Private ruling: GST and health services
Published: April 2015

Ruling: Q1: Are you making a GST-free supply under subsection 38-7(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when you provide diabetes education to patients referred to you by a General Practitioner (GP) under an allied health form? | A1: Yes. The diabetes education health service will be a GST-free supply of a medical service if there is a medicare benefit payable for the supply. | Q2: Are you making a GST-free supply under subsection 38-10(1) of the GST Act, when you provide diabetes education directly to patients? | A2: Yes. The diabetes education health service provided by a registered nurse will be a GST free supply of other health services under section 38-10 if it is generally accepted in the nursing profession as being necessary for the appropriate treatment of the recipient of the supply. This would be the case where the services are provided by other recognised professionals in your practice, such as a Dietician, and all the requirements of section 38-10 are satisfied. Where the services are provided by an employee that is not a recognised professional, but that person is directly supervised by a recognised professional the supply would also be GST free where all the requirements of section 38-10 are satisfied.

Relevant facts and circumstances: You are registered for GST. You are a Credentialled Diabetes Educator registered with the Australian Diabetes Educators Association (ADEA). The ADEA website, viewed 1 April 2015, www.adea.com.au, provides information about their credentialling program including that an applicant for initial credentialling or recredentialling must include their current primary discipline registration or practicing certificate as a: • Registered Nurse (RN or Division One) • Accredited Practising Dietitian • Registered Medical Practitioner • Registered Pharmacist • Podiatrist • Accredited Exercise Physiologist • Physiotherapist You provide diabetes education health services which involves providing holistic diabetes education to patients either referred to you by a General Practitioner or sourced directly. Patients are referred to you by a General Practitioner (GP) using the form Referral Form for Individual Allied Health Services under Medicare for patients with chronic medical conditions and complex care needs . You are registered with Medicare Australia to provide diabetes education health services under Medicare Australia. Medicare Benefits Schedule items, 10951, 81100 through to 81125 and 81305 relate to the provision of an allied health service in relation to diabetes education. The publication, Australian Government Department of Health, Medicare Benefits Schedule Allied Health Services 1 November 2014, provides information on the provision of diabetes education by allied health professionals. To be eligible to provide services under Medicare, allied health professionals must meet specific eligibility requirements, be in private practice and be registered with Medicare Australia. There are specific requirements for each Medicare item. In summary these include, amongst other requirements: 10951 - Diabetes Education Service; 81100 - Diabetes Education Service - Assessment for group services; 81305 - Diabetes Education Health Service provided to a person who is of Aboriginal or Torres Strait Islander descent • Must be a Credentialled Diabetes Educator (CDE) as credentialled by the Australian Diabetes Educators Association (ADEA). • The person is referred to the eligible diabetes educator by the medical practitioner using a referral form. 81105 - Diabetes Education Service - Group service • Must be a Credentialled Diabetes Educator (CDE) as credentialled by the Australian Diabetes Educators Association (ADEA). • The person has been assessed as suitable for a type 2 diabetes group service under assessment 81100, 81110 or 81120. 81110 - Exercise Physiology - Assessment for group services • Must be an 'Accredited Exercise Physiologist' as accredited by Exercise and Sports Science Australia (ESSA). • The person is referred to the eligible exercise physiologist by the medical practitioner using a referral form. 81115 - Exercise Physiology - Group Service • Must be an 'Accredited Exercise Physiologist' as accredited by Exercise and Sports Science Australia (ESSA). • The person has been assessed as suitable for a type 2 diabetes group service under assessment 81100, 81110 or 81120. 81120 - Dietetics - Assessment for group services • Must be an 'Accredited Practising Dietitian' as recognised by the Dietitians Association of Australia (DAA). • The person is referred to the eligible dietician by the medical practitioner using a referral form. 81125 - Dietetics - Group Service • Must be an 'Accredited Practising Dietitian' as recognised by the Dietitians Association of Australia (DAA). • The person has been assessed as suitable for a type 2 diabetes group service under assessment 81100, 81110 or 81120. You are a registered nurse registered with Australian Health Practitioner Regulation Agency (APHRA). You have various employees who will be providing diabetes education health services. These include a Dietician and an Exercise Physiologist. The professions of other employees are not known at this stage.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-7(1), and | A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-10(1) .

