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.

The PSR Scheme was established by the Health Legislation (Profesional Services Review) Amendment Act 1993, and came into effect from 1 July 1994.

The Scheme aimed to provide an effective peer review mechanism to deal quickly and fairly with concerns about inapproporiate practice.

An outline of the current operation of the scheme can be found in the 2009-10 Annual Report, also located in our Publications section.