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Frequently Asked Questions and Addendum - 1 Feb 2011

This Update edition of the Frequently Asked Questions relating to the GP Super Clinics Program incorporates and updates the FAQs previously published in 2008 and 2009.

PDF printable version of Frequently Asked Questions (PDF 114 KB)

These FAQs are current at 31 January 2011 but may be subject to change. Any changes will be made available at the GP Super Clinics website.

I want to apply for GP Super Clinic funding as a new company. As a new company, I cannot provide three years of financial records with my application. What should I do?

Where the applicant is a newly created legal entity, it will not be possible to provide three years of financial records for the new entity (as required under¹ Objective 8 of the Application Form – page 41 of the GP Super Clinics National Program Guide 2010). Analysis of such records goes towards evaluating the financial capacity of the applicant to support the establishment and ongoing operation of a GP Super Clinic.

¹ Previously ‘C2.2 Managing finances during the Operational Phase’ – page 41 of the GP Super Clinic National Program Guide 2008

An applicant that is a newly created entity should submit any information that demonstrates its financial viability. That information may include, amongst other things, particulars of:

• the basis on which the entity was formed, for example the constitution;
• its capital resources;
• its governance and management structure;
• its assets and financial resources generally, including the financial history of any existing operations that will be transferred to the new entity;
• any financial support, such as parental guarantees or loan facilities provided or to be provided to it by third parties; and
• its planned project management arrangements for ensuring timely completion of the GP Super Clinic building.

Your financial adviser may have other useful examples of information that could be provided in an application to address this.

Can I use a Unit Trust to establish the clinic?

The Commonwealth will enter into a funding agreement with the Trustee of a Unit Trust – subject to legal advice that the terms of the Trust Deed are suitable for meeting the obligations of the funding agreement.

The Commonwealth will not accept units within a Unit Trust in return for its investment.

Can government organisations apply for funding to establish a GP Super Clinic?

Yes, if certain conditions are met. As set out at page 13 of the GP Super Clinics National Program Guide 2010, “A locally based State or Territory Government entity may, under partnership arrangements with private organisations, participate in an application for funding for a GP Super Clinic in a particular locality”. This requirement does not extend to local government entities (i.e. Councils). Top of page

Can I use GP Super Clinics funding to pay out or terminate an existing property lease?

Capital Funding
Capital funding under the GP Super Clinics Program must be primarily used for the construction of capital works and this includes the cost of acquiring property or land to be used as the site of a GP Super Clinic.

The acquisition costs can include a reasonable payment to pay out or terminate a pre-existing lease only when the leased site forms part of property or land being acquired and the lease would prevent or restrict the property’s or land’s use for the proposed GP Super Clinic.

Relocation Incentives
Relocation incentive funding allocated to a GP Super Clinic, which is then passed on to an individual nurse, allied health professional or, in some circumstances, pharmacist, who is eligible for the incentive in accordance with the GP Super Clinics National Program Guide, can be used by the individual practitioner to pay out a lease or discharge an existing property lease. The individual who receives a relocation incentive payment can, at his or her discretion, determine how that payment will be used.

Can I use the grant funding to buy an existing general practice as part of establishing the GP Super Clinic?

Capital funding can be used for the purchase of the physical premises in which an existing general practice is located and, subject to a sworn valuation, funds can be used for furniture, fixtures and fittings. Grant funding cannot be used to purchase the goodwill component of a business.

Are leases permitted – and if so, are there any special conditions that apply to them?

The establishment by a funding recipient of tenure to the site on which a GP Super Clinic is being built is fundamental to the GP Super Clinics Program, both for protecting the purpose of the investment and for meeting the Commonwealth’s obligations in managing public funds. It is the Commonwealth’s position that the best basis for establishing tenure is freehold title to the land and that is the concept contained in the funding agreement.

There are instances in which tenure based on a lease is proposed, and is accepted, although it is the Commonwealth’s position that it is an inferior form of tenure, and, where tenure is under a lease, the Commonwealth requires additional measures to protect the purpose of the investment and meet the Commonwealth’s obligations in managing public funds. When considering a proposal that tenure be established under a leasehold arrangement, the Commonwealth requires that the lease includes conditions which ensure that the clinic will have the right to operate as a GP Super Clinic for 20 years and that the right to operate as a GP Super Clinic cannot be taken away without the Commonwealth’s approval.

The terms of the draft lease will therefore have to be submitted to the Commonwealth for its consideration and approval.
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I want to establish the clinic within a larger development that is being built by someone else. Can I provide the grant funding to the developer in return for a guaranteed lease space?

