Last Updated: December 2025
Key 2025-26 Updates
Superannuation Guarantee rate is 12% from 1 July 2025. NDIS Pricing Arrangements and Price Limits were refreshed 1 July 2025 (check ndis.gov.au for current rates). Medicare Benefits Schedule is indexed annually (check servicesaustralia.gov.au/mbsonline for current rates). From 1 July 2025, the GP Collaborative Chronic Condition Management Plan (GPCCMP) replaces GPMP and TCA for Chronic Disease Management referrals, which simplifies the GP referral process but does not change allied health billing procedures.
Allied health practices including physiotherapy, psychology, occupational therapy, speech pathology, dietetics, and podiatry face unique bookkeeping challenges. Unlike standard businesses, practices must navigate multiple payment sources including Medicare, private health funds, NDIS, workers compensation, and private fees. Each has different claiming processes, timing, and compliance requirements.
AHPRA data shows that practice viability is increasingly challenging, with practitioners reporting that administrative burden consumes significant clinical time. Practices that fail to streamline billing and claiming processes often undercharge, miss rebates, or create cash flow problems that threaten sustainability.
This comprehensive guide explains how to manage bookkeeping for allied health practices in Australia, covering Medicare claiming, private health fund processing, NDIS compliance, and the practice management systems that integrate clinical and financial workflows.
Allied health practices require a chart of accounts that separates income by payment source, tracks practitioner revenue for split arrangements, and supports analysis by service type.
Practice income should be categorised by payment source.
Medicare Revenue includes Better Access Initiative (mental health), Chronic Disease Management (now under GPCCMP from 1 July 2025), DVA (Department of Veterans Affairs), and other Medicare-rebatable services.
Private Health Fund Revenue includes claims processed through HICAPS or similar systems, with rebates paid directly to practice or patient.
NDIS Revenue includes services provided to NDIS participants, billed through the NDIS portal or plan managers.
Other Revenue includes workers compensation claims, CTP (motor vehicle accident claims), private fees without rebates, and group program fees.
Allied health practices have specific expense categories including practitioner costs (employed practitioner salaries or contractor payments), clinical supplies and equipment, professional registration (AHPRA fees, professional association memberships), professional indemnity insurance, and practice management software.
Allied health practitioners can provide Medicare-rebatable services under specific programs and referral pathways.
The process begins when the patient presents with a valid referral such as a GPCCMP, Mental Health Treatment Plan, or DVA referral. The service is then provided and clinical notes are recorded. Next, the claim is lodged either as a bulk bill direct to Medicare or the patient claims their own rebate. Medicare processes the claim within two to five business days. Payment is received by the practice if bulk billed, or by the patient if private billed. Finally, the practice reconciles against expected claims.
Psychologists, social workers, and occupational therapists can provide Medicare-rebatable services to patients with Mental Health Treatment Plans from GPs.
Patients receive up to 10 sessions per calendar year with Medicare rebates. Item numbers and rebates differ between clinical psychologists, registered psychologists, and other allied health practitioners.
Example: Clinical psychologist consultation (item 80010) has a Medicare benefit at the current indexed rate (check servicesaustralia.gov.au/mbsonline for current rates as these are indexed annually). If the practitioner charges $220, the patient pays $220 at time of service, then claims from Medicare at the current MBS rate, with the patient out-of-pocket being the difference between fee and rebate.
If the practice bulk bills (typically for concession card holders), the practice bills Medicare directly at 100% of MBS rate with no patient payment required.
From 1 July 2025, the GP Collaborative Chronic Condition Management Plan (GPCCMP) replaces the former GPMP and TCA arrangement. This simplifies the GP referral process by combining the management plan and team care arrangement into a single item.
For allied health practitioners, billing remains unchanged. Patients still receive five allied health services per calendar year under Chronic Disease Management. The Medicare rebate varies by profession (check current MBS rates).
Example: Physiotherapy under CDM has a Medicare benefit at the current indexed rate. If the practice charges $95, the patient pays $95, claims from Medicare at the current MBS rate, and the patient out-of-pocket is the difference.
Veterans with DVA Gold or White cards can access allied health services with DVA paying the full schedule fee directly to the practice.
DVA rates are typically higher than Medicare rates and are paid directly to the practice. DVA claims are processed through the DVA claiming system, not Medicare.
Most practices use HICAPS or similar point-of-sale claiming systems that process private health fund claims in real-time.
