When designing learning and assessment environments it is essential to articulate the underpinning education philosophy, theory, model and learning style support mechanisms that inform their structure and content. We elaborate on original PhD research that articulates the design rationale of authentic medication dosage calculation problem-solving (MDC-PS) learning and diagnostic assessment environments. These environments embody the principles of authenticity, building knowledge and skills and competency assessment and are designed to support development of competence and bridging of the theory-practice gap. Authentic learning and diagnostic assessment environments capture the features and expert practices that are located in real world practice cultures and recreate them in authentic virtual clinical environments. We explore how this provides students with a safe virtual authentic environment to actively experience, practice and undertake MDC-PS learning and assessment activities. We argue that this is integral to the construction and diagnostic assessment of schemata validity (mental constructions and frameworks that are an individual's internal representation of their world), bridging of the theory-practice gap and cognitive and functional competence development. We illustrate these principles through the underpinning pedagogical design of two online virtual authentic learning and diagnostic assessment environments (safeMedicate and eDose™).