FEDERAL COURT OF AUSTRALIA

Hatcher v Cohn [2004] FCA  1548

HEALTH LAW – medical practitioner – review of conduct in rendering services to patients over period of time – Professional Services Review Scheme under Part VAA of the Health Insurance Act 1973 (Cth) – investigative referral made by Health Insurance Commission to Director of Professional Services Review – adjudicative referral made by Director of Professional Services Review to Professional Services Review Committee – final report provided by Committee to Determining Authority – directions made by Determining Authority – whether there were matters which the Commission was obliged to take into account in considering whether to refer the matter for investigation – meaning of “exceptional circumstances” in s 106KA(2) – whether Committee erred in its opinion that “exceptional circumstances” in s 106KA(2) generally refers to intermittent or episodic situations and not ongoing situations or those of long-standing – whether Committee erred in its opinion that “exceptional circumstances” does not refer to matters which are within a practitioner’s control – failure by Committee to identify the correct question about the nature of the medical shortages put forward by the applicant as constituting exceptional circumstances – failure by Committee to apply reg 11(b) of the Health Insurance (Professional Services Review) Regulations 1999 in its own terms – whether Determining Authority had jurisdiction to make direction for repayment under s 106U(1)

Statutes

Administrative Decisions (Judicial Review) Act 1977 (Cth)

Health Insurance Act  1973 (Cth) Part VAA, s 106KA, s 80(1), s 86(1), s 81, s 86(2), s 86, s 88, s 89, s 91, s 93(1), s 93(6), s 101(2), s 106KD, s 106L, s 106U, s 106T, s 106TA, s 106U(1), s 82(1), s 106KA(5), s 106KA(2), s 106KA(1), s 106U(1)(ca)

Judiciary Act 1903 (Cth) s 39B(1A)

Cases

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 cited

Baker v R (2004) 78 ALJR 1483 considered

Craig, Williamson Proprietary Limited v Barrowcliff [1915] VLR 450 cited

Day & Dent Constructions Pty Ltd (In Liquidation) v North Australian Properties Pty Ltd (Provisional Liquidator Appointed) (1982) 150 CLR 85 cited

Kelly v Daniel [2004] FCAFC 14 distinguished

Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 cited

Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 considered

United Mexican States v Cabal (2001) 209 CLR 165 considered

DONALD FRANK HATCHER vMARY COHN, ROBERT BROWN AND DAVID ROSENTHAL CONSTITUTING THE PROFESSIONAL SERVICES REVIEW COMMITTEE NO. 297, THE DETERMINING AUTHORITY ESTABLISHED BY SECTION 106Q OF THE HEALTH INSURANCE ACT 1973 (CTH), HEALTH INSURANCE COMMISSION, BERNARD RAYMOND KELLY IN HIS CAPACITY AS ACTING DIRECTOR OF PROFESSIONAL SERVICES REVIEW, ALAN JOHN HOLMES IN HIS CAPACITY AS DIRECTOR OF PROFESSIONAL SERVICES REVIEW

Q 81 OF 2003

KIEFEL J

30 NOVEMBER 2004

BRISBANE

THE COURT ORDERS THAT:

1.         The directions of 15 May 2003 by the second respondent be set aside.

2.         The finding of the first respondent of inappropriate practice made on 15 November 2002 be set aside.

3.         The matter be remitted to the Director of Professional Services for determination as to whether to make a referral to another, differently constituted, Committee.

4.         The first and second respondents pay the applicant’s costs of the application.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     The applicant is a medical practitioner whose conduct in rendering services to patients over a period of time was subject to review under Part VAA of the Health Insurance Act  1973 (Cth) (‘the Act’).  On 15 May 2003 the second respondent made directions that the applicant be reprimanded and counselled, that he repay $67,796.75 in Medicare benefits received and that he be fully disqualified from participation in the Medicare system for four weeks.  The applicant seeks review of that decision and of the decisions of the third respondentand first respondent which preceded it.  The applications are brought under the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B(1A) of the Judiciary Act 1903 (Cth). 

FACTUAL BACKGROUND

2                     On 20 December 2000 the applicant was advised by the third respondent, the Health Insurance Commission (‘the Commission’), that it appeared that his servicing pattern had reached the level prescribed by s 106KA of the Act.  On 13 December 2001 a delegate of the Commission made an investigative referral to the Director, Professional Services Review.  There had been an earlier referral to the Director which had been discontinued.  In the referral of 13 December 2001 it was said that Dr Hatcher had rendered eighty or more services, namely professional attendances, on thirty-seven days between 1 January and 6 November 2000.  The reason for the Commission making its referral was said to be:

‘… the HIC considers Dr Hatcher may have engaged in inappropriate practice because there is evidence that some of Dr Hatcher’s professional attendances constitute a prescribed pattern of services as defined in section 106KA of the Act and Part 3 of the Regulations.’

3                     On the same day the Commission notified the applicant of his right to make submissions to the Director in support of dismissal of the referral, as it was obliged to do.  The applicant had previously made representations during the earlier referral, in a letter dated 18 June 2001.  He relied upon them in connexion with the second referral.  One of the matters he there referred to was the shortage of doctors in Roma, a rural area in Queensland.  He pointed out that some of the other doctors worked only part-time and that none of them bulk-billed.  He said that he had tried three times to get locums to stay permanently but they were unwilling to work the long hours necessary and live in a rural area.

4                     By letter dated 21 February 2002 the Director advised the applicant that he had determined to establish a Committee, and make an adjudicative referral to it, to enquire into whether the applicant’s conduct in connexion with rendering services between 1 January and 6 November 2000 constituted inappropriate practice.  The Committee later corresponded with the applicant concerning the hearing on 17 May 2002, which he attended. 

