FEDERAL COURT OF AUSTRALIA

Hatcher v Fry [2009] FCA 1573 

ADMINISTRATIVE LAW – application to review decision of the Professional Services Review Committee – whether a medical practitioner engaged in inappropriate practice in rendering 80 or more professional attendances on each of the 65 days within the referral period – whether exceptional circumstances existed – meaning of “the absence of other medical services” – relevance of patient preference – relevance of doctor/patient ratios – application dismissed  

Administrative Decisions (Judicial Review) Act 1977 (Cth)

Health Insurance Act 1973 (Cth) ss 82, 83, 93, 106KA

Health Insurance (Professional Services Review) Regulations 1999 (Cth) regs 10, 11 

DONALD FRANK HATCHER v FRANK FRY, WARWICK CARTER AND AILSA LAIDLAW (IN THEIR CAPACITY AS PROFESSIONAL SERVICES REVIEW COMMITTEE NO 362)

QUD 043 of 2009

DOWSETT J

23 DECEMBER 2009

BRISBANE

THE COURT ORDERS THAT:

1.                  the application be dismissed; and

2.                  the applicant pay the respondent’s costs of the proceedings.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

1                     This is an application pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the “ADJR Act”) for review of a decision of Professional Services Review Committee No 362 (the “committee”), constituted pursuant to s 93 of the Health Insurance Act 1973 (Cth) (the “Act”).  The committee was established in order to investigate a matter referred to it by the Director of Professional Services Review, appointed pursuant to s 83 of the Act.  The matter referred for investigation was whether the applicant (a medical practitioner) had engaged in inappropriate practice in providing services specified in the referral.  The term “service” is defined relevantly to mean:

(a)        a service for which, at the time it was rendered or initiated, medicare benefit was payable;

…

2                     The applicant practices as a general practitioner at Roma.

3                     The committee’s final report indicates that the referral was made on 17 September 2002.  The report was dated 8 January 2009.  It concerned the applicant’s conduct during the period from 2 January 2001 to and including 23 November 2001.  The relevant conduct was that on 66 occasions during that period, he had rendered 80 or more professional attendances per day.  Completion of the investigation appears to have been delayed to some extent by the fact that other legal proceedings were in train.  Nonetheless it seems unlikely that the purpose of the Act has been served by an investigation completed more than six years after it was commenced.  However I am not presently concerned with that aspect of the matter. 

4                     Section 82 of the Act provides:

(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 a service as a general practitioner – the conduct would be unacceptable to the general body of general practitioners; or

(b)        …

(c)        …

(d)        …

(2)        A person (including a practitioner) engages in inappropriate practice if the person:

(a)        knowingly, recklessly or negligently causes, or knowingly, recklessly or negligently permits, a practitioner employed by the person to engage in conduct that constitutes inappropriate practice by the practitioner within the meaning of subsection (1); or

(b)        is an officer of a body corporate and knowingly, recklessly or negligently causes or knowingly, recklessly or negligently permits, a practitioner employed by the body corporate to engage in conduct that constitutes inappropriate practice by the practitioner within the meaning of subsection (1).

(3)        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.

5                     Section 106KA of the Act provides:

(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 person under review is taken, for the purposes of this part, to have engaged in inappropriate practice in providing those services.

(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 provided by the person, the person is not taken by subsection (1) to have engaged in inappropriate practice on that day or those days.

(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 provided referral services even if the circumstances in which the referred services were provided on that day or those days would not, if considered alone, have constituted a prescribed pattern of service.

(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 the period of the 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 the provision of services during a particular period without considering whether or not the circumstances in which the services were rendered or initiated constituted a prescribed pattern of services.

6                     Regulation 10, made pursuant to s 106KA, provides that professional attendances constitute a prescribed pattern of services if 80 or more services are rendered on 20 or more days during a 12 month period.  This rule is known as the “80/20 rule”. 

7                     Regulation 11 provides:

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 patients of the person under review.

8                     It is common ground that in the relevant period the applicant provided 80 or more professional attendances per day on 65 occasions. 