The process works as follows. The patient presents their private health fund card. The receptionist swipes the card through the HICAPS terminal. The system checks coverage and processes the claim. The rebate amount is confirmed instantly. The patient pays the gap (fee minus rebate).
Example: Physiotherapy consultation $95. Patient's private health fund rebate is $55. The fee is $95, the rebate claimed via HICAPS is $55, and the patient pays $40 gap.
The practice receives the full fee ($95) from two sources: patient payment ($40) and health fund rebate ($55). Both are practice income.
HICAPS payments settle to the practice bank account within two to three business days. Reconcile HICAPS statements against expected claims.
Providing services to NDIS participants requires registration (for some service types) and understanding of NDIS pricing and claiming.
NDIS sets maximum prices for each service type, published in the NDIS Pricing Arrangements and Price Limits (refreshed 1 July 2025). Prices vary by service type (therapy, assessment, group), location (metropolitan, regional, remote), and time of service (standard hours, evenings, weekends).
Important: Always check the current NDIS Pricing Arrangements at ndis.gov.au before quoting or invoicing. Prices are updated at least annually.
Claims can be processed through three pathways.
NDIS Portal (Self-Managed Participants): The practice invoices the participant directly, and the participant claims through the NDIS portal.
Plan Managers: The practice invoices the plan manager, and the plan manager pays within 14 days (typically faster).
NDIA-Managed (Agency-Managed): The practice submits claims through the NDIS provider portal, and the NDIA pays within 14 days.
NDIS requires detailed service records including participant name and NDIS number, date and time of service, service type and item number, duration of service, and service description linked to participant goals.
Inadequate documentation results in claim rejections and potential audit findings.
Most NDIS health services are GST-free. However, some services (such as certain assessments for non-therapeutic purposes) may be taxable. The NDIS pricing includes any applicable GST, so GST-free services use the full price as income while taxable services have GST extracted.
Allied health practices commonly use various payment arrangements with practitioners.
Practitioners employed by the practice receive salary plus superannuation (12% from 1 July 2025). The practice retains all fee income and bears all costs.
Example: Employed physiotherapist earning $90,000 plus $10,800 super (12%) generates $280,000 in billings annually. Practice gross margin is $280,000 minus $100,800 equals $179,200 (64%). This must cover rent, admin, equipment, insurance, and profit.
Practitioners operate as contractors, receiving a percentage of their billings. Common splits range from 60/40 to 70/30 (practitioner/practice).
Important: The ATO uses a multi-factor test to determine contractor versus employee status. Following the High Court decisions in CFMMEU v Personnel Contracting and ZG Operations v Jamsek, the emphasis is on the terms of the written contract. However, a contract cannot override the true nature of the relationship.
Key factors include whether the practitioner can delegate work, control over their own hours and methods, ability to work for other practices, and whether they bear commercial risk.
Practitioners working set hours, using practice equipment exclusively, and unable to work elsewhere may be employees regardless of contract labels.
Example: Contractor psychologist on 65% split generates $200,000 in billings. The practitioner receives $130,000 (invoices practice with ABN). The practice retains $70,000 (covers overheads, profit).
Practitioner pays fixed weekly or monthly fee to use practice room. Practitioner keeps all their billings.
Example: Room rental $400 per week. Practitioner billings vary based on their bookings. Practice income is $400 per week regardless of practitioner billings.
Allied health practices benefit from integrated practice management and accounting systems.
Practice Management Software options include Cliniko, Nookal, Power Diary, and Jane App for appointments, clinical notes, and billing.
Accounting Integration: Most practice management platforms integrate with Xero or MYOB. Key integrations include automatic invoice export, payment reconciliation, HICAPS settlement matching, and Medicare claiming reconciliation.
Recommended Stack: Cliniko or Nookal connected to Xero with HICAPS integration and Medicare Online claiming.
Most allied health services are GST-free when provided by a registered practitioner and the service is generally accepted in the profession as necessary for appropriate treatment.
GST-free services include physiotherapy treatment, psychology consultations, occupational therapy, speech pathology, dietetics, and podiatry treatment.
Some services are taxable at 10% GST including fitness assessments not for treatment purposes, corporate wellness programs, some medico-legal assessments, and services not provided by registered practitioners.
Practices providing only GST-free services cannot claim input tax credits on expenses. This is because there is no GST output to offset.
Example: Practice with 100% GST-free health services pays $5,500 including $500 GST for equipment. The $500 GST cannot be claimed as an input tax credit because the practice makes no taxable supplies.
Practices with some taxable supplies (such as product sales) can claim partial input tax credits apportioned by taxable revenue percentage.
