FEDERAL COURT OF AUSTRALIA
Sevdalis v Director of Professional Services Review [2017] FCAFC 9
ORDERS
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The appeal be dismissed with costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
TRACEY, PAGONE AND MARKOVIC JJ:
1 Dr Sevdalis appeals from a decision of Mortimer J dismissing an application for judicial review of a decision of the Determining Authority imposing sanctions upon Dr Sevdalis under s 160U of the Health Insurance Act 1973 (Cth) (“the Act”). The relevant background facts and legislative scheme are summarised in her Honour’s judgment and are largely not in dispute.
2 The Act provides for the payment of Medicare benefits for the provision of medical services. Dr Sevdalis is a general practitioner who had been paid Medicare benefits in relation to the provision of medical services. On 12 July 2013 the Chief Executive Officer of Medicare commenced a review into the services provided by Dr Sevdalis over a review period from 1 December 2011 to 30 November 2012. The Professional Services Review Committee gave its final report on 18 November 2014 finding that Dr Sevdalis had engaged in inappropriate practice within the meaning of s 82 of the Act in connection with the provision of services considered during the review. On 14 April 2015 the Determining Authority imposed sanctions upon Dr Sevdalis under s 106U of the Act in response to the findings made by the Committee. The sanctions included a disqualification for two years from rendering services under the Medicare Benefits Schedule (“MBS”) and that Dr Sevdalis repay amounts totalling $453,656.75.
3 The notice of appeal contains eight grounds which may conveniently be considered under four broad headings.
4 The first three grounds in the notice of appeal concern the Committee’s findings that Dr Sevdalis had not kept proper records. The first three grounds in the notice of appeal are:
The Committees’s findings about adequate and contemporaneous records
1. The primary judge erred in her construction of regulations 5 and 6 of the Health Insurance (Professional Service Review Regulations) 1999 (Cth) by holding that they, separately or together, required the Professional Services Review Committee No 855 (Committee) to have regard to whether the practitioner’s record of a service rendered or initiated was readily accessible to another practitioner.
2. The primary judge should have held that, on the proper construction of regulations 5 and 6, a record has been kept at the time that a handwritten record is made and that there is no further requirement that:
a. the handwritten record be kept in such a way that it is readily available to another practitioner; or
b. the handwritten record be “entered’ into a database or other system.
3. In respect of those services where the Committee held that “between the date of the consultation and the date that the notes were entered into into the electronic record, they were not readily available for another practitioner”, the primary judge erred by:
a. not holding that the Committee had erred in its construction of regulations 5 and 6 which, on their proper construction, provide that a record is kept at the time that the notes of that service are made and that any “gap” before entry of those notes into an electronic recorded is irrelevant;
b. holding that, as a matter of fact, the Committee made a finding of inappropriate practice as part of a “broader assessment” for the purposes of section 82(1) of the Health Insurance Act 1973 (Cth) (Health Insurance Act), rather than a finding based on its misconstruction of regulations 5 and 6.
5 The Committee’s final report had criticised Dr Sevdalis on the basis that his handwritten clinical notes were not readily accessible to other medical practitioners. Dr Sevdalis submitted that the adverse findings were based upon an erroneous construction of the relevant regulations and that the Committee’s findings had wrongly informed the reasoning of the Determining Authority in its final determination. Her Honour upheld the Committee’s findings upon a construction of the relevant regulations that Dr Sevdalis challenged.
6 Dr Sevdalis relied upon the following finding by the Committee as an example of the error he contended had been made. The Committee had found in respect of service 23 that:
The consultation was provided on the 16 November 2012. Dr Sevdalis did not enter the consultation details into the patient’s electronic record until 21 November 2012. Therefore, between the date of the consultation and the date that the notes were entered into the electronic record, they were not readily available for another practitioner.
The written submissions for Dr Sevdalis emphasised the words “not readily available” in this finding and submitted that the finding was based upon an erroneous construction of the definition of an “adequate record” and of a “contemporaneous record” in regs 5 and 6 of the Health Insurance (Professional Services Review) Regulations 1999 (Cth) (“the Regulations”).
7 The question for the Committee had been to consider whether Dr Sevdalis had engaged in inappropriate practice within the meaning of s 82(1)(a) of the Act which provided:
(1) A practitioner engages in inappropriate practice if the practitioner’s conduct in connection with rendering or initiating services is such that a Committee could reasonably conclude that:
(a) if the practitioner rendered or initiated the services as a general practitioner—the conduct would be unacceptable to the general body of general practitioners; or
[…]
The Committee was obliged by s 82(3) to consider whether Dr Sevdalis had “kept adequate and contemporaneous records” when determining whether his conduct was inappropriate practice. Section 82(3) provided:
A Committee must, in determining whether a practitioner’s conduct in connection with rendering or initiating services was inappropriate practice, have regard to (as well as to other relevant matters) whether or not the practitioner kept adequate and contemporaneous records of the rendering or initiation of the services.
The meaning of “adequate and contemporaneous records of the rendering or initiation of services” for the purposes of s 82, was, by s 81(1), made to mean the “records that meet the standards prescribed by the regulations for the purposes of” the definition in s 81(1).
8 Part 2 of the Regulations set out the standards to be met for a practitioner’s records of the rendering or initiation of services to be adequate and contemporaneous records. Regulations 5 and 6 provide:
5 An adequate record
For the definition of adequate and contemporaneous records in section 81 of the Act, the standard to be met in order that a record of service rendered or initiated be adequate is that:
(a) the record clearly identify the name of the patient; and
(b) the record contain a separate entry for each attendance by the patient for a service and the date on which the service was rendered or initiated; and
(c) each entry provide clinical information adequate to explain the type of service rendered or initiated; and
(d) each entry be sufficiently comprehensible that another practitioner, relying on the record, can effectively undertake the patient’s ongoing care.
6 A contemporaneous record
For the definition of adequate and contemporaneous records in section 81 of the Act, the standard to be met in order that a record of a service rendered or initiated be contemporaneous, is that record must be completed:
(a) at the time the practitioner rendered or initiated the service; or
(b) as soon as practicable after the service was rendered or initiated by the practitioner.
Regulation 5 is concerned with the obligation in s 82 that a practitioner’s record be “adequate” and reg 6 is concerned with the obligation that a practitioner’s record be “contemporaneous”. The requirement for the record to be contemporaneous requires that the record be completed “at the time” the service is rendered or initiated or that it be completed “as soon as practicable after” the service was rendered or initiated by the practitioner.
9 Dr Sevdalis maintained that he had made handwritten records which he had subsequently transferred to an electronic record. The Committee recorded, however, that none of the handwritten documents which Dr Sevdalis had tendered in evidence were contemporaneous but that they were then “recent fabrications”. The only evidence before the Committee was, therefore, of the electronic record having been made by Dr Sevdalis some time after the rendering or initiation of the service which the Committee found not to have satisfied the obligation upon Dr Sevdalis by the Regulations for the purposes of s 82 of the Act. He submitted to her Honour, however, that the Committee’s findings revealed what was submitted to be an erroneous construction of the Regulations by introducing an impermissible gloss or additional requirement to the Regulations that the records needed to be “readily accessible to other practitioners” or “readily available”.
