The three stages of the PSR process

This content is prepared for employers, including corporate entities &/or their related officers, subject to a review under Part VAA of the Health Insurance Act 1973.

The process followed by PSR for an employer 'person under review' (you) comprises up to three stages. The Director’s review is the first stage. The Director is an independent statutory officeholder appointed by the Minister for Health, subject to agreement of the Australian Medical Association (AMA), and is responsible for the administration of the PSR scheme. The Director employs staff to coordinate and administer matters referred to PSR.

More information about each stage can be found on following pages.

Review by the Director

The PSR process begins when a delegate of the Chief Executive Medicare requests the Director undertake a review of services provided during a specified period (the review period). Those services are services provided by practitioners engaged or otherwise employed by you.

The Director must undertake a review if, after considering that request and any other relevant material, it appears that there is a possibility that you engaged in inappropriate practice.

For an employer 'person under review', inappropriate practice is found to have occurred if the following two step test applies:

  1. A Committee concludes that practitioners employed or otherwise engaged by you engaged in inappropriate practice. ‘Inappropriate practice’ for an individual in these circumstances is conduct in connection with rendering or initiating services that a Committee of peers could reasonably conclude was unacceptable to the general body of that practitioner’s profession or, if applicable, medical speciality and

  2. If a Committee finds that you knowingly, recklessly or negligently caused or permitted a practitioner to engage in inappropriate practice, then you will be found to have engaged in inappropriate practice. The practitioners found to have engaged in inappropriate practice must be employed or otherwise engaged by you. 

Both steps must apply for you to be found to have engaged in inappropriate practice. It is necessary for a practitioner engaged by you to have engaged in inappropriate practice in order for an adverse finding against you to be made. The finding of inappropriate practice in relation to individual practitioners has no statutory effect beyond assessing whether you caused or permitted that conduct to occur.

The Director will obtain details of a random sample of services that were billed or prescribed by practitioners employed or otherwise engaged by you that relate to particular MBS and/or PBS items. The Director will then request medical records corresponding to that sample of services. Following a review of those records, the Director may seek to meet with you before preparing a report.  You will have the opportunity to make submissions about that report.

The Director may decide to take no further action or refer you to a Committee.

Review by a Committee

The Director may establish a Committee, comprising a Deputy Director (who is a medical or other practitioner) and at least two other practitioners from the profession or speciality (as applicable) of the practitioners engaged or employed by you. Committee members are drawn from a panel appointed by the Minister for Health.

Like the Director, a Committee will examine a sample of services pertaining to particular MBS and/or PBS items. It will obtain medical records that are relevant to those services. If a Committee considers there is a possibility that you caused or permitted inappropriate practice to occur, it will hold a hearing. During a hearing, a Committee will take evidence on the services under review and any other relevant information.

After considering the evidence, if a Committee finds that the two step test (described above) has not been met, the matter is closed. If a Committee intends to make adverse findings that you caused or permitted inappropriate practice to occur, it will prepare a Draft Report. This report contains preliminary findings of inappropriate practice. You will be given an opportunity to provide submissions in response to the Draft Report. After considering any submissions, the Committee will prepare a Final Report detailing its findings of inappropriate practice. This is then provided to you, the Director and the Determining Authority.

Determining Authority

The Determining Authority has one function in relation to you: it determines what actions should follow from a Committee’s finding of inappropriate practice.