The Health Care Home approach



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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.

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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.
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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.

ATO view

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.

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TR 2005/16 Income tax: Pay As You Go - withholding from payments to employees
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SGR 2005/1 Superannuation guarantee: who is an employee?
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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.

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

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