10 Her Honour reviewed the representative samples relied upon by Dr Sevdalis and concluded that the Committee had not misconstrued the relevant provisions. In that regard her Honour said at [98]-[99]:
98 Rather, the Committee’s focus was on the standards set out in reg 6(a) and (b), both of which concern the timeliness of records made by a practitioner measured against the time at which a service was provided. Timeliness in making a record of what occurred during the provision of a service is no doubt important for reasons of maximising accuracy and ensuring that, if further treatment is required, past treatment is ascertainable. Further treatment for a patient may be required very soon after past treatment. It may be required when the medical practitioner who provided the past treatment is not available. It may be required by a different medical practitioner because of a choice made by the patient about where to go for treatment. Numerous other examples could be given.
99 In the approach it took to reg 6(a) and (b) and the standard of timeliness of record making, I can see no construction error in the Committee’s approach. It examined the chronology on the evidence before it and made findings of fact about the gaps in time between when a service was provided and when a record of that service was entered by Dr Sevdalis. Having done that, it found that the standard of timeliness had not been met, and it explained its reasoning by the proposition (self-evidently, in my opinion) that during the gap, the records would not have been available to another practitioner. As I have noted, there can be no doubt that at least part of the reason for this standard is precisely that. In my opinion, the reference by the Committee in [79] of its report to the question whether the records were “readily accessible” is to be understood in the same way, and does not involve any legal error in the construction of regs 5 or 6.
Dr Sevdalis submitted on appeal that her Honour erred in upholding the Committee’s construction and application on the facts. Her Honour went on to reject at [107] a separate submission by the Director that the requirement in reg 6 that the record be completed should be taken to mean transferred from a handwritten to an electronic form. That finding was submitted by Dr Sevdalis to require her Honour also to have concluded that the Committee was wrong in its finding that the standard of timeliness required by reg 6 had not been met.
11 The submission by Dr Sevdalis might have had force if the facts had been, as he asserted, that he had made a handwritten record at the time of rendering or initiating the service which had then been transferred to an electronic form. That, however, was not the evidence found by the Committee and, as stated above, the only evidence of written records were found by the Tribunal to be fabricated. The only evidence before the Committee, therefore, was of Dr Sevdalis not having completed a record at the time he rendered or initiated the service or as soon as practicable after the service had been rendered or initiated by him.
12 The requirement in reg 6 that a record be “contemporaneous” with the rendering or initiation of the service is, as the Committee said and as her Honour upheld, a requirement of timeliness. The Committee found gaps in time between the service and the recording of relevant services. It found that the standard of timeliness had not been met and explained its reasoning by the proposition that during the gap between the service and the record there would have been a gap in time when a record of the service would not have been available to another practitioner. Her Honour was, with respect, correct to observe at [99] that at least part of the reason for the standard in reg 6 was to enable another practitioner to have access to the record of the service rendered or initiated. It may also be assumed that its accessibility by the practitioner making the entry was also a reason for the requirement. Neither the Committee’s reasons, nor her Honour’s judgment, construed reg 6 as imposing an obligation that the record be accessible or available to another practitioner or to the medical practitioner who had rendered or initiated the service. Accessibility of the record, however, during a period between the service and its recording, bore upon the inquiry into whether the record had been completed contemporaneously. Her Honour was correct to conclude that the statutory scheme permitted consideration of accessibility or availability of records to an inquiry into whether the records had been made contemporaneously with the service. The fact that the record was not accessible to someone during the “gap” revealed that it had not been made contemporaneously.
13 There appeared to be some dispute between the parties about whether regs 5 and 6 could be satisfied by a handwritten record of the service. The second ground in the notice of appeal contended that the proper construction of regs 5 and 6 required only that a handwritten record had been made and that there was no further requirement in the regulation that the handwritten record be kept in such a way that it was readily available to another practitioner or that the handwritten record subsequently be entered into a database or other system. Neither the decision of the Committee, nor the judgment of her Honour, can fairly be read as saying that a handwritten record would not be sufficient to meet the requirements in regs 5 and 6. Her Honour made this clear at [106]-[107]:
106 I do not consider that these parts of the Committee’s report provide any support for the applicant’s contention that the Committee approached its task by construing regs 5 and 6 to require that electronic records be kept.
107 In accepting these submissions, I should not be taken to accept a different submission put by the first respondent. In his written submission, the first respondent submitted that where reg 6 requires that a record be “completed”, this should be taken to mean transferred from a handwritten to an electronic form. I do not accept that submission. The regulations say nothing about electronic data entry, just as they say nothing about handwritten entries. The standard is silent about the form of the record (whether electronic, typed or handwritten). That is presumably because of the myriad of circumstances in which medical practitioners may find themselves having to provide treatment, and the variety of resources available to practitioners depending on the nature and circumstances of their practices. Adequacy and contemporaneity can be achieved just as readily through a handwritten note as an electronic one, although whether the standard is met or not for a given service will depend on an evaluative assessment of that particular service. Illegible handwriting, for example, may render a record incapable of meeting the adequate standard in reg 5. Incompetent typing may do the same for an electronic one.
No part of her Honour’s judgment is susceptible to the criticism imbedded in ground 2 of the notice of appeal as construing regs 5 and 6 to require a handwritten record to be either readily available to another practitioner or subsequently to be entered into a database or other system. Her Honour’s conclusion was, rather, that the Committee had been correct in its finding that what Dr Sevdalis had produced was not a record that was contemporaneous with the service. He had not produced records made contemporaneously with the service but rather, had produced records made subsequently but said to have been based upon earlier handwritten records which he did not produce except for four handwritten records which the Committee found to be then recently fabricated.
14 The third ground in the notice of appeal formulated substantially the same challenge in different terms. Dr Sevdalis submitted that her Honour erred in relation to those services where the Committee had held that “between the date of the consultation and the date that the notes were entered into the electronic record, they were not readily available for another practitioner”. Dr Sevdalis contended by the third ground of appeal that the Committee’s finding expressed as being that “between the date of the consultation and the date that the notes were entered into the electronic record, they were not available for another practitioner” meant that her Honour had erred (a) by not holding that the Committee had misconstrued the Regulations and (b) by holding that the Committee had found as a fact that Dr Sevdalis had engaged in inappropriate practice as part of a “broader assessment” of the purposes of s 82(1) of the Act rather than a finding based on its misconstruction of regs 5 and 6. Neither of these challenges, however, can be made out. The Committee did express itself by saying that the records were not readily available for another practitioner between the date of service and the date of entry of the record into the electronic record, but the Committee did not say or find that a written record would not have satisfied the requirements of the Regulations had it been satisfied by Dr Sevdalis that such records had existed. The Committee found on the evidence before it that Dr Sevdalis had not maintained contemporaneous records and none were produced except for (a) those electronic records that were not contemporaneous with the service and (b) four handwritten notes which were found to be fabricated.
15 There was similarly no foundation to the criticism that her Honour was wrong in holding that the Committee’s findings of inappropriate practice had been part of a “broader assessment” for the purposes of s 82(1) rather than a finding based on the submitted misconstruction of regs 5 and 6. The task for the Committee was to determine whether Dr Sevdalis had engaged in inappropriate practice within the meaning of s 82 of the Act. In that task the Committee was required to determine whether it “could reasonably conclude” that the conduct of a practitioner rendering or initiating a service as a general practitioner “would be unacceptable to the general body of general practitioners”. Section 82(3) required the Committee to determine those questions having regard to whether or not Dr Sevdalis had kept adequate and contemporaneous records of the rendering or initiation of the services “as well as to other relevant matters”. The Committee was neither required nor permitted to restrict its inquiry only to the terms of regs 5 and 6.