9                     The applicant submitted to the committee that there were exceptional circumstances of the kind contemplated by reg 11, and that the committee should therefore be satisfied, for the purposes of subs 106K(2), that he was not to be taken to have engaged in conduct which constituted a prescribed pattern of services for the purposes of subs (1).  Subsection (2) provides that it is for the person under review to satisfy the committee of such matters.   The committee rejected the applicant’s submissions.  This is an application to review that decision, the grounds for such review being as follows:

1.         the respondents erred in applying regulation 11(b) of the Health Insurance (Professional Services Review[)] Regulations 1999 in that:

(a)        they did not consider, or they did not properly consider, the location of the practice of [the applicant]; and/or

(b)        they did not consider, or they did not properly consider, the characteristics of the patients of [the applicant];

2.         the respondents erred in interpreting the phrase, “the absence of other medical services” as meaning a total absence of medical services;

3.         the respondents erred in concluding that patient preference was not relevant in determining whether exceptional circumstances existed;

4.         the respondents erred in that:

(a)        the respondents concluded that while Roma and its surrounding area is likely to have a higher patient/doctor ratio than many metropolitan regions in Australia, Roma is likely to have been no worse off than any other rural areas;

(b)        such conclusion was not permitted by the Health Insurance Act 1973 and/or the Health Insurance (Professional Services Review) Regulations 1999 and/or constituted an irrelevant consideration; and

(c)        there was no evidence before the respondents of the doctor/patient ratios in other rural areas; [and]

5.         the respondents erred in concluding that while Roma and its surrounding region had a lower average income, Roma did not suffer a disadvantage.

10                  Grounds 1 and 5 were not pursued at the hearing.

11                  Roma is a regional centre lying to the west of Brisbane at a distance of about 475 km.  The Supreme and District Courts sit there.  There is a rail connection to Brisbane and regular air services.  There may be no evidence of the above matters, but they comprise common general knowledge and give background to the proceedings.  They are not relevant to my decision.  The evidence discloses that Roma is the site of regular cattle sales. 

12                  The applicant has been a general practitioner in Roma for many years.  There is, as far as I know, no professional criticism of him or his practice other than in connection with the matter which is the subject of these proceedings.

13                  The applicant makes three discrete criticisms of the committee’s reasons.  They are:

·                    that the committee misinterpreted the expression “the absence of other medical services” as used in reg 11;

·                    that the committee erred in concluding that patient preference (for a particular practitioner) was not relevant in deciding whether exceptional circumstances existed; and

·                    that the committee erred in concluding that whilst Roma and its surrounding area is likely to have a higher patient/doctor ratio than many metropolitan regions in Australia, it is likely to have been no worse off than other rural areas, and in treating such matter as relevant to its enquiry.

All three matters are said to go to the question of whether there was an absence of other medical services as contemplated in reg 11(b).

Meaning of the phrase “the absence of other medical services”

14                  The applicant submits that a perusal of the whole of the committee’s reasons discloses that it interpreted this phrase as meaning a total absence of medical services, rather than medical services which are not readily available, or the level of which was such as to justify the applicant rendering 80 or more services on the days in question.  The question is dealt with by the committee at paras 25-57.  In particular, the applicant points out that in para 40 the committee observed that it was “not satisfied that there was an absence of services for [the applicant’s] patients, having regard to the location of his practice, on the relevant days”.  In para 48 it said that it was “not satisfied, however, that there was an absence of bulk-billing services for [the applicant’s] disadvantaged patients on the relevant days”.  In para 52 it said that there was no evidence that any increase in demand for medical services during cattle sales days was such that it could be said that “there was an absence of services for [the applicant’s] patients during those times having regard to the location of his practice”.  Finally, in para 56 the committee observed that there was no evidence that increases in demand over long weekends during the referral period or during winter was so large that it could be said that there was “an absence of services for [the applicant’s] patients during those times having regard to the location of his practice”. 

15                  The committee’s language reflects the wording of the regulation.  Fairly clearly, reg (b) contemplates an absence of medical services, other than those provided by the practitioner whose conduct is under review, to treat patients of that practitioner.  In other words, the question is whether there is some other source of medical services available to them at the relevant time.  The applicant’s point is a little obscure.  It seems to involve the assertion that the committee dismissed the “defence” that there was an absence of other medical services, for the purposes of reg 11, simply because there were other medical practitioners in the area.  The submission may also contain the further implicit assertion that notwithstanding the fact that there were other medical practitioners, they would not, or could not, have serviced the applicant’s patients.  As I understand it, the point is distinct from the submission concerning the alleged preference of patients for the applicant’s services and the submission concerning the allegedly high patient/doctor ratio.  However the three submissions are probably connected.

