PSR Annual Report 2006-07

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Report on performance

External review of actions

The person under review can seek judicial review in the Federal Court. Administrative decisions can be reviewed in the Administrative Appeals Tribunal (see Table 2).

Table 2: Court/tribunal actions
2006–07 2005–06
Court applications 6 9
Professional Services Review Tribunal 0 1
Federal and Full Federal Court hearings held 8 19
High Court applications 0 2
High Court decisions 2 1
Administrative Appeals Tribunal 1 0
Federal Court
Dr Hugo Huu Hiep Ho and
Dr Hien Than Do
General practitioners
Merrylands, NSW

Dr Ho and Dr Do practiced in partnership. On 13 December 2001 the then Health Insurance Commission (HIC) referred each to PSR because Dr Ho had rendered 80 or more professional attendances on 24 occasions between 1 January and 6 November 2000 and Dr Do had done so on 56 occasions between 1 January and 23 June 2000. Independent PSR Committees considered each referral and ultimately reported that their subjects had engaged in inappropriate practice for the purposes of section 106KA (prescribed pattern of services).

The Committee examining Dr Ho’s referral found that exceptional circumstances did not affect the rendering of the services in question. Some circumstances were outside the referral period; others were part of a long-term and ongoing practice. The partners should have adjusted their patient load to maintain quality of service.

The Committee examining Dr Do’s referral also found no exceptional circumstances. The practice generally provided high numbers of services and the days of 80 or more were simply part of that pattern. There were then about 50 other medical providers in the area, including some surgeries with extended opening hours that might have taken overflow patients. Further, some of the circumstances had been foreseeable; yet there was no evidence of an action plan (such as triage, appointments or locum) to manage numbers of patients seen.

The doctors each commenced judicial review proceedings in the Federal Court. In preliminary proceedings, Jacobson J had ordered, based on an agreement between the parties, that the outcome of their proceedings (and of similar proceedings brought by several other doctors) would ultimately turn on the result of one test case concerning section 106KA issues[15] and separate consideration of Constitutional issues by the Federal and High Courts. In that test case, challenges to the investigative and adjudicative referrals were dismissed but the Committee was found to have erred in its understanding of the ‘exceptional circumstances’ provisions in section 106KA(2) and regulation 11(b) and to have wrongly had regard to whether the alleged exceptional circumstances had been foreseeable. As a result of that test case, Jacobson J ruled on 19 April 2006 that unless Drs Ho and Do could show they should be taken to have relied on regulation 11(b) this was the end of their matters.

Drs Ho and Do successfully appealed to the Full Court[16] which held that their review applications should not have been formally tied to the outcome of the test case and, moreover, that the ‘agreement’ was ‘of uncertain meaning and could not bind the Court’. The doctors were free to pursue their original applications for judicial review.

In considering their substantive review applications, Rares J noted[17] that a previous partnership of Drs Ho and Do and a third doctor had dissolved in 1999 with Drs Ho and Do as new partners retaining over 10,000 case files. They had submitted to their respective PSR Committees that exceptional circumstances had affected their rendering of services. These included the high case load inherited from the previous partnership, stress (including litigation) resulting from the dissolution, inability (despite efforts) to engage a third full-time doctor to replace the previous partner, high numbers of patients presenting after weekends and public holidays and during winter, and the occasional absence of either of the two doctors due to illness or other reasons.

Rares J examined the provisions of section 106KA and regulation 11 and previous decisions. He concluded that the term ‘exceptional circumstances’ in section 106KA(2) required consideration of all the circumstances – it could be a single circumstance or a combination. The circumstances did not have to be unexpected, unpredictable or one-off. He held that regulation 11 added circumstances, which might or might not fall within, but could not restrict, the terms of section 106KA(2). He considered that the Committee had wrongly limited the scope of ‘exceptional circumstances’ by reference to regulation 11 and the 1999 Report of the Review of the PSR Scheme by concentrating on ‘intermittent or episodic’ circumstances rather than the combination of circumstances relied on by Drs Ho and Do. Further, a Committee must consider whether there were exceptional circumstances as defined in any of section 106KA(2) and regulations 11(a) and 11(b).

In this case, the doctors had raised circumstances which were arguably exceptional in terms of regulation 11(a); for example, on 4 January 2000 when the new partnership commenced after a difficult dissolution and public holidays with only two doctors to service 90 per cent of the patients previously serviced by three doctors. Similarly, when Dr Do went home sick on two occasions, was this ‘an unusual occurrence creating an unusual level of need for professional attendances’ by Dr Ho? The Committees should have specifically addressed such issues.

The Full Court had indicated in Oreb[18] that a Committee should determine whether circumstances were ‘exceptional’, in the general meaning of that word under section 106KA(2), having regard to the usual operation of a medical practice, and practice management might be considered in that context. However, Rares J noted, the Full Court had also held that practice management was not relevant to regulation 11 where the focus was on patient needs, not management skills. Rares J concluded that the two Committees had misconstrued or failed to apply the tests for exceptional circumstances. He ordered[19] that the members of those Committees be prohibited from further constituting those Committees, primarily because the Committees had taken an active role in defending their decisions in the litigation, which might raise an apprehension of bias. It was left for the Director of PSR to decide whether to reconstitute the Committees with new members.

Appeals against both these decisions were lodged with the Full Federal Court on 16 May 2007.

Dr Lynette Bellamy
Medical practitioner
Edgecliff, NSW

Between 8 and 15 August 2006 Dr Bellamy was served with a Notice under section 102 to appear before PSR Committee 345 at 9 am on 22 September 2006 and to give evidence as required. On 19 September she informed the Committee of pre-existing arrangements for her to attend and speak at a conference elsewhere during 20 to 22 September and advised that she would not attend the hearing until 2.15 pm on 22 September. As the Committee declined to change its existing arrangements and commencement time, she asked that the respondent Committee be restrained from commencing at 9 am and that commencement be deferred to 2.15 pm.