16 Grounds 4 and 5 in the notice of appeal are concerned with the construction of MBS items 37 and 5043. Grounds 4 and 5 in the notice of appeal are:
The Committee’s Construction of MBS items 37 and 5043
4. The primary judge erred in her construction of MBS items 37 and 5043 and ss 3 and 10 of the Health Insurance Act by
a. having held that items 37 and 5043 do not require or authorise the Committee to engage in any evaluative exercise about whether in its opinion the attendance at a location other than the consulting rooms was justified;
b. holding that that it was open to the Committee to assess whether the attendance at a location other than the consulting rooms was “necessary for the appropriate treatment of a patient”.
5. The primary judge erred by upholding the decision of the Committee by reference to the test in ss 3 and 10 of the Health Insurance Act, being that the service rendered is “necessary for the appropriate treatment of the patient”, when the test to be applied by the Committee is whether, within the meaning of s 82 of the Act, the practitioners conduct was “unacceptable to the general body of general practitioners”.
17 The Committee had found, in respect of some of the services provided by Dr Sevdalis, that services he had provided did not fall within the terms of MBS items 37 and 5043 because the Committee considered that the consultation was not warranted. Item 37 is concerned with the professional attendance by a general practitioner other than at that practitioner’s consulting rooms. Item 37 provides:
37 Professional attendance by a general practitioner (other than attendance at consulting rooms or a residential aged care facility or a service to which another item in the table applies), lasting at least 20 minutes and including any of the following that are clinically relevant:
(a) taking a detailed patient history;
(b) performing a clinical examination;
(c) arranging any necessary investigation;
(d) implementing a management plan;
(e) providing appropriate preventive health care;
for 1 or more health-related issues, with appropriate documentation — an attendance on 1 or more patients at 1 place on 1 occasion — each patient
Item 5043 is concerned with professional attendance by a general practitioner not at the practitioner’s consulting rooms but after hours. Item 5043 provides:
5043 Professional attendance by a general practitioner (other than attendance at consulting rooms, a hospital or a residential aged care facility or a service to which another item in the table applies), lasting at least 20 minutes and including any of the following that are clinically relevant:
(a) taking a detailed patient history;
(b) performing a clinical examination;
(c) arranging any necessary investigation;
(d) implementing a management plan;
(e) providing appropriate preventive health care;
for 1 or more health-related issues, with appropriate documentation — an attendance on 1 or more patients on 1 occasion — each patient
18 In each case the amount payable to the practitioner for a service under these items is the amount found under clause 2.1.1. The Committee found that consultations charged by Dr Sevdalis under these items were unwarranted. Her Honour held that the Committee had erred in construing the terms of items 37 and 5043 as enabling it to decide whether a home visit was justified but concluded that the Committee’s decision was nonetheless supported by ss 3 and 10 of the Act. Dr Sevdalis submitted that her Honour erred in upholding the decision of the Committee by reference to the test in ss 3 and 10 and that those provisions, together with the terms of items 37 and 5043, did not permit the Committee to engage in an evaluation about whether the attendance at a location other than the consulting room was justified or was necessary for the appropriate treatment of a patient. The Director submitted that her Honour was justified in reaching her conclusions but also relied upon a notice of contention in support of the Committee’s construction of items 37 and 5043 as entitling the Committee to take into account the adequacy of the explanation Dr Sevdalis had given for not providing the services in his consulting rooms.
19 Section 10(1) of the Act provides that a medical benefit is payable in respect of “a professional service rendered” in Australia to an eligible person subject to and in accordance with the Act “in respect of that professional service”. The expressions “eligible person”, “medical expenses”, “medical benefits” and “professional services”, amongst others, are defined in s 3(1). Professional service is defined in s 3(1) to include:
(a) a service (other than a diagnostic imaging service) to which an item relates, being a clinically relevant service that is rendered by or on behalf of a medical practitioner;
[…]
Section 3(1) also contains a definition of “clinically relevant service” which is defined to mean:
…a service rendered by a medical … practitioner … that is generally accepted in the medical, … profession … as being necessary for the appropriate treatment of the patient to whom it is rendered.
Her Honour considered that these provisions permitted the Committee to evaluate whether the service was necessary for the appropriate treatment of a patient and her Honour was persuaded on the balance of probabilities that the Committee had assessed Dr Sevdalis’ conduct against the standard required by s 10 read with the definition in s 3(1). There was no error in her Honour’s approach.
20 Ground 5 of the notice of appeal is that her Honour erred in upholding the decision by reference to the test in ss 3 and 10 of whether the service rendered was “necessary for the appropriate treatment of the patient” because the test to be applied by the Committee was whether the practitioner’s conduct would be “unacceptable to the general body of general practitioners” within the meaning of s 82. The consideration of whether the conduct of a practitioner would be “unacceptable to the general body of general practitioners” within the meaning of s 82 of the Act does not exclude, but may be answered by, a consideration of whether a service was “necessary for the appropriate treatment of the patient” within the meaning of ss 3 and 10.
21 It was open to the Committee, as a peer review body, to assess what was “necessary” for the appropriate treatment of patients, including whether it was necessary to consult with those patients at locations other than the appellant’s consulting rooms, and to take that into account when determining whether the practitioner’s conduct would be “unacceptable to the general body of general practitioners”. The definition of “clinically relevant service” defines a service as one that is “necessary” for the appropriate treatment of the patient. Section 79A of the Act describes the object of Part VAA (in which s 82 is found) as follows:
The object of this Part is to protect the integrity of the Commonwealth medicare benefits, dental benefits and pharmaceutical benefits programs and, in doing so:
(a) protect patients and the community in general from the risks associated with inappropriate practice; and
(b) protect the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice.
22 The terms in which “clinically relevant service” is defined, and the objects in s 79A, required the Committee, where appropriate, to evaluate and form a view about the appropriateness of the treatment given by a medical practitioner to a patient. The Committee did that as her Honour recorded at [130] of her Honour’s reasons:
Then, at [65] the Committee addressed the s 10 and s 3(1) requirements of “professional service”, together with submissions made on behalf of Dr Sevdalis:
This is further supported by the requirement in the Act that Medicare benefits are payable only in respect of a “professional service” that is a “clinically relevant service”. This means that the particular service rendered must be a service that is generally accepted in the medical profession as being necessary for the appropriate treatment of the patient. If it was not necessary to conduct a home visit for the treatment of the patient, then it was not a clinically relevant service and was not eligible for the payment of a Medicare benefit. Consequently, a practitioner needs to document the clinical information adequate to explain the type of service rendered, which in respect of home visits should include the fact that it was a home visit, and the reason for having to go to that particular location on that occasion to attend to the patient. For after-hours visits, it should indicate when the attendance occurred and the clinical reasons for needing to attend to the patient at that time. For minimum timed services, the clinical record should record the actual time spent and indicate the clinical reasons for spending at least the minimum amount of time for the MBS item billed.
The Committee had based its conclusion upon its construction of items 37 and 5043 but had considered also the requirements of “professional service” in ss 10 and 3(1). Her Honour was permitted to conclude that despite any supposed erroneous interpretation of the requirements by the Committee of items 37 and 5043, it was substantially correct also to conclude that the requirements of s 10 of the Act, read with s 3(1), permitted it to consider whether the service rendered by Dr Sevdalis was necessary for the appropriate treatment of the patient to whom it had been rendered: see Eastman v Commonwealth Director of Public Prosecutions (ACT) (2003) 214 CLR 318, [124]; Australian Education Union v Department of Education and Children’s Services (2012) 248 CLR 1, [34]; Attorney-General (SA) v Corporation of the City of Adelaide (2013) 249 CLR 1, [175].