16                  In my view the regulation dictates a practical approach to the availability of other medical services.  Within Australia it can hardly be said that anybody has no access to medical services.  For a person in Roma there would always be the option of travelling to Brisbane for such services.  However such a requirement might not be practicable simply because the requirement for such services might not justify the journey.  In other cases that solution would not enable the patient to obtain the required services in a suitable timeframe.  In others it would simply involve too much of a disruption to a patient’s day-to-day life.  On the other hand, it is conceivable that in a small country town having, say, two medical practitioners, both may be so busy that neither is, in a practical sense, able to fit in the other’s patients other than by seeing more patients in the same timeframe.  The question to be addressed is simply whether or not, if a patient could not have consulted the applicant within an appropriate timeframe, he or she would reasonably have been able to consult another medical practitioner.  Such an enquiry involves consideration of the geographical locations of other practitioners, the hours during which they were available and their history of patient numbers.

17                  The committee did not dismiss the practitioner’s submissions simply because there were other medical practitioners in the area.  A considerable amount of time was spent in trying to identify the number of other practitioners and the amount of time spent by them in providing medical services.  Reference was had to various prescribed patient/doctor ratios.  It is relatively clear that the committee was attempting to identify the capacity of other practitioners to see patients who were, in fact, seen by the applicant.  The committee concluded that it was not satisfied that there was an absence of other medical services reasonably available to patients.  I see no evidence of any misinterpretation of the kind alleged by the applicant.  The committee cannot be criticized for using the words of the regulation.

Patient preference

18                  This matter is dealt with in paras 58-60 of the committee’s report as follows:

58.       [The applicant] submits that he has practised in Roma for a period of over 30 years, in circumstances where the town “has seen many other medical practitioners come and go”.  [The applicant] states that his obstetrics practice has “attracted a following … in the community from families who wish to continue having him treat themselves as well as their children”.

59.       [The applicant] submitted at the hearing on 6 March 2008 that his patients had a right to “bypass” a practitioner working in the patient’s area, that Australia is “a country where we’ve got choice”.  Counsel assisting [the applicant] submitted that patient preference could be considered to be a characteristic of the patient for the purposes of regulation 11(b) of the Regulations.

60.       It is the view of the committee that patient preference amounts neither to an exceptional circumstance in the ordinary meaning of those words, nor to an unusual occurrence, and is neither a characteristic of a patient nor evidence of an absence of other services for a practitioner’s patient.  It is not an exceptional circumstance.

(Footnotes omitted.)

19                  The applicant submits that any patient has the relevant characteristic of having selected a preferred medical practitioner.  At one level this may be correct but at another, it may not be.  No doubt some patients seek out a particular practitioner and others do not.  A person may go to a medical practice not knowing which of the medical practitioners he or she will see there.  Patients may choose a particular practice or a particular practitioner for a wide range of reasons.  To treat preference as a characteristic for the purposes of reg 11 would seriously undermine the underlying purpose of the regulation and the Act.  Subsection 106KA(4) seems clearly to contemplate the possibility that the regulations would treat as a prescribed pattern of service the provision of more than a specified number of services during a nominated period.  Regulation 10 does so.  If reg 11 were to be interpreted as exempting a practitioner from the limitations prescribed by reg 10, simply because he or she was in great demand, then the regime established by s 106KA and regs 10 and 11 would be seriously undermined.  Every practitioner who services 80 or more patients in a day must do so because the patients have chosen him or her as the practitioner to be consulted.  In that sense (and assuming the presence of an alternative) they express a preference for his or her services.  The applicant’s case goes no further than that, although he sought to identify reasons for his being more popular than his colleagues.

20                  I accept that patients may have preferences for doctors having particular qualifications or experience, including non-medical qualifications or experiences and that those preferences may, in some circumstances, be characteristics of the patient.  I have in mind a patient who prefers either a male or a female medical practitioner, a patient who prefers a medical practitioner with a particular area of expertise or a practitioner who has a particular non-medical qualification such as a capacity to speak a language other than English.  It may, in some circumstances, be difficult to determine whether or not a patient’s desire to consult a practitioner having one or other of those qualities can properly be described as a characteristic for the purposes of reg 11.  Everybody has preferences in connection with the acquisition of goods or services, but not all such preferences are strongly held, or will be insisted upon or satisfied in every case.  For example a woman who would normally prefer to consult a female practitioner would presumably be willing to consult a male practitioner if no female practitioner were available, depending upon the urgency of the situation or her particular convenience at the time.  Similarly one can imagine circumstances in which a person who is not fluent in English would nonetheless resort to an English-speaking medical practitioner and try to make him- or herself understood. 

