Practice owners: Why your compliance checklist has doubled (and what you cannot afford to overlook)
Most healthcare practice owners believe they are broadly compliant.
They have practitioner agreements in place, privacy documentation and employment contracts. They have been operating successfully for years and assume that if nothing has gone wrong, their compliance framework must still be fit for purpose.
Increasingly, that assumption is proving to be incorrect.
Over the past 12 to 18 months, the compliance landscape for healthcare practices has shifted significantly. Legislative reforms, regulatory scrutiny and changes to Medicare administration have expanded what practice owners need to monitor.
Compliance is no longer simply about having the right documents sitting in a folder. It is about whether your practice is structured correctly, operating consistently and able to demonstrate that its day-to-day operations align with its legal framework.
One of the most common issues we see is practices continuing to rely on agreements, policies and operational processes that were appropriate several years ago but no longer reflect today's regulatory environment. Many practices have grown, introduced new services or changed the way they operate without reviewing whether their legal documentation has kept pace.
For practices planning to expand, restructure, acquire another clinic or prepare for sale, this can create unnecessary legal and commercial risk.
Below are five compliance areas that practice owners should prioritise.
1. Review whether your practitioner arrangements reflect operational reality
Independent practitioner models continue to be a key focus for regulators and revenue authorities.
Many practices still rely on practitioner services agreements that were drafted before recent changes to contractor laws and increased regulatory scrutiny. While those agreements may have been appropriate at the time, the legal environment has evolved.
The key issue is no longer simply what the agreement says.
Increasingly, regulators examine how the relationship operates in practice.
Practice owners should consider questions such as:
- are practitioner hours largely determined by the practice?
- who controls appointment scheduling?
- who manages patient billing and financial flows?
- do the day-to-day arrangements reflect what the agreement actually says?
If operational reality differs from the written agreement, the practice may face increased legal risk.
Regular reviews help ensure practitioner arrangements continue to support a genuine independent practitioner model where that is the intended structure.
2. Understand that payroll tax remains a structural issue
Payroll tax continues to be one of the most significant unmanaged legal risks facing healthcare practices across Australia.
One of the most common misunderstandings is the belief that engaging independent practitioners automatically removes the obligation to pay payroll tax in relation to those practitioners.
Unfortunately, it is rarely that straightforward.
Revenue authorities increasingly examine the substance of the arrangement rather than relying on contractual labels. They may consider issues such as:
- who receives patient fees;
- how practitioners are remunerated;
- the financial relationship between the practice and practitioners; and
- whether the practice's operational structure reflects genuine independence.
Payroll tax is no longer simply a tax issue.
Unexpected liabilities can affect profitability, financing, expansion plans and business value. Practitioner engagement is also becoming a routine area of enquiry during practice acquisitions and due diligence.
Rather than reviewing practitioner payroll tax risk in isolation, practice owners should consider it alongside their practitioner services agreements and overall business structure.
3. Ensure your Medicare and telehealth systems have kept pace with reform
Another significant area of change has been Medicare administration.
Recent reforms have focused less on what services can be claimed and more on how practices administer Medicare processes, obtain patient consent and maintain appropriate records.
For many practices, this means reviewing internal systems rather than simply updating policies.
Examples include:
- updated Assignment of Benefit processes;
- increased use of digital patient consent;
- enduring Assignment of Benefit arrangements for eligible patients;
- strengthened record-keeping expectations; and
- ongoing MyMedicare and telehealth eligibility requirements.
Similarly, telehealth compliance continues to evolve.
Practices should ensure they understand eligibility requirements, documentation obligations and when exemptions apply. Administrative staff and practitioners should apply these requirements consistently across the practice.
One of the biggest shifts we are seeing is that Medicare compliance has become an operational issue.
Strong compliance now depends on consistent systems, staff training and documented workflows rather than relying on individual knowledge.
4. Prepare your practice for new models of care
Healthcare continues to evolve, and many practices are expanding the range of services they provide.
One recent example is the expansion of prescribing arrangements for appropriately endorsed registered nurse prescribers.
For practice owners, this is not simply a clinical development.
Introducing new clinical services should prompt broader governance questions, including:
- do our policies support the new model?
- are our clinical workflows documented?
- have practitioner agreements been reviewed?
- have insurance and governance implications been considered?
- are staff appropriately trained?
Many practices focus on implementing new services quickly but overlook the supporting compliance framework.
As practices grow, governance should evolve alongside service delivery.
5. Think about compliance before you sell
Many owners only think about compliance when they decide to sell their practice.
Increasingly, that is too late.
Buyers, lenders and advisers are conducting far more sophisticated due diligence than they did only a few years ago.
Financial performance remains important, but purchasers also want confidence that the practice has appropriate legal and operational foundations.
Areas commonly reviewed include:
- practitioner services agreements;
- payroll tax exposure in relation to practitioners;
- Medicare compliance processes;
- governance documentation;
- operational policies; and
- evidence that legal risks have been proactively managed.
The strongest practices are those where the documentation, operational systems and day-to-day activities all tell the same story.
This not only reduces legal risk but can also support business value and improve confidence during transactions.
Why periodic compliance reviews matter
One of the biggest misconceptions about compliance is that it is a one-off exercise.
Healthcare practices are constantly evolving. New practitioners join the practice, additional locations are opened, services expand and regulatory expectations continue to change.
Without regular review, documentation and operational processes can gradually drift away from the way the practice actually functions.
That disconnect is where many of the legal and commercial risks arise.
A periodic review allows practice owners to assess whether their practitioner arrangements, financial structures, Medicare systems and governance frameworks continue to support the business they operate today; not the business they operated several years ago.
Strong compliance should be viewed as part of strengthening the practice. It helps protect profitability, supports sustainable growth, improves transaction readiness and provides greater confidence that the practice can withstand regulatory scrutiny as expectations continue to evolve.
If you have not reviewed your compliance framework within the last 12 to 18 months, now is an appropriate time to do so.
If your practice is expanding, restructuring, introducing new services or preparing for a future sale, contact our team at You Legal here, to discuss how a proactive compliance review or one of our Fast Track Solutions can help ensure your practitioner arrangements, operational systems and governance framework remain aligned with today's regulatory environment.
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This article is general information only and is not legal advice. Every practice is different and the law can differ across Australian jurisdictions. Please seek advice tailored to your circumstances before acting.