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Health

Fair Work Ombudsman launches investigation into Tristar Medical Group

The Mildura clinic is now closed and is the subject of a probe into claims of rife staff underpayment.  (ABC News: Kyra Gillespie)

An investigation by the Fair Work Ombudsman is underway into a Victoria-based medical clinic estimated to owe former employees and creditors millions of dollars.

The Mildura-based Tristar Medical Group is the subject of action in the Supreme Court.

It also faces claims made in public documents and by staff that it owes hundreds of thousands in unpaid wages.

The bulk-billing conglomerate was placed into voluntary administration in May with an estimated debt of $23 million.

The Fair Work Ombudsman has confirmed to the ABC it is investigating Tristar for potential breaches of the Fair Work Act for the second time after inquiries were made in 2019.

A spokeswoman urged any workers with concerns about their pay or entitlements to come forward.

"Workers can also report their concerns anonymously if they prefer," she said.

Last week the failed transition of seven doctors from the Langtree Avenue clinic in Mildura to Family Doctor left more than 15,000 local patients like Darlene MacDonald without a doctor.

Ms MacDonald found out Tristar had closed via text, leaving her without her GP or skin cancer doctor.

"I have melanoma, I had a big piece of it taken out my leg three quarters of an inch deep and was told I would need follow up appointments every three months," she said.

"Now I'm in a predicament … I don't know where to go or what to do.

"It's making me feel pretty uncomfortable and I'm scared."

Matt Jones is urging the state and federal governments to address rising costs and difficulties in accessing health services. (Supplied: Murray Public Health Network)

'Disastrous' situation, doctor says

Health services in Sunraysia are scrambling to find room for displaced patients within an already overburdened system.

Pop-up clinics are being considered to fill the void, according to Murray Primary Health Network chief executive Matt Jones.

"It means a specific group of people within Mildura that would have gone to Tristar now don't have access to GP services at the moment," he said.

"The prospect of everybody currently with Tristar just going to one of the other practices in the Mildura region is really unlikely and very limited."

Mr Jones is urging the state and federal government to address the rising challenges in costs and access to health services.

"The financial viability of an exclusive bulk-billing service in this day and age, with these costs, is incredibly problematic," he said.

"It can also can provide some opportunity of looking at new models and new approaches."

Thousands of patients are awaiting word of how to retrieve their medical records and test results, which remain in the hands of the administrators.

"We understand the level of frustration that would be experienced in people waiting to find out what's happening," Mr Jones said.

Rural Doctors Association of Victoria president Rob Phair said the situation in Mildura was "disastrous."

"There's no other clinic that will be able to absorb these 15,000 patients," he said.

"Mildura needs significant support from a state and federal level to solve this problem.

"Our concern, big picture, would be that Mildura is a canary in the coal mine where bulk-billing Medicare has failed."

Tristar Medical Group was established in 2003. (ABC News: Kyra Gillespie)

'Consuming cash rather than generating it'

According to an initial Administrator's report lodged with ASIC, an estimated $23m was owed to 317 creditors and employees as of May this year.

The report says Tristar was likely insolvent from at least June 30 2019 or earlier, but notes that "if Tristar is placed into liquidation, additional work will be performed by the liquidator to form a more definitive view regarding the date of insolvency".

"Tristar was consuming cash rather than generating it," the administrators' report reads.

The entity behind Tristar appeared before Melbourne's Supreme Court on Wednesday morning for a hearing.

The court heard the company was likely to be wound up and that proceeds from the sale of 12 clinics to Family Doctor would go towards paying back creditors.

The case was adjourned until September 7.

At its peak Tristar operated 59 clinics with 440 employees and 165 doctors, but in the past five years 35 clinics shut down.

The administrator's report says that that unprofitable clinic expansion, difficulty recruiting and retaining medical staff and "inadequate" financial control led to the appointment of administrators in May.

According to the report, Tristar's records detail $1.9m of unpaid payroll tax, $4.4m in unpaid superannuation and outstanding tax payments of $5.1m.

The report also said that Tristar had not lodged any tax returns since 2019.

Administrators say some unpaid service fees owed to doctors date back to July 2020.

Administrators also said that balance sheet accounts had not been maintained since 2018 and they therefore had concerns about "the accuracy of the underlying accounting information and consider that some financial information produced is likely misleading".

According to the report, the company said changes to supervision requirements for trainee doctors, the replacement of the 457 visa with the 482 temporary skill shortage visa and a personal family law dispute all contributed to Tristar's failure.

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