Practice Management Blog

Managing Contract Practitioners in Allied Health

Growth for allied health roles is expected to increase at nearly double the rate of other occupations in the next two years, with allied health contract roles expected to grow by 10% in the next year alone. 

In many cases, hiring contractors in an allied health practice is a win-win for both contractors and practice owners.

Contract practitioners can bring a unique blend of expertise and flexibility, aiding practice owners in the pursuit of adaptability and growth. 

Implementing this model, however, can be challenging.

This article delves into the crucial aspects of effectively managing contract practitioners (if a contractor role is a good fit for your needs). Remember, the goal is not just to grow, but to grow wisely and sustainably with the right team by your side.

Note from our Legal Eagles: This article is for informational purposes only and does not constitute legal advice. Readers should consult with their local association or tax planner and be aware of the local regulations applicable to their situation.

Understand the Difference Between Practitioner Contractors and Employees

Before you look into onboarding contractors, you need to determine whether a contractor would be the right addition to your practice, or if you should fill an employee role instead.

Choosing between contract practitioners and employees is influenced by multiple factors, including:

Flexibility and Overhead Costs

Contractors offer the flexibility to manage client load without the commitment of a full-time employee. Contractors handle their own taxes, insurance and benefits, reducing your practice’s financial burden. 

However, while they cut overhead costs, contractors may charge higher hourly rates than an equivalent employee. On the other hand, employing staff means accepting an ongoing fixed cost and commitment, regardless of fluctuations in your practice.

Administrative Burden

Hiring contractors typically involves less paperwork and fewer administrative responsibilities related to payroll and benefits when compared to employees.

Control and Team Cohesion

Contractors are more autonomous, so your practice has less control over their work schedules and methods. 

Employees, conversely, work according to your practice’s schedule and protocols, which offers more control over client care and service quality. Employees also tend to integrate more into the team, fostering a stronger workplace culture and team spirit.

So, which is the better fit for your practice? You’ll need to evaluate your practice’s unique requirements and goals. 

But don’t rush it! 

This decision will shape your operational efficiency, team dynamics and financial health.

If you’ve decided that contract practitioners are the right fit for your practice, keep reading! There are a few things you’ll want to get right to ensure you’re offering contractors an exciting opportunity when they join your practice.

Define Your Practice’s Value Proposition

You need to create an appealing work environment to attract the best contract practitioners. Consider the following when developing your practice’s value proposition:

  • Competitive Compensation: Offer attractive fee-split arrangements or competitive hourly rates.
  • Flexible Scheduling: Many contractors value setting their own schedules.
  • Professional Development Opportunities: Provide access to training and professional development courses.
  • State-of-the-Art Facilities: Equip your practice with the latest technology.
  • Strong Referral Network: A robust referral system assures contractors of a steady stream of clients.
  • Supportive Administrative Staff: Efficient administrative support allows practitioners to focus more on client care.
  • Positive Work Culture: Foster a collaborative and inclusive environment.
  • Marketing Support: Include contractors in your marketing efforts.
  • Insurance and Liability Coverage: Providing or assisting with insurance can be an added incentive.
  • Innovative Practice Models: Offer unique services that set your practice apart.

Determine Payment Models for Contractors

When it comes to compensating practitioner contractors in allied health, there are several commonly used payment models. These models are designed to balance the financial interests of both the practice and the contractors. Understanding payment models helps in creating a mutually beneficial arrangement.

Fee-Split Arrangements

In this model, contractors receive a percentage of the revenue generated from each client they see.

The split ratio can vary, with higher percentages going to contractors with more experience. A 70/30 or 60/40 split is commonly seen in allied health practices.

This model serves as an incentive for contractors to maintain and grow a steady client base.

Hourly Rate

Contractors are paid a fixed hourly rate regardless of the number of clients seen.

This model is straightforward but might not encourage contractors to take on additional clients. It’s suitable for practices that require contractors to be available at specific times.

Per Session Payment

Contractors are paid a set amount for each client session they conduct. This model aligns the contractor’s earnings directly with the number of sessions they complete and is most often used in practices where session lengths are consistent. It’s important to have a clear cancellation or no-show policy in place with clients and to embed this in the contract with your contractors, too. Are you willing to pay your contractor for a session where a client didn’t show up?