5                     The Committee provided its draft report to the applicant on 18 September 2002 after receiving further submissions from him.  The applicant sent further submissions in response to the draft report.  On 15 November 2002 the Committee provided its final report to the applicant.  That report was sent to the Determining Authority, as is required by the Act.  On 6 March 2003 the Authority sent its draft determination to the applicant, inviting him to make submissions upon it, which he did.  On 15 May 2003 the Determining Authority made its final determination containing the directions referred to above. 

statutory provisions

6                     The Professional Services Review Scheme is established by Part VAA of the Act which was introduced in 1994.  It has been the subject of amendment on a number of occasions.  It is the Act as amended following the 1999 amendments but prior to the amendments of 2002 which has application in this case.

7                     Section 80(1) provided, with respect to Part VAA:

‘This Part creates a scheme under which a person’s conduct can be examined to ascertain whether inappropriate practice (see section 82) is involved.  It also provides for action that can be taken in response to inappropriate practice.’

8                     Section 86(1) relevantly provided:

‘(1)      The Commission may, in writing, refer to the Director the conduct of a person relating to one or both of the following:

(a)       whether the person has engaged in inappropriate practice in connection with rendering of services;’

A referral so made is an ‘investigative referral’:  see s 81.  An investigative referral may relate only to services rendered during a two year period immediately preceding the referral (s 86(2)) and must contain certain particulars and set out reasons why the Commission considers the person under review may have engaged in inappropriate practice (s 86).  A copy of the referral must be sent to the person under review together with a notice inviting them to make written submissions to the Director as to why the referral should be dismissed:  s 88. 

9                     When an investigative referral is made, the Director must conduct an investigation in such manner as thought appropriate into the referred services:  s 89.  The Director may dismiss the investigative referral if satisfied that no Committee could reasonably find that the conduct of the person under review constituted an inappropriate practice:  s 91.  The Director has certain other powers to determine not to take further action. 

10                  The Director may set up a Committee and make an adjudicative referral to it, as here occurred:  s 93(1).  If the Director does so, the Director must prepare a written report to the Committee in respect of the services to which the referral relates giving the reasons why the Director thinks that conduct may have constituted an inappropriate practice:  s 93(6).  The Committee is obliged to hold a hearing if, after considering the matters the subject of the referral, it appears to the Committee that the person under review may have engaged in an inappropriate practice:  s 101(2).  The Committee prepares a draft report with its preliminary findings and the person under review is entitled to make submissions concerning changes to it:  s 106KD.  A final report is then prepared and given to the Determining Authority within a specified period:  s 106L.  If the final report of the Committee contains a majority or unanimous finding that the person under review has engaged in inappropriate practice, the Authority is obliged to make a draft determination in accordance with s 106U within a specified period:  s 106T.  The person under review again has an opportunity to make submissions as to changes to the directions proposed.  A final determination is then prepared:  s 106TA.  The content of the draft and final determinations is dealt with by s 106U.  Subsection (1) of that section, so far as is here relevant, provided as follows:

‘(1)      A draft determination or a final determination must contain one or more of the following decisions:

(a)       that the Director, or the Director’s nominee, reprimand the person under review;

(b)       that the Director, or the Director’s nominee, counsel the person under review;

(c)        that any medicare benefit that would otherwise be payable for a service in connection with the rendering or initiation of which the person is stated in a report under section 106L to have engaged in inappropriate practice cease to be payable;

(ca)      if any medicare benefit for a service:

(i)        that was 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 the person under review or such an employee is stated in a report under section 106L (other than a report based on a finding made under subsection 106K(2) or 106KB(3) to have engaged in inappropriate practice;

has 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 benefit that was paid for that service;’

11                  An ‘inappropriate practice’, is the foundation for the statutory scheme.  It appears in sections other than s 86(1). So far as is presently relevant s 82(1) provided the following definition:

‘(a)      if the practitioner rendered or initiated the referred services as a general practitioner - the conduct would be unacceptable to the general body of general practitioners;…’

12                  Section 106KA deemed certain conduct to constitute engaging in an inappropriate practice.  It provided as follows:

‘106KA Patterns of services

(1)       Subject to subsections (2) and (2A), if, during a particular period (the relevant period), the circumstances in which some or all of the referred services were rendered or initiated constituted a prescribed pattern of services, the conduct of the person under review in connection with rendering or initiating services during that period in those circumstances is taken, for the purposes of this Part, to have constituted engaging in inappropriate practice.

(2)       If the person under review satisfies the Committee that, on a particular day or particular days during the relevant period, exceptional circumstances existed that affected the rendering or initiating of services by the person, the person’s conduct in connection with rendering or initiating services on that day or  those days is not taken by subsection (1) to have constituted engaging in inappropriate practice.

(2A)     However, subsection (2) does not affect the operation of subsection (1) in respect of the remaining day or days during the relevant period on which the person rendered or initiated referred services even if the circumstances in which the referred services were rendered or initiated on that day or those days would not, if considered alone, have constituted a prescribed pattern of services.

(3)       The regulations may prescribe, in relation to:

(a)       a particular profession; or

(b)       an identified group or groups of practitioners in a particular profession;

circumstances in which services of a particular kind or description that are rendered or initiated constitute, or do not constitute, a prescribed pattern of services for the purposes of subsection (1).

(4)       The circumstances that may be prescribed under subsection (3) as circumstances in which services that are rendered or initiated constitute a prescribed pattern of services include, but are not limited to, the rendering or initiation of more than a specified number of services, or more than a specified number of services of a particular kind, on each of more than a specified number of days during a period of a specified duration.

(5)       The circumstances that constitute exceptional circumstances for the purposes of subsection (2) include, but are not limited to, circumstances that are declared by the regulations to be exceptional circumstances.