Justice Graham held:

No reason whatsoever is advanced as to why it would be unjust for the Review Committee to proceed with the hearing at the appointed time in circumstances where the applicant has had over a month’s notice of the intended hearing time. In my opinion, the application has no merit and should be dismissed with costs.[20]

Dr Lam Quoc Phan
General practitioner
Cabramatta, NSW

The HIC referred Dr Phan to PSR on 29 June 2000 in respect of all services provided during 1999 because he had rendered 18,165 services, including 17,970 level B services in that year. A Committee investigated and its final report on 28 October 2004 was that Dr Phan had engaged in inappropriate practice in rendering 47 of 80 services examined. It identified deficiencies in his patient histories, examinations, management plans and prescribing.

On 7 December 2004 Dr Phan sought judicial review by the Federal Court.[21]

First, Dr Phan said the Director failed to proceed fairly because adverse reports from two medical advisers, which he considered in making the referral to the Committee, were not disclosed to Dr Phan and he was therefore not able to comment on them. The reports were not mentioned in that referral or conveyed to the Committee. Tamberlin J noted legal authorities that procedural fairness must be considered in the overall context of a statutory scheme and that there may be no entitlement to be heard at the first stage, particularly if there is a right at a later stage. In this case, the two reports were not before the Committee, which could not have been ‘infected’ or ‘poisoned’ by them, and he was satisfied that procedural fairness regarding the Director’s decision was afforded by the overall process.

Second, Dr Phan said the lists of services and patient files referred to the Committee were not a proper sample, having been examined and found deficient by the Director. This must have skewed the sample and adversely affected Committee deliberations. Tamberlin J accepted the view of the Committee’s statistical adviser that, from a statistical point of view, it was irrelevant that the Committee looked at the same random samples and services as the Director. The Committee, not the Director, had the authority to decide whether the sample disclosed inappropriate practice.

Third, Dr Phan said, relying on the decision in Mathews,[22] the sample had not been randomly drawn from the preliminary random sample as required by the relevant sampling Determination.[23] Tamberlin J distinguished the Mathews decision and held that the Committee had been entitled, under section 106K(4), to use an alternative sampling methodology advised by an accredited statistician to be statistically valid. Furthermore, previous examination by the Director did not affect the random character of the sample.

Fourth, Dr Phan said the Committee had not complied with the sampling determination, but had changed its methodology in accordance with undisclosed advice from an accredited statistician. His Honour held that the Committee had not been obliged to disclose its advice, so long as it had been obtained, and had it been entitled under section 106K(4) to adopt the alternative methodology. Further, the statutory scheme provided adequate opportunity for Dr Phan to meet the substantive case against him.

Finally, Dr Phan objected on grounds of the Committee’s ‘judicial immunity’[24] to certain evidence from the statistician based on material said to have been before the Committee. It was argued that this waived the Committee’s immunity and the whole Committee file should be discoverable. Tamberlin J rejected these arguments. The immunity protects the freedom of the decision-making process. The statistician’s report was not itself part of the Committee’s own deliberations. Further, the statistician was an independent consultant, not protected by the immunity. Nor was he an agent of the Committee, able to waive its immunity.

Accordingly, having failed on all grounds, the judicial review application was dismissed. Dr Phan did not appeal to the Full Court.

Dr Jane Carrick
Medical practitioner
Auburn, NSW

On 28 June 2002 the HIC asked the Director of PSR to review Dr Carrick’s provision of services because she was rendering a high number of certain services compared with her peers; Dr Carrick’s practice predominantly involves use of endoscopies. A Committee investigated and found that her conduct would be unacceptable to the general body of medical practitioners in connection with 28 of the 30 MBS item 30487 services it examined. Dr Carrick sought judicial review by the Federal Court.[25]

Branson J dismissed the application on all grounds other than Constitutional issues reserved for separate consideration.

First, the judicial review challenge to the investigative referral failed. Branson J distinguished the decisions in Daniel[26] as the HIC had clearly appreciated that the referral was discretionary, correspondence with Dr Carrick made plain that there were significant unresolved issues at the time of referral, there had been no undertaking not to refer, the HIC had correctly declined to advise on her professional practice, and her Honour had found no consideration not identified in the referral which the HIC was bound to take into account. A further claim that an HIC counsellor had misled Dr Carrick was not supported in her submissions to the Court or her personal evidence. Branson J did not accept that Dr Carrick had not had the opportunity to act on the counsellor’s advice.

Second, the challenge to the adjudicative referral failed. Dr Carrick argued that, by including with that referral medical materials that had been examined and found sufficiently deficient to cause the referral, the Director had impermissibly skewed the exploratory sample results for the Committee’s deliberations. After referring to the failure of this argument in Phan,[27] Branson J likewise rejected it because section 93(6) required the Director to give written reasons for his referral, and relevant Guidelines[28] permitted him to include any relevant information or material.

Third, attachment to the adjudicative referral of a report to the Director by a consultant gastroenterologist who was also a Deputy Director of PSR did not invalidate the Committee report. It had been attached as the basis for the Director’s referral, not as a basis for the Committee’s decisions. The Committee appeared to have applied its own expertise and had not referred to the report of the consultant gastroenterologist in support of its findings. Dr Carrick had not sought that the consultant gastroenterologist be available for cross-examination, so there was no substance to the claim that his report could not be tested.

Finally, regarding application of the sampling methodology, her Honour held, following Mathews[29] and Phan,[30] that the Committee was not required to, itself, select a random sample of services from the preliminary random sample and that the Act did not require the Committee to look at evidence ‘truly independent’ of that considered by the Director.

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