Tristar Medical: Financial collapse sparked by $25 million in debts

The future of dozens of regional bulk-billing medical services is uncertain following revelations Tristar Medical owes $25 million to creditors.

Tristar Medical Group provides the only bulk-billing GP services in some regional towns. Picture: Jessica Ball

The future of dozens of regional bulk-billing medical services is uncertain following revelations one of Australia’s largest privately owned health service providers owes debts totalling more than $25 million to creditors.

Tristar Medical Group, which runs 29 GP clinics in Victoria, NSW and South Australia, was placed under voluntary administrator McGrathNicol Restructuring on May 24.

The Weekly Times understands the troubled company’s debts include millions in unpaid consulting fees to regional doctors.

A spokesman for McGrathNicol Restructuring said on Wednesday Tristar’s clinics would remain open while the administrator searched for a buyer for the business.

Doctors, staff, landlords and suppliers would be paid for their services during the administration period to keep clinic doors open, the spokesman said.

Tristar is one of a limited number of providers offering bulk-billing to all its patients, and in some regional towns is the only GP service offering bulk-billing.

Bulk-billing, a process whereby a doctor bills Medicare directly for services, is a safety net offering free healthcare to Australia’s most vulnerable.

The Rural Doctors Association has warned any future buyers may need to restructure the company, labelling a 100 per cent bulk-billing business “not sustainable” under current funding models.

A McGrathNicol spokesman said the administrator was still in the process of calculating the company’s total debts this week, and had applied to extend the administration period by two months to further investigate its affairs.

“Amounts owing, or potentially owing, by Tristar to its creditors prior to the administration commencing exceeds $25 million. This includes an allowance for unpaid amounts owing to doctors (which remain subject to final verification) for services rendered prior to the commencement of the administration,” the spokesman said.

The Weekly Times understands the company owes more than $3 million to doctors in outstanding consulting fees, and some doctors did not receive payments for more than three months before the company entered administration.

The news comes as many regional centres grapple with a shortage of GPs and extra strain on emergency services.

Rural Doctors Association president Megan Belot told The Weekly Times earlier this month Tristar’s collapse provided a lesson both for the health sector and government.

“We really need to look at how primary healthcare is funded,” Dr Belot said.