Capitation Model

Here, contractors are paid a fixed amount for each client assigned to them, regardless of how many times the client is seen.

This model is less common but can be effective in managing long-term care where the frequency of visits varies.

Retainer Model

Contractors receive a regular, fixed payment (monthly or weekly) to be available for a set number of hours or sessions.

This model provides income stability for the contractor and is beneficial for practices needing guaranteed availability.

Performance-Based Incentives

Some practices include performance incentives, such as bonuses for high client satisfaction scores or achieving certain treatment outcomes. 

Ultimately, the choice of which payment model to pursue depends on factors like the nature of the practice, the type of services offered, and the preferences of both the practice and the contractors. 

It’s also important to ensure that your chosen payment model complies with local regulations and industry standards.

Improve Client Attendance Rates

Client attendance is a crucial factor for practitioner contractors. Regular attendance ensures a steady revenue flow for your practice and influences morale and productivity.

Understand the Impact of No-Shows

No-shows can be particularly frustrating for contract practitioners. Their income is often directly linked to client attendance. Frequent no-shows disrupt schedules and lead to lost income opportunities, affecting contractor commitment and job satisfaction.

Establish Clear Policies

It’s essential to establish and enforce clear cancellation and no-show policies. Policies should detail the timeframe for cancellations without a fee and the charges for late cancellations and missed appointments. Transparent policies set client expectations and help reduce no-shows.

Communicate Effectively

Communicate attendance policies clearly at booking and through appointment reminders. Reminders help ensure clients are aware of the consequences of missed appointments, encouraging adherence to schedules.

Automate Appointment Reminders

Implement practice management software like Power Diary with automatic appointment reminders. The software allows you to send automated SMS or email reminders, decreasing the likelihood of forgotten appointments without the need to send messages manually.

Examine Attendance Trends

Regularly review client attendance patterns to identify trends, such as specific times with higher no-show rates or clients that cancel regularly. 

Offer Flexible Rescheduling Options

Make it easy to confirm or reschedule an appointment. If clients find it convenient to change appointments, they’re less likely to miss them.

Explore Alternative Models: Service Offices and Room Rentals

If working with contract practitioners isn’t right for you, service offices and room rentals may be appealing alternatives. These models can diversify income streams if you have additional administrative capacity or office space.

Service Offices

With a service office, your practice operates like a business center, charging a fee for administrative services. 

This approach can attract health professionals seeking a supportive environment with reduced overhead, and your practice benefits from a steady income stream.

Room Rental

Rent space within your practice to independent practitioners and charge a fixed rate for the use of space and facilities.

Room rental is suitable for practitioners who have their own client base and prefer more autonomy over their practice. It can be a steady source of income for your business, and creates an opportunity for cross-referrals and a collaborative environment.

Look at Legal and Ethical Implications

When exploring models for managing contract practitioners or alternative arrangements like service offices and room rentals, you need to understand the legal and ethical implications of each.

Local Regulations

Get familiar with local regulations as they vary by region and practice type. Compliance with employment laws, insurance and tax regulations, and professional practice standards is mandatory.

Risks of Mismanagement

Incorrect management of contractor models exposes your practice to legal risks, including potential lawsuits. Common issues include misclassifying employees as contractors, leading to conflicts with tax authorities and breaches of employment law.

Consult legal experts regularly to ensure the correct setup and maintenance of these models.


Align your business practices with ethical guidelines and legal regulations regarding referrals. Charging contractors for receiving referrals is typically prohibited.

Proper Setup of Contractor Models

Detail clear contracts, set transparent payment terms and ensure adherence to legal requirements. It’s important to seek legal advice to ensure your contractor agreements and practices are compliant.

Review and Adaptation

Laws and regulations change regularly, so you may need to review and update how you manage contractors. Stay connected with professional bodies or legal advisors for updates affecting your practice.

Contract practitioners offer flexibility and growth opportunities for health practices, but the arrangement needs to work for everyone. Consider what’s important to you, and what you can offer a contractor. Then, when you’re ready to take the next step, don’t forget to take legal and ethical considerations into account. If you want to onboard contractors successfully, make sure you have practice management software to support your journey. Start a 14-day free trial of Power Diary. No credit card required!

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