FEDERAL COURT OF AUSTRALIA
Li v Determining Authority [2022] FCA 1448
ORDERS
Applicant | ||
AND: | First Respondent COMMONWEALTH OF AUSTRALIA Second Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The applicant’s application be dismissed with costs.
2. The parties are to confer as to the additional orders to be made to give effect to these reasons and to provide their draft short minutes within seven (7) days of the date of these orders.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
RAPER J:
Introduction
1 This is an application for judicial review of a decision made by the first respondent (the Authority) on 28 June 2022 (Final Determination or FD), pursuant to s 106TA of the Health Insurance Act 1973 (Cth). By way of the Final Determination, the Authority found that the applicant had engaged in “inappropriate practice” as defined in s 82(1) of the Act in connection with providing certain services. The application relates to two directions made by the Authority in its Final Determination, namely that:
(a) the applicant repay the amount of $433,488.52, which reflected the total benefits paid for the Medicare Benefits Schedule (MBS) items in connection with those services the applicant was found to have engaged in inappropriate practice (the repayment direction) (FD[82]); and
(b) the applicant be fully disqualified from rendering MBS item services for 18 months from the date of the Final Determination (the disqualification direction) (FD[83]).
2 The first respondent filed a submitting notice, save as to costs, and the second respondent (the Commonwealth) participated in these proceedings.
3 By originating application filed on 10 August 2022, the applicant sought judicial review of these two directions under ss 5(1)(e) (improper exercise of power – specifically taking an irrelevant consideration into account: s 5(2)(a)), 5(1)(f) (the decision involved an error of law)), and/or 5(1)(j) (the decision was otherwise contrary to law) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) or, alternatively, pursuant to ss 39B(1) and (1A) of the Judiciary Act 1903 (Cth).
4 By application, filed on 5 August 2022, the applicant sought an extension to file his application for judicial review. The applicant also sought, inter alia, an interlocutory order that the repayment and disqualification directions be stayed pursuant to s 15(1)(b) of the ADJR Act. On 10 August 2022, Bromwich J made those orders.
5 The applicant’s originating application was heard on 25 October 2022. In support of the application, the applicant relied on the two affidavits of Douglas Laing McClelland, solicitor, sworn on 25 August 2022 and 29 August 2022.
6 The Commonwealth relied on the three affidavits of Rosalie Byrne, solicitor, sworn on 28 September 2022, 17 October 2022 and 25 October 2022.
7 For the reasons which follow, the grounds of judicial review are not made out and the application must be dismissed.
Legislative Scheme
8 The Act requires that those medical practitioners who wish to practice as general practitioners in the Medicare scheme, amongst others, must not engage in inappropriate practice: The Scheme “practically compels” practitioners to abide with a particular standard of professional behaviour in connection with rendering or initiating services: Wong v Commonwealth [2009] HCA 3; 236 CLR 573 at [224].
9 Part VAA of the Act provides for the multi-tier professional services review scheme (PSR Scheme) for reviewing and investigating a person’s provision of services to determine whether they have engaged in inappropriate practice. The protective object of Pt VAA is set out in s 79A and the features of the PSR scheme are provided for at s 80(2). Both are extracted below:
79A Object of this Part
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.
…
80 Main features of the Professional Services Review Scheme
…
(2) The Professional Services Review Scheme is a scheme for reviewing and investigating the provision of services by a person to determine whether the person has engaged in inappropriate practice.
…
10 Section 82(1) defines “inappropriate practice” as follows:
82 Definitions of inappropriate practice
Unacceptable conduct
(1) A practitioner engages in inappropriate practice if the practitioner’s conduct in connection with rendering or initiating services (other than a service of a kind referred to in paragraph (c) of the definition of service in subsection 81(1)) 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
(b) if the practitioner rendered or initiated the services as a specialist (other than a consultant physician) in a particular specialty—the conduct would be unacceptable to the general body of specialists in that specialty; or
(c) if the practitioner rendered or initiated the services as a consultant physician in a particular specialty—the conduct would be unacceptable to the general body of consultant physicians in that specialty; or
(d) if the practitioner rendered or initiated the services as neither a general practitioner nor a specialist but as a member of a particular profession—the conduct would be unacceptable to the general body of the members of that profession.
Prescribed pattern of services
(1A) Subject to subsections (1B) and (1C), a practitioner engages in inappropriate practice in rendering or initiating services during a particular period (the relevant period) if the circumstances in which some or all of the services were rendered or initiated constitute a prescribed pattern of services.
(1B) A practitioner does not, under subsection (1A), engage in inappropriate practice in rendering or initiating services on a particular day during the relevant period if a Committee could reasonably conclude that, on that day, exceptional circumstances existed that affected the rendering or initiating of the services.
(1C) Subsection (1B) does not affect the operation of subsection (1A) in respect of the remaining day or days during the relevant period on which the practitioner rendered or initiated services even if the circumstances in which the services were rendered or initiated on that day or those days would not, if considered alone, have constituted a prescribed pattern of services.
(1D) The circumstances that constitute exceptional circumstances for the purposes of subsection (1B) include, but are not limited to, circumstances that are prescribed by the regulations to be exceptional circumstances.
Causing or permitting inappropriate practice
(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 or otherwise engaged by the person to engage in conduct that constitutes inappropriate practice by the practitioner under subsection (1) or (1A); or
(b) is an officer of a body corporate and knowingly, recklessly or negligently causes, or knowingly, recklessly or negligently permits, a practitioner employed or otherwise engaged by the body corporate to engage in conduct that constitutes inappropriate practice by the practitioner under subsection (1) or (1A).
Matters to which Committee must have regard
(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.
11 The PSR Scheme involves several levels of review and consideration, which may be summarised as follows:
(a) The Director of Professional Services Review, upon the request of the Chief Executive Medicare, may review the provision of services by a person: s 80(3). The Director must decide whether or not to undertake the review within one month: ss 88A(1) and (3).
(b) Following the Director’s review, if the Director makes a referral to a Professional Services Review Committee, the Committee can then investigate the provision of services “and its investigation is not limited by any reasons given in a request for review or a Director’s report following a review”: s 80(6). A written report is provided alongside the Director’s referral: s 93(6).
(c) If the Committee finds that the person under review has engaged in “inappropriate practice”, this finding will be reported to the Authority, who can take action in response and holds a discretion as to which directions to make: s 80(10).
12 Once the Director has conducted a review, and given the person under review an opportunity to make submissions, the Director may decide to: (1) take no further action; (2) enter into an agreement under s 92 with the person under review; or (3) make a referral to a Committee: s 89C.
13 When the matter is referred to a Committee, the Committee may hold a hearing: s 101(1). A hearing is mandatory where it appears to the Committee that the person under review may have engaged in inappropriate practice in providing the referred services: s 101(2). Following a hearing, the Committee must prepare a draft report, then consider the submissions of the person under review made with respect to the draft report, and subsequently prepare a final report of its findings: ss 106KD, 106L. For a majority or unanimous finding of inappropriate practice, the final report must be given to the person under review, the Director and the Authority: s 106L(3) and (5).
14 At the Authority’s decision-making stage, the Director may give any information they consider relevant to the Authority making its draft or final determinations, but can only do so once (s 106S(2)), before the Authority makes its draft determination (s 106S(1) and (2A)), and where that information must also be given to the person under review: s 106S(3). The Authority must then consider that information in making its draft or final determinations under s 106U: s 106S(4).
15 The Authority is then obliged by the Act to invite the person under review to make written submissions before the draft determination is made (s 106SA(1)) and before the final determination is made (ss 106T(2), 106T(3), 106TA(1)) and the Authority must take those submissions into account: ss 106T(1), 106TA(1).
16 Sections 106T and 106TA outline the basis for the Authority to make a draft and final determination in relation to a person under review:
(1) The Determining Authority must, after taking into account any submissions made by the person under review in accordance with section 106SA:
(a) make a draft determination in accordance with section 106U relating to the person; and
(b) give copies of the draft determination to the person and to the Director.
(1A) The Determining Authority must comply with subsection (1) within 1 month after the last day on which the person under review may make submissions in accordance with section 106SA.
Note: The period for making the draft determination may be affected by section 106TB.
(2) The copy of the draft determination given to the person under review must be accompanied by a statement inviting the person to make written submissions, within 14 days after the day on which the copy of the draft determination is given to the person, suggesting changes to any directions contained in the draft determination in accordance with section 106U.
Note: The period for making submissions may be affected by section 106TB.
(3) The person under review may, within the 14 day period referred to in subsection (2), make written submissions to the Authority suggesting changes to the directions contained in the draft determination.
(4) Failure to comply with subsection (1) within the period referred to in subsection (1A) does not affect the validity of the draft determination.
(1) If the Determining Authority has made a draft determination under section 106T, the Authority must, within one month after the end of the 14 day period within which the person under review may make submissions, and after taking into account any submissions made by the person during that 14 day period, make a final determination in accordance with section 106U relating to the person under review.
Note: The period for making the final determination may be affected by section 106TB.
(2) Failure to make the final determination within that period of one month does not affect the validity of the determination.
17 Section 106U provides for the type of directions that are contained in draft and final determinations. Sections 106U(1)(cb), 106U(1)(h), 106U(1A) and 106U(3) are relevant to this application:
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 or an associated person; and
(ii) in connection with the rendering or initiation of which, or of a proportion of which, the person under review or an associated person 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;
…
(h) if the person under review is a practitioner—that the practitioner be fully disqualified for a specified period starting when the determination takes effect.
…
(1A) For the purposes of paragraph (1)(cb), it is to be assumed that all the medicare benefits paid for services in the class of services referred to in that paragraph were paid at the lowest rate that was payable for any of the services included in the class.
…
(3) For the purposes of paragraphs (1)(g) and (h), the period specified must not be more than:
(a) if the person under review is a practitioner in relation to whom an agreement under section 92, or a final determination under section 106TA, has previously taken effect—5 years; or
(b) in any other case—3 years.
18 The Committee is obliged to note in its report if, during the course of its investigation, it had formed an opinion that a person has caused a significant threat to the life or health of a person or has failed to comply with professional standards and has sent a statement of its concerns to the Director: ss 106M(1)–(2). However, when making its findings as to “inappropriate practice”, the Committee must “disregard” any such opinion formed: s 106M(3).
19 The Act includes specific referral powers to State or Territory bodies (which operate separate disciplinary regimes to the PSR Scheme) where the Director prepares, or has received from the Committee or the Authority, a written statement of concerns by reason of either significant threat to life or health (under s 106XA) or non-compliance with professional standards (under s 106XB). The relevant provisions are extracted as follows:
106XA Significant threat to life or health
Opinion formed by Committee or Determining Authority
(1) If, in the course of the performance of functions or the exercise of powers under this Part, a Committee or the Determining Authority forms the opinion that conduct by a practitioner has caused, is causing, or is likely to cause, a significant threat to the life or health of any other person, the Committee or the Authority, as the case may be, must give to the Director a written statement of its concerns, together with the material, or copies of the material, on which its opinion was based.
(2) If the Director receives, from a Committee or the Determining Authority, a statement and material under subsection (1) in relation to conduct by a person, the Director must send the statement and material to:
(a) a State or Territory body that is responsible for the administration of health services or the protection of public health and safety in the State or Territory in which the conduct occurred; and
(b) each appropriate person or body for the person (see subsection (4)).
Opinion formed by Director
(3) If, in the course of or in connection with the performance of functions or the exercise of powers (whether by the Director, the Director’s nominee, a Committee or the Determining Authority) under this Part in relation to a person who renders professional services, the Director forms the opinion that any conduct by the person has caused, is causing, or is likely to cause, a significant threat to the life or health of any other person, the Director must:
(a) prepare a written statement of his or her concerns; and
(b) attach to the statement the material, or copies of the material, on which his or her opinion is based; and
(c) send the statement and material to:
(i) a State or Territory body that is responsible for the administration of health services or the protection of public health and safety in the State or Territory in which the conduct occurred; and
(ii) each appropriate person or body for the person (see subsection (4)).