23 It was submitted for Dr Sevdalis, however, that her Honour erred in her construction of items 37 and 5043 with ss 3 and 10 by holding that it was open to the Committee to assess whether the attendance at a location other than the consulting rooms was “necessary for the appropriate treatment of a patient”. The submission for Dr Sevdalis was based upon the proposition that the Committee’s conclusion was not open in view of her Honour having held that items 37 and 5043 did not require or authorise the Committee to engage in an evaluative exercise about whether attendance at a location other than the consulting rooms was justified in the Committee’s opinion. Whether her Honour erred in the construction of items 37 and 5043 is a matter arising under the Director’s notice of contention but it is sufficient to dispose of this ground to note that it does not follow that the construction of those items constrains the construction of ss 3(1) and 10. The definition of “clinically relevant service” in s 3(1) is based upon conceptions of what is “generally accepted” in the medical profession as being “necessary” for the appropriate treatment of a patient. The terms of the definition contemplate evaluation and assessment by the body charged with reviewing professional services.
24 It may not be strictly necessary also to consider the notice of contention, but it is desirable to do so. The Committee had construed items 37 and 5043 as permitting the Committee to decide whether the service was justified. The Director had argued before her Honour, and maintained on appeal, that consideration by the Committee of items 37 and 5043 permitted an evaluation by reference to the words “clinically relevant” in the text in each item. In each case a fee was payable for an attendance by a general practitioner for an item described as being “clinically relevant”. The Director submitted that an attendance for which a fee was paid under these items had to be one that came within the definition of “clinically relevant service” in s 3(1) of the Act. Her Honour rejected that submission saying at [112]-[117]:
112 The applicant also points to the characterisation of items such as item 37 and item 5043 in the Medicare Benefits Schedule Book, relevant extracts of which were in evidence on this review. In an affidavit relied upon by the first respondent, the Book is described as a “Booklet” that is “published annually by the Department of Health and Ageing and used generally by the medical profession for information and guidance about Medicare service items prescribed under the Act”. As such, it does not have legal force and provides information and guidance only regarding rights and obligations the source of which is to be found in the relevant legislation, in particular the Act and the applicable regulations setting out the General Medical Services Table.
113 In the Book, items 37 and 5043 are described as “non urgent attendances”. The text of the book does not suggest any evaluative aspect to services claimed under these items, in contrast to the way it describes an “urgent attendance”. However, given the role of the Book, I am not persuaded this takes the applicant’s argument any further than the text of the regulations themselves.
114 The first respondent’s answer to this ground is to focus on the phrase “clinically relevant” in the text of each item. He does so by reference back to the definition of “clinically relevant service” in s 3 of the Act, which I have extracted at [41] above.
115 In my opinion, this submission involves a conflation of the defined term in s 3(1) and the text of items 37 and 5043 as set out in the regulations. The text in the items does not use the defined term “clinically relevant service”. Indeed, the adjectival phrase “clinically relevant” in the regulations relates not to the “service” as a whole, but to the five activities set out in each item. It is one of more of those activities which must be “clinically relevant”. In my opinion that means one or more of those activities (such as performing a clinical examination) must be relevant, in a clinical sense, to one or more of the “health related issues” a patient had at the time of the attendance.
116 There is simply nothing in the text or context of the regulations dealing with items 37 and 5043 which supports a construction of these items making it part of the Committee’s task to decide whether, in the Committee’s opinion, a “home visit” was justified.
117 Yet that is the analysis the Committee undertook. This is apparent from a number of entries in its report in which the Committee responded to Dr Sevdalis’s explanations regarding particular home visits (which I do not extract as they may identify the patient), examples of which include:
The Committee still does not understand why this patient could not have been seen at the clinic…
…
The Committee does not accept that this patient could not have attended the clinic.
(Emphasis in original.)
25 The Director maintained in the notice of contention on the appeal that the Committee was entitled to consider whether Dr Sevdalis had shown that each of the services was “clinically relevant” and to take into account the adequacy, or lack of adequacy, of the explanation given by a medical practitioner for not providing a service at his consulting rooms when claims were made under items 37 or 5043.
26 It is true, as her Honour noted at [115], that the text of items 37 and 5043 do not use the term “clinically relevant service” but, rather, the phrase “clinically relevant”; but the defined words “clinically relevant” should be understood as being referred to in items 37 and 5043. The definition of “clinically relevant service” in s 3(1) should inform the task of the Committee in evaluating whether the service in question was clinically relevant for the fee charged. In Gill v Donald Humberstone & Co Ltd [1963] 1 WLR 929 Lord Reid said at 934-5:
They are addressed to practical people skilled in the particular trade or industry, and their primary purpose is to prevent accidents by prescribing appropriate precautions…They have often evolved by stages as in the present case, and as a result they often exhibit minor inconsistencies, overlapping and gaps. So they ought to be construed in light of practical considerations, rather than meticulous comparison of the language of their various provisions such as might be appropriate in construing sections of an Act of Parliament…if the language is capable of more than one interpretation, we ought to discard the more natural meaning if it leads to an unreasonable result, and adopt that interpretation which leads to a reasonably practicable result.
This passage was recently applied by the Full Court in Secretary, Department of Health (as successor to the Secretary, Department of Social Services) v DLW Health Services Pty Ltd [2016] FCAFC 108 at [93]. A similar approach should be adopted to the construction of items 37 and 5043.
27 Ground 6 of the notice of appeal is concerned with the repayment direction made by the Determining Authority. Ground 6 in the notice of appeal was:
Whether the Determining Authority made directions which were punitive and not protective
6. The primary judge erred by not holding that the Determining Authority had erred by:
a. failing to have regard to a relevant consideration, being the minimum determination(s) necessary to satisfy the protective (and not punitive) purposes of Part VAA of the Health Insurance Act:
b. failing to have regard to a relevant consideration, being an assessment of the risk (if any) that the Appellant would engage in inappropriate practice in the future.
In the final determination the Determining Authority directed that Dr Sevdalis be fully disqualified for a period of two years. Dr Sevdalis submitted that her Honour ought to have found that the Determining Authority had failed to have regard to one or more mandatory relevant considerations concerning the protective purposes of Part VAA of the Act. He had argued before her Honour that a period of two years disqualification was punitive rather than protective and that the Determining Authority had failed to consider the possibility of a partial disqualification.
28 Dr Sevdalis had provided submissions both before and in response to a draft determination before the final determination was made by the Determining Authority. The sanctions imposed in the final determination were unchanged from the draft determination. Dr Sevdalis had been candid in his submissions about private matters affecting his behaviour and had submitted that he had presented as contrite and with insight into his conduct. He referred in particular to three matters: (a) he explained that there were considerable mitigating circumstances including an extreme ice addiction of his nephew and that his brother had bipolar psychosis; (b) he had commenced ongoing education dealing with his poor competence with computers and note recording; and (c) he had offered to accept a partial disqualification from receiving Medicare benefits from the MBS for a period of time for all items except for item 23 (being for general consultations).