(6)       This section only applies to services rendered or initiated after the commencement of this section.

(7)       This section does not preclude the Committee from making a finding under this Subdivision (other than section 106KB) in relation to conduct during a particular period in connection with rendering or initiating services without considering whether or not the circumstances in which the services were rendered or initiated constituted a prescribed pattern of services.’

(emphasis is added)

13                  The regulations referred to in subsection (3) - the Health Insurance (Professional Services Review) Regulations 1999 (Cth) - made provision for the circumstances which constitute a prescribed pattern of services and which apply to general and other medical practitioners:  see Part 3, reg 9.  Regulation 10 provided that:

‘The circumstance in which services that are professional attendances constitute a prescribed pattern of services is that 80 or more such services are rendered on each of 20 or more days in a 12 month period.’

A ‘professional attendance’ by reference to the definition in reg 7 is a consultation and not a procedure.

14                  The regulations also provided for the exceptional circumstances referred to in s 106KA(5).  The relevant regulation was in these terms:

‘11       Exceptional Circumstances

            For subsection 106KA(5) of the Act, the following circumstances are declared as constituting exceptional circumstances:

(a)       an unusual occurrence causing an unusual level of need for professional attendances;

(b)       an absence of other medical services, for patients of the person under review during the relevant period, having regard to:

(i)         the location of the practice of the person under review;  and

(ii)        characteristics of the patients of the person under review.’

THE EXTRINSIC MATERIAL

15                  The respondents in their submissions relied upon certain extrinsic material, to which I shall now refer.  I have not determined at this point whether regard should be had to it.

16                  The Review Committee of the Professional Services Review Scheme reported to the Minister in March 1999 and made recommendations.  Amongst them was a recommendation for a deeming provision to overcome the need to examine a large number of individual services.  It argued that such a provision should take effect such that, once a specified number of services per day is reached, the practitioner must justify the provision of such a high volume of services to a Committee.  It would trigger a shift in the evidentiary burden.  If a general practitioner performed 80 or more consultation services on 20 or more days in a year, they would be deemed to be practising inappropriately, unless they could show exceptional circumstances ‘… which allow them to practice appropriately while rendering such a high number of services.’  A claim of exceptional circumstances would be based upon general evidence, not upon an examination of individual patient records.  The Committee advised that:

‘The exceptional circumstances will need to be well defined in the legislation (eg to be either an exceptional event or a very extreme geographic circumstance).’

17                  Whilst skill, competence and organisational skills may be relevant to the practitioner’s ability to provide 50 rather than 20 consultation services in a day, they have little effect at 80 consultations a day, the Committee said.  It went on:

‘It is, therefore, expected that argument that a practitioner’s ability or organisation provides an exceptional circumstance is unlikely to be sustained.’

18                  The deeming provision was to be applied ‘… to all consultation services on all days where the services exceed the number set out in the regulation …’.  The Committee said:

‘For example, if a practitioner has been referred to a PSRC for inquiry because he or she has rendered 80 or more consultation services on 35 days, and is able to demonstrate exceptional circumstances for seven of those days, repayment would be for all services rendered on those other 28 days.’

19                  In the ‘Illustrative Draft Regulation’ that the Committee prepared the following reference was made to the assessment of exceptional circumstances:

‘(5)      In assessing whether there are exceptional circumstances, the Committee may have regard to, but is not limited to:

(a)       the unavailability of alternative medical services to the practitioner’s patients; and

(b)       unusual occurrences causing unusual levels of need for consultation services.’

20                  In the Explanatory Memorandum it was said that a person may satisfy a Committee that services rendered on a particular day or days were rendered in exceptional circumstances and that:

‘This approach recognises that while the exceptional circumstances may relate only to specified services on a particular day they nevertheless impact on the whole day.  This gives the person under review the benefit of any doubt, and also avoids the need to examine individual services on the day in question.’

the Commission’s decision

21                  Investigative referral number 297 from the delegate of the Commission to the Director of Professional Services Review provided the ‘Reasons for Investigative Referral’ as follows:

‘Part VAA of the Act provides a scheme (the Professional Services Review Scheme) under which a practitioner’s conduct can be examined to ascertain whether they have engaged in inappropriate practice as defined in section 82 of the Act.

Section 106KA of the Act (which section commenced on 1 August 1999) also provides that, if, during a particular period, the circumstances in which some or all of the referred services were rendered or initiated constituted a prescribed pattern of services, the conduct of the person under review in connection with rendering of initiating services during that period in those circumstances is taken to have constituted engaging in inappropriate practice.

Dr Hatcher is a general practitioner (as defined in the Act) and, for present purposes, Part 3 of the Regulations (which part commenced on 1 January 2000) applies.  Part 3 provides that, in relation to general practitioners, the circumstance in which services that are professional attendances constitute a prescribed pattern of services is that 80 or more such services are rendered on each of 20 or more days in a 12 month period, where ‘professional attendance’ means a service of a kind mentioned in group A1, A2, A5, A6, A7, A13, A14 or A15 of Part 2 of the general medical services table (as defined in the Act).’

22                  The particulars of services and the conduct the subject of the referral was then described in these terms:

‘In accordance with subsection 86(4)(b) of the Act, the HIC considers Dr Hatcher may have engaged in inappropriate practice because there is evidence that some of Dr Hatcher’s professional attendances constitute a prescribed pattern of services as defined in section 106KA of the Act and Part 3 of the Regulations.

Specifically, the HIC’s records for professional attendances rendered by Dr Hatcher during the referral period show that Dr Hatcher:

·                         rendered 80 or more professional attendances per day on 37 occasions on and from 1 January 2000 to and including 6 November 2000.

Further material in relation to the referred conduct and particulars of services is attached as part of this Investigative Referral.’

The committee decision

23                  A Committee (Professional Services Review Committee No. 297), was established by the Director of Professional Services Review.  It comprised three doctors, the system of review under the Act being one of peer review and assessment.  The Committee was unanimous in its finding which was summarised as follows:

‘In accordance with s.106L of the Health Insurance Act 1973, Professional Services Review (PSR) Committee No. 297(the Committee) finds that the conduct of Dr Donald Frank Hatcher in relation to the rendering of professional attendances on the days identified as constituting a prescribed pattern of services within the referral period constitutes engaging in inappropriate practice.’

24                  The principal issue before the Committee was whether or not exceptional circumstances existed.  Its reasoning on the meaning of the term was as follows:

‘27.      In particular, s.106KA(2) refers to exceptional circumstances that existed on “a particular day or particular days”, which appears to describe intermittent or episodic circumstances. However, Regulation 11(b) appears to include what might be on-going circumstances.

28.       In order to help its understanding of the relationship between the legislation and the regulations, the Committee examined relevant extrinsic materials.

29.       Section 106KA was introduced by the Health Insurance Amendment (Professional Services Review) Act 1999. Both the Second Reading Speech and the Explanatory Memorandum for the corresponding Bill, introduced on 2 June 1999, make it clear that the Bill was to implement recommendations in the Report of the Review Committee of the Professional Services Review Scheme.

30.       The Review Committee noted that:

            “The medical profession generally accepts that high volume provision of services by a practitioner prohibits adequate clinical input.”

            and it discussed the difficulty of assessing extremely high volumes of servicing.  To address this problem it recommended the inclusion of 'deeming' provisions in the legislation.

31.       After consulting widely with relevant medical organisations, the Review Committee recommended that the threshold for the provision deeming practice to be inappropriate should, for general practice, be 80 or more services on 20 or more days a year.

32.       However, the Review Committee also recommended provision for a practitioner to be able to demonstrate to the satisfaction of a PSR Committee that exceptional circumstances occurred which allowed them to practice appropriately while rendering such a high number of services.

33.       The Review Committee gave examples of exceptional circumstances as being such things as an exceptional event or a very extreme geographic circumstance.  It said regard may be had to the availability of alternative medical services or unusual occurrences causing unusual levels of need for medical services. The Review Committee also said:

            “The Review Committee believes high levels of skill, competence and organisational arrangements are worthwhile and important. However, while they may have a great effect in a practitioner's ability to provide 50 rather than 20 consultation services regularly in a day, they have little effect at the 80 consultation services a day mark. It is, therefore, expected that argument that a practitioner’s ability or organisation provides an exceptional circumstance is unlikely to be sustained.”

34.       This Committee considers that these examples and comments confirm that 'exceptional circumstances' were seen as being generally intermittent or episodic situations beyond the practitioner's control but necessitating the provision of medical services as well as practicable.

35.       In relation to exceptional circumstances, the Explanatory Memorandum for the Health Insurance Amendment (Professional Services Review) Bill 1999, introduced on 2 June 1999, states:

….  The deeming provision in s.106KA(1) will not apply in respect of a particular day or days where a person under review satisfies a committee that services on that day or days were rendered or initiated under exceptional circumstances.

            This approach recognises that while the exceptional circumstances may relate only to specified services on a particular day they nevertheless impact on the whole day. This gives the person under review the benefit of any doubt, and also avoids the need to examine individual services on the day in question.

36.       The Explanatory Memorandum also gave, as examples of exceptional circumstances, “the absence of alternative medical services to the practitioner's patients or unusual occurrences causing unusual levels of need for consultation services” and said this gave effect to Recommendation 5 of the Review Committee.

37.       This Committee considers that these passages also confirm that 'exceptional circumstances' were seen as most likely to be of an intermittent or episodic nature, rather than a predictable on-going situation. The Committee does not see that some extreme on-going circumstance is totally ruled out (if 'particular days' can be 'many days') - although the general body of general practitioners would ordinarily expect a practitioner to manage their practice to promptly bring patient attendance rates down to acceptable levels such that proper clinical care can be provided to all patients.

38.       In summary, it appears to the Committee that ss.106KA(1) and the Regulations implement a view of the legislature that it is most unlikely that 80 or more professional attendances can be rendered satisfactorily on a given day. The “20 or more days” proviso acknowledges that the exigencies of normal practice may occasionally require a doctor to provide more attendances in a day than would otherwise be considered satisfactory. But by ss.106KA(2), exceptional circumstances will be required to justify 20 or more such days. Thus, the exception may be read as excusing lower standard services on particular days because of exceptional circumstances - but it will be difficult to justify this on an on-going basis.’

25                  The Committee turned to consider whether there were exceptional circumstances shown.  It summarised Dr Hatcher’s claims in the following terms:

·                         ‘Dr Hatcher works in a rural area with an ongoing shortage of doctors and he also sees patients from the surrounding area due to a lack of continuity of care in those areas.

·                         Dr Hatcher has reduced the number of patients he sees to 70 per day but is legally bound to see emergency cases above that number and some other patients attend without an appointment.

·                         Roma has a high percentage of disadvantaged, unemployed and Aboriginal people and Dr Hatcher is the only doctor in town who bulk bills all patients.

·                         A lot of patients come into town on Tuesdays and Thursdays for the cattle sales and expect to be seen by the doctor.  Likewise there is high patient demand after long weekends, after Dr Hatcher has been on holiday, and during the winter season.

·                         Dr Hatcher has more time to see patients as his practice is highly organised and two nursing sisters do the basic procedures and most of the day-to-day running of the practice.’

26                  There was no suggestion that the Committee’s summary was inaccurate.  It then proceeded to consider each of the claims made by Dr Hatcher. 

27                  In relation to the first claim, the Committee recorded that Dr Hatcher was a sole general practitioner who had been practising in Roma in rural Queensland for approximately 27 years.  He said that he was on call 24 hours per day, 7 days per week.  There was a shortage of doctors in Roma and the surrounding area and there was a very high patient to doctor ratio.  The Committee accepted that a shortage of doctors is common in rural, and some urban, areas but this was not unique to Roma.  It also observed that during the referral period Dr Hatcher rendered approximately three times more professional attendances than the next highest ranked practitioner in Roma.  It appeared to the Committee that Dr Hatcher appeared to have little ability to refuse services and that his patients expected that he would drop everything to attend their needs.  The Committee appears to have accepted Dr Hatcher’s figures.  It considered however that whilst a shortage of doctors and a high patient demand may have existed during the referral period, these problems could have been addressed through more effective practice management.  In addition this appeared to be of a long-standing difficulty and ‘accordingly, it was not an exceptional occurrence on particular days’. 

28                  The Committee did not accept the second claim as an exceptional circumstance.  In a general practice setting it was to be expected that practitioners deal with unexpected or emergency cases, it considered.  However the Committee considered that it was the responsibility of practitioners to put mechanisms in place to enable them to regulate the number of daily attendances and this problem could be addressed through better practice management.  Most practitioners would consider reducing the number of non-urgent appointments or rescheduling them.  In its view, Dr Hatcher’s servicing was ‘patient-driven’.

29                  As to the third claim, whilst the Committee understood that Dr Hatcher was providing a service to disadvantaged patients in an under-serviced area, it did not consider this to be an exceptional circumstance.  The Committee again noted Dr Hatcher’s evidence that this was a regular and long-standing feature of the practice, with the result that it was not an exceptional occurrence on particular days.

30                  Dr Hatcher submitted that Tuesdays and Thursdays resulted in high patient demand because there were cattle sales in Roma on those days.  Similarly, he pointed to high patient demand after long weekends, after he had been on holiday and during the winter season.  The data did not however bear this out.  In the Committee’s view there did not appear to be any difference in patterns of servicing relating to any of those factors.  Dr Hatcher’s pattern of servicing remained fairly constant.  Holiday and seasonal factors were not peculiar to his practice and did not set him apart from other general practitioners.

31                  Dr Hatcher claimed that his practice was highly organised, from which it may be inferred that he is able to see 80 patients.  The Committee did not however think that his manner of organisation was unusual.  Further, in its view, the 80 patient limit was one agreed to by the profession as an extreme number of patients to see in one day ‘… with a very high likelihood that the practitioner would be stretched to the limit and the level of clinical care for patients would suffer…’.  It concluded that, having regard to the intent of the legislation, and the fact that this aspect does not set Dr Hatcher apart from other general practitioners, it did not constitute an exceptional circumstance.  It again noted that this was a regular and long-standing feature of Dr Hatcher’s practice and so it was not an exceptional occurrence on particular days. 

The determining authority’s direction

32                  In its final determination the Determining Authority considered that the rendering of 80 or more professional attendances on 37 days in a period of just over ten months was clearly in excess of the threshold in the legislation set by the Parliament.  It took into account submissions made by Dr Hatcher in relation to the directions that it ought to make.  It is not necessary to refer to each of them.  So far as concerned the direction for repayment, which is subject to challenge by the applicant, the Authority said that the amount ‘represents the entire amount of benefits paid for the professional attendances rendered by Dr Hatcher on the 37 days on which he saw 80 or more patients.’

the applicant’s grounds for review

33                  In relation to the amended application for an order of review at the hearing, the applicant maintained reliance only upon ground 1, part of ground 5 and ground 10.  The grounds relied upon are in these terms:

‘1.        The making of the Investigative Referral involved jurisdictional error and errors of law and was an improper exercise of power, in that:

(i)        The Third Respondent erroneously construed the Act as establishing a separate procedure for investigative referrals alleging conduct constituting a prescribed pattern of services within s 106KA of the Act.

(ii)       The Third Respondent erroneously construed the Act as requiring it to make an investigative referral once it had identified a prescribed pattern of services.

(iii)      The Third Respondent applied a policy of making an investigative referral once it had identified a prescribed pattern of services without regard to the merits of the particular case.

(iv)      The Third Respondent failed to take into consideration all relevant aspects of the conduct of the applicant over the referral period.

(v)       The Third Respondent failed to consider whether during the referral period the applicant might have engaged in inappropriate practice as defined in s 82 of the Act.

…

5.         The preparation of the Committee’s Report involved errors of law, in that:

…

(ii)       The First Respondents thought that “exceptional circumstances” within s 106KA(2) and (5) of the Act were “generally intermittent or episodic situations beyond the practitioner’s control”.

(iii)      The First Respondents thought that “exceptional circumstances” within s 106KA(2) and (5) of the Act were “most likely to be of an intermittent or episodic nature, rather than a predicable on-going situation”.

(iv)      The First Respondents thought that it would “be difficult to justify” more than 80 per day “on an on-going” basis as distinct from “occasionally”.

(v)       The First Respondents required that evidence of exceptional circumstances relevant to s 106KA(2) should show particular distinguishing features when compared to the applicant’s attendances on other days during the referral period.

(vi)      The First Respondent considered that regular or long-standing features of the Applicant’s practice, including the general shortage in Roma of doctors and of doctors providing bulk-billing to disadvantaged groups, were incapable of constituting exceptional circumstances within s 102KA(2).

…

(viii)    The First Respondents should have held that “exceptional circumstances” within s 106KA(2) could equally arise from events affecting a medical practice which preceded the referral period and which affected the rendering of services throughout the referral period.

…

(x)       The First Respondents failed to consider separately whether the services rendered by the applicant on all or some of the 37 days came within the circumstances prescribed in either reg 11(a) or 11(b).

(xi)      It was not open to the First Respondents to hold (if they did) that the applicant’s circumstances on all or some of the 37 days were not circumstances coming within reg11(b), in view of their findings that:

·                         The applicant practiced in a disadvantaged area of rural Queensland, where there was a shortage of doctors and a high patient demand during the referral period.

·                         The applicant was bound to see emergency cases and some patients attending without appointment even where this took him over 70 patients per day.

·                         The applicant provided a service to disadvantaged patients in an under-serviced area, as the only doctor in Roma who bulk billed all patients.

…

10.       The Second Respondent had no jurisdiction or authority to make a direction under s 106U(1)(ca) that the applicant pay $67,796.75 since:

(i)         The First Respondents made no findings which identified or allowed any identification of one or more services which was rendered by the applicant and in connection with which he had engaged in inappropriate practice.

(ii)        Alternatively, any finding by the First Respondents which allowed a direction under s 106U(1)(ca) extended no further than that services had been inappropriately rendered to those patients who attended at times where the applicant exceeded the threshold fixed by Regulation 10, i.e. those services rendered after the 79^th service on those days after the 19^th day in which 80 or more services were rendered.’

34                  At the hearing the applicant sought leave to further amend to add further grounds 5A and 5B in the following terms:

‘5A.     The first respondent erred in law in its consideration of whether the applicant’s circumstances constituted exceptional circumstances in that it considered those circumstances in isolation and did not consider those circumstances cumulatively, or as part of the whole of the circumstances of the applicant.

5B.       The first respondent erred in law in its consideration of whether the applicant’s circumstances constituted exceptional circumstances in that it was of the view that a circumstance that was a ‘regular and longstanding feature’ of the applicant’s practice could not constitute an exceptional circumstance.’

35                  Subject to a question concerning the grant of an extension of time, the respondents did not object to leave to amend being granted. 

extension of time

36                  The respondents point out that the applicant’s application for an order of review under the Administrative Decisions (Judicial Review) Act 1977 (Cth), so far as concerns the decisions of the Commission and the Committee, were made outside the time permitted by the Act and require extension. No issue was taken about whether these decisions were of such a kind to be reviewable.  The point about the need for an order extending time was not taken when orders by consent were made granting leave to amend on 1 October 2003 nor when the matter was set down for hearing.  Further, the applicant would not be prevented from pursuing these matters under s 39B(1A) of the Judiciary Act.  Insofar as an extension of time is necessary, it should be granted.

GROUND 1

37                  There was no evidence of any policy as referred to in paragraph (iii) of this ground.  It is however clear that the Commission determined to refer the question of the applicant’s conduct for the reason that it had identified evidence of a prescribed pattern of services as referred to in reg 10.

38                  The applicant submits that the Commission was not entitled to make a referral automatically upon establishing that there had been 80 or more services on 20 or more days in a 12 month period.  A Full Court in Kelly v Daniel [2004] FCAFC 14 had held that s 86 confers a broad discretion upon the Commission in relation to the decision to refer the question whether a practitioner has engaged in inappropriate practice to the Director (at [82]).  The Commission is not entitled to answer the question whether there should be an investigative referral by reference to the prescribed pattern of services contained in s 106KA alone (at [81]).

39                  In Kelly v Daniel there was a circumstance which would have been relevant to the exercise of the Commission’s discretion, but which it did not take into account.  It was this feature which resulted in the Commission’s referral decision being held invalid.  The Commission had itself been involved in negotiations and with counselling of the practitioner, but had not taken these factors into account in determining to refer.  Its decision was based solely upon its opinion that there had been a breach of the ‘80/20 rule’.  It considered that where there had been such conduct it was obliged to make a referral.

40                  In the present case there is no additional factor which the Commission ought to have considered.  It was submitted that it ought to have considered all aspects of the applicant’s conduct and whether there were ‘exceptional circumstances’ present.  The Commission ought also have considered whether the applicant had engaged in inappropriate practice, it is submitted.

41                  The submissions misunderstand the role of the Commission and the points at which the questions - whether there has been an engagement in an inappropriate practice and if so whether there have been exceptional circumstances shown to explain the practice -  arise.

42                  The role of the Commission, in the statutory scheme, is a limited one.  It considers whether the person under review may have engaged in inappropriate practice, in determining whether to refer the matter for investigation.  As earlier discussed it has a discretion not to refer if there are factors present which suggest that it is not appropriate to do so.

43                  The Commission is not required to come to a conclusion whether there has been an engagement in inappropriate practice.  Nor does the Director answer that question.  The question is one posed for a Committee constituted by the Director after the Director’s investigation.  The Director considers only whether a Committee could reasonably make such a finding.

44                  The statute leaves a finding, as to whether there has been inappropriate practice, to the Committee.  Such a finding is open where the services rendered constitute a prescribed pattern of services.  It is the Committee’s task however to consider whether exceptional circumstances have been shown in the referral period.  It is the Committee’s finding which found the directions which may be made by the Determining Authority.

45                  A conclusion that it is not intended that the Commission have the role envisaged by the applicant’s submissions is confirmed by a consideration of the materials which are likely to be before the Commission.  In the present case it had not only its records but also the applicant’s representations justifying his lack of consultations, because he had provided them in connexion with the earlier referral which had been discontinued.  In the usual case however the Commission will not be in possession of material from the person under review.  The first notification the person has is when they receive a copy of the investigative referral, after the Commission’s decision to refer is made.

46                  It could not be said that there was a matter or matters which the Commission was obliged to take into account in the present case in considering whether to refer the matter for investigation.  This ground is not made out.

GROUNDS 5, 5A AND 5B – EXCEPTIONAL CIRCUMSTANCES

47                  The essential feature of the explanation put forward by the applicant was that he was working in a rural area which suffered from a shortage of doctors.  This was exacerbated by the fact that he was the only doctor in the area who bulk-billed all patients.   As a consequence there was a larger demand for his services.  The Committee appears to have accepted that there was a shortage of doctors in the area and a large demand for his services.  It did not accept that the situation was exacerbated on particular days nor did it accept that the organisation of the applicant’s practice constituted exceptional circumstances.  I do not understand the applicant to challenge these latter findings.

48                  The principal error which the applicant identifies is the Committee’s opinion that ‘exceptional circumstances’ generally refers to intermittent or episodic situations and not ongoing situations or those of long-standing. The Committee’s finding that the term does not refer to matters which are within a practitioner’s control is also said to be erroneous.

49                  ‘Exceptional’ circumstances, in general terms, are those circumstances which are unusual or out of the ordinary.  But the term is also one which may have a wide operation.  Factors affecting a person and which set them apart from other persons in a comparable situation may amount to exceptional circumstances.  Speaking in the context of extradition, Gleeson CJ, McHugh and Gummow JJ have held that ‘special circumstances’ need to be ‘extraordinary and not factors applicable to all defendants facing extradition’.  It was not necessary that any particular circumstance be regarded as special;  several factors in combination could constitute special circumstances:  United Mexican States v Cabal (2001) 209 CLR 165;  [2001] HCA 60 at [52].  And in Baker v R (2004) 78 ALJR 1483;  [2004] HCA 45 at [13] Gleeson CJ considered the use of ‘special circumstances’ to condition the exercise of judicial discretion.  His Honour said:

‘This is a verbal formula that is commonly used where it is intended that judicial discretion should not be confined by precise definition, or where the circumstances of potential relevance are so various as to defy precise definition.  That which makes reasons or circumstances special in a particular case might flow from their weight as well as their quality, and from a combination of factors.’

50                  Although his Honour was speaking of judicial decision-making the observations are apposite here.  The words ‘exceptional circumstances’ may apply to a variety of circumstances and no definition which limits their application should be adopted, unless the limitation appears from the words of the relevant statutory provision.  That is a question which arises here.

51                  The process of construing words in a statute must always begin with an examination of the context of the provision being construed:  Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 381, [69].  As was there pointed out, the object of statutory construction is to construe a provision so that it is consistent with the language and the purpose of the provisions of the statute as a whole.  It is necessary to give meaning to each word of a provision (at 382, [71]).  And words are to be assumed to be used consistently:  Craig, Williamson Proprietary Limited v Barrowcliff [1915] VLR 450 at 452, unless a contrary intention appears.

52                  Section 106KA(2) has the effect that a finding of inappropriate practice which would otherwise be made under s 106KA(1) is not to be made.  The reason it is not made is that the Committee is satisfied that the explanation provided by the practitioner, as to why the practitioner was required to attend upon so many patients on the days in question, identifies exceptional circumstances.  The ‘exceptional circumstances’ are therefore an unusual circumstance or circumstances which caused or influenced the practitioner to exceed the number of services which ought to have been provided or which otherwise provides the explanation for that conduct.  This connexion is confirmed by the reference in the subsection to circumstances which existed ‘that affected’ the rendering of services.

53                  It does not seem to me that the ‘exceptional circumstances’ in s 106KA(2) should be read as importing some temporal element.  The words are not directly qualified and there is nothing in the purpose or object of the subsection which would suggest that such a limitation was either intended or necessary.  The purpose of the provision is to protect a practitioner where the large number of consultations are shown to have been brought about by circumstances which are out of the ordinary and, one would think, beyond their control.  Protective provisions ought not be construed in such a way as to limit their scope:  Day & Dent Constructions Pty Ltd (In Liquidation) v North Australian Properties Pty Ltd (Provisional Liquidator Appointed) (1982) 150 CLR 85 at 107 - 108 per Mason J.  If the Committee, when it considers the provision of services, finds that exceptional circumstances existed, the basis for an exemption from a finding of inappropriate practice is made out.  Such a finding can and should relate to so much of the referral period over which the exceptional circumstances were maintained.

54                  The reference in the subsection to a person’s conduct being affected by exceptional  circumstances ‘on that day or those days’ is not in my view to be taken as limiting the duration of the circumstances which are exceptional.  In the context of a prescribed pattern of services the Act and regulations focus upon the number of services, or consultations, provided in a day, and the subsection simply reflects this.  The phrase also reflects the recommendations of the Committee that the practitioner be given the benefit of the whole day, where exceptional circumstances are shown to have occurred on that day.  It is to be assumed that the influence of the circumstances extends over a whole day.  There is nothing in my view which would prevent the ‘days’ referred to as being any number of days in the referral period, or indeed all of them.

55                  A view that ‘exceptional circumstances’ is not restricted to some days or some other short period, and that there is no time limitation to be read into the words, is borne out in part by reg 11.  The regulation identifies as exceptional circumstances situations which might be of either short or long duration.

56                  Regulation 11(a) describes ‘an unusual occurrence causing an unusual level of need for professional attendances’ as exceptional circumstances.  One may consider the example of an epidemic or a tragedy involving injury to many people. Occurrences of these types may require far more doctors in one location than is normally required.  Their duration may vary, depending upon the nature of the occurrence and the availability of other practitioners over time to assist and so to reduce the number of services each practitioner is required to provide.  It may however be observed that occurrences of this kind would not be expected to continue indefinitely.  But that assumption does not provide a warrant for reading ‘exceptional circumstances’ or the duration of ‘unusual occurrences’ as limited to particular periods of time.  It may however be observed, in connexion with this part of the regulation, that it requires that the unusual occurrence explains the need for the level of services provided in the period.  This is consistent with the construction of s 106KA(2) to which I have referred. 