Meaning of appropriate person or body
(4) For the purposes of paragraph (2)(b) and subparagraph (3)(c)(ii), an appropriate person or body for a person who renders professional services is a person or body that:
(a) is specified in the regulations; and
(b) has the power to take action against the person.
106XB Non-compliance by a practitioner with professional standards
(1) If, in the course of the performance of functions or the exercise of powers under this Part, a Committee or the Determining Authority forms the opinion that a person who is a practitioner has failed to comply with professional standards, the Committee or the Authority must give to the Director a written statement of its concerns, together with the material, or copies of the material, on which its opinion was based.
(2) If:
(a) in the course of or in connection with the performance of functions or the exercise of powers (whether by the Director, the Director’s nominee, a Committee or the Determining Authority) under this Part in relation to a person who is a practitioner, the Director forms the opinion that the practitioner has failed to comply with professional standards; or
(b) the Director receives from a Committee or from the Determining Authority a statement and material under subsection (1);
the Director must:
(c) if paragraph (a) applies—prepare a statement of his or her concerns, attach to the statement the material, or copies of the material, on which his or her opinion was based and send the statement and attached documents to the appropriate body or bodies referred to in subsection (3); or
(d) if paragraph (b) applies—send the statement and attached documents received from the Committee or Authority to the appropriate body or bodies referred to in subsection (3).
(3) The appropriate body or bodies for the purposes of paragraphs (2)(c) and (d) are the body or bodies specified by the regulations.
20 Similarly, where the Authority, in the course of considering a report by a Committee forms its own opinion that there is a significant threat to life or health of any other person and has sent a statement of concerns to the Director (under s 106XA) or formed an opinion that the person under review failed to comply with professional standards and sent a statement of its concerns to the Director (under s 106XB), the Authority must disregard those matters when making its draft determination or final determination, as prescribed under s 106UAA, which is set out as follows:
106UAA Referral of matter by Determining Authority to a regulatory body not to be taken into account by the Authority in making draft or final determinations
If the Determining Authority, in the course of considering a report by a Committee:
(a) formed an opinion that any conduct by the person under review caused, was causing, or was likely to cause, a significant threat to the life or health of any other person and sent a statement of its concerns to the Director under section 106XA; or
(b) formed an opinion that the person under review failed to comply with professional standards and sent a statement of its concerns to the Director under section 106XB;
the Authority must disregard those matters when making its draft determination or final determination.
Relevant chronological events
21 The applicant is a general practitioner with a practice in skin cancer medicine.
22 Since April 2009, the applicant has been the subject of various disciplinary reviews (relating to different conduct and during different review periods) by the Director (and related Federal agencies under the Act) but also by the Medical Council of New South Wales under the Health Practitioner Regulation National Law 2009 (NSW).
23 Whilst this review proceeding concerns the Final Determination of the Authority, it is useful to understand the steps undertaken at a State and Federal level over the period preceding the Final Determination.
24 On 23 November 2009, following a review of the applicant’s provision of services under the Act, the Director entered into an agreement with the applicant under s 92 of the Act, acknowledging certain inappropriate practice during the period 1 January 2008 to 31 December 2008 with respect to specified services with the MBS item numbers 30203, 721, 723, 35, 44, in the following way:
The Parties agree that the conduct of the Person Under Review in connection with rendering the specified services and which forms the basis for the acknowledgement in paragraph [1] is as follows:
• Failing to satisfy the minimum clinical content of MBS item 721 and 723 services in that the Person Under Review appeared to have prepared plans for patients presenting with simple conditions or as a mechanism to refer patients to allied health professionals.
• Failing to maintain adequate and contemporaneous medical records, in particular, in connection with MBS item 30203 services. Those records fail to adequately explain the type of service rendered in that they did not record proof of malignancy.
• Failing to maintain adequate and contemporaneous medical records, in particular, in connection with MBS item 36 and 44 services. Those records fail to adequately explain the type of service rendered in that they did not adequately record detail to justify billing of the MBS item.
25 As part of the agreement, the following action, pursuant to s 92(1)(b) of the Act, was taken:
5.1 The Director reprimand the Person Under Review.
5.2 The Person Under Review repay to the Commonwealth the sum of $162,111.66 being approximately 46% of the Medicare benefits paid in respect of the specified services.
5.3 The Person Under Review be disqualified from the provision of the following service for 12 months starting from when this agreement takes effect:
• MBS item 30203.
5.4 The Person Under Review be disqualified from the provision of the following services for 6 months starting from when this agreement takes effect:
• MBS item 721
• MBS item 723.
5.5 The Person Under Review be disqualified from the provision of the following services for 4 months starting from when this agreement takes effect:
• MBS item 36
• MBS item 44.
26 In the period after the agreement was entered, the Council conducted performance interviews with the applicant in 2009, 2011 and 2012 to “explore issues raised in the complaint and also to explore more general aspects of his practice”. A conduct interview was also conducted in 2013. No further action was taken by the Council.
27 On 18 February 2019, the Chief Executive Medicare sent a request to the Director to review the provision of services by the applicant during the period between 1 May 2017 and 30 April 2018. As a consequence, on 14 May 2019, the Director issued a notice under s 89B of the Act requesting the production of the applicant’s clinical records during the reviewable period. On 21 August 2019, the Director met with the applicant to discuss her concerns arising from her review of the applicant’s records.
28 On 8 April 2019, the Council completed its performance assessment and found the applicant’s performance to be unsatisfactory.
The Director’s Statement of Concerns (3 October 2019)
29 On 3 October 2019, the Director sent a letter to the Medical Board (in the care of the Australian Health Practitioner Regulation Agency (AHPRA)), notifying it of her concerns pursuant to ss 106XA and 106XB of the Act and attaching the Director’s statement of concerns, which stated that she was of the opinion that the applicant’s “conduct had caused, is causing and is likely to cause a significant threat to the life or health of his patients” and he had “failed to comply with professional standards”.
30 The Director set out her reasons for why she held the concerns, pursuant to s 106XA of the Act, as follows:
Reasons for concerns: s 106XA significant threat to life or health
8. Following a review of Dr Li’s clinical records and my meeting with him on 21 August 2019, I am of the opinion that Dr Li’s provision of surgical procedures including skin flap procedures and the use of nerve blocks has created and continues to create an ongoing significant threat to the life or health of his patients.
9. I am of the opinion that Dr Li performed skin flap procedures in cases where there was no clinical indication. Generally, the records appear to refer to the lesion and reason for excision (for example melanoma) but there is no reference as to why a skin flap was necessary.
10. This is particular [sic] concerning because Dr Li appears to routinely perform skin flap procedures on elderly patients. For example, one reviewed record was for [a patient] who was 94 years old at the time of the procedure. The record reflects an attendance where the patient had a lesion removed, which the record documents as 12x6x2mm in size and the histopathology reports as non-malignant. There [sic] report states that the skin is sun damaged but there is no evidence of severe pre-existing scarring, severe skin atrophy or sclerodermoid damage. It is unclear why such a small non-malignant lesion on the forearm required a skin flap procedure. Further, it is unclear why Dr Li determined it necessary to perform a skin flap procedure, which requires major surgery and has risks including significant bleeding and morbidity, on an elderly patient.
11. This same patient had another skin flap procedure three months later, on 29 May 2017, to repair an excision of a lesion on his hand. Again, there is no documentation in the record, which reveals a clinical justification for using a skin flap to repair the excision.
12. Dr Li’s provision of skin flap procedures without documented clinical justification is also concerning because the record often fails to include vital information such as current medications, co-morbidities, family or social histories or allergies. It is therefore unclear whether Dr Li considers these factors prior to determining that a surgical procedure is appropriate.
13. I am also of the opinion that the nature of Dr Li’s practice causes a significant threat to patient’s [sic] life or health. At our meeting, Dr Li described his practice to me. He informed me that it is not an accredited surgery. Dr Li explained that his practice has a receptionist and a practice manager and that he does not require a nurse for the procedures he performs (including skin excisions, nerve blocks and skin flap procedures). I am of the opinion that the patient’s safety was at risk because Dr Li had no skilled help should an intra-operative complication arise.
14. I am concerned that these major procedures were often performed on elderly patients and the record does not reflect that the patient was appropriately monitored during the procedure (for example a pulse was often not recorded). Nor did Dr Li appear to secure IV access for his patients undergoing these procedures.
15. I am also particularly concerned that Dr Li performs skin flap procedures, including neurovascular skin flaps, in this environment. There is no evidence from the reviewed records that Dr Li performed pre-operative checks, monitored the patient’s vital signs during the surgery or performed a post-operative and pre-discharge check to ensure it was safe for the patient to go home. The record does not appear to reflect how the patient was getting home and who was collecting them. After major surgery (and even in cases where the patient has undergone local anaesthetic), it may be unsafe for the patient to drive or go home alone.
(Emphasis in original, footnotes omitted).
31 The Director also provided her reasons, pursuant to s 106XB of the Act, as to why it was her view that the applicant had failed to comply with professional standards:
Reasons for concerns: s 106XB Failure to comply with professional standards
16. In addition to posing a significant threat to life or health, it is my view that Dr Li’s practice, as described above, also fails to comply with professional standards.
17. I am of the view that performing major surgeries, involving skin flap procedures on elderly patients, without clear clinical indications and in a potentially unsafe clinical environment, constitutes a failure to comply with relevant professional standards of care.
18. In my opinion, Dr Li’s practice may not comply with Part 2.2 of the Good Medical Practice: A Code of Conduct for Doctors in Australia, as promulgated by the Medical Board of Australia. In particular, Part 2.2.4 states that good medical practice involves “considering the balance of benefit and harm in all clinical management decisions.” It does not appear that Dr Li adequately considers whether major surgeries are clinically necessary and appropriate for his elderly patient base, particularly when they are to be performed in a practice that is not accredited as a surgery.
(Emphasis in original, footnotes omitted).
32 On 31 October 2019, the Director made a referral to the Professional Services Review Committee No 1291 (the Committee) to investigate whether the applicant had engaged in inappropriate practice.
33 On 21 November 2019, the Committee issued a Notice to Produce on the applicant.
34 On 28 January 2020, the Health Care Complaints Commission (HCCC) wrote to the applicant advising him of the referral to it from AHPRA.
35 On 4 February 2020, the Council conducted a hearing and on 10 February 2020 imposed conditions on the applicant’s registration requiring inter alia, the need for a second opinion in order to perform a skin flap or skin graft and the appointment of a supervisor.
36 In March and September 2020, the Committee conducted its hearings.
37 In the period between April 2020 and February 2021, the Council varied the conditions imposed on the applicant’s practice, conducted a further performance review and imposed additional conditions upon the applicant’s practice.
The Committee’s Statement of Concerns (2 March 2021)
38 On 2 March 2021, the Committee issued a draft report. On the same day, the Chair of the PSR Committee wrote to the Director, providing the Committee’s statement of concerns pursuant to ss 106XA and 106XB of the Act.
39 In the Committee’s reasons, it stated:
Reasons for concerns
5. The Committee is of the opinion that Dr Li’s conduct is likely to cause a significant threat to the life or health of his patients.
6. Based on the Committee’s review, the Committee shares the concerns of the Director outlined in the 2019 referral.
7. The Committee has further concerns which are dealt with in detail in the statement below made under section 106XA of the Act and forming the Committee’s written statement of concerns.
8. The Committee has also further concerns that Dr Li failed to comply with professional standards in respect of his record-keeping.
