Getting a Win:Win - 5 Questions Health Practitioners Should Ask in a Facilities and Services Agreement
If you're a practitioner about to sign a facilities and services agreement, or a clinic preparing one, here's what to check first.
Facilities and services agreements (sometimes called services and licence agreements) are common across healthcare business models and can be a genuinely effective way to align a clinic’s business with a practitioner’s independent practice.
They’re often presented as “standard form”, but the commercial and legal consequences can be significant for both the service entity (which funds staff, premises and systems) and the practitioners (whether owners or non‑owners) who rely on those services to treat patients.
A well‑drafted agreement should properly characterise the relationship, allocate risk in a way that is insurable and workable, and deal transparently with the goodwill context (including who is introducing and retaining patients). Before signing, ask these five key questions.
- What is actually included in the scope of services?
Be clear on what the service provider must do and, just as importantly, what is excluded (e.g. clinical supplies/consumables, equipment such as beds, IT/practice software access). Vague drafting can leave you paying for services you assumed were included or filling operational gaps at your own cost. Confirm what you can rely on day‑to‑day so you’re not forced to supply essentials (or compromise standards) at your own cost.
- How are fees calculated and paid?
Understand exactly how fees are calculated, when they are payable, and whether deductions or direct debits apply. Definitions matter: poorly drafted revenue or usage formulas can materially increase cost exposure over time. Be explicit about whether items like incentive payments, grants (including bulk billing incentive programs) are included in, excluded from, or irrelevant to the fee calculation. Make sure “medical revenue” is defined so you’re not paying a percentage on amounts you’re not entitled to receive.
- Who owns or controls goodwill and records?
This is often the most commercially sensitive issue. While the service entity may build enterprise goodwill through the clinic brand, premises, staff, systems and marketing, practitioners build personal goodwill through clinical care and continuity of treatment. The agreement should describe, in practical terms, what drives patient origination and retention in your clinic (e.g. booking channels and phone numbers, website and marketing funnels, who “introduces” new patients, how recalls and follow‑ups are run, how patient feedback and complaints are handled, and what happens on exit). Separate that commercial question from the legal and professional obligations around patient records: ensure any rights to access, store and use records, data and IP are proportionate, privacy‑compliant, and support the practitioner’s professional duties and lawful access during and after the term. In practice, also confirm who is responsible for records processes and systems (consent forms, storage, practice management software) and how each party can obtain access to information they legitimately need.
- What risks is the practitioner indemnifying and are they insurable?
Indemnities frequently go beyond common law risk allocation. Check whether liabilities are capped, fault‑based (e.g. limited to loss caused by negligence), and realistically covered by each party’s insurance. Also confirm the clinic/service entity’s insurance obligations (public liability, workers’ compensation and other legally required cover) and the practitioner’s professional indemnity and any required business cover. The goal is not to “win” the indemnity clause—it’s to end up with a risk allocation that matches who controls the risk in practice, and that both parties can actually insure.
- Termination rights, notice periods and post‑termination restraints can significantly affect future flexibility and operational continuity.
A fair exit framework should protect the clinic’s stability (staffing, patient communications, and handover processes) while recognising patient choice and the practitioner’s ability to continue treating established patients where lawful (including via telehealth). If restraints and non‑solicitation clauses are used, ensure they are tightly drafted, tailored to the goodwill context you have agreed (including patient introduction pathways), and supported by practical handover obligations (e.g. transition of bookings, clinically appropriate transfer of care, and compliant communications to patients).
Many services and licence agreements are issued as standard form contracts and may be subject to Australia’s unfair contract terms (UCT) regime. Where it applies, certain one‑sided terms may be unenforceable and, in some cases, unlawful to rely on. It’s not a substitute for a proper review, but it can be relevant leverage when you are trying to land a balanced outcome.
Need advice? Our Commercial & Business team can help. Call +61 3 9822 8588, email supportteam@burkelawyers.com.au or connect with one of our team.