57                  The circumstances referred to in reg 11(b) might pertain to a lengthy and even an indefinite period.  Exceptional circumstances will exist so long as there are no other medical services available to the practitioner’s patients.  In some rural or remote areas this may not be a matter which can readily be resolved.  The fact that it is a circumstance which might maintain for some time was acknowledged by the Committee itself.

58                  In my view the Committee was in error in limiting the operation of ‘exceptional circumstances’ to intermittent or episodic events and denying their application to circumstances which were of an on-going nature.  This error clearly affects its findings relating to the applicant’s claim that a shortage of medical services put him in a position where he had no choice but to see an unacceptably high number of patients.  It is difficult to imagine that the decision may not have been different if this error had not occurred and therefore the decision involves an error of law:  Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 353, 384.  Nonetheless there is another aspect of the Committee’s understanding of the meaning of ‘exceptional circumstances’ which requires consideration.

59                  The Committee also considered that the term did not refer to circumstances within a practitioner’s control.  So much may be accepted.  If, to take an example, there was a shortage of doctors in an area which could be remedied by the local practitioner bringing others to the area it would be difficult to conclude that the circumstances pertaining to the practitioner’s practice were ‘exceptional’.  Rather it results from an exercise of choice.

60                  The Committee did not however make findings of this kind concerning the applicant’s claims that the shortages of doctors could not be remedied, although he had tried.  The control it spoke of, which the applicant could exercise, was practice management.  In its view he could simply limit the number of patients he saw each day to keep below the prescribed figure.

61                  The control which the Committee considered ought to be exercised by the applicant was not one which could be directed at the lack of medical services to disadvantaged people.  The practice management of which it spoke would, on the applicant’s evidence to it, leave some people on some days without a doctor to see because they could not afford it.

62                  The Committee did not deal with the applicant’s claims that there was a shortage of doctors in the area for the number of patients needing services nor with his claim that he was the only doctor who could provide medical services to disadvantaged people because only he bulk-billed every patient.  Properly understood, the applicant’s claim was of a shortage of medical services to disadvantaged people.  This explanation was not considered by the Committee.  Unless the Committee took a different view of the facts, which it did not, the explanation clearly comes within what is contemplated by reg 11(b).

63                  The Committee approached the references to the shortage of medical services and the applicant’s bulk-billing practice as separate questions.  It was of the view that because shortages of medical services were not uncommon in some rural areas they could not be regarded as exceptional circumstances.  And it considered that the provision of services which are bulk-billed are not themselves unusual.  What it did not consider was whether the combination of which the applicant spoke provided the explanation of the need for his services and whether they were exceptional.  I add that the Committee’s reasoning with respect to shortages is untenable.  The fact that there may be a number of areas suffering from a shortage of medical services does not negate the fact that there is a shortage in each area.  It follows that in each area there will be an ‘exceptional circumstance’ as contemplated by reg 11(b).

64                  In my view the Committee’s decision was affected by substantial errors.  The first involved a misunderstanding of the meaning to be given to a term in a statutory provision which it was applying.  The Committee then failed to identify the correct question, about the nature of the medical shortage, and failed to apply reg 11(b) in its own terms.  It has made errors of a jurisdictional kind:  Minister for Immigration and Multicultural Affairs v Yusuf(2001) 206 CLR 323 at [84].  Its finding of inappropriate practice and that of the Determining Authority following upon it should therefore be set aside.

ground 10 -  no jurisdiction to repay under s 106U

65                  Although it is unnecessary, in view of my findings of error on the part of the Committee, to deal with this remaining ground, I shall do so for completeness.  The applicant submits that the Determining Authority was required to make findings identifying or permitting the identification of particular services provided by him which were inappropriate before it would give a direction under s 106U(1) for repayment.  Alternatively the direction could not go further than to require repayment of those services beyond the 79^th service on a particular day.  A claim of unreasonableness, in an administrative law sense, was not pursued.  These conclusions were said to be derived as a matter of construction.

66                  Neither contention can be accepted.  Section 106U(1)(ca) refers to the repayment of a benefit for a service rendered where a Committee report connects the rendering of that service with engagement in an inappropriate practice.

67                  A finding of inappropriate practice, under s 106KA(1), is based upon the practitioner having provided more than eighty professional attendances, or services, in one day over a period of twenty days.  If exceptional circumstances are shown to exist on a day the result is that that day is excluded from a finding of inappropriate practice, as are all services provided and making up the conduct that day.  There may, consistent with what I have said above, be many such days.

68                  This construction of the provision is consistent with the recommendations of the Committee which were implemented.  The relevant finding upon which a direction for repayment are based relates to days.  So far as the application of s 106KA(2) is concerned this may work to the practitioner’s advantage.  The provisions do not relate to individual services, this being an approach which was sought to be avoided in the amendments.

ORDERS

69                  The directions of the Determining Authority and the finding of the Committee will be set aside.  The initial referral however remains valid.  It is a matter for the Director whether a different Committee would be able reasonably to make a finding of inappropriate practice.  This may depend largely upon a consideration of the facts relating to the shortage of medical services in the area, which were not gone into by the present Committee. In these circumstances there should be orders remitting the matter to the Director to determine whether a referral to another, differently constituted, Committee should be made.  The first and second respondents should pay the applicant’s costs.

Associate:

Dated:              30 November 2004