9. The professional standards and legislative requirements that the Committee considers have been breached by Dr Li include aspects of the code of professional standards contained in the Medical Board of Australia Good Medical Practice: A Code of Conduct for Doctors in Australia. The Committee has also borne in mind the definitions for ‘unsatisfactory professional conduct’, ‘professional misconduct’ and ‘unsatisfactory professional performance’ within the meaning of the Health Practitioner Regulation National Law (NSW) (the National Law).
10. This concern is dealt with in detail in the statement below made under section 106XB of the Act and forming a written statement of the Committee’s concerns.
(Emphasis in original).
40 The Committee thereafter set out its reasons, first with respect to its concerns as to the significant threat to life or health, at [11] and following:
Section 106XA: significant threat to life or health
11. Following the Committee’s examination of Dr Li’s clinical records and the oral evidence he provided during the eight day hearing, the Committee is of the opinion that Dr Li’s management of some patients could create a significant threat to the life or health of said patients.
12. Dr Li’s records do not reflect appropriate clinical justifications for the repeated provision of non-surgical ablative procedures such as cryotherapy as an ongoing course of treatments, particularly where provided to elderly patients.
13. Further, Dr Li’s records do not sufficiently identify lesions which are being either treated or observed on any particular occasion nor record the effectiveness or responsiveness of past treatments which have been provided in respect of particular lesions. As a result, the Committee is concerned that patients have been provided with repeated treatments of lesions to an excessive degree where the treatment has not been effective. Noting the pain involved in these invasive procedures this is of concern, particularly where elderly patients are subjected to such ongoing treatments.
14. The Committee is also concerned that Dr Li’s records do not reflect appropriate clinical justifications for Dr Li performing trigeminal nerve blocks for procedures where use of local anaesthetic would suffice.
15. Dr Li provided nerve blocks for simple procedures such as 2 mililmetre [sic] punch biopsies. In the Committee’s view there was no indication that local infiltration would not have provided adequate anaesthesia and performing nerve blocks involving serious risks was not justified.
41 The Committee then set out the bases for its concerns based on the review of the applicant’s records and provided the reasons for its concerns with respect to the applicant’s failure to comply with professional standards at [26]–[39].
42 On 3 March 2021, the Director wrote to the Medical Board (in the care of AHPRA), enclosing the Chair’s letter and the Committee’s statement of concerns, noting that they were “additional” to the concerns raised in the Director’s statement of concerns dated 3 October 2019.
43 On 4 May 2021, the Council appointed a supervisor for the applicant.
44 On 10 June 2021, the applicant provided his written submissions to the Committee.
Final Committee Report (9 September 2021) which annexed its statement of concerns and in turn referred to the Director’s statement of concerns dated 3 October 2019
45 In its Final Report dated 9 September 2021, the Committee made findings that the applicant had engaged in inappropriate practice in respect of many of the services under review and provided the applicant with its Final Report on the same day. The Committee made the following finding:
In particular, the Committee finds that the conduct of Dr Li in connection with providing the services examined by the Committee and referred to below would be unacceptable to the general body of general practitioners per s 82 of the Health Insurance Act 1973 (Act):
• 90% of MBS item 23 services,
• 100% of MBS item 36 services,
• 100% of MBS item 18234 services,
• 33% of MBS item 18236 services,
• 100% of MBS item 30192 services,
• 100% of MBS item 30195 services,
• 100% of MBS item 30203 services,
• 100% of MBS item 45202 services, and
• 10 out of 10 MBS item 45563 services reviewed.
(Emphasis in original).
46 The Final Report and its appendices comprised 350 pages and set out the reasons why the Committee found that the conduct of the applicant “in connection with rendering the services described would be unacceptable to the general body of general practitioners”: The test enunciated in s 82(1)(a) of the Act.
47 Relevant to these proceedings, the Committee annexed its statement of concerns to its Final Report. Its statement of concerns in turn referred to the Director’s statement of concerns dated 3 October 2019 in the following way:
Based on the Committee’s review, the Committee shares the concerns of the Director outlined in the 2019 referral.
48 The Director’s statement of concerns were not attached. However, the Committee referred in its Final Report (at [85]) to the fact of the Director having held those concerns when it made the referral to the Committee.
Section 106S Notice to the Authority
49 On 19 November 2021, pursuant to s 106S(1), the Director wrote to the Chair of the Authority noting that she had been given a copy of the Committee’s Final Report in accordance with s 106L(3)(a) of the Act and stated:
I have reviewed this final report and I consider that there is information which may be relevant to the Determining Authority when making its draft determination or final determination.
Therefore, in accordance with subsection 106S(1) of the Act, I provide the following information:
• The MBS Item payment summary which sets out the minimum and maximum benefits paid to Dr Li during the Review Period;
• On 25 [sic] November 2009, the Director entered into an agreement with Dr Li under section 92 of the Act (Referral No 661) which was ratified by the Determining Authority on 9 December 2009. Under the section 92 agreement Dr Li: acknowledged inappropriate practice in respect of MBS items 36, 44, 721, 723 and 30203; agreed to repay $162,111,66 to the Commonwealth; and agreed to be disqualified from providing services under MBS item 30203 for twelve months, MBS item 721 and 723 for six months and MBS item 36 and 44 services for four months. Copies of the section 92 agreement and correspondence confirming ratification are enclosed;
• I sent a written statement of concerns about Dr Li to the Australian Health Practitioners Regulation Agency (AHPRA) under sections 106XA and 106XB of the Act on 3 October 2019 during my review of Dr Li’s provision of services. A copy of this AHPRA referral is enclosed.
• I sent a written statement of concerns about Dr Li, which I received from the Committee, to AHPRA under sections 106XA and 106XB of the Act on 3 March 2021. A copy of this AHPRA referral is enclosed.
I have provided Dr Li with a copy of this letter including the above information.
(Emphasis in original).
50 On 26 November 2021, the Secretariat of the Authority wrote to the applicant, inviting him to make submissions to the Authority. On 1 March 2022, the applicant made submissions in response to that invitation (dealt with more substantively at [54]–[58] below).
The Draft Determination
51 On 29 April 2022, the Authority provided the applicant with its Draft Determination and invited him to make submissions “suggesting changes to the directions contained in the Draft Determination” consistent with s 106T(3) (extracted above at [16]). On 16 May 2022, the applicant made submissions in response to the Draft Determination.
52 Notably, the Draft Determination identified the “Material relied upon” at [8]–[9]:
Material relied upon
Committee report
8 In making its draft determination, the Determining Authority has relied on the Report of the Committee dated 9 September 2021 and attached appendices to that report.
Other documentation
9 The Determining Authority has had regard to:
(a) The letter from the Director dated 19 November 2021, providing additional information under section 106S of the Act.
(b) The submissions from Mr Douglas McClelland, Platinum Lawyers, dated 1 March 2022, provided on behalf of Dr Li, along with the various attachments provided with those submissions.
(c) The letter from Mr McClelland dated 4 March 2022, providing a copy of a letter from Dr Roland Nguyen, Dermatologist, Dr Li’s Level C supervisor pursuant to the orders of the Medical Council of New South Wales.
(d) The further letter from Mr McClelland dated 9 March 2022, advising that reports with the Medical Council could not be released due to confidentiality.
53 It also considered, in detail, the applicant’s submissions to date, including his responses to the Committee’s findings regarding the individual MBS item services. In addition, the Draft Determination referred to the applicant’s submissions regarding him being “subjected to separate performance management processes imposed by the Council”, at [45]:
Dr Li notes that he has been subjected to separate performance management processes imposed by the Council, in response to a referral by the Director. This has included restrictions on his practice and continued supervision by Dr Roland Nguyen, dermatologist. The Determining Authority notes that in a letter dated 3 March 2022, Dr Nguyen outlines his role as Dr Li’s indirect supervisor and comments on the improvements he has seen in relation to Dr Li’s practice, particularly in relation to recordkeeping. Dr Nguyen states that while he has not had the opportunity to observe Dr Li’s procedural competence, such as performance of skin cancer surgery, he does not have concerns in relation to his skin cancer diagnosis and management advice.
The applicant’s submissions to the Authority
54 By the applicant’s submissions dated 1 March 2022, the applicant responded in detail to the findings of the Committee (dated 9 September 2021) with respect to the MBS item numbers. The applicant made submissions as to why there should be no period of exclusion with respect to his provision of the relevant services, why he should not be required to pay the level of repayments, that he should not be, in effect, “sanctioned twice” by reason of the HCCC proceedings and the conditions imposed on his registration from 10 February 2020 he submitted were in place at that time (at [129]):
The Medical Professionals at the hearing could be classed as “a general body of general practitioners” [sic] the purposes of the health insurance act. Conditions were imposed on Dr Li’s registration as from 10 February 2020 and continuing which included:
a. Level C supervision of practice;
i. Reports to the Medical Council on a monthly basis;
ii. The supervisor must be a GP having obtained a full fellowship of the skin Cancer College of Australasia, Master of medicine (Skin Cancer) or a specialist dermatologist;
iii. The supervisor must be independent and not have any business or financial relationship with Dr Li;
b. At each supervision meeting the practitioner is to review and discuss Dr Li’s practice with focus on:
i. Communication with patients – clinical assessment and management;
ii. Medical records feedback in relation to any second opinion or procedures performed during the month;
iii. It is highlighted in the decision which imposes the conditions;
iv. Authorise the medical Council of New South Wales to provide proposed and approved supervisors with a copy of the decision including any conditions.
c. With any proposed skin graft or flap procedure the practitioner is to obtain a second opinion from the Medical Council Supervisor which supports the procedure. (This may be either written or if oral to be filed in the patient’s record) Dr Li must within seven days from the end of each calendar month provide the Medical Council of New South Wales with a record of all patients for which Dr Li obtained a second opinion. The log to include:
1. Name date of birth of the patient
2. Name and nature of the surgical procedures proposed or performed
3. The full name and signature of the Council approve [sic] supervisor who provided the second opinion
4. A copy of the second opinion
5. Dr Li to provide the second opinion log to the supervisor to be reviewed and discussed before submitting the log to the medical Council
6. Authorise Medical Council of New South Wales to contact the supervisor to verify the second opinion
d. Within seven days from the end of each month Dr Li is to provide the medical Council with a log of all surgical procedures undertaken in the previous month which includes the conditions outlined above
55 The applicant relied upon the fact that he had to undergo a performance assessment with the Council and was the subject of related conditions. The applicant submitted, inter alia (at [130]–[140]):
130. Dr Li was also to undergo a performance assessment. A copy of the conditions imposed by the Medical Council of New South Wales is Annexure E.
131. The conditions imposed on Dr Li’s medical certificate were a direct consequence of the complaint by the Director of the PSR to AHPRA.
132. Following the hearing on 4 February 2020, together with the outbreak of the pandemic Dr Li was unable to secure a level C supervisor until 7 May 2021.
133. Dr Li was forced to approach the Medical Council of New South Wales who after consideration of all of the factors presented by Dr Li accepted an undertaking from Dr Li that he would not perform procedures described under MBS item numbers 45201, 45202, 45439, 45451 and 45200 (flap & graft procedures).
134. A further hearing was conducted on 30 April 2020 by the Medical Council of NSW of the [sic] which was decided on the papers by Dr Janes, Dr Bostock panel members and orders were made under section 150A(3) to vary the conditions on Dr Li’s registration imposed by the hearing of 4 February 2020. The reasons for the decision are Annexure F.
135. On 24 November 2020 the Medical Council of New South Wales conducted a performance review by way of video conference. The panel of the Medical Council consisted of Dr Antonio Di Dio, Dr Katherine Smart (both of whom are PSR panel members) and Ms Diane Robinson the chair of the Medical Council of New South Wales Professional Standards. Present at this hearing was Ms Cindy Lo (MCNSW), Dr Margaret Daly (MIPS) and Marianne Nicolle (a solicitor from Meridian lawyers).