Reasons for decision: Summary: Subsection 38-7(1) states that a supply of a 'medical service' is GST-free. 'Medical service' is defined in section 195-1, in part, as: medical service means : (a) a service for which medicare benefit is payable under Part II of the Health Insurance Act 1973; or … The provision of diabetes education health services by you to patients referred to you by a GP via Referral Form for Individual Allied Health Services under Medicare for patients with chronic medical conditions and complex care needs will be the provision of a service where a medicare benefit is payable under various items listed in the Medicare Benefits Schedule. This is subject to conditions outlined by Medicare Australia. When you provide a diabetes education health service and there is a medicare benefit payable for the supply, the service will be a GST-free supply of a medical service. You make a GST-free supply of other health services if all the requirements of subsection 38-10(1) are met. Subsection 38-10(1) states: (1) A supply is GST-free if: (a) it is a service of a kind specified in the table in this subsection, or of a kind specified in the regulations; and (b) the supplier is a *recognised professional in relation to the supply of services of that kind; and (c) the supply would generally be accepted, in the profession associated with supplying services of that kind, as being necessary for the appropriate treatment of the *recipient of the supply. | Detailed Reasoning - Service: 1 Aboriginal or Torres Strait Islander health 2 Acupuncture 3 Audiology, audiometry 4 Chiropody 5 Chiropractic 6 Dental 7 Dietary 8 Herbal medicine (including traditional Chinese herbal medicine) 9 Naturopathy 10 Nursing 11 Occupational therapy 12 Optometry 13 Osteopathy 14 Paramedical 15 Pharmacy 16 Psychology 17 Physiotherapy 18 Podiatry 19 Speech pathology 20 Speech therapy 21 Social work | Detailed Reasoning - Service of a kind specified in the Table: Diabetes education health service is not a service specified in the table in subsection 38-10(1) (Table). Issue 2.a.1 of the Health Industry Partnership - issues register (Issues Register) considers the requirement of 'services of a kind' in relation to psychotherapists and psychoanalysts. Issue 2.a.1 of the Issues Register in part states: Psychotherapy and psychoanalysis are not services of a kind specified in the Table for section 38-10(1)(a). However, psychotherapy and psychoanalysis may be considered to be techniques of one or more of the services listed in that Table. Applying this principle to your situation, while diabetes education is not specified in the Table it may be a technique of one of the services listed in the Table. Whether or not, diabetes education is a technique of one of the services in the Table is a question of fact. | Detailed Reasoning - Recognised professional: Recognised professional is defined in subsection 195-1, in part, as: recognised professional : a person is a recognised professional, in relation to the supply of a service of a kind specified in the table in subsection 38-10(1), if: (a) the service is supplied in a State or Territory in which the person has a permission or approval, or is registered, under a *State law or a *Territory law prohibiting the supply of services of that kind without such permission, approval or registration; or (b) the service is supplied in a State or Territory in which there is no State law or Territory law requiring such permission, approval or registration, and the person is a member of a professional association that has uniform national registration requirements relating to the supply of services of that kind; or … A registered nurse satisfies paragraph (a) of the definition of a recognised professional as nursing is regulated by law and a nurse must be registered under the relevant law in each state and territory. Issue 2.a.6 of the Issues Register considers the type of recognised professional that provides a service of 'Dietary' listed at Item 7 of the Table. Issue 2.a.6 of the Issues Register states: It is considered that dieticians and nutritionists would in certain circumstances be providing dietary services. From information supplied to the ATO it is understood there is only one professional association that may have uniform national registration for the purposes of paragraph (b) of the definition of *recognised professional in section 195-1. This association is the Dieticians Association of Australia. A Dietician registered with the Dieticians Association of Australia satisfies paragraph (b) of the definition of a recognised professional. An Exercise Physiologist registered with a professional association with uniform national registration would also satisfy paragraph (b) of the definition of a recognised professional. You will need to assess whether your supply of diabetes education health service is provided by a recognised professional in relation to a health service listed in the Table. Issue 2.a.7 of the Issues Register provides guidance on what is considered to be 'a professional association that has uniform national registration requirements' under paragraph b of the definition, and in part, states: A number of professional associations have been identified in relation to the supply of services of the kinds listed in the Table in section 38-10(1). These professional associations often require a person to a have a minimum level of educational qualifications (usually tertiary level qualifications) before that person will satisfy the association's requirements for practitioner status. These professional associations are national associations and the registration requirements for practitioner status are the same for all practitioners regardless of the state or territory in which they practice. Issue 2.a.8 of the Issues Register considers the situation where allied health practitioners employ assistants that are not 'recognised professionals' to provide certain services to patients. Issue 2.a.8 of the Issues Register, in part, states: Section 38-10(1)(b) requires that the supplier of the service for the purposes of section 38-10 be a recognised professional. If a component of the supply is not provided by a 'recognised professional' it will be a taxable supply unless that assistant is directly supervised in undertaking that component. It is considered that a person will be directly supervised where the *recognised professional: • attends the patient at the commencement of the treatment and at the subsequent commencement of each new treatment, and • is readily available for the whole of the time that the assistant is working with the patient, and • that the *recognised professional be available to take appropriate action in the case of an emergency, and • determines all of the appropriate treatment to be provided by the assisting person, and • can satisfactorily prove that they monitor the services of the unqualified staff. Where the diabetes education health service is not provided by a recognised professional in relation to a health service listed in the Table, the person providing the service will need to be directly supervised in order to satisfy the requirement of being a recognised professional under paragraph 38-10(1)(b). | Detailed Reasoning - Appropriate treatment: For the purposes of paragraph 38-10(1)(c), the recognised professional must provide the service listed in the Table, and the relevant profession would need to consider the service as being necessary for the appropriate treatment of the recipient of the supply. Whether or not, diabetes education health service is generally accepted in the relevant profession as being necessary for the appropriate treatment of the recipient of the supply is a question of fact. You will need to assess whether diabetes education health service is generally accepted as appropriate treatment by the relevant profession in the Table in relation to the recognised professional providing the service. | Summary: In this case, the diabetes education health service provided by a registered nurse will be a GST free supply of other health services under section 38-10 if it is generally accepted in the nursing profession as being necessary for the appropriate treatment of the recipient of the supply. This would be the case where the services are provided by other recognised professionals in your practice, such as a Dietician, and all the requirements of section 38-10 are satisfied. Where the services are provided by an employee that is not a recognised professional, but that person is directly supervised by a recognised professional the supply would also be GST free where all the requirements of section 38-10 are satisfied. Therefore, you will be making GST-free supplies under subsection 38-10(1) of the GST Act when you supply diabetes education health services.

Reasons for decision: In this ruling, please note: | • All legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) unless otherwise specified. | • All terms marked by an *asterisk are defined terms in the GST Act.