There is no bar to this approach, however such proposals are considered on a case by case basis. The paramount principle considered by the Commonwealth in considering proposals based on agreements with developers is to ensure that Value for Money is achieved. It also considers the risks to the Commonwealth and the protection of the purpose for which the funds have been provided – the delivery of integrated, multidisciplinary primary health care services that meet local health needs and priorities. Generally the Commonwealth would expect that the clinic will have clear tenure distinct from the larger development. This may take the form of, for example, a lease based on a substantially discounted rental which is to be submitted to the Commonwealth for approval (note details in the response on leases above). The Commonwealth will not give approval in circumstances where it does not believe that there is adequate recognition of the contribution of public funds towards the development.

I want to lease one room in the GP Super Clinic to a visiting specialist and another room to a full time psychologist. Are arrangements like this permitted within the GP Super Clinic?

There is no bar to the use of tenancy arrangements within a GP Super Clinic – it is a matter for the funding recipient. However, as it effectively “sub-contracts” the delivery of some services within the clinic this will need to be reflected in the Operational (or business start-up) Plan for the clinic and the Commonwealth will ask for a copy of the proposed terms and conditions.

The Commonwealth expects that the benefit of the grant will be used in a variety of ways across the clinic’s operations including, potentially, reduced or discounted rental to allied health practitioners, community based health organisations and the like; access to reduced or discounted administrative support services; and access to reduced or discounted IM/IT services.

Can I set aside some of the grant funds for Relocation Incentive Payments for GPs in the 28 additional GP Super Clinics announced in the 2010-11 Budget?

As part of the 2010-11 Budget the Government announced a range of incentives to support GPs moving to regional, rural and remote locations. To avoid duplication, Relocation Incentives for GPs under the GP Super Clinics Program have been discontinued, however they continue to be available for nurses, allied health professionals and, in some circumstances, pharmacies. GPs in the additional 28 GP Super Clinics are not barred from applying for the new Rural Relocation Incentive Grant, information on which is available at Doctor Connect
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I see that GP Super Clinic grant funding is divided into four categories: capital, non-capital, recurrent and relocation incentives. What payments are covered by the non-capital category? How are such payments managed?

It should be noted that all categories of funding have the same accountability requirements – they must be detailed in the Project Budget approved by the Commonwealth and acquitted as part of regular financial reporting and audited reports.

Expenditure on non-capital costs is capped at 5% of the total funding available under the GP Super Clinics Program for a locality e.g. for a $7 million site, non capital costs of up to $350,000 may be approved. The purposes to which this funding may be applied are those associated with establishing the GP Super Clinic business:

• professional legal fees and charges for incorporating a new entity and developing leasehold and/or participation agreements [note that legal fees and charges (including Stamp Duty) for the acquisition of property are not included in this category of funding, being costs associated with the capital works];
• professional accountancy fees and charges for developing three year operational cash-flow projections and the Project Budget, establishing bank accounts and managing the acquittal of funds during the construction phase;
• professional clinical service planning fees for the development of a clinical service model that will meet the GP Super Clinic Program Objectives.

For the sake of clarity, non-capital funding cannot be used for payments to Board Members.

As with all aspects of the GP Super Clinics funding, ensuring Value for Money must be the paramount consideration in the expenditure of non-capital funds. Non-capital costs should be clearly identified in the Project Budget using the format to be provided by the Commonwealth. Importantly, grant funds cannot be used to pay for non-capital expenses incurred prior to signing the funding agreement.
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The building I have in mind will cost more than the grant funding, can I use commercial borrowings to meet the difference?

Proposed borrowings, including how the debt will be serviced, should form part of an application for funding and will be considered as part of the report on the business model contained in the application provided by the Independent Financial Advisor.

These matters are considered on a case by case basis, in light of the risks to the Commonwealth and the protection of the purpose for which the funds have been provided – the delivering of integrated, multidisciplinary primary health care services that meet local health needs and priorities for 20 years.

Where approval is provided, it will be conditional upon the lender agreeing to:

• the Commonwealth registering a second mortgage (there is no interest payable as the mortgage simply secures the performance of the obligations in the funding agreement); and
• enter into a Deed of Priority with the Commonwealth whereby it recognises the funding agreement and the purpose of the Commonwealth’s investment.

Disclaimer:
Once the funding agreement has been executed, the Commonwealth reviews each proposal regarding securing borrowings on a case by case basis. This statement is of a general nature only and does not imply that the Commonwealth will agree to all or any proposal regarding borrowings.

How do I know who is the successful funding recipient?