29 The final determination recited briefly that some of these submissions had been made but the Determining Authority did not relate any of the matters to any of the considerations of the appropriate determination. It was submitted for Dr Sevdalis in those circumstances: (a) that the Determining Authority did not explain or consider why a full disqualification from receiving Medicare benefits was necessary to satisfy the protective purpose of the scheme in circumstances where Dr Sevdalis had provided detailed submissions explaining a change in circumstances between the review period and the future; and (b) that the Determining Authority did not explain or consider why a partial disqualification (from certain item numbers) was not sufficient to satisfy the protective purposes of the scheme. Her Honour held, however, that the Determining Authority had considered the matters which had been submitted, although her Honour was critical about the way in which the Determining Authority had expressed its reasons in that regard. Her Honour said at [142]-[145]:
142 The submission that the Determining Authority “never considered” why a full disqualification was appropriate and a partial disqualification was inappropriate, particularly given the tragic personal circumstances experienced by Dr Sevdalis and outlined to the Determining Authority, is put too high. The Determining Authority’s reasons make it plain the Determining Authority was aware of, and took into account, those circumstances. Similarly, it cannot be said the Determining Authority “never considered” why a partial disqualification would not satisfy the scheme’s protective purpose. This was Dr Sevdalis’ submission and the Determining Authority took that submission into account.
143 What is missing from the Determining Authority’s reasons, however, is any substantive examination of why it made the directions it did, in preference to the directions Dr Sevdalis contended would be appropriate (or any other directions for that matter). Its reasons are largely conclusory.
144 Such an approach can be criticised as less than best practice – it does not inform Dr Sevdalis, as the affected practitioner, why his submissions were so roundly rejected, nor does it inform a reviewing court as to why the Determining Authority reached the conclusions it did. Both are left to piece together a few observations made earlier in the Determining Authority’s reasons (such as those at [23]-[29] of its reasons) and infer that these were the matters the Determining Authority then decided weighed strongly in favour of full disqualification (and full repayment.
145 Nevertheless, such a criticism of the way the Determining Authority has expressed its reasoning process is not the same as a conclusion that it misunderstood its task and was intent on punishing Dr Sevdalis, rather than making directions it was satisfied would give effect to the protective purposes of the legislative scheme. While in parts of its reasons, it is critical of Dr Sevdalis, those criticisms are generally couched in the context of the Determining Authority explaining why the shortfalls in Dr Sevdalis’s behaviour may pose a risk to patients. An example is [28] of its reasons:
The importance of clinical records in the management of patient care should not be understated. The inadequacies of Dr Sevdalis’ clinical records adversely affect his ability (and the ability of other practitioners) to provide effective and adequate care to his patients. The Committee’s finding is indicative of the importance and value that the profession places on clinical records.
At [149] her Honour observed that it was not possible to identify from the reasons of the Determining Authority why there was not more sympathy for the situation in which Dr Sevdalis found himself, but concluded that the fact that there was less sympathy than other minds might have brought to the decision was not a legal error.
30 An inquiry into whether the Determining Authority failed to take into account something it was bound to take into account is not to be answered by whether it could have expressed itself more clearly or differently. The final determination by the Determining Authority was given on 14 April 2015 after provision of a draft and receipt of submissions. The determination recorded the matters relied upon by Dr Sevdalis, including specific reference to his personal circumstances, ongoing education he was undertaking to remedy adverse comments of the Committee, and the specific submission by Dr Sevdalis that a direction which would be proportionate and fair was that he would be disqualified from all consultation items other than MBS item 23. In [7] of the Determining Authority’s final determination it said:
Other documentation
7 The Determining Authority has also had regard to:
(a) PSRC Referral No 855, given to the Determining Authority on 22 December 2014 by the Director of Professional Services Review, under section 106S of the Act
(b) Submissions dated 6 February 2015 made on behalf of Dr Sevdalis by John W. Ball & Sons Lawyers in accordance with section 106SA of the Act. The submissions were accompanied by supporting documents. Further references and supporting documents were provided by John W. Ball & Sons Lawyers under cover of a facsimile dated 9 February 2015. The submissions and supporting references and other documents included the following points:
• Dr Sevdalis was practising in very difficult personal circumstances during the review period, as he was responsible for dealing with the severe mental illnesses of two family members as well as the infirmity and medical needs of his mother, while continuing to attend to the needs of his patients
• Dr Sevdalis’ […] suffered from bipolar psychosis during the review period, and his actions caused immense stress and consumed a significant amount of time
• Dr Sevdalis’ […] also required significant attention from Dr Sevdalis during the review period due to the effects of his illicit drug use
• Dr Sevdalis was a self-taught user of computers and had ongoing problems with losing typed notes due to internet connection and server failures
• Dr Sevdalis is taking action to remedy the adverse comments of the Committee. He is addressing the need for ongoing education
• The internet server at the clinic was replaced in April 2014, greatly reducing the number of system failures, and Dr Sevdalis has commenced further education in the ‘Medical Director’ software program
• Dr Sevdalis has changed his behaviour, including by referring patients to hospital or seeing them at the clinic rather than treating them in their homes, and seeking to lessen his practice load
• Dr Sevdalis has found his experience of the PSR Scheme process confronting and stressful
• Submissions about Dr Sevdalis’ financial status and the impact of any direction to repay part or all of the benefits to the Commonwealth
• Submissions on the impact on Dr Sevdalis, his patients and the community if a direction is made that he be partially or totally disqualified from the provision of MBS services
(c) Submissions made in response to the draft determination dated 24 March 2015 made by Dr Sevdalis under cover letter from John W. Ball & Sons Lawyers. The submissions included the following points:
• Dr Sevdalis accepted the draft directions on reprimand and counselling
• The draft directions on repayment and disqualification are crushing, punitive and unreasonable
• A direction on repayment calculated by applying a percentage of the inappropriate practice to all payments for those services is harsh and not warranted
• The Determining Authority has not allowed Dr Sevdalis any concession for the fact that consultations were in response to patients’ conditions, their need for medical attention and Dr Sevdalis provided therapeutic services to his patients
• A repayment direction should balance the findings of the Committee which were substantially on inadequate clinical records and the fact that Dr Sevdalis attended patients with medical needs and provided a therapeutic benefit to them
• The calculation of the repayment direction was made by extrapolating from the percentage of services examined by the Committee found to constitute inappropriate practice. The fact is that the number of services examined is a very small proportion of the total services in the review period
• Allowance should be made for the prospect that inappropriate practice would not have been found in all services
• The substantial difficulties and personal circumstances of Dr Sevdalis have not been fairly recognised by the Determining Authority in calculating the repayment and proposed period of disqualification. The evidence that Dr Sevdalis has provided to the Determining Authority warrants a significantly lesser repayment and period of disqualification than set out in the draft determination
• A change in the personal circumstances of Dr Sevdalis means that he is now better equipped to serve the medical needs of his patients but the period of disqualification set out in the draft determination would preclude him from doing so
• Dr Sevdalis had difficulties with the practice’s computer system and the Determining Authority did not have sufficient regard to those difficulties. Dr Sevdalis accepts that his notes were inadequate as concluded by the Committee but contends that in the past his notes were often more detailed and no worse than other GPs. He was not aware of the detail that was required and was not aware of an example of “correct notes” being available to practitioners to know what Medicare requires
• A lengthy period of disqualification will result in Dr Sevdalis being significantly deskilled which is not in the interests of the community
• If it is a matter of reducing the period of disqualification or reducing the repayment, Dr Sevdalis would prefer the Determining Authority to prioritise a lesser period of disqualification
• Dr Sevdalis submits that a direction that would be proportionate and fair is for the Determining Authority to disqualify him from all consultation items other than MBS item 23. That would balance the importance of Dr Sevdalis not losing his clinical skills and a financial consequence for the findings of the Committee
• The period of disqualification should be significantly less than 2 years. Dr Sevdalis submits a six month period of partial disqualification would be appropriate
• Dr Sevdalis submits that the repayment direction be for 50% of the amount in the draft direction in the draft determination.
