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AI in Healthcare: Managing Privacy, Legal & Compliance Risks

The Cost of Poor Documentation to Medicos – Webinar with Hillhouse and Pilot Partners

Hillhouse advises on service agreements for medical practices.

Fact Sheet: Service Agreements for Medical Practices

The Cost of Poor Documentation to Medicos – Webinar with Hillhouse and Pilot Partners

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The Cost of Poor Documentation to Medicos – Webinar with Hillhouse and Pilot Partners

Author: Craig Hong

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54 min watch

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5 May 2026

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Missed the live session? You can now watch the replay.

With increased ATO scrutiny and recent court decisions placing medical practices under the spotlight, this practical webinar with Craig Hong (Hillhouse Director) and Tom Howard (Pilot Partners Associate Partner – Taxation) unpacks where practices are being caught out - particularly around documentation and intra-group arrangements - and what you should be doing now to reduce risk.

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Areas of Expertise

AI in Healthcare: Managing Privacy, Legal & Compliance Risks

The Cost of Poor Documentation to Medicos – Webinar with Hillhouse and Pilot Partners

Fact Sheet: Service Agreements for Medical Practices

Fact Sheet: Service Agreements for Medical Practices

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FACT SHEET: Service Agreements for Medical Practices

Author: Craig Hong, Zach Sudiro

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3 min read

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2 Apr 2026

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Key Takeaways
ࠂ
Service and Facilities Agreements (SFAs) define the relationship between a medical practice and independent practitioners, outlining how facilities, services, fees, and responsibilities are managed.
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Well-drafted SFAs are critical for legal protection and compliance, particularly in reducing disputes, managing operational responsibilities, and supporting practice valuation or succession.
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Regularly reviewing SFAs is essential due to payroll tax risks and regulatory changes, ensuring agreements accurately reflect how the practice operates and protect the business from financial or legal exposure.

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What they are, why they matter, and how to get them right

Running a medical practice involves far more than delivering quality patient care. Behind the scenes, your legal and commercial arrangements play a critical role in protecting your business, managing risk, and ensuring compliance - particularly in today’s evolving regulatory environment.

One of the most important (and often misunderstood) documents in any medical practice is the Service and Facilities Agreement (SFA).

This fact sheet explains what an SFA is, why they matter, and why medical practices should be reviewing their agreements to remain compliant and protected.

What is a SFA?

A SFA (sometimes referred to as a Practitioner Services Agreement or simply a Service Agreement) governs the relationship between a medical practice and the practitioners who operate their own independent business utilising services offered by the medical practice.

A common point of confusion for medical practices is the difference between the relationship between a practitioner engaged under an SFA and employed under an Employment Contract. Some of the key factors that distinguish an employment contract from an SFA include:

	Employment Agreement	Service and Facilities Agreement
Role and relationship of the parties	The relationship is that of employer and employee. The practitioner is providing labor to the medical practice in consideration of the remuneration (e.g. wage, salary) paid to the practitioner.	The relationship is that of service provider and practitioner. The medical practice is providing services and facilities necessary for the practitioner to operate their own independent medical business in consideration of the service fees payable to the medical practice.
How are the practitioner and medical practice paid?	The medical practice collects patient fees and then pays the practitioner a salary or other agreed remuneration.	The preferred approach is for practitioners to collect fees into their own bank account and are invoiced by the medical practice for service fees, rather than the medical practice collecting fees on the practitioner’s behalf.
Duties of each party and control over performance of work	The medical practice determines the nature of the medical services available at the practice, and practitioner must comply with the policies and instructions of the medical practice while performing medical services.	The practitioner has discretion as to the operation of their medical practice without rigorous oversight from the medical practice.
Obligations regarding employee entitlements	The medical practice is responsible for superannuation, annual leave, sick leave, long service leave, and other employee entitlements of the practitioner.	The practitioner is responsible for superannuation, annual leave, sick leave, long service leave, and other employee entitlements.
How patient records are handled	The medical practice will claim control and ownership of patient records and other confidential information at all times.	The medical practice does not control or own the patient records, except to the extent needed to provide the services to the practitioner.
Does the practitioner represent him or herself as being part of the medical practice’s business?	The medical practice is advertised as the provider of medical services and the practitioner is a part of the business.	The medical practice is advertised as a place for patients to visit the practitioners.