21                  To my mind reg 11(b)(ii) is not concerned with the preferences of individual patients, but with characteristics of the relevant practitioner’s “patients”.  The provision is directed towards a practitioner who attracts patients having particular characteristics, not merely individual preferences.  To avail oneself of the benefit of the provision a practitioner would have to show that a group of his or her patients consulted him because they share a particular characteristic.  A characteristic is not merely a preference.  If a practitioner regularly attracts Chinese-speaking patients, for whatever reason, then that may be a characteristic of his or her patients.  If he or she regularly attracts patients whose primary concern is about skin complaints, then that may be a characteristic of his or her practice.  If he or she has a substantial proportion of aged patients, that may be a characteristic of his or her patients. 

22                  The way in which the committee worded its finding in para 60 may be a little loose.  It speaks of “a characteristic of a patient” whereas as I have indicated, the proper enquiry is as to the characteristics of patients of the practitioner whose conduct is under review.  It cannot be intended that entirely idiosyncratic preferences should be treated as such characteristics.

Patient/doctor ratio

23                  As I have said, the committee considered a quite substantial amount of evidence concerning the patient/doctor ratio in Roma and throughout Australia.  At paras 39 and 40 it said:

39.       The Committee accepts that Roma and its surrounding area was likely to have had a higher patient-doctor ratio than many metropolitan regions in Australia during the referral period, although the Committee considers that the region is likely to have been no worse off than other rural areas.

40.       Having regard to the doctor-patient ratio (however calculated), the number of practitioners who practised in the Roma region on the days on which [the applicant] rendered 80 or more services, and the total number of services rendered on each of those days, the Committee is not satisfied that there was an absence of services for [the applicant’s] patients having regard to the location of his practice, on the relevant days.

24                  The applicant complains particularly about the words at the end of para 39 “the region is likely to have been no worse off than other rural areas”.  It submits that this constitutes an error:

because even if the respondent is correct in its assumption that Roma and its surrounding area is likely to be no worse off than any other rural area, the fact that there are, for example, shortages of doctors in rural areas of Australia generally does not prevent the shortage of doctors in Roma and its surrounding area being a relevant factor in determining whether there is an absence of medical services … .

25                  Alternatively, the applicant submits that reg 11(b) “does not require that the rural area in which the practitioner was working in the referral period be a rural area that is worse off than other rural areas before it can be found that there ‘exceptional’ circumstances”.  The applicant submits that the shortage of doctors in rural areas is not relevant to his case, and that the committee distracted itself from addressing the correct question by considering that matter.  The applicant also submits that there was no evidence of the patient/doctor ratios in other rural areas. 

26                  The respondent submits that there was, in fact, evidence of the patient/doctor ratio in remote centres.  A reference to that evidence appears at para 31 of the final report.  I understand the expression “remote centres” to be generally used to described towns and cities in rural areas.  The applicant submits that the committee should not have had regard to whether the shortage of doctors in Roma and its surrounding area was as acute as the shortage of doctors in rural areas of Australia generally.  I accept that this fact would not, itself, necessarily lead to the conclusion that there were no exceptional circumstances for the purposes of reg 11.  However it does not follow that the fact was irrelevant to the committee’s consideration.  It is not surprising that the exercise in which the committee was engaged resulted in reference to patient/doctor ratios.  One suspects that the choice of the figure of 80 consultations per day in the regulations was probably based upon some sort of statistical research.  However I do not rely upon that speculation for present purposes.  The patient/doctor ratios were clearly in evidence and clearly relevant to the task in hand.  That task inevitably involved an evaluation of the adequacy or otherwise of the services available from other medical practitioners who were reasonably able to provide such services to the applicant’s patients.  I see no reason why the committee should not have had regard to such statistics as indicating ratios prevailing throughout the country, using them as an indicator of the level of medical services likely to be available or necessary in the area in question. 

27                  The committee’s approach to the question really depended upon the approaches taken by the parties, particularly the applicant, to that question.  The applicant had, himself, asserted that the patient/doctor ratio in the region was higher than the average for both rural and city areas in Australia: see para 29 of the final report.  He can hardly complain that the committee chose to deal with that assertion in its reasons.  The committee compared the figures in the Roma area to ratios identified as appropriate by Medicare.  The applicant seems to have invited comparison with other recommendations more favourable to his case.  It was for the committee to use this evidence as it reasonably thought appropriate.  There is no reason to believe that it did otherwise. 

28                  The application must be dismissed with costs.

Associate:

Dated:         23 December 2009