(Footnotes omitted.)
Despite these considerations the Determining Authority decided to impose a direction under s 106U(1)(h) of the Act for a full disqualification for a period of two years. The Determining Authority said at [51]-[59]:
Disqualification
51 The Determining Authority is concerned about the very high proportion of inappropriate practice (100% of services for three of the sampled MBS item services examined by the Committee) and considers that it should make a direction under section 106U(1)(h) of the Act for a period of full disqualification.
52 The Determining Authority considered the submissions of John W. Ball & Sons Lawyers and the possible impact of a disqualification on the patients of Dr Sevdalis and the Fairfield area community. It was submitted that, given the ongoing needs of Dr Sevdalis’ patient demographic, the Determining Authority should not impose sanctions which would have the effect of excluding him from participating in Medicare.
53 According to the statistics which were provided to the Director by the Department of Human Services with the request for review (and passed on to the Committee), Dr Sevdalis had a patient base during the review period of approximately 626 patients and 1,014 in the previous year which was low in comparison with his peers (12th percentile and 26 percentile respectively).
54 Dr Sevdalis has submitted that the period of disqualification set out in the draft determination would result in him being significantly deskilled. The Determining Authority noted that deskilling was a possibility but that Dr Sevdalis could also be engaged as a medical practitioner in other contexts and that could result in an increase in medical skills. Further, when the other considerations referred to in this determination were balanced by the Determining Authority, it weighed strongly in favour of disqualification.
55 The Determining Authority considered the impact of a disqualification on the practice of Dr Sevdalis in the course of making the draft determination. No additional evidence has been brought forward by Dr Sevdalis which would weigh in favour of a different view on this issue. The Determining Authority observed that the area in which Dr Sevdalis has his practice (Fairfield Victoria), has a number of medical service providers which may be well placed to provide medical services to the patient’s of Dr Sevdalis during the period of disqualification. However, little weight was placed on this observation in the decision making process.
56 The Determining Authority is of the view that inappropriate conduct can place patients at risk and that the directions in this determination are proportionate to the-inappropriate conduct found by the Committee and also the previous conduct of Dr Sevdalis as set out in the previous final determination. Any possible adverse consequences to the patients of Dr Sevdalis of a disqualification may be managed by Dr Sevdalis’ patients for the period of the disqualification.
57 The Determining Authority noted the previous final determination involving Dr Sevdalis made on 24 February 2004 and which was based on similar findings by a Committee. Accordingly, the Determining Authority has the power under subsection 106U(1)(g)(i), with reference to subsection 106U(3), to direct a period of disqualification for up to 5 years.
58 Having considered the nature and extent of the inappropriate practice found by the Committee and the issues raised in submissions on behalf of Dr Sevdalis, the Determining Authority has, on balance, decided that it should exercise its discretion to make a direction for a period of full disqualification.
59 Accordingly, the Determining Authority directs that Dr Sevdalis be fully disqualified for a period of two years (subparagraph 106U(1)(g)(i) of the Act). The period of disqualification will commence from the time the final determination takes effect.
31 It is true, as her Honour said at [149], that it is not possible to identify from the reasons why there was not more sympathy for Dr Sevdalis’ situation, and it is also true, as her Honour found at [143], that what is missing from the reasons is any substantive examination of why it made the directions it did in preference to the directions Dr Sevdalis had contended would be appropriate, but the reasons of the Determining Authority explain the determination it made and the reasons for making it. The Determining Authority read, took into account, and engaged with the submissions which had been made but decided within its jurisdiction to impose a heavier sanction than Dr Sevdalis submitted was proportionate. The Determining Authority explained its reasons for that decision although it did not in terms spell out why and how its reasons involved a rejection of the submissions Dr Sevdalis had made.
32 Dr Sevdalis sought to rely in this context on dicta from Quinn v Law Institute of Victoria Ltd (2007) 27 VAR 1 and Soliman v University of Technology, Sydney (2012) 207 FCR 277. Quinn was a case concerning a failure of reasons to deal with a matter required to be considered by a professional disciplinary tribunal obliged to provide reasons. The Court held that the Tribunal’s failure to deal in its reasons with an undertaking which had been offered by the appellant amounted to an error of law. Maxwell P said at [31]-[33]:
31 Critically for present purposes, however, the tribunal’s protective function is paramount. Thus, where there is a choice of sanctions, it is to be expected that the tribunal will choose that sanction which maximises the protection of the public.
32 In my opinion, the tribunal was here faced with just such a choice. Counsel for Quinn had offered the tribunal an undertaking to have his bills of costs independently assessed. This undertaking was offered apparently without limit of duration. As Buchanan JA and I said when granting a stay of the suspension, the imposition of a continuing obligation of that kind would seem likely to afford considerably greater protection to the public than a period of suspension, unaccompanied by any requirement of training or further education, followed by a resumption of unsupervised practice. Put simply, compliance with the undertaking would ensure that there was no recurrence of the overcharging which occurred here.
33 As I have mentioned, the tribunal’s otherwise careful reasons for decision make no mention of the proffered undertaking. The tribunal said that it had considered other options short of suspension but in my view, because of the long-term protection which the undertaking offered the public, that course required separate consideration and evaluation.
(Footnotes omitted.)
Chernov JA agreed with the learned President, adding at [40]-[41]:
40 I have had the advantage of reading the reasons for judgment of the learned President. I agree that, for the reasons given by him, putting aside the question of penalty, the challenges to the tribunal’s findings are without merit. In my view the tribunal was entitled to come to the impugned findings and to regard the appellant’s misconduct to which he pleaded guilty - particularly that which involved improper use of trust moneys – as being of the “utmost seriousness.” The misconduct involved, I think, abuse by the appellant of his position of trust and privilege which he enjoyed as an officer of this court. It also involved serious breaches of the legislation.
41 As to the penalty, given the institute’s attitude to the issues as described and the reasons of the President, and the other mitigating factors, I think that the suspension of the appellant’s practising certificate for 12 months was, at least, very stern. Although the tribunal’s discretion on this issue is very wide, it must be exercised judicially which means that it was required to act in accordance with relevant principles and take into account all relevant matters and not those that are irrelevant. It is also the case that the tribunal was obliged to explain in its decision the path of reasoning that it adopted in order to come to the impugned decision so that the parties and the appellate court could discern if the tribunal relevantly erred. This requirement includes the obligation to make apparent what matters it took into account for the purpose of sentencing the appellant.
Nettle JA (as his Honour then was) also agreed with the President adding at [46]:
In this case, the tribunal stated in its reasons that it regarded the appellant’s misconduct as so grave that the only course was to suspend him. In a sense that was an explanation of why suspension was chosen. But it is an inadequate explanation because it does not reveal the path of reasoning which led to that conclusion. It does not disclose whether the tribunal considered that nothing short of suspension would provide the level of general deterrence that was needed, or whether the tribunal considered that nothing short of suspension would provide the sort of specific deterrence that was needed, or whether it was a combination of both factors and maybe something else. Moreover and more importantly, inasmuch as the appellant offered an undertaking and requested the tribunal to consider it as an alternative to suspension, he was entitled to know why in the opinion of the tribunal the undertaking would not suffice. Yet, so far from disclosing the reasons, the subject is not even mentioned.
