Key takeaways
Replace the owner’s work before measuring profit.
Allow for clinical, supervisory and management duties that a purchaser must resource.
Value the entity’s income, not every patient billing.
Reconcile gross collections, practitioner entitlements and service fees to the specified business.
Compare payer contribution, not just payer turnover.
Medicare, private and NDIS work can require different clinical time, administration and collection effort. Test referral eligibility and continuity against the chronic condition plan transition.
Test practitioner and referral dependence separately.
A diversified payer mix does not remove reliance on one clinician or referral relationship.
Credentials and agreements need their own continuity review.
Qualifications belong to individuals; registrations, payer arrangements and contracts may require action or consent. Certain NDIS acquisitions can trigger condition audits. Health-information privacy applies regardless of practice turnover.
Define the practice interest before analysing turnover
Physiotherapy, psychology, occupational therapy, podiatry and multidisciplinary clinics can operate through very different structures. A clinician-owned business employing therapists is not economically identical to a service entity supplying rooms and reception to independent practitioners. Identify whether the instruction concerns operating assets, company shares, a partnership interest or a particular service entity.
State what is excluded, including separately owned property, practitioner businesses and personal investments. Establish the valuation date, purpose and intended users. For a minority interest, governance and distribution rights also matter: a proportional share of the whole practice is not automatically the value of the specified interest.
Separate owner labour from business earnings
An owner may treat patients, supervise clinicians, manage referrals and run the business. Their drawings or salary may not reflect the commercial cost of those duties. Reconstruct time spent on each role and assess evidenced replacement remuneration, including associated employment costs and realistic coverage for leave.
Do not add back the entire owner salary while retaining all owner-generated revenue. Equally, avoid charging twice for management already performed by a paid practice manager. If a replacement clinician would need time to build a caseload, reflect that transition rather than assuming immediate full productivity. Recruitment history, candidate availability and supervision capacity are more useful than a generic salary assumption.
Reconcile gross billings to entity receipts
Start with a revenue bridge from appointments to invoicing, collections and the income earned by the valuation subject. Where independent practitioners own their clinical fees and pay a service charge, total patient billings are not automatically service-entity revenue. Conversely, an employing clinical business may recognise patient revenue and bear practitioner employment costs.
Identify agency collections, practitioner remittances, refunds, rejected claims and timing differences. Compare practice-management exports with the ledger and bank records. Explain gross or net presentation consistently across years. Growing billings can coexist with flat retained income if practitioner fee shares, administrative workload or collection delays increase.
Payroll tax needs separate analysis. Queensland's medical-centre ruling includes physiotherapy and similar healthcare providers; a service agreement or independent-contractor label does not establish an exemption. Obtain jurisdiction-specific advice and reflect supported costs or uncertainties in the valuation. Queensland medical-centre payroll tax ruling
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A clear valuation conclusion starts with an agreed purpose, relevant evidence and disclosed assumptions. The report identifies the interest valued and explains the reasoning behind its conclusion.
Examine Medicare, private and NDIS payer economics
Segment income into Medicare-related work, private self-funded appointments, private health insurance, NDIS and any other material contracts. Within NDIS activity, distinguish management arrangements and the services actually delivered. Reconcile service dates, invoices and cash collection rather than treating a funding plan as guaranteed practice revenue.
Compare realised fees, session duration, clinician cost, travel, report-writing and administration for each stream. A long session with substantial unpaid documentation may contribute less than its invoice suggests. Check cancellations, non-attendance charges, debt ageing, refunds and claim corrections. Forecast payer mix from evidenced activity, not an unsupported assumption that every available slot will be filled at the highest fee.
Medicare administration is practitioner-specific. Services Australia describes managing provider details and opening or closing provider-number locations. Do not treat a practitioner's number as a freely transferable asset of the clinic; verify the arrangements needed for continuing billable work. Services Australia provider-number guidance
Medicare-funded allied health services depend on applicable practitioner, referral, patient eligibility and billing requirements. From 1 July 2025, GP Chronic Condition Management Plans replaced GP Management Plans and Team Care Arrangements for new plans. Eligible patients with plans established before that date can continue accessing relevant services through the transition period ending at 1 July 2027, subject to the transitional rules. From 1 July 2027, an appropriate current GP chronic condition management plan or multidisciplinary care plan is generally required for ongoing access. Where Medicare referrals contribute materially to practice revenue, assess eligibility, referral continuity and the implications of regulatory changes for sustainable earnings rather than assuming historical referrals will continue. Medicare allied health transition arrangements
Measure two different concentrations
Practitioner concentration asks how much revenue and contribution depend on individual clinicians. Referral concentration asks where new work originates. A clinic can have a diverse workforce but still depend on one referrer, school, employer or disability-service relationship. Conversely, many referral sources may feed a caseload delivered almost entirely by the departing owner.
