Doctor Wallet uses a bank clearing facility to handle practice payment flows in a way that may solve a lot of payroll headaches.
Last week saw the formal launch of DoctorWallet, a mobile app version of the Surgical Partners medical finance administration platform.
Among some other neat functions, it might go some way to solving the complex and expensive money flow problem practices are now going to have to overcome as one part of becoming compliant on payroll tax rules if you operate as a services entity and use tenant doctors.
Doctor Wallet, like Surgical Partners’ server-based application, is middleware in the payments and finance processes occurring between practices, the doctors who work at a practice and the bank(s) which ultimately manage the payment flows between each party.
It takes information on consults directly from most of the key patient management systems it is integrated with, and uses that data to pay doctors (directly and first, where required now according to Surgical Partners), remit commissions to a landlord practice and track that information for a doctor and a practice so the money can be reconciled in some manner after the fact.
The key to why the app might solve quite a few issues for tenant doctors and service entity landlord setups is that it talks to a supposedly “neutral” clearing facility offered by a big four bank which, in theory at least, is able to make the money flow directly to a doctor first and with the permission of that doctor, have the commission remitted to the landlord entity, all in real time.
It’s in theory because, although the clearing account technically has nothing to do with the service entity servicing tenant doctors (it is not owned, run or controlled in any way by this entity) and the money is technically flowing first to the doctor and not a practice, the concept is yet to be tested at the level of a state revenue office audit.
The service also gets around the mess and expense of each tenant doctor having to have a separate payment terminal, with all the mess and cost that would likely ensue.
The clearing account solution on offer within Doctor Wallet would manage payment flows even if multiple doctors were using one payment terminal in a practice.
If it all works, and the various state SROs don’t want to test the flows on some sort of technicality (why would they if the flows are truly as Surgical Partners is suggesting?) then the solution might go a long way to helping larger practices sort out how they restructure their payment flows in order to meet SRO rulings.
It would save a lot of mess and a lot of money in reconfiguring payments and commissioning of tenant doctors.
Of course, all the tenant doctors in a practice would need to be signed up to said bank’s clearing account product and have their own bank account with their ABN attached to it.
A lot of doctors in so called service entity setups still don’t have their own bank account or don’t have one linked to their ABN so such payment flows can take place.
The process to link a tenant doctor to their own account with an ABN takes place through PRODA and can be very confusing as to who puts what ABN against what option.
Services Australia still seems confused as to what options to actually offer possibly because it has never seen it as its job to help doctors with their tax issues, but this seems to be slowly getting sorted out.
In the past practices have erroneously been nominating their bank account for their tenant doctors. This would not pass a Queensland SRO audit. All of these practices will need to go back and unwind any of these set ups going forward to become payroll tax compliant.
According to Doctor Wallet, a tenant doctor can do all this signing up with services Australia within the app via Provider Connect Australia.
As a part of the process the doctor will need to identify which practices they work with.
The solution might be of particular help to recruitment agencies trying to follow their armies of locum doctors and pay them properly without getting the practices they are working with into trouble with an ATO.
For this solution to work, the tenant doctor would need to sign up directly with the bank for the clearing facility with all the information on the practice sites they are working at so commissions can be remitted (recruitment agencies might do this for their locums), with appropriate permission from the practice to do this, presumably via a correctly constructed tenant doctor contract.
For this process to work, a service entity (let’s call it a medical centre from now on, operating like a shopping centre owner) would need to first provide a tenant doctor with an appropriate contract which identified all the services and terms of their tenancy at the medical centre.
Given how rigorous the SROs are being about command and control issues with practices (strictly, a practice must have virtually no command or control in the relationship other than normal tenancy type terms), the medical centres will need to ensure these contracts are strictly services-based agreements within the bounds of what an SRO is looking for, and for that, practices are going to need good legal and accounting advice on constructing their contracts.
Centres can send their contractor agreements straight to tenant doctors’ Doctor Wallet, where a tenant doctor can digitally sign and store their contract in just a few steps.
Doctor Wallet can also store a tenant doctor’s credentials such as degrees, police checks, insurances, certificates and more.
When a tenant doctor has to onboard to a new practice, that doctor can share all the credentials securely at the tap of a button.
Given the app is underpinned by a big four bank (who is an investor in Doctor Wallet tech), the security, governance and identity management of the system are all big four bank grade.
Surgical Partners does have a couple of competitors in the payment flows and reconciliation market – CliniMetrix’s CMxPay, Doctors Pay Calculator and KPeyes.
It is not known if CMxPay or KPeyes is using a clearing account type solution yet, but Doctors Pay Calculator does. Doctors Pay Calculator also claims its payment flow solution has been signed off by specialised accountants and lawyers and has already been tested in both SRO and ATO audits.
Only Doctor Wallet is offering a web based mobile app so far.
If everything Doctor Wallet and Doctor Pay Calculator says is true about the possibility of payment flows going to tenant doctors first via a clearing account, and if the tenant doctor is in control of setting up that account and there is no formal involvement of the medical centre, these products should go a long way to satisfying the payment flow problem identified by a few state SRO rulings.
That in some apps a tenant doctor would be able to see all their transactions across multiple medical centres, including patient billings, services, facility fees and payment disbursements, in real time, is a neat bonus.
It is understood that none of these solutions are going to solve every potential accounting issue for a tenant doctor or the medical practices they are working at.
While Doctor Wallet claims it can reconcile all payment flows, if mistakes are made in relation to consult data in the patient management system, such a mistake can be passed through the system and can’t be easily backtracked.
This would likely create reconciliation issues and at scale some pretty nasty ones possibly – robots always need a bit of oversight.
But given the huge complexity and looming expense for medical centres of managing the payment flow issue, these apps are quite feasibly a big step in the direction of helping medical centres operating as service entities, and their tenant GPs, cope with the significant new red tape that state revenue offices are foisting on them.