The undertaking which Mr Quinn had offered was an undertaking that his future bills would be subject to independent consideration. The Court of Appeal in Quinn found that the undertaking had not been mentioned by the decision-maker. The same cannot be said about the reasons of the Determining Authority in relation to Dr Sevdalis. The Determining Authority referred to and took into account the lesser sanction he had proposed but decided to impose a higher disqualification for a greater protection to the public than the lesser penalty would have provided. Its reason for selecting that path was identified notwithstanding that it may not in terms have explained why the more lenient path did not commend itself to the Determining Authority.
33 Soliman was a case in which the Full Court found jurisdictional error in the reasons by a Tribunal which had not considered a matter that was centrally relevant to its decision. The Tribunal in that case, like the Determining Authority but unlike the decision-maker in Quinn, was not obliged by statute to give reasons. It did give reasons for its decision, however, and in those reasons the Full Court found that the Tribunal had failed to address a submission that was centrally relevant to the decision being made. The Court said at [53] that the failure to address a submission in reasons where facts and reasons have been provided, albeit that there is no statutory requirement to provide either reasons or findings of fact, may found a conclusion that the submission had not been considered or addressed. The Court then said at [55]-[57]:
55 Even in the absence of a statutory requirement to provide findings or reasons, a failure to address a submission centrally relevant to the decision being made may similarly found a basis for concluding that that submission has not been taken into account. Such a failure may be exposed in reasons voluntarily provided. And a failure to take into account such a submission may constitute jurisdictional error: cf WAFP v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 319. Lee, Carr and Tamberlin JJ there concluded:
[21] However, in our view, the failure by the RRT to refer to the interview of 10 September 1997 and to take it into account in considering whether the appellant departed illegally did amount to an error of law, because it constituted a failure to have regard to relevant material, which is so fundamental that it goes to jurisdiction: see Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 per McHugh, Gummow and Hayne JJ at [82].
56 In the present proceeding it is concluded that the failure to refer to the submissions relating to mitigating circumstances and the reasonableness of the decision of the Acting Vice-Chancellor is properly to be characterised as a failure on the part of the Vice President to resolve, in accordance with law, the application that had been made.
57 Just as reasons for an administrative decision should not be read with an eye keenly attuned to discerning error (Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272 per Brennan CJ, Toohey, McHugh and Gummow JJ), eyes should not be so blinkered as to avoid discerning an absence of reasons or reasons devoid of any consideration of a submission central to a party’s case. Two factors, in particular, dictate the conclusion that the reasons of the Vice President fail to give any real consideration to the submissions advanced on behalf of Dr Soliman as to mitigating circumstances, namely:
• the fact that the findings and reasons provided were written by an experienced, senior member of Fair Work Australia with legal qualifications and a person who had the considerable benefit of written submissions filed by experienced legal practitioners: Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia (2012) 206 FCR 576 at [36]; Yum! Restaurants Australia Pty Ltd v Fair Work Australia Full Bench (2012) 205 FCR 306 at [37] per Lander, Flick and Jagot JJ;
and, irrespective of any consideration being given to the qualifications and experience of the person who prepared those findings and reasons:
• the fact that any reading of the findings and reasons of the Vice President disclose no real attempt to engage with the submissions being advanced on behalf of Dr Soliman.
The submissions advanced on behalf of Dr Soliman as to mitigating circumstances were not considered by the Vice President. The decision of the Full Bench gives no greater consideration to those submissions. Both the decision of the Vice President and the decision of the Full Bench, it is concluded, should be quashed.
In that case the Court found that the decision-maker’s references to the relevant submissions had only been their restatement (see [39]) but that they had not been considered by the decision-maker (see [57]). The same conclusion cannot be reached in respect of the Determining Authority’s reasons for not adopting submissions by Dr Sevdalis for a lesser sanction. The Determining Authority set out the substance of the submissions in its own words in [7] quoted above and explained in detail at [51]-[59] quoted above why it decided to impose the disqualification it imposed.
34 Grounds 7 and 8 in the notice of appeal are concerned with the repayment direction made by the Determining Authority. Grounds 7 and 8 in the notice of appeal are:
The Determining Authority’s repayment directions
7. The primary judge erred because her Honour should have held that the Determining Authority, when deciding whether to require repayment of amounts under s 106U of the Health Insurance Act, erred by failing to separately consider whether repayment ought to be required for each of the individual services the subject of findings by the Committee.
8. In rejecting the ground summarised in paragraph 7 above, the primary judge erred by recognising that s 106U(cb)(ii) of the Health Insurance Act authorises repayment for a class of services, but failing to recognise that the Determining Authority may require repayment of the “whole or part of the medicare benefits”, and that the Determining Authority was therefore required to consider whether a partial repayment was an appropriate determination in the circumstances.
35 These grounds concern the way in which the Determining Authority calculated the amount Dr Sevdalis was directed to repay. Ground 7 in the notice of appeal was that her Honour erred in finding that the Determining Authority was not obliged separately to consider whether repayment ought to be required for each of the individual services which were the subject of findings by the Committee. Ground 8 in the notice of appeal was that her Honour failed to find that the Determining Authority was “required to consider whether a partial repayment was an appropriate determination”. The Committee had used a sampling regime as permitted under s 106K of the Act. That section provides:
106K Committee may have regard to samples of services
(1) The Committee may, in investigating the provision of services included in a particular class of the referred services, have regard only to a sample of the services included in the class.
(2) If the Committee finds that a person has engaged in inappropriate practice in providing all, or a proportion, of the services included in the sample, then, the person under review is taken, for the purposes of this Part, to have engaged in inappropriate practice in the provision of all, or that proportion, as the case may be, of the services included in the class from which the sample is chosen.
(3) The Minister may, by legislative instrument, make determinations specifying the content and form of sampling methodologies that may be used by Committees for the purposes of subsection (1).
(4) The Committee may use a sampling methodology that is not specified in such a determination if, and only if, the Committee has been advised by a statistician accredited by the Statistical Society of Australia Inc that the sampling methodology is statistically valid.
36 The Determining Authority noted at [39] that the Committee had proceeded in accordance with sampling methodology set out in this section and that s 106U gave the Determining Authority a discretion about the amount to direct Dr Sevdalis to repay to the Commonwealth. It referred to the submissions by Dr Sevdalis that the draft direction on repayment would be “crushing, punitive and unreasonable” and his criticisms that the sampling process had been based upon numbers that were “a very small proportion of the total services in the review period”.
37 The Determining Authority, however, determined in its discretion to require amounts to be repaid as follows:
Repayment of MBS Benefits
32 Consistent with the objectives of the Act, the Determining Authority is not satisfied that the Commonwealth should have to bear the cost of services in respect of which Dr Sevdalis has been found to have engaged in inappropriate practice.
33 In the exercise of its discretion, the Determining Authority has considered the information contained in the submissions made by John W. Ball & Sons Lawyers on behalf of Dr Sevdalis which evidences that Dr Sevdalis is making changes to his practice and has made efforts to train himself in software program use and record keeping. It was submitted that the Determining Authority ought to have regard to his difficult circumstances and ameliorate the consequences of his inappropriate practice accordingly.
34 In the submissions of 24 March 2015, Dr Sevdalis reiterated the difficult circumstances that he was dealing with during the review period. He contended that those difficult times are now past and that he is better equipped to serve the medical needs of his patients.
35 The Determining Authority has had regard to Dr Sevdalis’ difficult circumstances and the other submissions made by John W. Ball & Sons Lawyers.