Following the completion of a funding process, the contact details of the successful funding recipient are made available on the relevant State /Territory page on the GP Super Clinics website
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What happens if I no longer want to use the building as a GP Super Clinic?

If, during the period designated for use as a GP Super Clinic [the standard period being until 20 years after completion of the capital works], the funding recipient stops using the premises to provide integrated multidisciplinary care services then this will, in all likelihood, be a breach of its agreement with the Commonwealth.

Where such a breach occurs, the Commonwealth will have a range of rights, which include:

• Recovering some, or all, of the GP Super Clinic funding;
• Terminating the funding agreement;
• Either directly, or through a nominee, ‘stepping in’ to perform the funding recipient’s obligations and recovering the costs of doing so;
• Rights arising from securities, undertakings or guarantees, as applicable for that site; and
• General rights at law, which may include specific performance, rights to damages and relief granted by injunction.

The terms and conditions applicable under the funding agreement will form part of the Invitation to Apply for each locality. Intending applicants should seek independent legal advice on such matters.
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What are the implications if a funding recipient wishes to leave a GP Super Clinic within the contracted 20 year period?

Contractual arrangements with the operator of the GP Super Clinic include a commitment to use the infrastructure provided under the program to deliver integrated, multidisciplinary primary health care services for a period of 20 years from the date upon the capital works are completed (in a hub and spoke model, the date on which construction of the hub is completed).

The 20 year period has been chosen to reflect the significant investment by the Commonwealth in each locality, and the need:

• for surety in achieving the Australian Government's commitment to strengthen primary care services through infrastructure investment;
• to ensure that community expectations of ongoing service delivery by the clinic are met; and
• to ensure that assessments about the achievement of Value for Money are consistent with the requirements of the Financial Management and Accountability Act 1997.

The Australian Government acknowledges that the ownership of an individual clinic (including the ownership of the land on which it is built), the legal arrangements under which the funding recipient operates, and the range of services provided at the clinic may need to change over this 20 year period.

Where it is proposed that the clinic will continue to be used to provide integrated, multidisciplinary primary health care services, the Department will work with the current and future operators of the clinic to ensure that services will continue to meet the needs and priorities of the local community for the balance of the designated period. Where, for any reason, it is proposed that within the 20 year period, the provision of integrated, multidisciplinary primary health care services from the clinic will cease, there are provisions under the funding agreement which may require the repayment to the Commonwealth of a proportion of the funding provided to establish the GP Super Clinic. This proportion will depend on the period of time that the GP Super Clinic has been operational.
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I would like to work in a GP Super Clinic – how do I go about it?

As the Australian Government will not own or operate the GP Super Clinics, you should approach the GP Super Clinic funding recipient if you are interested in exploring opportunities for involvement with a GP Super Clinic.

The GP Super Clinic funding recipient is responsible for all operational and employment matters. This includes the procurement of the necessary building and construction services, fittings and equipment; and the decision on the mix and range of health care services to be provided in order to meet the needs and priorities of the local community.

All health practitioners involved in a GP Super Clinic need to abide by all relevant state and territory government legislation.

Following the completion of a funding process, the contact details of the successful funding recipient are made available on the relevant State /Territory page on the GP Super Clinics website

HUB and SPOKE models

I am confused about the hours that hub and spoke GP Super Clinics are expected to be open. Can this be clarified?

Page 9 of the National Program Guide 2010 states that hub and spoke arrangements must ensure that, in at least one site, privately practising GPs will deliver services during standard business hours (generally accepted as being around 8am-6pm weekdays and 9am – 12 noon Saturdays).

To clarify the situation, as stated at Page 8 of the National Program Guide 2010 , all of the 28 GP Super Clinics funded through the 2010-11 Budget, including hub and spoke model clinics, will offer hours of opening that extend beyond 8am-6pm weekdays and 9am-12 noon Saturdays. This includes ensuring the availability of privately practising GPs during those extended hours.
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We are establishing a hub and spoke model and want to provide grant funds to some of the owners of spoke sites to carry out improvements. Will they have to agree to deliver services as part of the GP Super Clinic for 20 years?

While the operators of spoke sites in a hub and spoke model GP Super Clinic are not themselves required to enter into a funding agreement directly with the Commonwealth, it is expected that there will be formally documented arrangements between the organisation establishing the GP Super Clinic and each operator of a spoke site. Those formal arrangements must be consistent with the terms of the funding agreement that the organisation establishing the GP Super Clinic has with the Commonwealth.

Where a funding recipient proposes to provide grant funds to the operator of a spoke site, this must be set out in the Project Budget and approved by the Commonwealth.

