History

The PSR Scheme was introduced in 1994 to replace the previous Medical Services Committees of Inquiry (MSCI) scheme. A report by the Australian National Audit Office (ANAO) in 1992-93, entitled Medifraud and excessive servicing: Health Insurance Commission, found that MSCIs were not operating satisfactorily and needed to be strengthened.

A major complaint in the ANAO report was that the MSCI process did little to discourage the provision or initiation of excessive services. The MSCIs did not provide an effective deterrent because, in many instances, the level of benefits recovered from practitioners was totally eclipsed by the level of overservicing that had actually occurred.

The inability to impose penalties commensurate with the extent of a practitioner's overservicing was largely due to a lack of power to make decisions on the extent of overservicing on the basis of generalised evidence. MSCI judgements about overservicing could only be made on the basis of individual services. That is, benefit recovery and penalties could only be made in respect of the identified excessive services.

With the new legislation, Panel Members were appointed by the Minister based on nominations from their respective professional groupings, and from that group a number of Deputy Directors are appointed by the Minister to act as Chairpersons of PSR Committees (PSRCs).

A more detailed account can be found in the 1994-95 Annual Report, also located in our Publications section.