Edited version of your private ruling

Authorisation Number: 1012589883085

Ruling

Subject: Reports prepared by a medical practitioner

Question

Is the supply of written reports prepared by a medical practitioner to Financial Decision Makers and/or Treatment Decision makers who make decisions on behalf of a patient, a GST-free supply?

Answer

Yes, the supply of written reports prepared by a medical practitioner to Financial Decision Makers and/or Treatment Decision makers who make decisions on behalf of a patient is a GST-free supply.

Relevant facts and circumstances

· As part of your practice, you provide a medical service (to which Medicare benefits are not payable), to patients who would otherwise be unable to receive those services due to their particular disabilities.

· Before performing medical procedures on patients who do not have legal capacity, you are required by law to supply a written report to the Financial Decision Makers and/or the Treatment Decision Makers and to obtain their informed consent on behalf of the patient.

· In many cases, the Treatment Decision Maker is the patient him or herself and the Financial Decision Maker is someone to whom financial decision making powers have been granted (either by the patient or by a court or tribunal). In such cases, the patient makes the Treatment Decision, but you will not render treatment unless and until the Financial Decision maker confirms that they will fund the treatment.

· In other cases, the patient is represented by a separate:

· Treatment Decision Maker; or

· Financial Decision Maker.

In such cases, you will only render the treatment once both the Treatment Decision Maker and the Financial Decision Maker have confirmed that the treatment may proceed.

· In other cases, the two Decision Makers are one and the same.

· The report you prepare states the findings of an oral examination of the patient and your recommendations for their care and treatment.

· The reports are for the sole purpose of providing appropriate treatment to the patient.

· In the absence of such reports, and the subsequent consent from Financial Decision Makers and/or Treatment Decision Makers, you are not legally permitted to treat the patient.

· You charge a fee for the provision of the reports.

· The Financial Decision Makers pay for the cost of the reports and the particular medical treatment of the patients on behalf of the patient.

· The reports are not billed separately, but included in the overall fee for the particular medical treatment of the patients. The cost of the reports are itemised in the invoice provided to the Financial Decision Makers.

· The cost of the written report can vary. It may or may not be less than 20% of the ensuing procedures undertaken.

Relevant legislative provisions

Section 38-10 A New Tax System (Goods and Services Tax) Act 1999

Reasons for decision

Pursuant to section 38-7 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) the supply of a medical service is GST-free. A medical service is defined in section 195-1 of the GST Act as follows:

A medical service means:

(a) a service for which medicare benefit is payable under Part II of the Health Insurance Act 1973; or

(b) any other service supplied by or on behalf of a *medical practitioner or *approved pathology practitioner that is generally accepted in the medical profession as being necessary for the appropriate treatment of the *recipient of the supply.

(terms marked with asterisks (*) are defined in section 195-1 of the GST Act)

Under section 38-7 of the GST Act, a medical service would only be GST-free where it is supplied to the patient. Accordingly, it needs to be determined whether the recipients of your services are the patients (in particular in those circumstances where the Treatment Decision Makers and/or the Financial Decision Makers are involved), and whether the supply of the report forms part of a medical service that you supply to those patients.

In this case, although the Financial Decision Makers and/or the Treatment Decision Makers make a decision about whether the patients should receive the necessary medical service, those decisions are made 'on-behalf' of patients who do not have legal capacity. Therefore any decision made by the Financial Decision Makers and/or the Treatment Decision Makers is as if they were made by the patient themselves. Therefore we are of the view that, whilst the Financial Decision Makers and/or the Treatment Decision Makers might have the final say in whether you should go ahead with the treatment that you have proposed, the ultimate recipient of your service is the patient. As the report is an analysis of the patients' condition, we are also of the view that it forms part of your medical services.

Having established that the recipient of your services is the patient and the report forms part of your medical service, it needs to be established whether your services is the supply of a medical service. As a Medicare benefit is not payable for your services it needs to be determined whether the supply of your services meets paragraph (b) of the definition of 'Medical service'. According to that paragraph, a medical service is GST-free if it meets the following two requirements:

· you perform the service, or it is performed on your behalf,

· the service is generally accepted by the medical profession as a necessary and appropriate treatment for the patient.

As you prepare the report the first criterion is satisfied.

You have advised us that the reports are for the sole purpose of providing appropriate treatment to the patient. Accordingly, the second criterion is also satisfied.

Item 2.a of the Health Industry Partnership - Issues Register provides the ATO view on what is appropriate treatment as follows:

It is considered that 'appropriate treatment' will be established where the recognised professional assesses the recipient's state of health and determines a process to pursue, in an attempt to preserve, restore or improve the physical or psychological wellbeing of that recipient insofar as that *recognised professional's particular area of training allows and will include subsequent supplies for the determined process.

This means that even where a decision is not made for a particular procedure to go ahead, the supply of the report still meets the second criterion.

Accordingly, as the supply of the report meets the two requirements mentioned under section 38-7 of the GST Act, it is a GST-free supply.