SFA’s typically set out:

how the practitioner uses the medical practice’s facilities and services;
how and when fees are collected and distributed;
what services the medical practice provides (rooms, staff, IT, equipment, administration);
what services the medical practice will not provide the practitioners (specialist equipment);
the obligations of each party;
insurance requirements of each party; and
termination and exit arrangements, including the handling of patient records.

For many medical practices, and SFA underpins the entire business model.

Why SFA’s Matter

A well-drafted SFA helps to:

clearly define the legal relationship between the practice and practitioner;
support compliance with payroll tax and revenue laws;
reduce the risk of disputes during, and after, a practitioners engagement;
align operational, financial and regulatory obligations;
support practice valuation and future sale or succession; and
poorly drafted or outdated agreements can expose practices to significant financial and legal risk.

Service Agreements & Payroll Tax - A Critical Connection

Payroll tax has become one of the most significant issues affecting medical practices across Australia.

Recent various state revenue rulings have made it clear that the substance of the relationship matters more than the label.

Payroll tax risk may arise where:

patient fees are collected by the practice and later distributed to practitioners;
the medical practice controls billing, pricing or appointment systems;
practitioners are not operating independently, but rather for or on behalf of the medical practice; and
agreements do not reflect the reality of how a medical practice operates as a service entity.

Even where practitioners are engaged as independent contractors, state revenue authorities may still treat payments as “wages” if the agreement and practice structure do not support genuine independence.

Each state has its own payroll tax thresholds, exemptions, amnesty regimes, and reporting requirements, making regular review of Service Agreements essential. For more detailed information on a specific state’s requirements, please visit the Hillhouse website’s Knowledge Hub: https://hillhouse.com.au/knowledge/

Key Elements Every Medical Service Agreement Should Address

A well-drafted Service Agreement should clearly deal with:

Nature of the relationship - confirming the practitioner is an independent contractor, not an employee
Fee collection and payments - how patient fees are received, service fees calculated, and funds distributed
Services provided by the practice - rooms, reception, IT systems, nursing support, equipment and administration
Practitioner obligations - professional standards, compliance, insurances and use of practice systems
Leave, absence and locum arrangements - how absences are managed
Termination and exit - notice periods, handover obligations, restraint provisions and patient continuity
Data, records and confidentiality - ownership of records, privacy compliance and information security.

Common Issues We See in Practice

Some of the most common risks we encounter include:

outdated agreements that no longer reflect how the practice operates;
template agreements not tailored to medical practices;
inconsistencies between agreements and actual operational and billing arrangements;
poor alignment with payroll tax requirements;
unclear exit provisions leading to disputes; and
misalignment between Service Agreements and shareholder or lease arrangements.

These issues often only come to light during:

payroll tax audits;
practice sales or restructures;
Partner or practitioner exits;
disputes between medical practices and practitioners; and
ATO or state revenue reviews.

What Medical Practices Should Do Now

To protect your practice, we recommend:

reviewing all current Service Agreements;
ensuring agreements reflect how the medical practice business actually operates;
assessing payroll tax exposure with legal and accounting input;
checking consistency across service, lease and shareholder documents;
updating agreements to reflect legislative and regulatory changes; and
reviewing agreements whenever there is a change in ownership, structure or billing practices.

Proactive review is far more cost-effective than addressing issues after a problem arises.

How Hillhouse Legal Partners Can Help

Hillhouse Legal Partners has over 30 years’ experience supporting medical and healthcare practices across Australia. Our team regularly advises on the drafting and review of Service Agreements, payroll tax risk management, practice structuring and restructuring, medical practice compliance, and practice acquisitions and exits.

We understand the commercial realities of running a medical practice and provide clear, practical advice focused on solutions - not legal jargon.

Need a Service Agreement Review?

If your Service Agreements haven’t been reviewed recently or if you’re unsure whether they align with current payroll tax and compliance requirements NOW is the time to act.