The length of time that the operator of a spoke site within a hub and spoke GP Super Clinic must deliver services in line with the GP Super Clinics Program Objectives escalates with the amount of grant funding provided to the operator of the spoke site by the GP Super Clinic funding recipient.

As a guide, it is expected that the following minimum time periods for the delivery of aligned services would be reflected in any formal agreement between the GP Super Clinic funding recipient and the operator of a spoke site:

• Up to $150,000 (GST exclusive) – not less than 2 years;
• Above $150,000 but below or equal to $300,000 (GST exclusive) – not less than 3 years;
• Above $300,000 but below or equal to $500,000 (GST exclusive) – not less than 5 years;
• Above $500,000 – up to 20 years.

These time periods commence with the completion of capital works at the hub site for the GP Super Clinic.

Is there ability in the virtual service delivery model for independently owned sites to operate under a joint venture arrangement?

Yes. However, where the joint venture is not incorporated, the Department would still require a lead organisation to be nominated which "would execute the relevant funding agreement and accept responsibility for meeting contractual obligations to the Commonwealth, including in relation to the construction and operation of the GP Super Clinic and for financial and other reporting and accountability requirements and the achievement of outcomes" (section 5.3 of the National Program Guide 2010²).

Accordingly, one of the organisations in the unincorporated joint venture arrangement would need to be nominated as the lead organisation which has ultimate contractual responsibility to the Commonwealth for the GP Super Clinic under the funding agreement.

Alternatively, the organisations could incorporate the joint venture arrangement. The incorporated joint venture vehicle could then be the organisation which enters into the funding agreement with the Commonwealth. As stated at section 5.3 of the National Program Guide 2010: "In some cases new legal entities may be established specifically for the purpose of the Program”.

Importantly, the Department will expect that within a hub and spoke arrangement there would be shared clinical and organisational governance arrangements as outlined in³ Section 4.2 (page 9) of the National Program Guide 2010.

² Previously section 3.3 of the National Program Guide 2008
³ Previously Section 2.7 (p. 8) of the National Program Guide 2008 and in the GP Super Clinics - Hub and Spoke Service Delivery Models Paper

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How would clinical governance work in a hub and spoke GP Super Clinic model?

Clinical Governance refers to how the GP Super Clinic manages responsibility and accountability for clinical performance across the organisation, be it located at one site or at various locations in a hub and spoke model or in a virtual model.

Clinical governance in integrated primary care ensures that all health care providers and administrators in the GP Super Clinic take joint responsibility for the quality of clinical care delivered by the organisation. As such, clinical decision-making is integrated within the management and organisational arrangements, with both clinical and administrative personnel involved in the governance process, including planning, implementation, operation and evaluation of clinical services.

Clinical governance may include for example, shared care protocols based on best practice guidelines and consensus arrangements guided by a cross-professional steering group.

This requires joint standard setting and monitoring where care is provided by more than one clinician and agreed team based administrative and clinical systems to support quality care and patient safety.

Examples of existing Australian integrated multidisciplinary services with clinical governance models include:

• Integrated Primary Mental Health Services (in North Eastern Victoria);
• Several Health One integrated primary care services in New South Wales; and
• Brisbane South Centre for Health Services Integration.

Further information on clinical governance models in multiple sites or community settings is available from resources including:

• Australian Primary Health Care Research Institute
• Victorian Health Care Association
• LaTrobe University

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Under a hub and spoke or a virtual model GP Super Clinic, will member practices be expected to bulk bill all patients and/or ensure bulk billing by the allied health services?

Bulk billing is not mandated under the GP Super Clinics Program. Health professionals working in GP Super Clinics will retain autonomy over billing arrangements. However, bulk billing will be strongly encouraged and applications for funding that include bulk billing, will be viewed positively.

The extent of bulk billing would be a factor for consideration in the assessment of how proposals might achieve the Program Objective of providing accessible, culturally appropriate and affordable care to patients. GP Super Clinics operating under hub and spoke or virtual models are required to have in place shared organisational governance arrangements. It would be reasonable to assume that this would include consistent billing practices across and within sites.

We are setting up a hub and spoke model and are actually starting services with a spoke site. Can we use recurrent funding from that point or must we wait until the hub is built?

The purpose of recurrent funding is to support personnel costs associated with integrating procedures and systems for the different clinicians and service providers during the early stages of the clinic’s operations.

Recurrent funding is limited to 12.5% of the total grant funding and is payable quarterly as reimbursement of expenses actually incurred, and will typically be claimed when service delivery from the hub has commenced.