136. The attendees at the performance review could also be classed as a general body of general practitioners however on examination of Dr Li’s practices did not consider that Dr Li was likely to cause or has caused a significant threat to life or the health of the person as alleged by the Committee and the Director of the PSR.
137. Dr Li had issues with the opinions of the Director of the PSR, Professor Quinlivan (a gynaecologist), and the members of the Committee who were general practitioners, with the exception of Prof Cooper (a dermatologist). Dr Li practised only in Skin Cancer Medicine during the review period. In submissions on behalf of Dr Li during the Committee hearing Ms Brown submitted that there would be difficulties in finding a true peer being a GP who was a Skin Cancer Specialist.
138. The findings of the 24 November 2020 Review were released on 15 February 2021 and is Annexure G. These findings were in accord with the findings of PSR Committee 1291 whose investigations concluded on 18 September 2020, Dr Li’s notes were inadequate.
139. On 19 February 2021 the Medical Council of NSW advised Dr Li by letter of the performance panel review findings, a copy of which appear as Annexure H.
140. On 4 May 2021 the Medical Council of New South Wales approved Dr Roland Nguyen a dermatologist as the supervisor of Dr Li. A copy of the letter to Dr Nguyen from the Medical Council of New South Wales is Annexure I.
(Emphasis in original, footnotes omitted.)
56 The applicant thereafter made submissions as to the impact of the restrictions on his billing practice (and therefore revenue) as a consequence of the PSR investigations.
57 The applicant detailed the further formal training and education he had undertaken in 2020 and 2021 (at [150]–[151]).
58 The applicant made submissions as to the impact of the restrictions, which would “cripple” him financially if he were directed to repay Medicare for services deemed to have been delivered inappropriately and in conclusion submitted (at [165]–[170]):
165. In view of the above, the actions of both the Director of the Professional Services Review Agency and the actions taken by Committee 1291 do not support a finding that Dr Li practised inappropriately during the review period as concluded at paragraphs 218 and 219 of the final report or at all.
166. Further, the referral of Dr Li to APRAH [sic] by the Director of the PSR and the Committee and in particular that the wrongful allegations made under the protection of the Health Insurance Act 1973, caused a parallel enquiry to occur, with Dr Li be [sic] subject to sanctions already placed upon his medical practice.
167. The sanctions of the Medical Board of New South Wales concerning Dr Li’s practices are described above and in conclusion the Determining Authority is estopped from imposing further sanctions against Dr Li stemming from the PSR’s enquiry.
168. In the event that the Determining Authority rejects Dr Li’s submissions based upon sanctions already being imposed is [sic] suggested that should the Determining Authority choose to impose further sanctions it is advanced that [a reduced sanction of $49,443 would be acceptable, rather than $488,750].
…
169. The Determining Authority has a discretion as to sanctions being applied to both the quantum sought to be repaid and the time the person under review is excluded from billing the MBS items reviewed.
170. No exclusion period should be imposed is [sic] any further sanction with respect to the above item numbers and the maximum monetary penalty imposed (if any) should be no more than $49,443.
(Emphasis in original, footnotes omitted.)
59 On 4 March 2022, the applicant made a further submission to the Authority enclosing a letter from his supervisor, dated 3 March 2022, including the following observations:
My observations of Dr Li since my appointment as level C supervisor are as follows:
1. Dr Li has not undertaken any skin graft of [sic] skin flap procedures.
2. My review of Dr Li’s 5 patient records monthly indicates significant and progressive improvement in compliance with respect to contemporaneous note takings and accurate medical records. At the most recent monthly meeting on 21/02/2022, the review of 5 medical records showed standards expected of a competent medical practitioner.
3. Dr Li conducted patient consultations competently during the observation sessions in relation to skin cancers. Dr Li’s consultations and management advice are of the expected standards of a medical practitioner of comparable qualifications with respect to skin cancers. Dr Li spent sufficient time with history taking and performed adequately detailed skin examination. His advice on management was appropriate for skin cancers. Dr Li has been given specific instructions to improve his approach to and management of conditions outside of his area of interest such as inflammatory skin conditions.
Based on my observations of Dr Li, I do not have any concerns with respect to his skin cancer diagnosis and management advice. I have not had opportunity to observe Dr Li’s procedural competence such as performance of skin cancer surgery.
Subject to the restrictions placed upon me by the various regulating Acts, and with the consent of the Medical Council of New South Wales I would be happy to provide to the determining authority my reports delivered to the Medical Council of New South Wales dated 7 August 2021, 7 November 2021 and 7 February 2022.
60 By the applicant’s submission, sent by email on 16 May 2022, the applicant responded to the Draft Determination (referred to at [51] above). The applicant submitted, inter alia, that the Authority is not bound to “follow the decision of the committee” and must itself decide “what action to take”, the sanctions proposed were disproportionate to the alleged findings of fact and that the Authority must not take into account certain matters, identified as follows:
Further Considerations
We note the operation of section 106UAA of the Act states that the determining authority must not to [sic] take into account matters where a committee has formed an opinion that any conduct that the person under review caused was causing are likely to cause a significant threat to life or health of any other person and sent a statement of concerns to the director under section 106XA or that the person under review has failed to comply with professional standards and sent a statement of its concerns to the Dir [sic] under s106XB.
Paragraph 8 of the draft determination states that the determining authority had relied upon the report of the committee dated 9 September 2021 and attached appendices in forming its opinion as to sanctions.
Paragraphs 9 of the draft determination report states that the determining authority has had regard to the letter from the director dated 19 November 2021 including the provision of additional information under s106S.
Paragraph 45 of the draft report indicates that the determining authority may have taken into account the referrals of Dr Li by the Director to the Medical Council in reaching its decision as to proposed sanctions.
The draft determination report does not specifically exclude the referrals by the committee or the Dir [sic] to the regulatory authorities and with respect it may have been that these referrals have been inadvertently taken into account in reaching the proposed sanctions described in the determining authority’s report.
Dr Li remains grateful to the determining authority for reducing the period of disqualification from the maximum of five years to 18 months however Dr Li’s patients should not be disadvantaged by the decisions of the determining authority.
The determining authority is urged to reconsider the proposed sanctions against Dr Li and it is suggested that the sanctions described in the last two columns of the table above would be in all the circumstances appropriate and would alleviate the necessity to continue on with this enquiry through the judicial system.
(Emphasis in original.)
Final Determination
61 The Authority provided the applicant with its Final Determination on 28 June 2022.
62 The Authority noted that the Committee made the following findings concerning the review period between 1 May 2017 and 30 April 2018 in connection with the itemised services:
The Report contains a finding that Dr Li engaged in inappropriate practice in connection with the services referred to below (the Services):
(a) 90% of the MBS item 23 services,
(b) 100% of the MBS item 36 services,
(c) 100% of the MBS item 18234 services,
(d) 33% of the MBS item 18236 services,
(e) 100% of the MBS item 30192 services,
(f) 100% of the MBS item 30195 services,
(g) 100% of the MBS item 30203 services,
(h) 100% of the MBS item 45202 services, and
(i) 10 MBS item 45563 services
rendered by Dr Li in the review period
(Emphasis in original).
63 The Authority directed that:
(a) The Director of Professional Services Review (the Director), or the Director’s nominee, reprimand Dr Li (paragraph 106U(1)(a) of the Act), and
(b) The Director, or the Director’s nominee counsel Dr Li (paragraph 106U(1)(b) of the Act, and
(c) Dr Li repay the amount of $433,488.52. This reflects the total benefits paid for the MBS item 23, 36, 18234, 18236, 30192, 30195, 30203, 45202 and 45563 services in connection with which he was found to have engaged in inappropriate practice (subparagraph 106U(1)(cb) of the Act), and
(d) Dr Li be fully disqualified from rendering MBS item services for a period of 18 months, commencing when the determination takes effect (subparagraphs 106U(1)(h) and 106U(3)(b) of the Act).
64 Under the heading “Material relied upon”, the Authority identified:
Material relied upon
Committee report
8 In making its final determination, the Determining Authority has relied on the Report of the Committee dated 9 September 2021 and attached appendices to that report.
Other documentation
9 The Determining Authority has had regard to:
(a) The letter from the Director dated 19 November 2021, providing additional information under section 106S of the Act.
(b) The submissions from Mr Douglas McClelland, Platinum Lawyers, dated 1 March 2022, provided on behalf of Dr Li, along with the various attachments provided with those submissions.
(c) The letter from Mr McClelland dated 4 March 2022, providing a copy of a letter from Dr Roland Nguyen, Dermatologist, Dr Li’s Level C supervisor pursuant to the orders of the Medical Council of New South Wales.
(d) The further letter from Mr McClelland dated 9 March 2022, advising that reports with the Medical Council could not be released due to confidentiality.
(e) The further submissions from Mr McClelland dated 3 March 2022 [dated incorrectly, the correct date was 16 May 2022], provided on behalf of Dr Li in response to the draft determination.
65 The Final Determination thereafter comprised:
(a) a summary of the Committee’s findings in its report regarding the MBS item services (at FD[11]–[28]);
(b) its reasons for the Final Determination that there was a “serious degree” of inappropriate practice (at FD[29]–[40]);
(c) a reference to the key objective of the PSR Scheme as contained in s 79A of the Act (at FD[41]–[42]);
(d) its consideration of the applicant’s submissions to the Authority (at FD[43]–[79]); and
(e) the directions it made as to reprimand (at FD[80]), counselling (at FD[81]), repayment (at FD[82]) and disqualification (at FD[83]).
Application for judicial review
Grounds of Review
66 The applicant pleaded two grounds of review, which were as follows (excluding particulars):
1. When making the repayment decision and the disqualification decision, the First Respondent took into account an irrelevant consideration, being the statements of concerns which the Director of Professional Services Review provided to the Australian Health Practitioner Regulation Agency (AHPRA) and, or alternatively, misdirected itself as to its statutory task, and misunderstood the nature and extent of its powers, when it stated in its Final Determination that it was required to take the information in the statements of concerns into account.
…
2. When making the repayment decision, the First Respondent misdirected itself as to its statutory task and misunderstood the nature and extent of its powers and, or alternatively, fettered its own discretion, by starting from the position that it should impose a direction requiring the Applicant to make full repayment of the total benefits paid for the MBS items 23, 36, 18234, 18236, 30192, 30195, 30203, 45202 and 45563 services in connection with which he was found to have engaged in inappropriate practice, then asking itself whether the Applicant had by his conduct or submissions justified a “reduction in the amount repayable.”
(Emphasis in original).
67 Based on these grounds of review, the applicant seeks declaratory and injunctive relief including orders that the repayment and disqualification decisions be declared void, quashed or set aside, declared invalid, or, pursuant to s 15(1) of the ADJR Act, that the repayment and disqualification decisions be suspended.
Ground 1
68 The applicant submitted that the Authority took into account an irrelevant consideration (see ss 5(1)(e); 5(2)(a) of the ADJR Act), or otherwise misdirected itself or misunderstood its statutory task, when making the repayment and disqualification directions, by taking into account the:
(a) Director’s statements of concerns, dated 3 October 2019, purportedly under s 106S of the Act, referred to at [29]–[31] above; and
(b) Committee’s statement of concerns dated 2 March 2021 referred to at [38]–[41] above.
69 To successfully impugn the Authority’s decision on the basis that it took into account an irrelevant consideration, the applicant must prove (i) that the Authority took into account, in fact, each of the Director’s and the Committee’s statements of concern; (ii) that those considerations were irrelevant considerations in that by taking them into account for a particular use or purpose, it was impermissible under the applicable statutory provisions; and (iii) that those applicable statutory provisions have the effect that taking the statements of concern into account will result in invalidity: Love v Victoria [2009] VSC 215 at [191]; see also Duffy v Da Rin [2014] NSWCA 270; 87 NSWLR 495 at [53].
70 However, relevantly, it is noted that the applicant’s grounds of review are more expansive and include a purported misdirection from or misunderstanding of its statutory task. The bases for both grounds were intertwined and will be dealt with together.
71 It is clear that the Authority “had regard to” the Director’s and the Committee’s statements of concerns made pursuant to ss 106XA and 106XB of the Act. At FD[9], identifying the material relied upon, the Authority refers to having “regard to”, inter alia, the letter from the Director dated 19 November 2021 providing additional information under s 106S of the Act. The letter, extracted in full at [49] above, included the following statements and attachments:
• I sent a written statement of concerns about Dr Li to the Australian Health Practitioners Regulation Agency (AHPRA) under sections 106XA and 106XB of the Act on 3 October 2019 during my review of Dr Li’s provision of services. A copy of this AHPRA referral is enclosed.
• I sent a written statement of concerns about Dr Li, which I received from the Committee, to AHPRA under sections 106XA and 106XB of the Act on 3 March 2021. A copy of this AHPRA referral is enclosed.
72 The Authority also notes at FD[8] that it relied on the Committee’s Final Report (which annexed the Committee’s statement of concerns).
73 The Authority, thereafter, only refers to the fact of these statements of concern, in response to the applicant’s submission about them at FD[56]–[57]. The applicant relies on FD[57]. It is worthwhile noting that this paragraph appears in the part of the Final Determination which addresses the applicant’s submissions, and with respect to a specific submission made by the applicant which is extracted at [60] above. For completeness, the preceding paragraph of the Final Determination is also relevant, and both paragraphs are extracted as follows:
56. More generally, Dr Li submits that the Determining Authority may have inadvertently taken into account the Director’s and the Committee’s statements of concerns about significant threats to the life or health of Dr Li’s patients and a failure to comply with professional standards, under sections 106XA and 106XB of the Act. Dr Li refers to section 106UAA of the Act, which makes clear that the Determining Authority must not take into account any statements of concerns the Determining Authority might prepare under those provisions.
57. The Determining Authority has not prepared any such statement of concerns in relation to Dr Li. Accordingly, section 106UAA does not apply. The Determining Authority also notes that in arriving at its findings of inappropriate practice, the Committee expressly disregarded the opinion which formed the basis of its statement of concerns, as it was required to do under section 106M of the Act. Equally, the Director notified the Determining Authority of the statements of concerns she provided to the Australian Health Practitioners Regulation Agency, under section 106S of the Act. The Determining Authority is required to take that information into account.
(Emphasis added).
74 The gravamen of the applicant’s submission regarding why, by operation of the legislative scheme, if the Authority did take into account the statements of concerns they constituted “irrelevant considerations”, was by reason of the preclusions that apply under ss 93(1), (8), (9), 106M(3) and 106UAA of the Act. These preclusions were said to reveal why the Authority was not able, purportedly under s 106S, to take them into account.
75 The applicant contends that the effect of the final sentence in FD[57] is that the Authority did take into account the Director’s and the Committee’s statements of concerns which, rather than being entitled to under s 106S, was prohibited because it may be inferred from the subject-matter, scope and purpose of the Act that there is an implied limitation on the factors to which the Authority may lawfully have regard to when imposing directions pursuant to ss 106TA(1) and 106U(1) of the Act: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; 162 CLR 24 at 40.
76 Sections 93(9), 106M(3) and 106UAA provide that the Director, Committee and Authority respectively are to disregard, for the purpose of them undertaking certain statutory tasks, opinions they have formed in statements of concern that the person under review caused a significant threat to the life or health of a person or failed to comply with professional standards when exercising their respective functions. The relevant provisions are extracted as follows:
(1) The Director may, by writing, set up a Committee in accordance with Division 4, and make a referral to the Committee to investigate whether the person under review engaged in inappropriate practice in providing the services specified in the referral.
…
(8) If, in the course of the review that gave rise to the referral:
(a) the Director formed an opinion that any conduct by the person under review caused, was causing, or was likely to cause, a significant threat to the life or health of any person and sent a statement of his or her concerns to a person or body under section 106XA; or
(b) the Director formed an opinion that the person under review failed to comply with professional standards and sent a statement of his or her concerns to an appropriate body or bodies under section 106XB;
the referral must contain a statement that the Director formed that opinion and set out the terms of the statement sent to the person, body or bodies.
(9) The Director must disregard any opinion formed as mentioned in subsection (8) when making the referral.
…
106M Referral of matter to a regulatory body to be mentioned in Committee’s report
(1) This section applies if, in the course of its investigation, the Committee:
(a) formed an opinion that any conduct by the person under review caused, was causing, or was likely to cause, a significant threat to the life or health of any other person and sent a statement of its concerns to the Director under section 106XA; or
(b) formed an opinion that the person under review failed to comply with professional standards and sent a statement of its concerns to the Director under section 106XB.
(2) The Committee must mention that it has formed the opinion, and set out the terms of the statement, referred to in paragraph (1)(a) or (b):
(a) if the statement was sent before the Committee prepared its draft report—in the draft report; and
(b) in the final report.
(3) The Committee must disregard any opinion formed as mentioned in subsection (1) when making findings for the purposes of its draft report or final report.
…
106UAA Referral of matter by Determining Authority to a regulatory body not to be taken into account by the Authority in making draft or final determinations
If the Determining Authority, in the course of considering a report by a Committee:
(a) formed an opinion that any conduct by the person under review caused, was causing, or was likely to cause, a significant threat to the life or health of any other person and sent a statement of its concerns to the Director under section 106XA; or
(b) formed an opinion that the person under review failed to comply with professional standards and sent a statement of its concerns to the Director under section 106XB;
the Authority must disregard those matters when making its draft determination or final determination.
(Emphasis added.)
77 The applicant submits that those “concerns” are matters which are to be referred by the Director, Committee or Authority to State and Territory regulatory bodies for their consideration such that it is “implicit” from these provisions that the legislature intended that the Authority is not to have regard to an opinion expressed in a Director’s or Committee’s statement of concerns made under ss 106XA or 106XB, when making its determinations.
78 It follows, according to the applicant, that on its proper construction, s 106S of the Act does not authorise the Director to provide a statement of concerns to the Authority. Further, those statements are not something which is “relevant” to the Authority making its draft or final determination (having regard to ss 93(9), 106M(3) and 106UAA) and its directions pursuant to s 106U.
79 The applicant contends that in its Final Determination, the Authority rejected the applicant’s submission that it was not permitted to take into account the statements of concern by it saying it was “required to take that information into account”: FD[57]. Those statements of concern, on the applicant’s submission, were highly prejudicial, akin to taking into account a charge as opposed to a conviction and, whilst the Authority did not explain the effect of taking into account those statements, it did so “expressly” such that when “examining an open-textured discretion” it may be inferred that the prejudicial matters were taken into account such that the error was material because it deprived the applicant of a realistic possibility of a different outcome.
80 At hearing, the applicant expanded on this submission, with the aid of the reasoning in Adams v Yung [1998] FCA 506; 83 FCR 248 at 298, submitting that by reason of the Authority taking those statements into account, it was taking into account the applicant’s conduct “at large” rather than the confined conduct required under the Act.
81 For the following reasons, I reject the applicant’s submission that the statements of concern constituted an “irrelevant consideration” or that the Authority misdirected itself or misunderstood its task when making the Final Determination.
82 To make out the “irrelevant consideration” ground of review, the impugned consideration is ordinarily described as needing to be forbidden or prohibited with reference to the canonical principle elucidated by Mason J in Peko-Wallsend at 39–40. However, this statement of principle needs to be understood with a degree of flexibility, which Mason J had recognised later in his Honour’s reasoning, at 41 (see Duffy at [52]), about which Basten JA opined expansively in Duffy at [53]:
This analysis was incomplete in that it did not address the weight given to permissible considerations and any possible flexibility with respect to impermissible considerations. The significance of these omissions is that “considerations” have different qualities which are not recognised by a simple classification as permissible, mandatory or prohibited. To identify a lion and a deer as wild animals and place them together in a zoo is unlikely to provide a satisfactory outcome (at least for the deer). Two considerations may each be relevant, but may pull in opposite directions. A particular consideration may be relevant to one aspect of the reasoning process, but not to other aspects. For example, in sentencing an offender a prior criminal record is relevant, but may only be used to diminish a plea for leniency, not to increase an otherwise appropriate sentence for the particular offence. Thus a consideration which is relevant for a specific purpose or in respect of a particular issue only may be impermissibly used for a different purpose or with respect to another issue. Such misuse could constitute an error of law.
83 In Duffy, the Court of Appeal ultimately found that the relevant Tribunal had erred in its conclusion as to Mr Duffy’s place of living by determining whether the connections with one town outweighed the connections with the other town, or were so substantial so as to prevent the other town constituting a place of living. Justice Basten stated, at [57], that this finding by the Tribunal “was not the exercise required by the statute. The use to which the factors, while not irrelevant for all purposes, were put by the Tribunal indicates that it misdirected itself as to the precise question it was required to determine”.
84 The alleged “prohibition” in the present case is said to arise, by implication, from a consideration of certain parts of the legislative scheme. As to the first basis for such an implication, being by reason of the restrictions imposed by ss 93(9), 106M(3) and 106UAA of the Act, a consideration of the statutory scheme and its history reveals the following, as submitted by the applicant:
15. When Part VAA was introduced into the Act in 1994, a committee was required to make a referral to a State or Territory regulatory authority, providing a statement of its concerns, if it considered that “material before it indicates that action should be taken against the person under review in order to lessen a serious and imminent threat to the life or health of any person” (Act, s 106P(1) (as it then stood)). However, this did not affect the Committee’s consideration of the referral (Act, s 106P(2)).
16. The professional services review scheme was reviewed in 1999 and it was recommended by a review committee that the Director, a committee and what was then the Determining Panel all be given a power to make referrals to regulatory bodies. The Health Insurance Amendment (Professional Services Review) Act 1999 (Cth) introduced new provisions expanding on the existing referral powers. It was specified, however, in the amended provisions, that the Director (s 93(9)), a committee (s 106M(3)) and the Determining Authority (s 106UAA) were “to disregard” any opinion each formed for the purposes of making a statement of concerns to be sent to a regulatory body.
17. Following the 1999 amendments, Part VAA of the Act provides for the Director, a committee and the Determining Authority to make a statement of concern to be sent to regulators if the decision-maker forms the opinion that the conduct by a person has caused a significant threat to the life or health of any other person (s 106XA) or that a practitioner has failed to comply with professional standards (s 106XB).
(Footnotes omitted.)
85 The applicant referred in his submissions to Recommendation 32 of the Report of the Review Committee to the Professional Services Review Scheme – March 1999. That report, at pp. 32–33, described why there was an expansion in the circumstances by which, at “any stage of the process”, there could be a referral to a State or Territory body as follows:
PSRCs [Committees] have identified various professional issues in relation to clinical competence and performance; aberrant professional behaviour or beliefs; lack of meaningful continuing medical education; physical or mental impairment; and substance abuse. Organisational issues that can affect patient safety, such as equipment and staffing deficiencies, are also sometimes evident.
These issues are relevant for professional practice but, in light of the Federal Court’s decision in Adams v Yung, are not necessarily relevant to the issue of inappropriate practice relating to the provision of services that attract a Medicare benefit.
Currently PSRCs must refer concerns about possible serious threats to the life or health of persons to State/Territory registration bodies. Matters relating to a practitioner’s compliance with professional standards (for example, compliance with conditions for vocational registration) can only be referred by the DO [Determining Officer] to other bodies such as a General Practice Recognition Eligibility Committee and a Specialist Recognition Advisory Committee.
The Review recommends that with the creation of a consolidated PSR Agency, the legislation be amended so that the DPSR [Director], PSRCs and the DP [Determining Panel] can, at any stage of the process, refer concerns relating to significant threats to the life or health of persons to State/Territory registration bodies, and refer matters relating to the practitioner’s compliance with professional standards to relevant bodies.
86 In his further written submissions, the applicant contended that:
The legislature introduced the injunction to each Part VAA decision-maker that he, she or it “must disregard any opinion formed” in making a statement of concerns in the 1999 Amending Act (in the new ss 93(9), 106M(3) and 106UAA). It may be inferred that it did so in light of Adams v Yung so as to help ensure that the Part VAA decision-makers did not take into account irrelevant material, or deny a practitioner natural justice.
87 The applicant correctly identified the confines of what constitutes “inappropriate practice” for the purposes of the Act, which by contrast does not include “professional issues” of the kind identified in the Report: They are the remit of the appropriate State or Territory body and as recognised under the National Law.
88 The chronology of events revealed above that there is likely to be an interplay between the parallel regimes in operation (with different powers and responsibilities) at a State or Territory and a Federal level. The Act contemplates and facilitates the same. There is a delineation between the kinds of professional matters that are dealt with under this Act and under the State and Territory regimes as is clear from the legislative history referred to above, the extrinsic material and the terms of the Act. The Act makes clear, as submitted by the applicant, that it is concerned with “inappropriate practice”, defined in s 82, which arises from the practitioner’s conduct “in connection with rendering or initiating services” which are defined in s 81 of the Act, as follows:
service means:
(a) a service that has been rendered if, at the time it was rendered, medicare benefit or dental benefit was payable in respect of the service; or
(ab) a service that has been initiated (whether or not it has been or will be rendered) if, at the time it was initiated, medicare benefit would have been payable in respect of the service had it been rendered at that time; or
(b) a service rendered by way of a prescribing or dispensing of a pharmaceutical benefit by a medical practitioner, a dental practitioner, an optometrist, a midwife or a nurse practitioner; or
(c) a service that:
(i) has been rendered in connection with the provision of treatment under a relevant DVA law; and
(ii) is of a kind that, if the service had not been rendered in connection with the provision of treatment under the relevant DVA law, medicare benefit or dental benefit would have been payable in respect of the service.
Note 1: See Part II, and in particular section 10, for when a medicare benefit is payable.
Note 2: See the Dental Benefits Act 2008 for when a dental benefit is payable.
(Emphasis in original.)
89 Necessarily, by these definitions, together with its stated object under s 79A (extracted above at [9]) the scope of this Act is to deal with “inappropriate practice” and is confined.
90 However, the Act contemplates and makes specific provision for the referral of “professional issues” to other regulatory bodies under Division 5A of Part VAA (the relevant provisions are extracted at [76] above). In order to facilitate the same, the Authority or Committee is required, pursuant to s 106XA, “in the course of the performance of functions or the exercise of powers under this Part”, to give the Director a written statement of its concerns which leads to a referral, if it forms the view that any of the conduct by the person under review caused, or was likely to cause, a significant threat to the life or health of any other person. Similarly, the Authority or Committee is required to give to the Director a written statement of its concerns regarding its opinion that the practitioner has failed to comply with professional standards: s 106XB. The Director is then required, by reason of “receiving” statements in either circumstance, to send the statement and material to a State or Territory body that is responsible for the administration of health services or the protection of public health and safety, as well as any other “appropriate person or body: ss 106XA(2), 106XB(2).
91 Similarly if the Director forms his or her own opinion of a similar kind, he or she must: (a) prepare a written statement of his or her concerns; and (b) attach to the statement the material or copies of the material on which his or her opinion is based; and (c) send the statement and material to the State or Territory body that is responsible for the administration of health services or the protection of public health and safety, as well as any other “appropriate person or body”: ss 106XA(3), 106XB(2).
92 If the Authority, in the course of considering a report by the Committee, forms its own opinion that any of the conduct falls within the criteria under s 106UAA(1)(a) (significant threat to life or health) or under s 106UAA(1)(b) (failure to comply with professional standards), it must disregard those matters when making its draft or final determination (extracted at [20] above).
93 Such statements of concerns (precipitating a prompt for the Director) and the Director’s referrals can be made at any time. The fact of these referrals then may precipitate a course of events, under the National Law, as occurred in the case of the applicant, leading to disciplinary proceedings and measures of the kind that occurred in this case, such as a hearing related to an inquiry or an appeal under s 150 of the National Law (see s 11 of Sch 5D of the National Law), conditional registration and supervision.
94 What is clear here is that the Authority did not prepare any such statement of concerns itself (as required under s 106UAA if those concerns had arisen): The Authority states that it “has not” done so explicitly at FD[57]. Given that it is compelled by the mandatory statutory command of ss 106XA(1) and 106XB(1) to provide a “written statement of its concerns” if it held those views, there was no submission made to the effect that the Authority held those views when making its draft or final determination.
95 What the Authority was aware of, which it identified at FD[57], was: (a) the Committee having previously held those views and disregarding them, as it identified; and (b) that the Director had notified AHPRA of her concerns as required under s 106XA(3): AHPRA being an “appropriate person or body” for the purpose of s 106XA(4): reg 10(2)(c) of the Health Insurance (Professional Services Review Scheme) Regulations 2019 (Cth).
96 Given this distinction, there was no suggestion that the Authority had its own present concerns (for which it was excluded from taking into account when making its determination). What, then, must be made of the fact that it was aware of the Committee and Director having those concerns in the past? There is a clear distinction between the two. Whilst, on one view, the Authority being aware of these past concerns might be prejudicial to an applicant, the fact that the Authority does not hold that view itself now is particularly relevant.
97 Importantly, as submitted by the Commonwealth, it must be remembered that the Authority was necessarily, by statutory command, aware of the fact of both the Director’s and the Committee’s statements of concerns, by operation of ss 106L(3) and 106M, regardless of being provided with them by the Director under a s 106S Notice.
98 Sections 106L(3) and (5) provides:
106L Final report of Committee
…
(3) Unless subsection (5) applies, the Committee must:
(a) give copies of the final report to the person under review and the Director; and
(b) give the final report to the Determining Authority not earlier than 1 month after the day on which a copy of the report is given to the person under review.
…
(5) If the final report does not contain a finding by all, or a majority, of the Committee members that the person under review engaged in inappropriate practice in the provision of some or all of the referred services:
(a) the Committee must give copies of the report to:
(i) the person under review; and
(ii) the Director; and
(iii) the Chief Executive Medicare; and
(b) the copies must include, or be accompanied by, a written notice stating that:
(i) the report does not contain a finding by all, or a majority, of the Committee members that the person under review engaged in inappropriate practice; and
(ii) no further action will be taken as a result of the report.
99 Accordingly, by operation of s 106L(3) the Committee was required to provide a copy of its Final Report to the Authority and by operation of s 106M(2)(b), the Committee was required in its Final Report to state whether it had formed the relevant opinion precipitating a statement of concerns and set out the terms of the statement of concerns. It is uncontroversial that in this case, consistent with the requirements of the Act, the Committee included both its written statement to the Director (as required under ss 106XA and 106XB) and also its statement of concerns (at Appendix 10 of the Final Report).
100 The Committee’s Final Report includes reference to the Director’s referral to the Committee on 31 October 2019 where the Committee was asked to investigate whether the applicant had engaged in inappropriate practice. The Director’s referral included, as required under s 93(8), the statement of concerns that the Director had formed regarding significant threat to life or health (s 93(8)(a)) and failure to comply with professional standards (s 93(8)(b)). Whilst the Committee did not attach the Director’s referral (and the Director’s statement of concerns) to its report, the Committee specifically referred, at [85] in its Final Report, to the fact of the Director having included in her referral to AHPRA, her statement of concerns under ss 106XA and 106XB, having been raised by the applicant in his submission to the Committee. Paragraph [85] of the Final Report was as follows:
The written submissions concluded by suggesting that the release of the Committee’s report to the Determining Authority would be resisted because “PSR is estopped from imposing a further penalty on this person under review”. This was said to be based on the fact of the Director’s referral of a statement of concerns concerning Dr Li to the Australian Health Practitioner’s Regulation Agency (AHPRA) under section 106XA and 106XB of the Act dated 3 October 2019. This was also provided to the Committee as Appendix 1 to the Director’s report to the Committee attached to the Referral.” The submissions advise that as a consequence of this referral under sections 106XA and 106XB, action was taken as a result of the “AHPRA enquiry [sic]” to impose conditions on Dr Li’s registration based on a finding that his performance was unsatisfactory.
(Footnotes omitted).
101 Sections 106L(3) and 106M(2)(b) reveal that it was ordinary and envisaged, that each of the relevant actors – the Director, Committee and the Authority – be appraised of the fact of the other holding those concerns.
102 Furthermore, the legislation’s permissive provisions by which each actor has knowledge of the fact of the Committee and Director previously holding these views is consistent with the legislation’s protective objects (s 79A), its referral powers as between the Director, the Committee and the Authority (ss 80(4), 80(10), 93, 106L), and then the referral powers from the Director to the State and Territory bodies (ss 106XA, 106XB) and what the Authority is required to consider for the purpose of making directions under s 106U. The scheme facilitates the funnelling of information such that the Authority understands what precipitated the other professional disciplinary processes (outside its remit).
103 Consistent with the same, they were the very matters the applicant wanted the Authority to be appraised of. On one view, the fact that the Authority was aware of AHPRA being notified, is something that may assist the applicant rather than be prejudicial to him. It is consistent with the applicant’s submission that he has been the subject of review and protective measures by other health regulatory bodies such that there is not the need for the Authority to impose its own regime. This was clear from the content of the applicant’s own submissions both before the Committee (see [84]–[87] of the Committee’s Final Report) and those to the Authority. Paragraph [87] of the Committee’s Final Report was as follows:
Action resulting from a review by another regulatory body under a different statutory regime is no impediment to investigation and action being taken by the Committee under the Act even where the genesis of the AHPRA review was a referral by the Director in respect of similar broad subject matter. The legislation under which the AHPRA review was conducted involves different protective objectives, methods, powers and focus to those under the Act. It is difficult to see how these circumstances might be suggested to operate as an estoppel or bar based on the legal concept of double jeopardy, which commonly understood as “prosecution twice for the same offence,” for the reasons outlined and where the action by Medicare to refer Dr Li to PSR occurred before the Director’s referral to AHPRA.
(Footnotes omitted).
104 Notably, the applicant provided the Director’s statement of concerns as part of the documents annexed to his first submissions. It appears entirely understandable, in the context of his submission, that it was the first Annexure to his submission because it is the first chronological step that precipitated the State-based professional services review, for which he claimed he should not be “sanctioned twice” (detailed at [122] of his 1 March 2022 submissions and where he refers to it at [124]–[125]):
124. The complaint by the Director of the PSR dated 3 October 2019 appears as Annexure A to these submissions.
125. Dr Li unaware of the action taken by the Director of the PSR in lodging the complaint to AHPRA provided submissions as a consequence of the interview with the Director conducted on 21 August 2019. Dr Li’s response dated 23 October 2019 appears as Annexure B.
(Emphasis in original.)
105 The applicant did not say in his first submission to the Authority, contrary to his submission later and in this Court, that the Director’s and the Committee’s statement of concerns should not have been before the Authority and was only referred to in his submission to the Authority because of the fact that the Authority’s invitation for submissions referred to the documents provided under s 106S which included the “statement of concerns”. As referred to above at [103], the applicant had already raised the fact of the concurrent processes including the Director’s referral to the Committee (and the existence of the Director’s statement of concerns) in his submissions to the Committee (which was before the Authority).
106 It is clear from the content of the applicant’s submissions that the Authority’s consideration of the applicant’s parallel disciplinary procedural history appear to be accepted by the applicant, as being relevant considerations for the purposes of the Authority’s determination. By extension, it appears ordinary, and consistent with the legislative scheme, that the Authority would be appraised of the steps taken by the Director and Committee which led to those processes. They complete the picture.
107 To the extent that the applicant submitted that by taking into account the statements of concerns the Authority was in effect considering the applicant’s conduct “at large” beyond that which fell within the Act’s confines of “inappropriate practice” (as described at [88] above) with reference to the reasoning in Adams v Yung, I do not accept that submission. The circumstances in Adams v Yung were very different. In that case, the error of law comprised the Committee’s failure to afford procedural fairness to Dr Yung by taking into account issues with Dr Yung’s practice which were not raised in the referral to the Committee (see at 291) and accordingly Dr Yung was not given an opportunity to address those other issues. Justices Burchett and Hill found that the Committee had “failed to confine itself to the very reference which was before it” and by not undertaking proper sampling of Dr Yung’s services, it “also failed to consider the issue in that reference which related to conduct in respect of the referred services by only considering the one day which it did”: at 298. By contrast, in the present case, the applicant himself provided the Authority with the Director’s statement of concerns in his 1 March 2022 submissions and then addressed, in his 16 May 2022 submissions, his concerns with the provision of the statements of concerns to the Authority.
108 Furthermore, it appears clear from the Authority’s reasoning and the manner in which the statements were provided (as contained in the context of the Director’s letter containing the documents for the purpose of s 106S) that the Authority was considering the fact of the statements of concern rather than taking into account possible conduct “at large” beyond its remit.
109 Similarly, the applicant’s contention is not persuasive when one considers that there may be, as there was here, an overlap between the “inappropriate practice” as found under this Act and the “conduct” which the Council had dealt with. Indeed, the applicant submitted, at [129] of his 1 March 2022 submissions, that those medical professionals who conducted the hearing on 4 February 2020, “could be classed as ‘a general body of general practitioners’ [for] the purposes of the health insurance act”: No doubt a reference to the applicable test for “inappropriate practice” under s 82(1) of the Act. The applicant went on to then refer, in detail, to the conditions which were imposed on him as part of the Council’s process, as extracted:
The Medical Professionals at the hearing could be classed as “a general body of general practitioners” [sic] the purposes of the health insurance act. Conditions were imposed on Dr Li’s registration as from 10 February 2020 and continuing which included:
a. Level C supervision of practice;
i. Reports to the Medical Council on a monthly basis;
ii. The supervisor must be a GP having obtained a full fellowship of the skin Cancer College of Australasia, Master of medicine (Skin Cancer) or a specialist dermatologist;
iii. The supervisor must be independent and not have any business or financial relationship with Dr Li;
b. At each supervision meeting the practitioner is to review and discuss Dr Li’s practice with focus on:
i. Communication with patients – clinical assessment and management;
ii. Medical records feedback in relation to any second opinion or procedures performed during the month;
iii. It is highlighted in the decision which imposes the conditions;
iv. Authorise the medical Council of New South Wales to provide proposed and approved supervisors with a copy of the decision including any conditions.
c. With any proposed skin graft or flap procedure the practitioner is to obtain a second opinion from the Medical Council Supervisor which supports the procedure. (This may be either written or if oral to be filed in the patient’s record) Dr Li must within seven days from the end of each calendar month provide the Medical Council of New South Wales with a record of all patients for which Dr Li obtained a second opinion. The log to include:
1. Name date of birth of the patient
2. Name and nature of the surgical procedures proposed or performed
3. The full name and signature of the Council approve supervisor who provided the second opinion
4. A copy of the second opinion
5. Dr Li to provide the second opinion log to the supervisor to be reviewed and discussed before submitting the log to the medical Council
6. Authorise Medical Council of New South Wales to contact the supervisor to verify the second opinion
d. Within seven days from the end of each month Dr Li is to provide the medical Council with a log of all surgical procedures undertaken in the previous month which includes the conditions outlined above
110 The applicant’s inclusion of this information was to support his submission as to why there was no need for the Authority to impose its own form of directions of those contained in s 106U.
111 The applicant, again, impressed upon the Authority that there was a significant overlap between the two regimes when he described the consequences that the “[State] PSR investigations” had on “his practice methods and processes with respect to MBS item billing” (at [141]–[149] of 1 March 2022 submissions).
112 I do not accept the applicant’s submission that he only referred to the fact of what was occurring at the other regulatory levels because of the fact that the Authority was aware of it. The central gravamen of his submission was that there was no need for the Authority to enter the fray because of what was happening at a State level, including his ongoing supervision and further training. Even if this were not the case, it makes no difference to the Court’s consideration of how the legislative scheme worked.
113 The issue is what was the “purpose” or “use” of the statement of concerns. It appears, in the context of the legislative scheme, and as elucidated in the Authority’s reasons of its Final Determination, that their provision was for the purpose of and their use to complete the regulatory history. It may be that if it were established that it were provided for another “purpose” or “use” it may be impermissible, if it were contrary to other specific statutory commands under the Act. However, this was not the case here.
114 There is nothing in the terms, nor by implication, of those provisions, which leads to a reading down (as required on the applicant’s submission) of the terms of s 106S.
115 Section 106S provides:
106S Director may give Determining Authority information
(1) The Director may give the Determining Authority any information that the Director considers is relevant to the Authority making its draft determination or final determination in accordance with section 106U.
(2) The Director may give information to the Determining Authority under subsection (1) on one occasion only.
(2A) The Director must not give information to the Determining Authority under subsection (1) after the Authority has made its draft determination in accordance with section 106U.
(3) If the Director gives the Determining Authority information under subsection (1) at a particular time, the Director must also give the information to the person under review at that time.
(4) The Determining Authority must consider the information in making its draft determination or final determination in accordance with section 106U.
116 Section 106S of the Act is cast in broad terms and contains no fetter of the kind identified in ss 93(9), 106M(3) and 106UAA. On a consideration of its terms, together with taking into account all those matters above, there is nothing to suggest the form of implied limitation nor prohibition for which the applicant contends. This is particularly so, given the legislation, by operation of ss 106L(3) and 106M ensured the Authority was aware of the Director’s and Committee’s statements of concern regardless of them being provided by the Director under a s 106S Notice.
117 Whilst unnecessary to aid any construction of the section, the drafting history of s 106S confirms why there should be no such implied limitation or prohibition in the circumstances. The Commonwealth noted that s 106S was repealed and substituted in 2002 and then amended in 2012. As a consequence of the 2002 amendment, the provision was as follows:
106S Director may give Determining Authority information
(1) The Director may give the Determining Authority any information that the Director considers is relevant to the Authority making its draft determination or final determination in accordance with section 106U.
(2) The information must be given no later than the day on which the Committee’s final report is given to the Determining Authority under subsection 106L(3).
(3) If the Director gives the Determining Authority information under subsection (1) at a particular time, the Director must also give the information to the person under review at that time.
(4) The Determining Authority must consider the information in making its draft determination or final determination in accordance with section 106U.
118 The Explanatory Memorandum to the Health Insurance Amendment (Professional Services Review and Other Matters) Bill 2002 (Cth) noted, that “[e]xamples of information which might be relevant are the nature and circumstances of any previous conduct of the person that has resulted in a criminal conviction or disciplinary action (by a registering or licensing body), responses to any counselling, ratification of a section 92 agreement, a final determination that has taken effect, and any particular needs of the locality in which the person under review practices” (emphasis added).
119 In 2012, s 106S(2) was repealed and replaced by a new s 106S(2) and s 106S(2A) which extended the time by which the Director could pass on information and required that the Director provide the information on “one occasion” only. The Explanatory Memorandum to the Health Insurance Amendment (Professional Services Review) Bill 2012 (Cth) stated that the amendments were “necessary” for the following reasons.
This amendment is necessary because there is no other provision under which the Director may pass information to the Determining Authority even though instances have arisen when the Director has acquired case-relevant information after the date upon which the Determining Authority had received the Professional Services Review Committee’s final report. In such instances, the Director was unable to pass the information to the Determining Authority.
The information the Director may provide to the Determining Authority may be to the advantage of the person under review, for example, if the practitioner has taken demonstrable steps to address the conduct under review in relation to the provision of services. However, the information provided may not be to the person’s advantage, for example, if it demonstrates that the person has persisted with conduct relevant to the review.
New subsections 106S(2) and 106S(2A) prevent the Director from giving information more than once and from giving information after the Authority has made its draft determination. These limitations ensure that the person under review has adequate opportunities to make submissions in relation to the information given, which affords natural justice to the person under review (refer to new section 106SA at item 36).
120 Again, it is clear from the 2012 Explanatory Memorandum that there will necessarily be information provided to the Authority regarding the practitioner’s conduct, during the review processes, including “demonstrable steps to address the conduct” which may be to the “advantage” of the person under review as well against them if they have “persisted with conduct relevant to the review”.
121 The fact that the Director can only provide the Authority with relevant information once is important. I accept the submission of the Commonwealth that the Director provided information about the applicant’s past involvement in the PSR process, which enlivened the scope for directions under s 106U(3)(a). In that context, it was relevant for the Authority to be aware of the broader regulatory activity with respect to the applicant. The Director, had provided under s 106S, an MBS item payment summary and the 2009 s 92 agreement (the full list extracted at [49] above). Notably, the fact of the statement of concerns having been made by both the Director and the Committee was already before the Authority, having been cited in the Committee’s Final Report (as it was required to under s 106M(2)(b) and s 106L(3)(b), as considered in more detail at [97] –[101] above).
122 Accordingly for the reasons identified above, I do not accept that the Authority engaged in error by taking into account the statements of concern. I do not accept that by doing so, it took into account an irrelevant consideration, misdirected itself or misunderstood its task when making the impugned directions.
123 Even if I am wrong, I also accept the Commonwealth’s submission that any such error was not material and that the applicant is required to prove materiality in this case for the following reasons.
124 Contrary to the submission of the applicant, grounds of review under s 5(1)(e) and (f) of the ADJR Act are both subject to an implied statutory test of materiality: Mohamed trading as Billan Family Day Care v Secretary, Department of Education, Skills & Employment (No 2) [2020] FCA 1749 at [38] (per O’Bryan J) citing Peko-Wallsend at 40 and Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 at 353–4. To the extent that the applicant sought to rely on recent Full Court consideration of whether the test of materiality applied to these provisions, in Darnell v Stonehealth Pty Ltd [2022] FCAFC 76, the Full Court referred to the jurisprudential lack of “resolution” as it arises with respect to s 5(1)(b) not ss 5(1)(e), (f) or (j) and ultimately did not resolve the issue: at [147]–[148].
125 The applicant conceded that the Authority did not explain whether the taking into account of the statements of concern had an effect upon the directions it made, only stating that it did take them into account (at FD[57]). However, the applicant submits that it can be inferred that as the Authority exercised an “open-textured discretion” in relation to the repayment and disqualification directions, “that prejudicial matters which are expressly taken into account affected or could have affected the discretion”. I do not accept this submission.
126 The applicant relied on Nathanson v Minister for Home Affairs [2022] HCA 26; 403 ALR 398 at [32], where the plurality stated that the Court had to be satisfied of the realistic possibility that a different decision could have been made had there been compliance with a particular condition. Accordingly, the applicant submitted that the Authority failed to comply with the statutory condition that it not take into account or have regard to a statement of concern.
127 As the Commonwealth submits, the Authority does not indicate what weight, if any, it placed on the statements of concern but rather focussed its reasoning upon the inappropriate practice found by the Committee. I accept this submission. The Final Determination is not to be read with an eye finely attuned to error (see Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; 185 CLR 259 at 272) and its reasons must be read as a whole. Paragraph [57] of the Final Determination needs to be read in its context, being part of the Authority’s discussion of and response to the applicant’s submissions, and in particular the applicant’s submission referred to, at FD[56], that the “Authority may have inadvertently taken into account the Director’s and the Committee’s statements of concern about significant threats to the life or health of [the applicant’s] patients and a failure to comply with professional standards, under sections 106XA and 106XB of the Act”.
128 The Authority’s reasons as to why it made the directions it did are extensive and include, inter alia, detailed consideration of: the Committee’s finding of “inappropriate practice” (at FD[29]–[40]), the key objectives of the PSR scheme as enshrined in s 79A (at FD[41]–[42]), the applicant’s own submissions as to the “separate performance management processes imposed by the Council, in response to a referral by the Director” (at FD[43]–[48]), how the Authority, whilst bound by the Committee’s findings, must determine for itself what the appropriate outcome is (at FD[49]–[50]), the nature of the “sanctions” not being “punitive” and addressing the applicant’s specific submissions as to its directions (at FD[51]–[55]), the potential disadvantage to be suffered by the applicant’s patients if the proposed directions were made (at FD[58]) and thereafter why it was appropriate to make the directions it did (at FD[60]–[79]).
129 In the circumstances, I do not accept the applicant’s contention that if the alleged error had not occurred, the absence of the knowledge of the Director’s and Committee’s statements of concerns could have realistically affected the result.
Ground 2 – Misdirection as to statutory task
130 The applicant submitted that the Authority misdirected itself as to its statutory task by starting from a position that it should make the repayment direction and then ask itself whether the applicant had justified a “reduction in the amount repayable” (at FD[67]). The applicant submits that this effectively placed an onus on the applicant to justify a different amount, which was not required by s 106U(1)(cb) and refers to FD[67] in this regard:
The Determining Authority is not satisfied that Dr Li has outlined sufficient mitigating factors, or shown substantial insight into the deficiencies identified with his practice, to warrant any reduction in the amount repayable.
…
131 The applicant contended that the Authority’s broad discretion as to directions it may impose under s 106U do not require it to make a repayment direction, but rather it is an “open-ended discretion” that does not warrant starting with a presumption that a person has to “repay everything”. Accordingly, the applicant argued that by “imposing a policy that a full repayment direction was to be imposed unless the applicant could justify a reduction, the Authority fettered its own discretion and misdirected itself.”
132 The applicant submitted that the proper approach was for the Authority to examine the whole of the circumstances, including all the matters raised in the applicant’s submissions, and then having considered all the circumstances, consider what might be an appropriate repayment direction, if any, and to determine what is appropriate for particular MBS item numbers, which it purportedly did not do.
133 The applicant further submitted that the Authority ought to have informed its decision as to whether to make a repayment direction by reference to the Committee’s different reasoning for each MBS item for which inappropriate practice had been found and the applicant’s submissions to the Authority (which related to the specific circumstances of each MBS item for which inappropriate practice had been found). Rather, the applicant submitted that the Authority misdirected itself by asking whether the amount repayable should be reduced from the full amount of the Medicare benefits paid for items in respect of which inappropriate practice had been found, notwithstanding that no amount was repayable (and accordingly no amount could be “reduced”) until the Authority made a repayment direction.
134 The applicant, at hearing, referred to Norouzi v The Director of the Professional Services Review Agency [2020] FCA 1524, a case where Logan J found that the Authority had not recognised that it was open to it to make a partial repayment direction (see pleadings of that case at [85]). The applicant referred to Norouzi at [103], where Logan J found:
As to a requirement for repayment, there is no “one size fits all” sequel in the subsequent decision by a Determining Authority. That decision must, inherently, be specific to the particular findings of the committee. And by express provision in s 106U(1)(cb) of the HIA, that necessarily includes the contingency of requiring part payment on the basis of those findings. In this case, and with all due respect, the Determining Authority has conspicuously failed to appreciate this in circumstances where it was expressly asked to address that subject.
135 Justice Logan further observed as to the purpose of s 106U(1)(cb) at [104]:
The repayment obligation which can be required pursuant to s 106U(1)(cb) of the HIA is responsive to the object of protecting the revenue of the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice. It is not penal. That part payment is a contingency surely recognises that the result of inappropriate practice as found by a committee in some cases may require something less than repayment of the whole in order to protect the revenue of the Commonwealth. The object is certainly not enrichment of the Commonwealth in a manner inconsistent with the findings of a committee. In contrast, a decision under s 106U(1)(a) to impose a reprimand is obviously penal. In truth, s 106U provides for some penal and some protective decisions by a Determining Authority.
136 The applicant submitted that “in this case the Determining Authority has recognised that it can require part payment, but its error has been in only partially departing from the position it took in Norouzi by still starting from the basis that full repayment is required and then effectively requiring the applicant to justify why that’s not so” (emphasis added).
137 First, contrary to the submission of the applicant, the Authority did not start from the presumption that the applicant had to “repay everything”. It is clear from the Authority’s reasons, consistent with what the applicant contends it should do, that it understood it had an “open-ended discretion”. This is clear from the Authority’s reasoning: At FD[62], the Authority notes:
The Determining Authority notes that in exercising its discretion under section 106U of the Act, it may direct that all, or part, or none of the amounts paid for services found to constitute inappropriate practice be repaid.
138 The Authority then considered the applicant’s differing positions over time as to what he submitted would comprise the “appropriate” repayment amount, at FD[63], as follows:
In his original submissions, Dr Li submitted that it would be appropriate that he be directed to repay $49,443 relating to services found to constitute inappropriate practice. In his further submissions, Dr Li submits that it would be appropriate that he be directed to repay $320,000. The Determining Authority appreciates that this represents a substantial change in Dr Li’s position, following his consideration of the draft determination.
139 The Authority then responded to these differing positions and stated, at FD[64], that it was:
[U]ltimately not persuaded that it would be appropriate in the circumstances to seek repayment of something less than of the full costs incurred by the Commonwealth in connection with services found to constitute inappropriate practice.
140 The Authority’s reasons identify the basis for why it considered, despite acknowledging its discretion to direct all, or part, or none, of the amounts paid for services (at FD[62]), that full repayment should occur.
141 Secondly, the Authority provided, in clear terms, the basis for its view that inappropriate practice had occurred in the provision of all the services: This is clear from the Authority’s reasoning at FD[65]–[66], extracted as follows:
65. For the reasons outlined above, the Determining Authority is satisfied that the Committee’s findings reflect a serious degree of inappropriate practice. The Determining Authority acknowledges that Dr Li provided the services examined by Committee during the Review Period, but the Committee’s Report highlights that the services did not meet the relevant MBS requirements, for a number of different reasons. The Committee found that Dr Li’s record-keeping was universally inadequate, in the sense that in every case where findings of inappropriate practice were made, Dr Li’s record-keeping was unsatisfactory. However, contrary to Dr Li’s submissions, the Committee’s findings go well beyond his poor record-keeping.
66. The Committee often found that there was no clinical indication for many of the services performed and they did not meet relevant MBS requirements. As noted above, the Determining Authority is particularly concerned about the extremely high proportion of MBS item 23 and 36 services found to constitute inappropriate practice. On occasion, the Committee found that Dr Li’s clinical input into services was also inadequate.
142 Thirdly, to the extent that the Authority refers at FD[67] to not being “satisfied” that the applicant had “outlined sufficient mitigating factors” warranting any reduction, this reasoning does not equate to the Authority requiring that the applicant bear the onus of justifying an amount less than the full amount, when the reasoning is understood in the entire context from FD[62] onwards.
143 This reading is fortified by a consideration of the whole of FD[67], which is extracted as follows:
The Determining Authority is not satisfied that Dr Li has outlined sufficient mitigating factors, or shown substantial insight into the deficiencies identified with his practice, to warrant any reduction in the amount repayable. While Dr Li provided the services in a very basic sense, they did not meet the relevant requirements to justify relevant payment. The Determining Authority must have regard to compliance with relevant MBS requirements in discharging it obligation to protect the integrity of the Medicare scheme.
(Emphasis added.)
144 The Authority’s consideration of the purported mitigating factors and the applicant’s insight are highly relevant to its considering what comprise appropriate directions in light of the protective nature of the regime as well as its consideration of the appropriate directions necessary to deter the applicant in future. As noted by Perry J in Selia v Commonwealth of Australia [2017] FCA 7, when exercising a power under s 106U deterrence may be a relevant factor that can be taken into account in the exercise of the discretion: at [152]; see also Sevdalis v Director of Professional Services Review (No 2) [2016] FCA 433 at [148].
145 The Authority expands its reasoning at FD[68] as to its concern regarding the applicant’s lack of insight, in the following way:
As noted above, Dr Li submits that any repayment direction should be proportionate in relation to ‘civil harm’ which has allegedly occurred. He submits that no civil harm has been caused by his conduct. The Determining Authority is not satisfied that this submission is reflective of any substantial insight by Dr Li into the deficiencies identified in his practice in the review period. Dr Li’s submission suggests that, it is only if his patients were harmed in some way that a full repayment direction may be appropriate. The Determining Authority rejects that submission. It accepts that harm to patients is a relevant factor, in terms of assessing risk to patients and the community from inappropriate practice. However, it does not follow that a lack of ‘civil harm’ is a sufficient basis to conclude that a full repayment may not be warranted in the circumstances.
146 It then, at FD[69], articulated the necessity for full repayment on the bases both that the “repayment direction appropriately reflects the benefits paid for the services found to constitute inappropriate practice” (being all of them given its reasoning at FD[65] and FD[67]) and “as well as deterring Dr Li and other practitioners from engaging in similar inappropriate practice into the future”.
147 In any event, even if I am wrong in concluding that the Authority did not start from the position that there ought to be full repayment where a finding of inappropriate practice is made with respect to Medicare services, I accept the submission, in the alternative, from the Commonwealth that starting from a point of full repayment “is entirely consistent with the objective in [s] 79A”. The direction to repay, in “whole”, the Medicare benefits for items for which inappropriate practice had been found, was one of two options if making a repayment direction under s 106U(1)(cb). Whilst it is not mandated to start from a point of full repayment, it was open to the Authority do so.
148 It follows that I find that the Authority did not misdirect itself as to its statutory task when determining whether it should make the repayment direction. Given this conclusion, there is no need for me to determine the issue of the purported materiality of the purported error. However, for completeness, I make the following observations in relation to materiality.
149 The applicant repeated his submissions already made with respect to ground 1, and also submitted that ground 2 was a material error “because it was capable of affecting the quantum of any repayment direction” thereby depriving the applicant “of a realistic possibility of a different outcome”.
150 In support of this submission, the applicant contended that the Authority had failed to look at all the circumstances, namely that the applicant had reduced his gross billing of Medicare by 60 percent, he no longer performs complex procedures such as flats and grafts and in relation to particular MBS item numbers he had a reasonable and honest belief that the way he billed was correct for various reasons. I do not accept this submission.
151 Again, the Authority’s Final Determination must be read as a whole. It is clear, contrary to the applicant’s submission, that the Authority did take into account the changes the applicant had made to his practice arrangements. Specific reference is made to the same at FD[30] and to the notation by the Committee that the applicant had been “generally receptive to its concerns and admitted many deficiencies in his record-keeping and billing” as well as having “expressed a willingness to continue to improve where necessary”. Whilst the Authority does not go into the detail of all of the forms of new arrangements, there is an explicit acknowledgement of the same in this part of the reasoning and again at FD[46]. Regarding the applicant’s purported “reasonable and honest belief” that his billing practices were correct for various reasons, specific reference is made to the same at FD[44(c)].
152 For these reasons, I do not accept if any error were established, if could have realistically affected the result.
Conclusion
153 For these reasons, the application is dismissed with costs.
154 By reason of the extant stay orders, additional orders will be necessary. I will give the parties seven (7) days from the date of judgment to confer as to the additional orders necessary to give effect to these reasons and provide either the consent or competing orders to the Court.
I certify that the preceding one hundred and fifty-four (154) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Raper. |
Associate:
