Running an allied health practice is one of the most rewarding things you can do. You’re helping people, building a team, growing something meaningful. But the financial side of allied health is surprisingly complicated, and in my work with physiotherapy clinics, OT practices, speech pathology businesses, and psychology groups across Australia, the same three problems keep coming up.
Medicare billing confusion. Contractor classification headaches. NDIS GST mix-ups. None of these are obscure technical issues – they’re everyday situations that catch busy practice owners off guard, often at exactly the wrong moment.
Here’s what you need to know.
1. Medicare Billing: The Rules Changed in July 2025
If your practice bills Medicare for chronic disease management services, you need to be across the changes from 1 July 2025. The old Enhanced Primary Care (EPC) referral system has been replaced by GP Chronic Conditions Management Plan (GPCCMP) referrals. The core entitlement hasn’t changed – eligible patients still access up to five Medicare-subsidised allied health visits per calendar year – but the way referrals are structured and documented is different.
The most common billing mistakes I see are: billing a Medicare item before the prerequisite GP item has been claimed (allied health services don’t attract Medicare benefits until Services Australia has paid the GP item first); not tracking how many of a patient’s five annual visits have already been used across other providers; and billing individual item numbers for group sessions, when most chronic disease management items require face-to-face individual treatment of at least 20 minutes.
Medicare compliance checks are real. Providers can be required to submit evidence about the services they’ve billed, and discrepancies can result in repayment demands going back years. Make sure your practice management software reflects the GPCCMP changes, and have a process for confirming referral validity before each appointment.
2. Contractor vs Employee: This Is Where It Gets Expensive
Allied health practices commonly engage therapists on a contracting basis – sessional physios, locum OTs, contract speech pathologists. It’s a flexible model that suits a lot of practices. But the rules around who genuinely qualifies as a contractor have tightened considerably, and getting this wrong is one of the most expensive mistakes a practice can make.
Following High Court rulings in 2022 and the ATO’s updated Tax Ruling TR 2023/4, worker classification now focuses heavily on what the contract actually says rather than just how the working relationship looks day-to-day. And having a worker with an ABN doesn’t automatically make them a contractor for super or tax purposes.
There’s also a separate issue with superannuation that catches a lot of practices out. The Superannuation Guarantee legislation uses a broader definition of ‘employee’ than tax law does. A therapist who is technically a contractor for income tax purposes may still trigger super obligations if they provide mainly their own labour, can’t delegate the work, and are paid by time. With the super guarantee rate at 12% from 1 July 2025, the liability adds up quickly – and that’s before you factor in ATO penalties or potential payroll tax exposure from the Queensland Revenue Office.
If you’re not 100% confident about your current arrangements, a review is worth it. Sorting this out proactively is significantly cheaper than dealing with it during an audit.
3. NDIS and GST: Not as Straightforward as It Looks
Many allied health practices also provide services to NDIS participants, and this is where GST treatment gets messy. Most allied health services are GST-free when provided to NDIS participants under a registered plan – but not all NDIS-related services are automatically GST-free. It depends on whether the service is directly related to the participant’s disability support needs and how the funding is structured.
The common pitfalls: applying GST to services that should be GST-free (overcharging participants); treating all NDIS income as GST-free when some services – such as report writing or non-therapeutic consultations – may attract GST; and handling invoicing inconsistently when the same therapist sees both NDIS and non-NDIS clients in the same week.
The NDIS is also under increased compliance scrutiny. Auditors now expect digital record trails that link service delivery directly to billing. If your invoicing and record-keeping don’t align, that’s a risk worth addressing sooner rather than later.
The Bottom Line
None of these issues are insurmountable – most are straightforward to resolve once you know what you’re looking for. The challenge is that practice owners are flat-out delivering services, managing teams, and keeping clients happy. Keeping up with every ATO ruling on top of that is a big ask.
Getting your compliance right is the starting point – your tax, BAS, super obligations, and Medicare billing all need to be in order. But for a lot of allied health practices, that’s where the relationship with their accountant begins and ends. And honestly? There’s a lot more value on the table if you want it.
Depending on where your practice is at, that might look like cash flow planning to manage the peaks and troughs of a growing clinic, help structuring a new associate or contractor arrangement, working through a lease or equipment decision, or simply having someone to call when something changes and you’re not sure what it means for your business.
These aren’t services every practice needs all at once – but knowing that support is available when you do makes a real difference.
If any of the above sounds familiar – whether it’s getting your compliance foundations right or figuring out what comes next for your practice – I’d love to have a chat. No jargon, just plain English and practical next steps.
Ready to get your finances sorted?
Book a free 15-minute call with Amanda to talk through your practice’s specific situation. Whether you’re sorting out the compliance basics or looking for more hands-on support as your practice grows – we can create a custom package to suit you delivered with plain English answers and practical next steps.