Let our experienced team help ensure your agreements protect your practice, support compliance, and position your business for long-term success.

Areas of Expertise

AI in Healthcare: Managing Privacy, Legal & Compliance Risks

The Cost of Poor Documentation to Medicos – Webinar with Hillhouse and Pilot Partners

Fact Sheet: Service Agreements for Medical Practices

Patient Confidentiality: Legal Obligations and Practical Actions for Doctors and Practices

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Patient Confidentiality: Legal Obligations and Practical Actions for Doctors and Practices

Author: Craig Hong, John Davies

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3 min read

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3 Sep 2025

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Key Takeaways

Patient confidentiality is both a legal obligation and an ethical duty for all doctors and medical practices.

Clear agreements on patient record ownership prevent disputes when doctors move practices.
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Privacy compliance requires informed consent, secure storage, and careful disclosure of patient information.
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With the rise of AI in healthcare, practices must review consent processes and update privacy policies.

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In today’s digitised healthcare environment, managing patient confidentiality goes far beyond professional courtesy—it’s a legal requirement. For Queensland doctors and practice managers, privacy compliance is central to both protecting patients and safeguarding practices from significant legal and reputational risks.

This article breaks down key obligations under the Privacy Act and Australian Privacy Principles (APPs), while also providing practical steps you can take to strengthen compliance in your practice.

Who Owns Patient Records?

There is no universal rule on who owns patient records. Ownership usually rests with either the practice or the individual doctor, with the other party licensed to access them.

The safest approach is to make ownership clear in practice agreements from the outset. This avoids disputes, especially when a doctor departs and patients follow. Without clarity, both legal and financial risks can quickly escalate.

Collecting and Using Information

Health information is among the most sensitive personal data. Under the Privacy Act and APPs, patient details must be:

Collected fairly and lawfully
Obtained with informed consent (particularly sensitive health data)
Used only for the purpose it was collected

Practices must also take reasonable steps to protect patient information from misuse, unauthorised access, or disclosure. Training staff, restricting access, and maintaining strong cybersecurity protocols are essential safeguards.

When Disclosure is Permitted

Doctors and practices may disclose patient information only if:

It is directly related to the purpose of collection
The patient has consented
It is legally required
The patient would reasonably expect it

Extra caution is required when responding to requests from spouses, parents, or insurers. For overseas disclosures, patients must consent, or the receiving organisation must comply with Australian privacy standards.

Retention, Destruction, and Data Breaches

Patient records must be kept for:

Adults: At least seven years from the last consultation
Children: Until the patient turns 25

Once records are no longer needed, they must be securely destroyed or de-identified, with the process documented.

Healthcare is also the most frequently reported sector for data breaches in Australia, commonly caused by phishing, ransomware, or human error. Every practice should have a breach response plan that includes:

Containing the breach
Notifying affected patients
Assessing whether to notify the OAIC under the Notifiable Data Breach scheme

Third Parties, Consent, and AI

Confidentiality extends beyond doctors to reception staff, nurses, IT providers, and contractors. Practices should regularly review contracts with third-party providers, especially if data is stored offshore.

Informed consent remains central. Privacy policies must explain what data is collected, how it is used, whether it is stored overseas, and patients’ rights to access or correct information.

With AI tools increasingly used for transcription, scheduling, and diagnostics, new challenges arise. Practices should ensure AI systems comply with privacy obligations, disclose their use to patients, and update privacy policies accordingly. From 10 December 2026, practices must also disclose if automated decision-making is used via AI.

What to Do Now

To strengthen confidentiality compliance, practices should:

Review privacy policies and consent forms
Confirm patient record ownership in contracts
Audit third-party service providers
Train staff in privacy and cyber-awareness
Have a breach response plan in place
Review AI systems in use

Final Word

Confidentiality is at the heart of patient trust—and compliance is the legal foundation that supports it. By reviewing agreements, policies, and systems now, Queensland doctors and practices can protect their patients, avoid risk, and operate with confidence.

Need tailored advice? Hillhouse Legal Partners can assist with patient record ownership, privacy compliance, and AI use in your practice.