Prepare de-identified schedules showing clinician contribution and referral origins over consistent periods. Distinguish personal relationships from formal arrangements with the entity. Examine notice periods, handover commitments, actual referral continuity and patient choice. Do not assume every relationship will follow the purchaser or that a restraint guarantees retention; legal advisers should assess enforceability.
Check qualifications and agreements separately
For professions within the National Scheme, Ahpra's register identifies registration status and published conditions or limitations. Not every allied-health discipline is regulated through Ahpra, so identify the applicable qualifications, professional recognition and payer requirements for each service rather than applying one universal credential checklist. Ahpra register of practitioners
Individual qualifications do not transfer with a business purchase. Review employment and contractor agreements, supervision obligations, insurer recognition, supplier licences and material service contracts. Identify assignment and change-of-control requirements with legal advisers. A report should distinguish confirmed continuity from assumptions requiring consent, replacement personnel or further evidence.
For a registered NDIS provider, ownership and organisational changes can trigger notification obligations. The Commission's guidance expressly includes ownership, legal structure, key personnel and service changes. Examine requirements applying at the proposed transaction date rather than assuming registration transfers automatically with goodwill. NDIS Commission change-notification guidance
From 1 July 2026, certain registered NDIS providers delivering supports requiring certification may also need a condition audit where an acquisition results in a significant change to their organisation or governance arrangements. Where applicable, the audit must generally commence within three months of the ownership change, unless a specified exception applies or the Commissioner allows a longer period. Exceptions include a mid-term audit falling within that period or registration ending during the period. This is not a requirement for every allied health provider: examine the registration groups and actual circumstances. Assess associated compliance costs, continuity requirements and implementation risks rather than assuming operations continue without additional obligations. NDIS Commission acquisition guidance and NDIS Provider Registration Rules, section 13BA.
Test capacity and premises together
Count productive clinician hours, not simply consulting rooms. Compare rostered availability with attendance, cancellations, supervision and documentation time. A waiting list may reflect demand, but it does not establish profitable capacity without staff, suitable space and workable payer economics.
Review lease tenure, options, permitted use, accessibility, assignment requirements and make-good obligations. Identify equipment ownership, software costs and replacement expenditure. If expansion needs another supervisor or larger premises, model those costs alongside the extra appointments. Separate an evidenced operating case from an expansion scenario that still depends on recruitment or landlord approval.
Build an owner-ready evidence pack
Prepare these items before the engagement:
Provide summaries first. Patient records are not an unrestricted commercial database, and clinical confidentiality requires an appropriate information-handling process. Agree any deeper review with relevant advisers.
Health service providers holding patient health information are generally subject to the Privacy Act regardless of annual turnover. Supply valuation information in aggregated or appropriately de-identified form wherever practicable. Any disclosure or transfer of identifiable patient records requires separate consideration of privacy, professional confidentiality and applicable consent requirements with relevant advisers; a valuation is not legal or privacy-compliance advice. OAIC health service provider guidance
Financial statements and current management accounts with revenue ownership explained.
Monthly appointments, collections and payer mix reconciled to the ledger.
Clinician contribution, roster and owner-duty schedules without patient identifiers.
Referral-source analysis and material agreements, including notice and consent terms.
Registration, qualification and payer-eligibility evidence relevant to each service.
Lease, equipment, payroll tax advice and a register of unresolved transition issues.
A conclusion tied to transferable operations
An earnings approach may suit a practice with supportable ongoing income; asset evidence or other methods may provide useful cross-checks. Method selection depends on evidence, purpose and business circumstances, not an invented sector multiple. Explain stock, working capital, essential equipment and financing consistently to avoid double counting.
The report should connect owner replacement costs, practitioner continuity and payer economics to its assumptions. Identify which earnings belong to the entity and which depend on an individual's continuing work. IBV voluntarily aligns with APES 225; it is not a CPA firm and does not provide expert-witness or court-appointed services. A valuation does not decide legal transferability, registration eligibility or future patient retention.
Where practitioner arrangements raise a potential liability, read our payroll tax and practitioner arrangements guide. Confirm the valuation purpose, intended users and information available before relying on a report.
Sources and further reading
Check the rules and source versions relevant to the valuation date and jurisdiction. Regulatory references explain the framework; they do not establish approvals, transferability or the value of any particular business.
Queensland Revenue Office — Queensland relevant-contract medical-centre ruling includes physiotherapy and similar healthcare providers.
Services Australia — Provider details and provider-number locations are managed for health professionals, including closing and reopening locations.
Ahpra — Ahpra lists regulated professions and publishes practitioner registration conditions and limitations.
NDIS Quality and Safeguards Commission — Registered providers must notify significant changes including ownership, legal structure, key personnel and services.
Medicare Benefits Schedule — allied health transition arrangements — Medicare chronic condition plan changes from 1 July 2025 and the transition to 1 July 2027.
NDIS Commission — buying or selling a registered NDIS business — Acquisition-related registration and audit requirements.
NDIS Provider Registration Rules, section 13BA — Scoped condition-audit commencement, exceptions and extensions.
OAIC — health service providers and small business — Health service providers holding health information are generally covered regardless of turnover.
Frequently asked questions
Can a sole-practitioner clinic have business goodwill?
Potentially, but distinguish durable business relationships and systems from income requiring the owner’s personal clinical work.
Why adjust an owner who takes only drawings?
Drawings do not measure labour cost. A purchaser still needs to replace the clinical and management work.
Are all patient collections service-entity revenue?
No. Collections may include money belonging to independent practitioners; reconcile entitlements and service fees.
Does an NDIS plan guarantee future revenue?
No. Funding availability is not a commitment to buy services from that practice.
Is a long waiting list evidence of valuable growth?
Only with supported conversion, staffing and contribution assumptions; unserviceable demand is not current earnings.
How should referral risk be measured?
Analyse new and continuing work by source and assess whether relationships attach to the business or individuals.
Must every allied-health professional appear on Ahpra?
No. Check whether the profession is nationally regulated and identify its relevant credential and payer requirements.
Can the buyer use the seller’s provider number?
Do not assume so. Confirm practitioner and location requirements with Services Australia before forecasting continuity.
What happens to contracts on a share sale?
Change-of-control provisions or other conditions may still matter. Obtain legal review instead of assuming uninterrupted rights.
What information should be withheld initially?
Health service providers holding health information are generally subject to the Privacy Act regardless of annual turnover. Begin with aggregated or appropriately de-identified financial, clinician and activity schedules through an agreed secure process. Disclosure or transfer of identifiable patient records needs separate consideration of privacy, professional confidentiality and applicable consent requirements with relevant advisers.
Source: OAIC: health service providers
How do Medicare chronic condition plan changes affect allied health revenue?
From 1 July 2025, GP Chronic Condition Management Plans replaced GP Management Plans and Team Care Arrangements for new plans. Eligible patients with earlier plans can continue relevant services through the transition period ending at 1 July 2027, subject to transitional rules. From 1 July 2027, an appropriate current GP chronic condition management plan or multidisciplinary care plan is generally required. Assess practitioner, referral, eligibility and billing requirements and their effect on sustainable earnings; historic referrals are not guaranteed future revenue.
Does an allied health practice sale require an NDIS ownership-change audit?
Not every practice sale does. From 1 July 2026, certain registered providers delivering supports requiring certification may need a condition audit where an acquisition significantly changes their organisation or governance arrangements. The audit must generally commence within three months, subject to specified exceptions or a Commissioner-approved extension. Exceptions include a mid-term audit falling within the period or registration ending during it. Review the actual registration groups, transaction circumstances, costs and continuity requirements with relevant advisers.
A clear, independent view of value — with the evidence behind it.
- Understand the conclusion — and what drives value.
- Gain an independent perspective. Move forward with confidence.
- Benchmark your business against industry performance.
- Identify strengths, risks and opportunities through SWOT analysis.
WHAT YOU GET IN A LIMITED SCOPE VALUATION REPORT
Inside your IBV™ report
Executive Summary
Conclusion of value · Method selected · Valuer qualifications
Detailed Report
Maintainable earnings · Cap rate / multiple · Premise of value
The Evidence Pack
SWOT analysis · Top Performers Report · RAVDA score
APES 225 voluntarily aligned. Report depth and supporting analysis follow your agreed package and engagement scope.
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