The Professional Services Review Scheme

Professional Services Review (PSR) is a key contributor to the compliance and regulatory framework that governs healthcare provision in Australia. PSR is an independent agency within the Australian Government's Health portfolio, and reports directly to the Minister for Health and Ageing.

The PSR Scheme was introduced in 1994 by the Australian Government to safeguard the public against the risks and costs of inappropriate practices by practitioners. The role and functions of PSR are set out in Part VAA of the Health Insurance Act 1973, which establishes the PSR Scheme. Section 79A of the Act states that:

In its administration of the Scheme, PSR is responsible for reviewing and examining possible inappropriate practice by health practitioners when they provide Medicare services or prescribe government subsidised medicines under the Pharmaceutical Benefits Scheme (PBS).

Under the PSR Scheme there is a two pronged approach to safeguard the integrity of the Medicare program and the PBS. This involves protecting the public from:

• inappropriate practice, by ensuring that the Commonwealth funded services delivered by practitioners are medically necessary and clinically relevant
• the consequences of inappropriate practice, by ensuring that payments to claimants are made in accordance with the regulations for the Medicare and Pharmaceutical Benefit schedules - specifically that the service provided is adequate in light of the associated requirements for the payment claimed.

The PSR Scheme has continued to evolve since its inception. Legislative amendments were made in 1997, 1999, 2002 and 2006 to strengthen and clarify the professional review process and address evidentiary difficulties. Comprehensive reviews conducted in 1999 and 2006 by government and key stakeholders also made recommendations to refine the administration of the Scheme and improve its legal effectiveness and transparency.

Referrals to the Director of Professional Services Review

The PSR process begins when Medicare Australia requests the Director to undertake a review of the provision of services by a practitioner over a specified period.

Under Section 81 of the Act, practitioners reviewed and investigated by the Scheme can be engaged in one of the following professions:

• medicine
• dentistry
• optometry
• midwifery
• the practice of a nurse practitioner
• chiropractic
• physiotherapy
• podiatry
• osteopathy

The Professional Services Review process

• Consideration by the Director of PSR of whether there is sufficient evidence that would enable a committee of peers to determine if inappropriate practice may have occurred. Alternatively, if the practitioner is willing to acknowledge inappropriate practice, the practitioner and the Director may seek to negotiate an agreement.
• A peer review process by a PSR committee (the Committee) to determine if inappropriate practice has occurred.
• Consideration and setting of an appropriate outcome by the Determining Authority.

SUMMARY OF STAGE 1 - Review by the Director

The PSR process begins when Medicare Australia requests the Director to undertake a review of the provision of services by a practitioner over a specified period.

A review must be undertaken if, after considering the Medicare Australia request, the Director forms the opinion that the practitioner may have engaged in inappropriate practice.

The Director undertakes a review of the data received from Medicare Australia, and may also direct the practitioner to produce complete and original patient records. After the records are examined, the Director may meet with the practitioner. A report on the findings is made and any submission received from the practitioner is considered. The Director must then decide to:

1. take no further action
2. negotiate an agreement under Section 92 of the Act, or
3. refer the practitioner to a peer review committee.

SUMMARY OF STAGE 2 - Review by a committee

If the Director considers that the conduct of the practitioner needs further investigation, or the practitioner chooses not to enter a Section 92 Agreement, a committee of the practitioner's peers is established. Members are drawn from the panel appointed by the Minister.

The Committee determines whether the practitioner's conduct in connection with the rendering or initiation of services would be acceptable to the general body of their peers. The Committee uses clinical records and any other material provided by the practitioner to make this decision.

If, after considering the information provided, the Committee forms a preliminary view that the practitioner may have engaged in inappropriate practice, a hearing is held. The hearing provides the practitioner with the opportunity to present both oral and written evidence to support their case. After considering all the evidence, the Committee produces a draft report containing its findings and provides a copy to the practitioner.

If the Committee finds that no inappropriate practice has occurred, the matter is closed. If the Committee finds that inappropriate practice has occurred, the practitioner is given time to make submissions on the draft report. The Committee then considers the practitioner's submissions and may or may not change their findings. The Committee then issues a final report to the practitioner and the Determining Authority.

SUMMARY OF STAGE 3 - Determining Authority

The Determining Authority is an independent body within PSR. The Determining Authority has two main functions, which are to:

• decide whether to ratify Section 92 Negotiated Agreements reached between the Director of PSR and a practitioner
• determine what sanctions to apply when a committee finds that a practitioner has engaged in inappropriate practice.

When a committee makes a finding of inappropriate practice against a practitioner, the Determining Authority will invite submissions from the practitioner on the sanctions it should impose. The Determining Authority will then draft a determination, including the sanctions it intends to impose.

• a reprimand
• counselling
• partial disqualification from claiming a Medicare benefit for no more than three years
• full disqualification from claiming a Medicare benefit for no more than three years
• an order for repayment of any Medicare benefits for services provided in the review period that have been found as being provided inappropriately
• a full disqualification from the PBS for no more than three years.

Practitioners are given an opportunity to make written submissions on the draft determination. The Determining Authority will consider this submission and then make a final determination. The final determination contains the final decision of PSR and is the end of the PSR process, unless the practitioner appeals to the Federal Court or Federal Magistrates Court.

Other possible outcomes of the Professional Services Review process

The Health Insurance Act 1973 allows the PSR Director to refer practitioners under review to appropriate bodies when a significant threat to the life or health of a patient is identified, or where the practitioner under review has failed to comply with professional standards.

When a practitioner has received two effective final determinations, the PSR Director must provide a written notice to the Chairperson of the Medicare Participation Review Committee.

These committees have a discretionary range of options: from taking no further action to counselling and reprimand, or full or partial disqualification from participation in the Medicare benefits arrangements for up to five years.

At any stage in the process, the practitioner under review may seek judicial review in the Federal Court.