Accounting services for Medical Clinics

With the government pledging $358 million over 5 years beginning 2023FY to establish 58 Medicare urgent care clinics, regular general practice clinics might find client retention easing as bulk billing urgent care clinics open up close by.

Medicare UCC’s are propped up by government incentives and some argue that this may distort the competitive market.

Despite your beliefs on these clinics there is no doubt that there has never been a more important time to ensure your clinic is lean, compliant and minimising tax to put more back into the business and remain competitive.

The indexing rate for most Medicare items is currently 3.6% which is below the current rate of inflation in Australia which sits at approximately 5.5% as at the end of 2023.

This discrepancy is putting pressure on GP’s to move towards mixed billing as the lagging Medicare indexing is essentially a pay cut for doctors.

Given that the current level of bulk billing for GP services where no out-of-pocket expenses are charged currently sits at 90% there is no doubt that there are many more practices who will likely move to mixed billing to ensure equitable income for their services in the future.

At the same time, many GP’s know their clients well enough to know that even small out of pocket expenses may be enough to scare away lower socioeconomic clients who need the care the most, this a big reason that more clinics have not moved to mixed billing already and can be a morally complex decision to make.

Missing reminders and patient follow ups in most businesses usually poses no great risk, however this is not the case for medical clinics and their doctors.

Patient recalls and reminders must be initiated in a timely manner to ensure patient safety and limit the risk of legal action against the clinic.

Often, practice managers and clinic owners will spend many hours ensuring their practice management software is running smoothly. Along with the internal functions of practice management software there is also the financial side to consider which will be ensuring that all financial data is flowing through to the accounting system properly.

Every hour clinic owners spend on setting up their accounting system processes is an hour that could have been spent on much more high value matters relating to internal practice management.

Regardless of the entity structure you are operating under, there are common themes for the tax related issues affecting medical practices.

Clinic owners will have to navigate income tax, payroll tax, GST, Fringe benefits tax, Payroll processing, bookkeeping and much more to keep their practice compliant and contractors and employees happy.

Medical clinics also have to navigate personal services income rules, compliance guides released by the ATO and part IVA of the tax act which relates to tax avoidance. 

Having a proactive, knowledgeable and reliable tax advisor by your side helps alleviate the burden of tax compliance and lifts practice owners into higher level thinking involving important business issues and strategy.