The Health Care Home approach
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This publication provides you with the following level of protection:
If you follow our information in this publication and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we must still apply the law correctly. If that means you owe us money, we must ask you to pay it but we will not charge you a penalty. Also, if you acted reasonably and in good faith we will not charge you interest.
If you make an honest mistake in trying to follow our information in this publication and you owe us money as a result, we will not charge you a penalty. However, we will ask you to pay the money, and we may also charge you interest. If correcting the mistake means we owe you money, we will pay it to you. We will also pay you any interest you are entitled to.
If you feel that this publication does not fully cover your circumstances, or you are unsure how it applies to you, you can seek further assistance from us.
This publication was current as at October 2017.
The Health Care Home approach
Does this change the withholding obligations for medical practices?
The Health Care Home approach is a new approach to chronic disease management in primary care. A Health Care Home can be either an existing general practice or an Aboriginal Community Controlled Health Service, both referred to below as medical practices.
The way a medical practice is paid for providing Health Care Home services is different from the fee-for-service provider based approaches under the Medicare Benefits Schedule.
Medical practices will receive a bundled Health Care Home payment for each enrolled patient. All general practice health care provided by the medical practice associated with the patient's chronic and complex conditions (previously funded by fee-for-service items) will now be funded through a bundled payment.
This bundled payment will be made to the medical practice on a monthly basis. The practice will then be responsible for paying health practitioners.
Is there an employment relationship between health practitioners and medical practices?
A medical practice may have a combination of health practitioners who are employees and/or contracted health practitioners who will be responsible for the care of an enrolled patient.
The source or method of payment (fee-for service payments or bundled payments) will not be material in determining whether an employment relationship exists between a medical practice and a health practitioner.
- If a health practitioner is currently engaged as an independent contractor by a medical practice, their participation in the Health Care Home program could continue on that basis.
- If a health practitioner is currently engaged as an employee of a medical practice, their participation in the Health Care Home program could continue on that basis.
Under common law, there are a range of factors relevant to determining whether an employment relationship exists. These factors are set out in detail in the ATO view documents listed below.
The various ATO view documents explain that no particular factor is determinative and that the relevance of and weighting given to a particular factor may vary according to the circumstances. The totality of the relationship between the parties must be considered to determine whether, on balance, the worker is an employee or independent contractor.
- TR 2005/16 Income tax: Pay As You Go - withholding from payments to employees
- SGR 2005/1 Superannuation guarantee: who is an employee?
- ATO ID 2011/87 Superannuation Guarantee Charge: employment status of a medical practitioner operating from a medical clinic
For the purposes of taxation and superannuation guarantee, adopting the Health Care Home model will not change the existing relationship that a health practitioner has with the medical practice.
Specifically, the Health Care Home model will not, of itself, create an employer/employee relationship under the tax or superannuation guarantee legislation.
What if I need more information?
For a call back from an ATO officer, email TaxAdvice@ato.gov.au
If you wish to discuss your circumstances, call the ATO on 13 28 61.
You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).Siebel/TDMS Reference Number: 1-C2O2NO2 Date of publication: 4 October 2017