lease

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