Areas of Expertise

Privacy

AI in Healthcare: Managing Privacy, Legal & Compliance Risks

The Cost of Poor Documentation to Medicos – Webinar with Hillhouse and Pilot Partners

Fact Sheet: Service Agreements for Medical Practices

Payroll Tax and What It Means for Queensland Doctors

Home » Health & Medical

Payroll Tax and What It Means for Queensland Doctors

Authors: Craig Hong, Zach Sudiro

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4 min read

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26 Jun 2025

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Key Takeaways

Broader Payroll Tax Scope - Recent rulings mean payments to contracted doctors may now be taxable under expanded "relevant contract" provisions.
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GP Payroll Tax Exemption - From 1 December 2024, Queensland GP practices will be exempt from payroll tax on payments to eligible GPs.
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Specialists & Allied Health Not Exempt - The exemption doesn’t apply to specialists or allied health practitioners—they must assess their own payroll tax risk.
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Review & Act Now - All practices should review contracts, check thresholds, and seek expert advice to manage compliance.

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Payroll tax has become one of the most talked-about legal and financial issues facing medical, dental, and allied health professionals in recent years. With increased scrutiny from state revenue authorities and changes in legal interpretation, doctors—whether early in their careers or well-established—need to understand how these developments could affect their practice models and income arrangements.

In this article, we focus on the evolving payroll tax landscape in Queensland and what it means for health practitioners across the state.

Why Is Payroll Tax an Issue?

Traditionally, where doctors operated under service agreements through medical centres or clinics, these arrangements were not subject to payroll tax. However, recent court decisions and updated guidance from the Queensland Revenue Office (QRO) have broadened how payroll tax laws are applied. In many cases, payments to contracted doctors are now treated as taxable “wages” under the extended “relevant contract” provisions.

This shift has raised alarm bells for practices and practitioners alike, prompting legal reviews of structures, agreements, and compliance strategies.

The Queensland Position

In Queensland, payroll tax is levied at 4.75% if a business’s annual taxable wages exceed $1.3 million.

On 22 December 2022, the QRO issued a Public Ruling (updated in February 2024), which clarified that agreements with contracted doctors—such as service agreements—may fall within the scope of taxable “relevant contracts” for payroll tax. This meant that many practices faced potential tax liabilities for payments made to independent GPs and other practitioners.

However, in a significant development, the Queensland Government passed the Revenue Legislation Amendment Bill 2024, confirming that from 1 December 2024, payments made by GP practices to general practitioners will be exempt from payroll tax—bringing welcome certainty for GPs and clinics alike.

Who Qualifies for the GP Exemption?

The exemption applies to:

Doctors registered under the Health Practitioner Regulation National Law to practice in the specialty of general practice;
Practitioners listed in the federal Health Insurance (General Medical Services Table) Regulations 2021 (Cwlth), schedule 1, part 1, clause 1.1.3;
Prescribed medical practitioners who predominantly provide GP-style services.

It’s important to note that this exemption does not extend to medical specialists or allied health practitioners, who must still assess their potential payroll tax obligations.

What Doctors and Practices Should Do

While the GP exemption offers relief, compliance obligations remain complex and vary depending on your practice model, specialty, and financial thresholds.

Here’s what you and your practice should consider:

Know the law: Understand current legislation and QRO rulings relevant to your specialty and business structure;
Assess your threshold: Determine whether your practice is approaching or exceeding the payroll tax threshold;
Review contracts: Revisit any service or independent contractor agreements with legal and accounting advisers;
Check eligibility: See if you or your practice qualifies for any exemptions or amnesties—and whether disclosure is required;
Seek advice: Don’t delay in obtaining expert legal and tax advice tailored to your specific situation.

Looking Ahead

While Queensland GPs now have greater clarity, specialists and allied health practitioners may still face uncertainty. It’s likely that further updates will emerge as state revenue offices continue to scrutinise practitioner arrangements.

Practices and individuals alike should take a proactive approach to ensure they’re not caught off guard.

Need Help?

Hillhouse Legal Partners can assist with reviewing or drafting agreements, assessing your payroll tax position, and preparing for any future audits. We also provide advice to individual practitioners seeking to understand their personal exposure or contractual risks.

For tailored advice, contact Craig Hong or Zach Sudiro, in our Corporate and Commercial Team, on (07) 3220 1144 or via email at craig@hillhouse.com.au or zach@hillhouse.com.au.

Areas of Expertise

AI in Healthcare: Managing Privacy, Legal & Compliance Risks

The Cost of Poor Documentation to Medicos – Webinar with Hillhouse and Pilot Partners

Fact Sheet: Service Agreements for Medical Practices

Payroll Tax Update: GP Exemption & Dental Clinic Amnesty

Home » Health & Medical

Payroll Tax Update: GP Exemption & Dental Clinic Amnesty

Authors: Craig Hong, Zach Sudiro

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3 min read



30 Oct 2024

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Key Takeaways

The newly elected Liberal National Party have pledged to exempt general practitioners from payroll tax. Details of this exemption are yet to be clarified.
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A payroll tax amnesty for dental clinics has been announced by the Queensland Revenue Office.
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Both announcements remain unclear regarding the scope and finer details.
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GPs and dental clinics should seek legal and accounting advice tailored to their specific situation.

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Further important updates to payroll tax for GPs and dental clinics in Queensland have been announced.

GP Payroll Tax Exemption

As part of their platform, the newly elected Liberal National Party (LNP) committed to exempting General Practice (GP) medical centres from payroll tax.

However, the details of these pre-election promises have not been revealed. For example, it is not known whether the exemption will apply solely to individual GPs or extend to the practice as a whole. Additionally, it has not been confirmed whether this exemption will include all GPs, or only those contracted GPs that are deemed employees under the Payroll Tax Act 1971 (Qld) (the Act)), however are not employees at common law.

GP practices are encouraged to monitor developments and updates in this area, and seek legal and accounting advice as required.

Hillhouse Legal Partners will continue to provide updates as they become available.

Dentist Payroll Tax Amnesty

The Queensland Revenue Office (QRO) has announced a payroll tax amnesty aimed at contracted dentists up until 30 June 2025.

The amnesty applies to payments made to contracted and registered dentists. Dentists classified as common law employees and contracted dentists who are already captured under an exemption for payroll tax, are excluded from the amnesty. This is an important distinction for dental practices to keep in mind to understand their obligations and potential liabilities.

Eligibility

To qualify for the amnesty, dental clinics must:

be a ‘designated dental clinic’;
submit a voluntary disclosure;
be registered for payroll tax before 30 June 2025; and
comply with ongoing payroll tax disclosure obligations post-disclosure, which includes from 1 July 2025.

A ‘designated dental clinic’ is an employer that conducts a medical centre business and one of the following applies:

meets the criteria for registration under section 52 of the Act but is not registered for payroll tax in Queensland and makes payments to contracted dentists;
is registered for payroll tax in Queensland but is not declaring its payments to contracted dentists for payroll tax;
is or was subject to audit activity (that has not been finalised) in relation to its payments to contracted dentists; or
has been assessed on payments to contracted dentists as a result of audit activity.

What does this mean for practices?

Whilst this amnesty is good news for businesses that operate a dental practice, it also signals that the QRO will be seriously investigating dental practices moving forward. While we cannot be certain as to the approach that other States may take, the respective revenue offices of other States may also be reviewing the arrangements between dental practices and practitioners with more scrutiny.

Dental clinics should review their current arrangements and assess whether they are eligible for the amnesty before the 30 June 2025 deadline. Dental clinics should also review their Service Agreements and seek legal and accounting advice well in advance of 30 June 2025 to best manage payroll tax risks before the amnesty deadline.

Hillhouse can help practices to prepare new agreements, update their existing agreement, and advise on practical and operational mechanisms that can be implemented to put best practice systems in place in the event your practice is audited.

Please contact Craig Hong, Director, Hillhouse Legal Partners on (07) 3220 1144 or email craig@hillhouse.com.au to discuss the specific needs of your practice further.

Areas of Expertise

Employment & Industrial Relations