Not Separating Revenue by Payer
Risk Level: MEDIUM
Description: Recording all income as general revenue without separating by payer source.
Consequence: Cannot analyse profitability by payer, difficult to reconcile claims, poor business decisions.
Solution: Create separate revenue accounts or tracking categories for each major payer source.
Incorrect NDIS Pricing
Risk Level: HIGH
Description: Charging above maximum prices or using wrong item numbers.
Consequence: Claim rejections, compliance issues, repayment demands, potential provider deregistration.
Solution: Reference current NDIS Pricing Arrangements before quoting or invoicing. Update prices when NDIS publishes changes.
Missing Contractor Superannuation
Risk Level: HIGH
Description: Treating practitioners as contractors when they are employees under ATO definitions.
Consequence: Back payment of super at 12% plus SGC (up to 200% of shortfall) and penalties.
Solution: Review arrangements against ATO contractor versus employee tests. Seek advice if uncertain.
Not Reconciling HICAPS
Risk Level: MEDIUM
Description: Assuming HICAPS payments match expected amounts without verification.
Consequence: Missed payments, unidentified claim rejections, estimated annual cost $2,000 to $5,000.
Solution: Reconcile HICAPS settlement reports against expected claims weekly. Investigate rejections immediately.
Incorrect Medicare Item Numbers
Risk Level: MEDIUM
Description: Using wrong MBS item codes for services provided.
Consequence: Claim rejections, potential compliance review, repayment obligations.
Solution: Verify correct item numbers for each service type and stay current with MBS updates.
What Medicare items can allied health practitioners claim?
Allied health Medicare claiming depends on profession and referral pathway. Better Access Initiative allows psychologists, social workers, and occupational therapists to provide mental health services with GP Mental Health Treatment Plan referral. Chronic Disease Management (from 1 July 2025, under GPCCMP) allows most allied health professions to provide services. Item numbers and rebates vary by profession and service type. Check servicesaustralia.gov.au/mbsonline for current items and rates as these are indexed annually.
How does HICAPS work for private health fund claiming?
HICAPS is a point-of-sale system that processes private health fund claims in real-time. When a patient presents their health fund card, the terminal checks coverage and processes the claim instantly. The rebate amount is confirmed, and the patient pays only the gap (fee minus rebate). HICAPS payments settle to the practice bank account within two to three business days. Monthly HICAPS statements should be reconciled against expected claims.
What are the NDIS documentation requirements for allied health?
NDIS requires detailed service records including participant name and NDIS number, date and time of service, service type and item number, duration in minutes, and service description linked to participant goals. Records must support that services were delivered as claimed. Inadequate documentation results in claim rejections and potential audit findings. Practice management software with NDIS-specific fields helps ensure compliance.
Are allied health services subject to GST?
Most allied health services are GST-free when provided by a registered practitioner for treatment purposes. This includes physiotherapy, psychology, occupational therapy, speech pathology, dietetics, and podiatry treatment. Some services are taxable including fitness assessments not for treatment, corporate wellness programs, and certain medico-legal assessments. Practices with only GST-free income cannot claim input tax credits on expenses.
How should practices account for practitioner commission splits?
For contractor practitioners on percentage splits, the practice records full fee income when services are provided. The contractor's share is recorded as an expense when the contractor invoices. Contractors must have ABN and appropriate registrations. Ensure arrangements meet ATO contractor versus employee tests to avoid superannuation and PAYG obligations that apply to employees. The ATO emphasises written contract terms but will look beyond labels to the substance of the relationship. Consult a registered tax agent for advice on your specific arrangements.
What changed with Chronic Disease Management from 1 July 2025?
From 1 July 2025, the GP Collaborative Chronic Condition Management Plan (GPCCMP) replaced the former GP Management Plan (GPMP) and Team Care Arrangements (TCA). This simplifies the GP referral process by combining the two items. For allied health practitioners, billing procedures remain unchanged. Patients still receive five allied health services per calendar year under CDM, and the same MBS item numbers apply for allied health services. The change primarily affects how GPs create and bill for the referral plans.
Disclaimer: This guide provides general information only and does not constitute financial, legal, tax, or healthcare advice. Scale Suite is a registered BAS agent, not a registered tax agent. For tax advice specific to your circumstances, consult a registered tax agent. Medicare item numbers, private health fund rebates, and NDIS pricing change regularly. Always verify current rates at servicesaustralia.gov.au and ndis.gov.au.
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