Agency overview
Development of the PSR Scheme legislation
The PSR Scheme was established by the Health Legislation (Professional Services Review) Amendment Act 1993 which amended the Health Insurance Act 1973, and came into effect on 1 July 1994.
The Act was substantially amended in 1999 following a comprehensive review of the scheme. An adverse decision by the Federal Court in November 2001 (Pradhan v Holmes & Others) raised concerns that the 1999 amendments to the Act may not have the effect intended. The Full Court of the Federal Court in May 2002 handed down a decision (Health Insurance Commission v Grey), which substantially agreed with the way PSR characterised its role. However, further amendment to the Act was needed to address the Federal Court’s concerns.
Parliament passed the Health Insurance Amendment (Professional Services Review and Other Matters) Act 2002 in December 2002. This new Act made a number of amendments to the existing Act, specifically to:
- clarify the roles and responsibilities of Medicare Australia, the Director of PSR and Committees
- enhance procedural fairness processes
- validate a number of referrals (that may otherwise have been found to be invalid on the basis of the Pradhan decision).
The Department of Health and Ageing developed the Act in consultation with the Director of PSR, Medicare Australia and the Australian Medical Association.