36 When considering the serious nature and extent of the inappropriate practice, including the findings on inadequate clinical input, clinical records and ·the purpose of the Act, and the issues raised in submissions on behalf of Dr Sevdalis, the Determining Authority has, on balance, decided that it should exercise its discretion to make a direction for repayment of the whole of the Medicare benefit that was paid for those services in connection with which Dr Sevdalis was found to have engaged in connection with which Dr Sevdalis was found to have engaged in inappropriate practice.
37 Dr Sevdalis has submitted that the direction on repayment in the draft determination would be crushing, punitive and unreasonable if included in the final determination.
38 Dr Sevdalis has submitted that a direction on repayment that has been calculated by applying a percentage of the inappropriate practice found by the Committee using the sampling process to all payments for those services is harsh and not warranted. He also contends that the numbers of services examined by the Committee were a very small proportion of the total services in the review period.
39 The Determining Authority notes that the Committee proceeded in accordance with the sampling methodology set out under section 106K of the Act and can discern no legal error in that process. Paragraph 106U(1)(cb) provides:
106U Content of draft and final determinations
(1) A draft determination or a final determination must contain one or more of the following directions:
(cb) if any medicare benefits or dental benefits for a class of services:
(i) that were rendered or initiated by the person under review, by an employee of the person under review, or by an employee of a body corporate of which the person under review is an officer; and
(ii) in connection with the rendering or initiation of which, or of a proportion of which, the person under review or such an employee is stated in a report under section 106L, based on a finding made under subsection 106K(2), to have engaged in inappropriate practice;
have been paid (whether or not to the person under review)–that the person under review repay to the Commonwealth the whole or a part of the medicare benefits or dental benefits that were paid for the services or that proportion of the services, as the case may be; ...
40 The effect of paragraph 106U(1)(cb) is that the Determining Authority is authorised to make a direction for the full amount of benefits that were paid in respect of the proportion of the services found by the Committee to have constituted inappropriate practice by Dr Sevdalis.
41 The fact that a repayment sum may be a large amount of money does not make it punitive or unreasonable.
42 Dr Sevdalis has submitted that:
a) the Determining Authority has not allowed any concession for the fact that consultations were in response to patients’ conditions, their need for medical attention and Dr Sevdalis provided therapeutic services to his patients; and
b) a repayment direction should balance the findings of the Committee which were substantially on inadequate clinical records and the fact that Dr Sevdalis attended patients with medical needs and provided a therapeutic benefit to them.
43 The Determining Authority has considered the Committee’s Report, the findings of inappropriate practice and the reasons of the Committee. It has also considered the submissions of Dr Sevdalis and other issues being the impact of directions on Dr Sevdalis, his patients and the community. The Determining Authority notes that Dr Sevdalis submits that he provided therapeutic services to his patients. However, balancing that submission is the conduct that the Committee found to have constituted inappropriate practice and the extensive and serious nature of that conduct.
44 Dr Sevdalis also submits that allowance should be made for the prospect that inappropriate practice would not have been found in all services. The process and the findings of the Committee are founded in the Act and delegated legislation. The Determining Authority considers the findings of the Committee and does not engage in conjecture on whether some of the services within the scope of the sampling process may have been considered appropriate if examined by the Committee.
45 Dr Sevdalis submits that the substantial difficulties he was facing and his personal circumstances have not been fairly recognised by the Determining Authority in calculating the repayment and proposed period of disqualification. The Determining Authority considered the difficult personal circumstances that Dr Sevdalis was under during the review period when making its draft determination and noted that consideration in that document. It has further considered those issues, and the fact that Dr Sevdalis’ personal circumstances have improved, in making this final determination.
46 Dr Sevdalis contends that the evidence that has provided to the Determining Authority warrants a significantly lesser repayment and period of disqualification than that set out in the draft determination.
47 In balancing the inappropriate practice that was found by the Committee with that submission and those other factors mentioned above, the Determining Authority considers that a direction requiring repayment of the whole of the Medicare benefits that were paid for the proportion of the services is indicated in the circumstances.
48 The Determining Authority directs that Dr Sevdalis repay $286,915.25 to the Commonwealth, being the whole of the amount of the Medicare benefits paid for 100% of the MBS item 37, 5043 and 721 services in connection with which Dr Sevdalis was found to have engaged in inappropriate practice (section 106U(1)(cb) of the Act).
49 The Determining Authority further directs that Dr Sevdalis repay $166,741.50 to the Commonwealth, being the whole of the amount of the Medicare benefits that were paid for the 89% of MBS item 597 services in connection with which Dr Sevdalis was found to have engaged in inappropriate practice (section 106U(1)(cb) of the Act).
50 The amount to be repaid has been determined in accordance with section 106U(1)(cb) of the Act as follows:
(a) 100% MBS item 37 services* examined by the Committee (857 services x $94) = $80,558
(b) 100% MBS item 5043 services* examined by the Committee (1563 services x $105.75) = $165,287.25
(c) 100% MBS item 721 services* examined by the Committee (296 services x $138.75) = $41,070
(d) 89% MBS item 597 services* examined by the Committee (1500 services x $124.90 x 89%) = $166,741.50
* being 100% of the Schedule fee relevant to the MBS item in the schedule of MBS benefits dated November 2011
Her Honour upheld at [150]-[159] the exercise by the Determining Authority of its discretion to direct the amount that Dr Sevdalis was required to repay to the Commonwealth.
38 Dr Sevdalis was not entitled to be paid any Medicare benefits by the Commonwealth in respect of services the subject of his inappropriate practice. The object of the Professional Services Review Scheme as stated in s 79A was “to protect the integrity of the Commonwealth Medicare benefits” and to “protect the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice”. The Committee had proceeded by reference to the sampling scheme permitted by s 106K which the Determining Authority had taken into account in its final determination. At [23] the Determining Authority said:
The Determining Authority considers that the inappropriate practice disclosed in the Report is of a serious nature. The finding of inappropriate practice has been made by reference to inadequate clinical input, a failure to meet MBS requirements for each service, and clinical records lacking in essential clinical information. All of these are matters of significant concern to the Determining Authority.
It had before it the statement of concerns produced by the Committee under the Act where a Committee concludes that a doctor is causing or is likely to cause a significant threat to the life or health of patients. The Committee’s statement of concerns outlined features of Dr Sevdalis’ treatment of his patients in relation to the examined services where the Committee concluded that there was a likelihood that the treatment would cause significant threat to the health of his patients.
39 Her Honour was correct to reject the submission by Dr Sevdalis that in determining what repayment direction to make the Determining Authority was obliged to consider separately each and every individual service which had been the subject of the Committee’s adverse findings. The Act imposed no such obligation either pursuant to s 106U(1)(cb) or otherwise. The power of the Determining Authority to require repayment in this case stemmed, as her Honour correctly found, to be from the terms of s 160U(1)(cb)(ii). That provision entitled it to require the making of repayment directions in respect of “a class of services”. The Committee’s findings were authorised by s 80(9) to be based upon samples of services and s 80(10) contemplated that the Determining Authority would decide what action to take if a Committee found that a person under review had engaged in inappropriate practice based upon the report from the Committee. The Determining Authority had regard to the appellant’s submission that he should only be directed to make a partial repayment of the Medicare benefits in issue but decided, nonetheless, to direct Dr Sevdalis to repay the whole of the Medicare benefits received by him as it was open to do.
40 Accordingly, we would dismiss the appeal.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Tracey, Pagone and Markovic. |
Associate:
