FEDERAL COURT OF AUSTRALIA
Hamor v Determining Authority [2023] FCA 267
ORDERS
Applicant | ||
AND: | First Respondent COMMONWEALTH OF AUSTRALIA Second Respondent | |
DATE OF ORDER: | 27 march 2023 |
THE COURT ORDERS THAT:
1. The amended originating application filed 31 July 2021 is dismissed.
2. The applicant is to pay the second respondent’s costs as agreed or taxed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
GOODMAN J
1 The applicant is a medical practitioner specialising in sleep and respiratory medicine. He seeks judicial review of decisions made by the Determining Authority on or about 1 June 2021 to make directions purportedly pursuant to 106U(1) of the Health Insurance Act 1973 (Cth). The Authority has filed a submitting appearance and the active respondent is the Commonwealth of Australia.
2 As a medical practitioner, the applicant is a “practitioner” for the purposes of Part VAA (ss 79A-106ZR) of the Act: s 81 of the Act.
3 Part VAA of the Act is concerned with “inappropriate practice” by practitioners. Section 82(1)(c) of the Act provides that a practitioner engages in “inappropriate practice” if the practitioner’s conduct in connection with rendering or initiating relevant services as a consultant physician in a particular specialty was such that a Committee, being a Professional Services Review Committee set up under s 93 of the Act, could reasonably conclude that the conduct would be unacceptable to the general body of consultant physicians in that specialty.
4 On 21 March 2016, and pursuant to s 86 of the Act, the Chief Executive of Medicare requested the Director of Professional Services Review to review the provision of services by the applicant during the period 1 July 2014 and 30 June 2015 (review period).
5 On 17 January 2017, and pursuant to s 93 of the Act, the Acting Director, Professional Services Review established Professional Services Review Committee No. 1015 comprising Dr Robyn Napier as Chairperson, and Professors Matthew Naughton and Ronald Grunstein. Dr Robyn Napier was a general practitioner (GP). As required by s 95(1)(a) of the Act, Dr Napier was a Deputy Director of Professional Services Review appointed under s 85 of the Act. Professors Naughton and Grunstein were both consultant physicians in the applicant’s speciality. The inclusion on the Committee of two members who were both consultant physicians in the applicant’s speciality was required by s 95(3) of the Act.
6 The Acting Director referred to the Committee an investigation as to whether the applicant engaged in inappropriate practice in providing Medical Care Benefits Schedule (MBS) item 12250 services during the review period. MBS item 12250 related to overnight investigations for sleep apnoea for adult patients and imposed several requirements including that prior to such investigation taking place a qualified adult sleep medicine practitioner had confirmed the necessity for the investigation.
7 On 4 and 5 May 2017, the Committee conducted a hearing. Section 101(2) of the Act required the Committee to hold a hearing if it appeared to the Committee that the applicant, as the person under review, may have engaged in inappropriate practice in providing the referred services.
8 On 28 August 2018, the Committee provided its draft report of that date to the applicant.
9 On 13 March 2019, and pursuant to s 106L of the Act, the Committee provided the applicant with the Committee’s Final Report. The Committee concluded that the applicant’s conduct in connection with all of the item 12250 services provided in the review period would be unacceptable to the general body of consultant physicians in respiratory and sleep medicine and thus that he had engaged in inappropriate practice. This conclusion was an extrapolation based upon the Committee’s investigation of 28 randomly sampled instances of services provided by the applicant to individual patients. Such sampling methodology is expressly authorised by s 106K of the Act. The Committee found that the applicant engaged in inappropriate practice, on one or more of the following bases in each of the 28 instances.
10 The first was that the applicant failed to keep an adequate record and meet other legislative requirements. In this regard, s 19(6) of the Act provided:
A medicare benefit is not payable in respect of a professional service unless the person by or on behalf of whom the professional service was rendered, or an employee of that person, has recorded on the account, or on the receipt, for fees in respect of the service or, if an assignment has been made, or an agreement has been entered into, in accordance with section 20A, in relation to the medicare benefit in respect of the service, on the form of the assignment or agreement, as the case may be, such particulars as are prescribed in relation to professional services generally or in relation to a class of professional services in which that professional service is included.
11 The Committee found that for each of the 28 sampled instances, the material submitted to Medicare did not contain prescribed particulars because (contrary to reg 13(1)(b) of the Health Insurance Regulations 1975 (Cth)) the applicant did not provide the “date on which the service was actually rendered” and instead provided an incorrect date. The Committee remarked in relation to this breach (and other recordkeeping breaches):
These are not mere technicalities. They go to the fact that it is public moneys that are being claimed and the practitioner who seeks to make a claim on such moneys has both a legal and an ethical obligation to ensure that the relevant information required by the paying authority is provided so that proper accounting and checking of payments and services can be made.
12 The second basis of the finding of inappropriate practice was that the applicant failed to meet the requirements for item 12250. Examples included:
(1) a failure by the applicant in one of the sampled instances to adequately consider the physiological events that MBS item 12250 required him to consider during his patient’s sleep. The Committee remarked that the data “… indicated that there were a number of episodes of significant alteration of heart rate that were not adequately assessed, analysed, or reported on. The study was of such poor quality that it should not have been used as the basis for making a strong statement to the GP regarding the patient’s driving status, but there should have been an urgent consultation arranged with a sleep physician before doing so”;
(2) in all of the sampled instances, the applicant failed personally to consider the need for an overnight investigation before it took place; and
(3) in six of the sampled instances, the applicant billed for overnight investigations that were of a duration less than the required hours.
13 The third basis of the finding of inappropriate practice was a finding that the applicant failed to supervise sleep technicians and scorers adequately in the rendering of the service. The Committee found that although the applicant said that the sleep technicians were trained to follow his criteria, he “did not know the detail of the qualifications or training of the scorers, but he said that he was confident that the service is robust and provided by qualified people”. The Committee also found many other instances of inadequate supervision by the applicant. Examples included technicians taking inadequate histories, recording inconsistent information, producing poor quality data, implementing an investigation of inadequate duration or proceeding with a home sleep study on the applicant’s behalf without a valid referral, and scorers assigning scores that were inconsistent with other measures, performing analyses with inaccuracies and making findings not supported by the data.
14 The fourth basis of the finding of inappropriate practice was a finding that the applicant failed to give adequate clinical input in the provision of the services. The Committee observed that “[i]n the course of examining [the applicant] is (sic) became apparent that he was not at all familiar with significant aspects of the data that he was reviewing” and “[the applicant] said that he did not know where the body position sensor is on the recording device or the respiratory movement impedance, and that he had never been involved in setting up a home sleep study”.
15 The Committee ultimately found that:
[The applicant] did not have an adequate appreciation and understanding of the technical elements of the equipment and the nature of the data and the parameters and measures to enable him to report adequately or sufficiently on any of the services. This adversely affected the content and quality of his reports and meant that another practitioner seeking to provide follow-up services for the patient would have been unable to properly appreciate the basis on which [the applicant’s] reports were written and their limitations.
16 Ten examples were then set out.
17 The Committee found that this lack of appreciation and understanding manifested itself in the applicant providing inadequate clinical input in provision of the services, including the applicant recommending treatment that “may not have been warranted”; recommending treatment that “would have significant intrusions” on a patient for the rest of the patient’s life without giving the patient’s general practitioner sufficient information to discuss it with him; making an inappropriate recommendation to cease driving; and failing to note signs of conditions that should have been investigated further.
18 The Committee also found that the applicant had failed to indicate the availability of treatment providers other than Healthy Sleep Solutions, the franchise for which he worked, in circumstances where there was a “clear conflict of interest in the same organisation, for whom [the applicant] worked, in providing the diagnostic test and then selling the treatment device”. The Committee opined that:
The general body of respiratory and sleep physicians would expect the patient to be given truly objective and independent advice regarding the available treatment and equipment choices, which is not what [the applicant] or the technicians who performed aspects of the service on his behalf did.
19 The findings made by the Committee in the Committee’s Final Report were the subject of a judicial review application in this Court that was dismissed on 4 December 2020: Hamor v Commonwealth of Australia [2020] FCA 1748.
20 On 4 December 2020, and pursuant to s 106L(3)(b) of the Act, the Authority received the Committee’s Final Report. The members of the Authority, appointed in accordance with s 106ZPA of the Act were Dr Anellio Iannuzzi (as Chair); Mr Paul Murdoch; and Dr David Smith. Section 106ZPA of the Act in the present context required that the Authority comprise a Chair who is a medical practitioner; a member who is not a practitioner; and a member who is a practitioner in the same profession as the applicant. There was no suggestion that the composition of the Committee did not comply with s 106ZPA of the Act.
21 On 9 December 2020, and pursuant to s 106SA(1) of the Act, the Authority invited the applicant to make submissions about the directions the Authority should make as a result of the Committee’s Final Report.
22 On 10 February 2021, the applicant, by his solicitor, made submissions to the Authority, together with a letter from the applicant and letters and statements in support from various sleep technicians.
23 On 15 April 2021, and pursuant to s 106T of the Act, the Authority made a Draft Determination. By letter of that date, and pursuant to s 106T of the Act, the Authority invited the applicant to make submissions concerning the directions proposed in the Draft Determination.
24 On 16 May 2021, the applicant provided the Authority with submissions concerning the directions proposed in the Draft Determination.
25 On 1 June 2021, and pursuant to s 106TA of the Act, the Authority made its Final Determination. Paragraph 5 of the Final Determination contains the following directions made pursuant to s 106U(1) of the Act:
The Determining Authority directs that:
(a) The Director of Professional Services Review (the Director), or the Director’s nominee, reprimand [the applicant] (paragraph 106U(1)(a) of the Act), and
(b) The Director, or the Director’s nominee counsel [the applicant] (paragraph 106U(1)(b) of the Act), and
(c) [The applicant] repay the amount of $1,959,718.75, being the Medicare benefits that were paid for the MBS item 12250 services in connection with which [the applicant] was found to have engaged in inappropriate practice (subparagraph 106U(1)(cb) of the Act), and
(d) [The applicant] be disqualified from rendering MBS item 12250 services for a period of 12 months starting when the determination takes effect (subparagraphs 106U(1)(g)(i) and 106U(3)(b) of the Act).
26 The directions in sub-paragraphs (a) and (b) are not challenged. The parties referred to the directions in subparagraphs (c) and (d) as the repayment direction and the disqualification direction respectively. I shall adopt that terminology.
27 The applicant seeks review under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth) of each of the repayment direction and the disqualification direction, primarily on the basis that each was legally unreasonable.
Summary of the Final Determination as set out by the Authority
28 The reasoning of the Authority in its Final Determination was set out as follows.
29 The Authority noted that it had relied upon and carefully considered the contents of the Committee’s Final Report which it noted was very detailed and well-reasoned in relation to the findings of inappropriate practice (at [8] and [14]).
30 The Authority noted that: the applicant rendered the highest volume of item 12250 services of all active Medicare providers in Australia during the review period, in that the applicant rendered item 12250 services on 6,875 occasions to 6,875 patients; the Committee considered that this very high volume may have been a reason why the applicant’s reports were not completed to an acceptable standard, including the failure to adequately review that raw sleep study data; and that as noted by the Committee, the applicant’s provision of such a high volume of services is likely to have been a product of his conscious decision to change the nature of his practice, which the applicant considered to be a convenient step towards his retirement (at [15]).
31 The Authority also noted that the Committee identified other significant issues in relation to the applicant’s provision of item 12250 services including that it was the applicant’s practice to not see a referral from the general practitioner or the patient’s history until after the investigation had been carried out and the raw sleep data had been scored, and the Committee’s finding that significant aspects of each of the item 12250 services had been rendered on behalf of the applicant by technicians and scorers. The Authority indicated its agreement with the Committee’s view that this was permissible under the Act but expressed its view that it is also essential that technicians and scorers are adequately supervised by the rendering practitioner, and its “serious concern” at the Committee’s finding that the applicant had failed to adequately supervise the technicians and the scorers in relation to each service. The Authority noted that in a substantial proportion of the services examined, the Committee was satisfied that there was an inadequate system of supervision in place (at [16]).
32 The Authority also noted: the Committee’s concerns about the applicant’s technical knowledge in relation to the provision of item 12250 services; the Committee’s statement that the applicant was not at all familiar with key aspects of the data that he was reviewing; the Committee’s view that the applicant did not have an adequate appreciation and understanding of the technical elements of the equipment and the nature of the data to enable him to report adequately or sufficiently on any of the services; and the Committee’s finding that this adversely affected the content and quality of the applicant’s reports, with the consequence that another practitioner seeking to provide follow-up services for a patient would not have been able to properly understand the basis on which the applicant’s reports were written (at [17]).
33 The Authority then stated (at [18]):
Having regard to the Committee’s findings of inappropriate practice and the extensive reasons for those findings, the Determining Authority is satisfied that the Committee’s findings reflect a very serious degree of inappropriate practice.
(emphasis added)
34 The Authority then addressed the submissions that the applicant had made to it.
35 The Authority noted that the applicant had set out his relevant qualifications and employment history and had made statements that: throughout his medical career, he had upheld the highest of medical standards and the traits of honesty, professionalism and humility; he had put the welfare of his patients ahead of anything else, often to the detriment of his personal life; he was 73 years of age and had relinquished most of his hospital responsibilities; and that to have been found to have engaged in inappropriate practice had been devastating for him (at [19]).
36 The Authority then noted the applicant’s submission that in 2010 he had joined a core group of well-regarded respiratory and sleep physicians who were reporting sleep studies for Healthy Sleep Solutions and that, in reliance upon their expertise, the applicant understood that processes had been put in place that were extremely well-thought out, professional and complied with the requirements of item 12250. The Authority then indicated that it was clear that the Committee had formed a different view of the applicant’s provision of such services during the review period and that the Authority was bound by those findings (at [20] to [21]).
37 The Authority then recorded the applicant’s submissions that: the reports from eminent specialists tendered during the Committee’s hearing process had not properly been considered; the reality of a home sleep study performed in accordance with item 12250 is that it is a sleep study to confirm obstructive sleep apnoea and is akin to a radiologist reporting on a test; and that upon receipt of the Draft Determination, the applicant was “incredibly disappointed, frustrated and disillusioned by the draft findings” (at [22]). The Authority expressed the following views in response to that submission:
(1) it agreed that item 12250 is essentially a diagnostic study. However, it was apparent from the Committee’s findings and the applicant’s submissions in response to the Committee’s Final Report that there was a divergence of views as to what is necessary to ensure that the relevant requirements are complied with; and
(2) it was “seriously concerned about [the applicant’s failure] to have an adequate system of supervision in place, to help ensure that the technicians who perform a large part of the work are properly monitored” (emphasis added). At [23] to [24], the Authority continued:
… This, along with other areas of clinical input, cannot simply be ‘outsourced’ to non-medical practitioners. In relation to this issue, the Determining Authority agrees with the Committee’s comments that ‘if in the course of rendering the service, information is obtained that highlights other important clinical concerns, the Committee is of the view that the general body of respiratory and sleep physicians would expect the practitioner to refer to, and comment upon, such information in a report, and that a failure to do so would be unacceptable’.
Indeed, the Determining Authority considers that in some respects, the fact that significant parts of MBS item 12250 services can be undertaken by other staff only serves to reinforce the importance of the medical practitioner adequately supervising the arrangements. The Committee’s findings are particularly troubling in light of [the applicant’s] apparent lack of understanding of the technical aspects of the equipment and what he was actually reporting on.
(emphasis added)
38 The Authority then stated it was not its role to go behind the Committee’s findings as to whether the applicant’s conduct fell short of the standards expected of his peers. The Authority noted that the Committee had taken into account the evidence from eminent specialists upon which the applicant relied, but nevertheless found that the applicant’s provision of all of the services examined was inappropriate. The Authority then stated that having reviewed the Committee’s Final Report and notwithstanding the applicant’s submissions, it agreed with the Committee’s findings, and with the reasons for those findings. The Authority noted that, in the course of doing so, the Committee did not accept the applicant’s interpretation of the MBS item descriptor (at [25]).
39 The Authority then referred to the applicant’s submission that although he has significantly reduced his specialist consulting practice and hours, he believes he still has much to offer and any potential period of disqualification would have a significant effect on his patients, referring doctors and the communities in both the Sutherland Shire and various rural and regional areas (at [26]).
40 The Authority opined that there is a real need for the relevant services, particularly in rural and regional areas, and acknowledged that the letters of support, from various sleep technicians with whom the applicant has worked, indicated that in their view, he was providing a valuable and effective service, particularly through telehealth arrangements (at [26]). The Authority expressed the view that, having regard to the Committee’s Final Report, which was based on a thorough examination of the applicant’s practice and patient records, it was essential for patient care that the relevant services be provided appropriately in accordance with the requirements for participation in the Commonwealth Medicare benefits program (at [26] to [27]). The Authority then stated (at [27]):
Noting that [the applicant] operates as part of a broader corporate model, the Determining Authority considers that there are likely to be other providers who can render MBS item 12250 services if [the applicant] is not available to do so for a period of time. In terms of [the applicant’s] practice itself, a partial disqualification from one MBS item number will not prevent him from providing other necessary services.
41 The Authority then noted the applicant’s submissions that he was not in any realistic position to make a significant repayment because: he was intending to retire at 75; he was suffering from prostate cancer; he was an honest, hard-working and committed medical practitioner who had dedicated his life to medicine, teaching and caring for patients; he did not have significant assets and those which he did have are heavily encumbered, due to certain unwise financial decisions and the impact of the global financial crisis; he had reduced his involvement in his consulting practice to focus on sleep study reporting and the ensuing telehealth consultations which he was able to undertake and perform at times which suited him and his family commitments; COVID–19 had had a marked impact upon his practice and he had closed the sleep clinic he established in Sutherland Hospital in 1995; and he had received only 17 per cent of the benefits paid for the item 12250 services he had rendered during the review period (at [28]).
42 The Authority noted its agreement with the applicant’s submissions that:
(1) in deciding which directions to make in relation to the Committee’s Final Report, the Authority needed to have regard to the findings of inappropriate practice and was not able to go behind those findings (at [29]);
(2) it was not the Authority’s role to punish any practitioner who has been found to have engaged in inappropriate practice and that in deciding upon appropriate directions, the over-arching objective is to protect the integrity of the Commonwealth Medicare benefits, dental benefits and pharmaceutical benefits programs, and in doing so to protect:
(a) patients and the community in general from the risks associated with inappropriate practice; and
(b) the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice (at [30]).
43 The Authority then noted the applicant’s submission that in undertaking its task, it should adopt a common-sense approach to issues concerning “mere administrative errors which are referred to by the Committee and about which findings of inappropriate practice have been made”. The Authority indicated that it agreed that it should adopt a common-sense approach, but expressed the view that having regard to the Committee’s findings of inappropriate practice, and the reasons for those findings, it was not satisfied that the applicant’s identified failings constituted “mere administrative errors” (at [31]). The Authority also rejected the applicant’s submission that the Committee had identified “one discrete issue” (at [31]).
44 The Authority then stated (at [32]):
As outlined above, the Committee found that [the applicant] did not meet the fundamental requirements for rendering MBS item 12250 services during the review period. In the Determining Authority’s view, the Committee’s findings cut to the very core of the appropriate provision of these services. The MBS item descriptor acknowledges that the service can be performed without personal attendance, but puts in place additional requirements to ensure that adequate supervision by a practitioner is provided to the non-medically trained persons administering components of the service. The Determining Authority considers that there needs to be a heightened attention to detail where the medical practitioner does not see the patient. The Committee was not satisfied that [the applicant] established consistent quality assurance procedures for the data acquisition or the scoring of the raw data. This is particularly important where the testing is largely patient-driven, making it more susceptible to technical uncertainties. The proposition that [the applicant’s] inadequate involvement in the provision of the services constitutes ‘mere administrative errors’ raises serious concerns about [the applicant’s] understanding of what is required, and creates genuine risk of inappropriate practice in the future.
(emphasis added)
45 The Authority then noted the applicant’s acceptance that:
(1) it would be appropriate for the Authority to impose a reprimand and counselling in relation to the Committee’s findings (and expressed its view that both a reprimand and counselling were warranted in the circumstances) (at [33]); and
(2) he should be directed to make some repayment of the monies paid by the Commonwealth in respect of item 12250 services found to constitute inappropriate practice; and his submission, relying on Norouzi v The Director of the Professional Services Review Agency [2020] FCA 1524, that such an amount should be limited to 10 per cent of the total amount paid for those services (at [34]).
46 The Authority then considered three reasons provided by the applicant as to why the amount should be limited to 10 per cent of the total:
(1) the first reason was that the Committee’s findings relate to administrative or technical compliance errors rather than inappropriate practice per se. The Authority reiterated its rejection of the proposition that the Committee’s findings related to “mere administrative errors”;
(2) the second reason was that the services were provided and a significant number of patients are likely to have benefited through the diagnosis and treatment of obstructive sleep apnoea, which in turn has led to costs savings for the Commonwealth. The Authority accepted that the applicant’s provision of item 12250 services may have benefited some patients and noted that this proposition was supported by the letters from the various sleep technicians with whom the applicant had worked. However, having regard to “the serious deficiencies identified by the Committee in its Report”, the Authority was not convinced that this was a persuasive factor in relation to a “potential reduction” in the amount to be repaid (at [34(b)]); and
(3) the third reason was that the applicant had received only a small proportion of the amounts paid for the services found to constitute inappropriate practice. The Authority accepted that the applicant is unlikely to have received all of the monies paid by the Commonwealth for the services found to constitute inappropriate practice (at [34(c)]). It noted ([34(c)]) that:
Nevertheless, [the applicant’s] inappropriate provision of those service (sic) led to the Commonwealth’s expenditure, which is directly relevant to the key objective objectives of the Scheme, as outlined above.
47 The Authority then noted the breadth of its discretion as to the directions which may be made under s 106U of the Act and its agreement with the applicant’s submission that it may direct that “all, or part, or none”, of the amounts paid for services found to constitute inappropriate practice be repaid. The Authority then reiterated that in deciding upon appropriate directions, it must seek to achieve the over-arching objective of protecting the integrity of the Commonwealth Medicare benefits, dental benefits and pharmaceutical benefits programs; and expressed the view that compliance by practitioners with relevant Medicare requirements was fundamental to the protection of the integrity of the Commonwealth Medicare benefits scheme (at [35] to [36]).
48 The Authority then noted that in the applicant’s further submissions, provided in response to the Draft Determination, he had submitted that:
(1) the Authority had appropriately acknowledged the divergence of views in relation to the requirements of item 12250 and that the service is a diagnostic study for the purposes of determining whether a patient has obstructive sleep apnoea; and
(2) despite the Committee’s disagreement with the applicant’s interpretation of the item 12250 descriptor, the applicant’s interpretation was one that was reasonably open to him and the applicant’s view was supported by the practices of Healthy Sleep Solutions and the specialists who gave evidence on his behalf (at [37]).
49 The Authority then stated:
[The applicant] also submits that he accepts the Committee’s findings, but nevertheless states that he continues to believe that his provision of the MBS item 12250 services was appropriate. It is difficult to reconcile the two positions. The Committee found that [the applicant’s] provision of the MBS item 12250 services was unacceptable to the general body of consultant physicians in respiratory and sleep medicine, indicating that the Committee did not consider [the applicant’s] view of what was required was reasonably open to him. Ultimately, [the applicant] indicates that he accepts that the findings were open to the Committee, but the Determining Authority considers such acceptance is heavily qualified and only goes some way towards alleviating its concerns about the risks of inappropriate practice in the future.
(emphasis added)
50 The Authority then considered the applicant’s submissions as to the changes that he had made to his practice. It noted that in his original submissions, provided in response to the Committee’s Final Report, the applicant submitted that in the years following the review period, he had made “substantial and appropriate” changes to his practice, demonstrating insight and acknowledging the need to improve his practice. The Authority then stated that it had carefully considered the applicant’s submissions on this point, but it “was unable to identify any meaningful reference to substantial change in his practice to alleviate concerns about potential inappropriate practice in the future, apart from a reduction in his specialist consulting practice and hours” (at [39]).
51 The Authority then considered the applicant’s submissions on this point made in response to the Draft Determination. At [40], the Authority stated:
In his further submissions, [the applicant] addresses this by outlining the following changes that have been made in relation to his practice, following his careful consideration of the Committee’s Report:
(a) The MBS requirements for item 12250 were amended in a couple of important ways since the review period, which relate to some of the reasons for the Committee’s findings of inappropriate practice and therefore lessen the risk of inappropriate practice in the future. In this regard, qualified sleep physicians are no longer required to confirm the necessity of the investigation before it takes place. In addition, the equipment now needs to be applied to the patient by a sleep technician or, if that is not possible, the patient is given instructions on how to apply the equipment by the sleep physician.
The Determining Authority has carefully considered this submission in relation to the changes to the MBS descriptor, and acknowledges that it is no longer a requirement for the sleep physician to personally assess the need for the investigation prior to it taking place. The Determining Authority also agrees that this issue did form part of the Committee’s deliberations and reasons for inappropriate practice, and therefore supports a conclusion that [the applicant] is less likely to engage in inappropriate practice in the future.
The Determining Authority accepts that the relevant monitoring equipment can be applied by a sleep technician or the patient themselves if the sleep physician has given them written instructions on how to apply it. However, adequate supervision by a sleep physician remains a fundamental component of the MBS item number, as well as the ‘interpretation and preparation of a permanent report by a qualified sleep medicine practitioner with personal review of raw data from the original recording of polygraphic data from the patient’. The Committee’s findings of inappropriate practice, and the reasons for those findings, are clearly relevant to the current MBS requirements.
(b) [The applicant] submits that he is completely compliant with the current requirements and has also satisfied himself that Air Liquide Healthcare, which took over from Healthy Sleep Solutions in relation to the provision of the services, has modified practices to ensure such compliance. [The applicant] further submits that he continues to educate and supervise the sleep technicians and the data scorers, in part because of his involvement in the PSR process. [The applicant] has satisfied himself that those persons are appropriately qualified and there are ongoing quality assurance measures which are in place to review that aspect of the study. For example, if [the applicant] has any concerns about any possible scoring errors or possible interpretation of specific portions of the scored data, he will contact the scorers and request clarification.
These submissions contain a number of assertions as to how he currently operates in compliance with the MBS requirements, which the Determining Authority accepts. However, in the absence of supporting evidence in relation to the many of the stated changes, the Determining Authority considers that the further submissions provide limited reassurance as to the potential risks of inappropriate practice in the future. This is particularly so where [the applicant] continues to hold the view that he provided the services were provided appropriately in the review period.
52 The Authority acknowledged the applicant’s statement that he had made a deliberate decision to reduce his rendering of item 12250 services since the review period. It also noted the Committee’s comments concerning the applicant’s reasons for previously increasing the level of his rendering of such services (at [41]).
53 The Authority noted the applicant’s preparedness to accept a reprimand and counselling in relation to the Committee’s findings of inappropriate practice; and his submission that the potential repayment and partial disqualification directions were unnecessary and would be punitive (at [42]).
54 The Authority then noted the applicant’s submission that a number of his patients benefited from the investigation. In this regard, the Authority noted that the applicant had provided a copy of documents from two patients to support his submission; and the Authority reiterated its acceptance that the applicant’s provision of the item 12250 services had benefited some patients (at [42]).
55 The Authority also noted the applicant’s submission that full repayment of the monies expended on the services found to have constituted inappropriate practice would represent a “windfall gain” to the Commonwealth, because services were provided to the benefit of patients. In support of this submission, the applicant had deployed the following analogy:
A general practitioner may request a sleep study to diagnose OSA [obstructive sleep apnoea] so that he or she might then assist the patient with treatment of that. Similarly, a general practitioner may request a radiologist to perform a CT scan of a patient’s lumbar spine so that he or she may assist the patient with treatment of any identified pathology. In those circumstances, the general practitioner is simply requesting a diagnostic study to assist with patient care and management.
56 In answer to this submission the Authority stated at [43] to [46]:
[43] … The Determining Authority rejects this proposition. In order for monies to be payable, it is necessary that they be rendered appropriately. While mitigating factors can lead to a reduction in the amount repayable, the Determining Authority is not satisfied that [the applicant’s] further submissions would justify any reduction in this case.
[44] In particular, the Determining Authority considers that the analogy adopted by [the applicant] in his further submissions is not applicable to the provision of MBS item 12250 services. As noted above, the Determining Authority accepts that the investigation is a diagnostic study. However, when a general practitioner refers a patient to a radiologist, the patient will come back to the GP for further management. The difference with a sleep physician is that the ongoing treatment is for the sleep physician to manage, including recommendations, on the basis that it a very specialised area. The referring doctor relies on the sleep physician for appropriate treatment and management and it is essential that the investigation leading to the relevant recommendations is carried out appropriately, including through adequate supervision.
[45] The Determining Authority acknowledges that [the applicant] did not personally receive all of the monies paid for the services found to constitute inappropriate practice. This is not uncommon, particularly where practitioners operate within a corporate structure. Nevertheless, the monies were incurred. The Determining Authority also accepts that a substantial repayment would have a significant impact on his finances. The Determining Authority is not persuaded that [the applicant’s] possible bankruptcy, which he suggests would lead to ‘very little by way of prepayment of benefits’, is a compelling reason not to seek an appropriate amount. It is a matter for [the applicant] to discuss potential repayment options with the Department of Health.
[46] For the reasons outlined above, the Committee identified significant deficiencies in [the applicant’s] system of work, including a distinct lack of adequate supervision and understanding of the services performed. Whilst the Determining Authority is always open to directing a partial repayment in appropriate circumstances, the Determining Authority is not satisfied that [the applicant] has provided compelling reasons in support of a reduction in the amount that should be repaid in this case. Having regard to [the applicant’s] further submissions, the Determining Authority accepts that a number of changes have been made to the MBS item descriptor and [the applicant’s] practice since the review period, but they do not go to the reasons for [the applicant’s] non-compliance in relation to the services found to constitute inappropriate practice. The Determining Authority is concerned that any reduction on the amount potentially repayable will not sufficiently deter [the applicant], and other practitioners, from engaging in inappropriate practice in the future.
57 The Authority then set out the repayment direction. It noted that the amount of $1,959,718.75 (being the full amount of the Medicare benefits that were paid for the item 12250 services in connection with which the applicant had been found to have engaged in inappropriate practice) was significant but found that this amount was “a product of the Committee’s findings of inappropriate practice across all of the services examined, and reflected that [the applicant] was the highest biller of MBS 12250 services during the review period”. The Authority then reiterated its rejection of the proposition that this decision would create a “windfall gain” for the Commonwealth, “noting that the objective of the PSR scheme is to maintain the integrity of the Medicare system and in doing so protecting the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice”. The Authority noted that, as a way of meeting the objective, Medicare benefits may simply not be payable at all for services found to constitute inappropriate practice (at [47]).
58 The Authority then turned to the disqualification direction. At [48] to [51], it stated:
[48] In relation to partial disqualification, [the applicant] reiterates his previous submissions, including that it would not be appropriate to impose any period of disqualification from rendering MBS item services, following the Committee’s findings of inappropriate practice. In support of this submission, [the applicant] reiterated his earlier comments that the services were provided and patients achieved some benefit from them. [The applicant] stated:
(a) The Committee’s findings relate to a technical administrative concern of noncompliance.
As noted above, the Determining Authority rejects this proposition.
(b) The item descriptor for MBS item 12250 was amended shortly after the end of the review period such that the processes which were in place and which are the subject of the findings of inappropriate practice would now satisfy the new descriptor.
Having regard to both the Committee’s detailed findings of inappropriate practice and [the applicant’s] submissions, the Determining Authority is not satisfied that [the applicant] would necessarily meet the current requirements for the provision of those services, noting that adequate supervision is still a key feature of the MBS item descriptor.
(c) [The applicant] has carefully considered the Committee’s comments and findings and he has taken advice. He has made significant changes to his practice.
The Determining Authority was unable to identify any meaningful change outlined in [the applicant’s] original submissions. However, having regard to his further submissions, provided in response to the draft determination, the Determining Authority accepts that changes to the MBS item descriptor and [the applicant’s] practice since the review period do lessen the risks of inappropriate practice in the future. This is so even though [the applicant] continues to believe that he acted appropriately during the review period and the relevant changes do not provide a complete answer to the Committee’s very serious findings of inappropriate practice – many of which are still relevant today.
(d) The public interest would not be served but rather harmed if [the applicant] was required to make a significant repayment or was disqualified from providing MBS item 12250 services to patients who require those.
The Determining Authority is satisfied that a repayment and partial disqualification from rendering MBS item 12250 services would help protect the purposes of the PSR scheme. In the Determining Authority’s view, both directions would therefore certainly be in the public interest.
[49] [The applicant] further submits that removing his ability to render MBS item 12250 services would also impact his ability to repay monies sought to be recovered in relation to the Committee’s findings of inappropriate practice. In relation to these submissions, the Determining Authority rejects [the applicant’s] assertion that it suggested that he was continuing to engage in inappropriate practice. The Determining Authority holds no such view, nor could it on the available evidence. Nevertheless, the Determining Authority remains concerned about risks of inappropriate practice in the future.
[50] The Determining Authority acknowledges that [the applicant] has been reporting sleep studies performed in rural and regional areas. However, it is imperative that the services be provided appropriately. That was clearly not the case during the review period and the Determining Authority is not persuaded that there has been sufficient change in [the applicant’s] practice to alleviate its serious concerns about the potential for continued inappropriate practice into the future. The Determining Authority notes that, as [the applicant] operates in a corporate model, there may be others who can assist his patients during the period of partial disqualification. [The applicant] will also be able to render other MBS item services during this period.
[51] Therefore, so that [the applicant] can reflect further on the Committee’s findings of inappropriate practice and allow adequate time to familiarise himself with the relevant requirements, the Determining Authority directs that [the applicant] be disqualified from rendering MBS item 12250 services for a period of 12 months starting when the determination takes effect.
59 After setting out its directions concerning a reprimand and counselling, the Authority stated (at [54] and [55]):
Directions: repayment
[54] The Determining Authority considers that due to the level of inappropriate practice as found by the Committee, [the applicant] repay the amount of $1,959,718.75, being the Medicare benefits that were paid for the MBS item 12250 services in connection with which [the applicant] was found to have engaged in inappropriate practice (subparagraph 106U(1)(cb) of the Act).
Directions: partial disqualification
[55] Having regard to the reasons for the Committee’s findings of inappropriate practice, the Determining Authority considers that [the applicant] must be disqualified from rendering MBS item 12250 services for a period of 12 months starting when the determination takes effect (subparagraph 106U(1)(g) of the Act).
Issues based summary of the Final Determination
60 The above summary of the Final Determination follows the order used by the Authority. Set out below is a summary of the Final Determination which draws together various strands of the Authority’s reasoning.
61 The Final Determination records that in exercising its discretion the Authority took into account, inter alia, the following matters:
(1) its concerns about the gravity of the applicant’s conduct;
(2) changes to item 12250 and to the applicant’s practice subsequent to the review period;
(3) its assessment of the risk that the applicant would engage in inappropriate practice in the future;
(4) the applicant’s submissions as to the hardship that the proposed repayment direction would cause him; and
(5) the availability of other practitioners to provide the services provided by the applicant during the period of his disqualification.
62 These matters are considered in more detail below.
(1) Concerns about the gravity of the applicant’s conduct
63 That the Authority – having considered the Committee’s findings – held concerns about the gravity of the applicant’s conduct is clear throughout the Final Determination, including the expression of the Authority’s views that:
(1) it was “seriously concerned by the Committee’s findings that [the applicant] failed to adequately supervise the technicians and the scorers in relation to each service” (at [16]);
(2) it was “satisfied that the Committee’s findings reflect a very serious degree of inappropriate practice” (at [18]);
(3) it was “seriously concerned about [the applicant]’s failure to have an adequate system of supervision in place, to help ensure that the technicians who perform a large part of the work are properly monitored” (at [23]);
(4) “[t]he Committee’s findings are particularly troubling in light of [the applicant’s] apparent lack of understanding of the technical aspects of the equipment and what he was actually reporting on” (at [24]);
(5) “[a]s outlined above, the Committee found that [the applicant] did not meet the fundamental requirements for rendering MBS item 12250 services during the review period. In the Determining Authority’s view, the Committee’s findings cut to the very core of the appropriate provision of these services” (at [32]);
(6) the Committee had identified “serious deficiencies” (at [34]) and “significant deficiencies in [the applicant’s] system of work, including a distinct lack of adequate supervision and understanding of the services performed” (at [46]); and
(7) having regard to the Committee’s findings of inappropriate practice, and the reasons for those findings, it did not accept the applicant’s contentions that the applicant’s identified failures were “mere administrative errors” or related to “one discrete issue” (at [31] and [34(a)]).
(emphasis added)
(2) Changes to item 12250 and to the applicant’s practice since the review period
64 The Authority considered changes to item 12250 and to the applicant’s practice since the review period.
Changes to item 12250 since the review period
65 The Authority considered (at [40(a)]) a submission by the applicant that:
The MBS requirements for item 12250 were amended in a couple of important ways since the review period, which relate to some of the reasons for the Committee’s findings of inappropriate practice and therefore lessen the risk of inappropriate practice in the future. In this regard, qualified sleep physicians are no longer required to confirm the necessity of the investigation before it takes place. In addition, the equipment now needs to be applied to the patient by a sleep technician or, if that is not possible, the patient is given instructions on how to apply the equipment by the sleep physician.
66 The Authority indicated that it had given careful consideration to that submission, and acknowledged that it was no longer a requirement for the sleep physician to personally assess the need for the investigation prior to it taking place. The Authority also agreed that this issue formed part of the Committee’s deliberations and reasons for inappropriate practice, and thus supported a conclusion that the applicant was less likely to engage in inappropriate practice in the future. The Authority then continued:
The Determining Authority accepts that the relevant monitoring equipment can be applied by a sleep technician or the patient themselves if the sleep physician has given them written instructions on how to apply it. However, adequate supervision by a sleep physician remains a fundamental component of the MBS item number, as well as the ‘interpretation and preparation of a permanent report by a qualified sleep medicine practitioner with personal review of raw data from the original recording of polygraphic data from the patient’. The Committee’s findings of inappropriate practice, and the reasons for those findings, are clearly relevant to the current MBS requirements.
(emphasis added)
67 The Authority considered (at [48(b)]) a second (and broader) submission by the applicant that:
The item descriptor for MBS item 12250 was amended shortly after the end of the review period such that the processes which were in place and which are the subject of the findings of inappropriate practice would now satisfy the new descriptor.
68 The Authority’s response to that submission was:
Having regard to both the Committee’s detailed findings of inappropriate practice and [the applicant’s] submissions, the Determining Authority is not satisfied that [the applicant] would necessarily meet the current requirements for the provision of those services, noting that adequate supervision is still a key feature of the MBS item descriptor.
Changes to the applicant’s practice since the review period
69 At [39] and [40], the Authority considered the applicant’s submissions as to the changes that he had made to his practice. It noted that in his original submissions, provided in response to the Committee’s Final Report, the applicant had submitted that in the years following the review period, he had made “substantial and appropriate” changes to his practice, demonstrating insight and acknowledging the need to improve his practice.
70 The Authority then stated that having carefully considered the applicant’s submissions on this point, it was unable to identify any meaningful reference to substantial change in his practice to alleviate concerns about potential inappropriate practice in the future, apart from a reduction in his specialist consulting practice and hours.
71 The Authority then considered the applicant’s submissions on this point made in response to the Draft Determination. The Authority set out (at [40(b)]) a submission by the applicant that:
[The applicant] submits that he is completely compliant with the current requirements and has also satisfied himself that Air Liquide Healthcare, which took over from Healthy Sleep Solutions in relation to the provision of the services, has modified practices to ensure such compliance. [The applicant] further submits that he continues to educate and supervise the sleep technicians and the data scorers, in part because of his involvement in the PSR process. [The applicant] has satisfied himself that those persons are appropriately qualified and there are ongoing quality assurance measures which are in place to review that aspect of the study. For example, if [the applicant] has any concerns about any possible scoring errors or possible interpretation of specific portions of the scored data, he will contact the scorers and request clarification.
72 The Authority’s response to that submission was:
These submissions contain a number of assertions as to how he currently operates in compliance with the MBS requirements, which the Determining Authority accepts. However, in the absence of supporting evidence in relation to the many of the stated changes, the Determining Authority considers that the further submissions provide limited reassurance as to the potential risks of inappropriate practice in the future. This is particularly so where [the applicant] continues to hold the view that he provided the services were provided appropriately in the review period (sic).
73 At [50], the Authority stated:
However, it is imperative that the services be provided appropriately. That was clearly not the case during the review period and the Determining Authority is not persuaded that there has been sufficient change in [the applicant’s] practice to alleviate its serious concerns about the potential for continued inappropriate practice into the future.
74 At [46], the Authority made the following statement with respect to both the changes to item 12250 and the changes to the applicant’s practice since the review period:
Having regard to [the applicant’s] further submissions, the Determining Authority accepts that a number of changes have been made to the MBS item descriptor and [the applicant’s] practice since the review period, but they do not go to the reasons for [the applicant’s] non-compliance in relation to the services found to constitute inappropriate practice.
(3) The risk that the applicant would engage in inappropriate practice in the future
75 The Authority considered there to be a risk that the applicant would engage in inappropriate practice in the future, arising from:
(1) the applicant’s contention that the identified failures were “mere administrative errors”, which the Authority opined: “raises serious concerns about [the applicant’s] understanding of what is required, and creates genuine risk of inappropriate practice in the future” (at [32]);
(2) the nature of the applicant’s acceptance that it was open to the Committee to find that the applicant’s provision of item 12250 services was unacceptable to the general body of consultant physicians in sleep and respiratory medicine, which the Authority found it considered to be “heavily qualified and only goes some way towards alleviating its concerns about the risks of inappropriate practice in the future” (at [38]); and
(3) the absence of evidence supporting submissions made by the applicant concerning changes to how he operates in compliance with the MBS requirements. In this regard the Authority stated (at [40(b)]:
However, in the absence of supporting evidence in relation to the many of the stated changes, the Determining Authority considers that the further submissions provide limited reassurance as to the potential risks of inappropriate practice in the future. This is particularly so where [the applicant] continues to hold the view that he provided the services were provided appropriately in the review period.
76 At [49], the Authority, in the course of rejecting a submission that it held the view that the applicant was at that time engaging in inappropriate practice, reiterated that it “remains concerned about the risks of inappropriate practice in the future”.
(4) The applicant’s submissions as to the hardship that the proposed repayment direction would cause him
77 The applicant’s submissions as to his financial position were recorded in some detail by the Authority at [28], together with a submission that he was not in any realistic position to make a significant repayment (see [41] above). The Authority accepted that a substantial repayment would have a significant impact upon the applicant’s finances (at [45]) and that the repayment amount of $1,959,718.75 was a significant amount (at [47]). However the Authority was not persuaded that the applicant’s “…possible bankruptcy, which he suggests would lead to ‘very little by way of prepayment [sic] of benefits’ is a compelling reason not to seek an appropriate amount. It is a matter for [the applicant] to discuss potential repayment options with the Department of Health” (at [45]). The Authority also noted at [27] that:“[i]n terms of [the applicant’s] practice itself, a partial disqualification from one MBS item number will not prevent him from providing other necessary services”.
(5) The availability of other practitioners to provide the services provided by the applicant during his disqualification
78 The Authority also considered the availability of other practitioners to provide the services provided by the applicant during his disqualification. In particular, the Authority:
(1) noted that the applicant had joined Healthy Sleep Solutions in 2010 (at [20]);
(2) stated (at [27]):
Noting that [the applicant] operates as part of a broader corporate model, the Determining Authority considers that there are likely to be other providers who can render MBS item 12250 services if [the applicant] is not available to do so for a period of time.
(3) noted a submission by the applicant that: his interpretation of the item 12250 descriptor was one that was reasonably open; and supported by the practices of Healthy Sleep Solutions and the specialists who gave evidence on his behalf (at [37]);
(4) noted that Air Liquide Healthcare had taken over from Healthy Sleep Solutions (at [40(b)]); and
(5) stated (at [50]):
The Determining Authority notes that, as [the applicant] operates in a corporate model, there may be others who can assist his patients during the period of partial disqualification. [The applicant] will also be able to render other MBS item services during this period.
79 The references by the Authority at [27] and [50] to the applicant operating in a corporate model are clearly a reference to his involvement with Air Liquide Healthcare which had taken over the operations of Healthy Sleep Solutions.
80 The applicant did not press all of the grounds of review set out in his Amended Originating Application. His case – as presented in submissions – is that legal unreasonableness attended both the disqualification direction and the repayment direction; and that the Authority made several findings without evidence. The no evidence ground was presented, and is considered below, as part of the legal unreasonableness grounds.
81 There was no dispute as to the principles to be applied when considering whether a decision is attended by legal unreasonableness and it is unnecessary to set out those principles in detail. I note the conspectuses of principles set out by Wigney J in BHL19 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCAFC 94; (2020) 277 FCR 420 at 443-445 [127] to [138] and the Full Court (Allsop CJ, Besanko and O’Callaghan JJ) in Djokovic v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCAFC 3; (2022) 289 FCR 21 at 27 to 28 [29] to [35].
82 The following matters were common ground:
(1) the starting point in considering whether there had been legal unreasonableness is the language and purpose of s 106U(1) of the Act, which provided in so far is presently relevant:
(1) A draft determination or a final determination must contain one or more of the following directions:
(a) that the Director, or the Director’s nominee, reprimand the person under review;
(b) that the Director, or the Director’s nominee, counsel the person under review;
…
(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;
…
(g) if the person under review is a practitioner—that the practitioner be disqualified, for a specified period starting when the determination takes effect, in respect of one or more of the following:
(i) provision of specified services, or provision of services other than specified services;
(ii) provision of services to a specified class of persons, or provision of services to persons other than persons included in a specified class of persons;
(iii) provision of services within a specified location, or provision of services otherwise than in a specified location;
...
(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. ;
(2) s 106U is to be read in the context of the object of Pt VAA of the Act, which is set out in s 79A of the Act as follows:
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.; and
(3) the power to make directions under s 106U(1) is protective and not punitive: see Selia v Commonwealth of Australia [2017] FCA 7 at [153]; Sevdalis v Director of Professional Services Review (No 2) [2016] FCA 433 at [135] to [136], [145] and [148]; Norouzi at [104] and Kutlu v Director of Professional Services Review [2011] FCAFC 94; (2011) 197 FCR 177 at 204 [86] (and the cases cited therein).
83 The respondent emphasised that the protective character of the power means that it may be used for both compensatory and deterrent purposes (Sevdalis at [148]; Selia at [153]) and that the purpose of deterrence includes both general and specific deterrence (Sevdalis at [148]).
84 I also bear in mind that the Final Determination is to be read as a whole and fairly; and not with an eye keenly attuned to the perception of error. Further, the Court should not be concerned with looseness in language or unhappy phrasing: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 271 to 272 (Brennan CJ, Toohey, McHugh and Gummow JJ); Plaintiff M1/2021 v Minister for Home Affairs [2022] HCA 17; (2022) 96 ALJR 497 at 512 [38] (Kiefel CJ, Keane, Gordon and Steward JJ). As Burley J explained recently in Hickey v Australian Postal Corporation [2023] FCA 57 at [45], it is the substance of the reasoning that is important.
85 The applicant submitted that the disqualification direction was legally unreasonable because:
(1) the Authority’s reasoning was logically unsound and included findings unsupported by probative evidence;
(2) the disqualification direction was made for a purpose beyond the purpose of Part VAA as explained in s 79A of the Act; and
(3) the Authority failed to engage with the applicant’s circumstances, including the issue of the hardship that would be caused to the applicant if the disqualification direction were made, or to engage meaningfully with his submissions to that effect.
86 These grounds are considered in turn below.
(1) Logically unsound reasoning
87 The applicant contended that there was an inconsistency in the Authority’s findings concerning the changes to item 12250. He referred to the following findings by the Authority (at [40(a)]):
(1) item 12250 had been amended in ways which related to reasons given by the Committee for its findings of inappropriate practice;
(2) as amended, item 12250 no longer requires sleep physicians to confirm the necessity of the investigation before it takes place; and
(3) the amendment of item 12250 supported “a conclusion that [the applicant] is less likely to engage in inappropriate practice in the future”.
88 The applicant then contended that such findings were inconsistent with (the emphasised text below in) [46]:
For the reasons outlined above, the Committee identified significant deficiencies in [the applicant’s] system of work, including a distinct lack of adequate supervision and understanding of the services performed. Whilst the Determining Authority is always open to directing a partial repayment in appropriate circumstances, the Determining Authority is not satisfied that [the applicant] has provided compelling reasons in support of a reduction in the amount that should be repaid in this case. Having regard to [the applicant’s] further submissions, the Determining Authority accepts that a number of changes have been made to the MBS item descriptor and [the applicant’s] practice since the review period, but they do not go to the reasons for [the applicant’s] non-compliance in relation to the services found to constitute inappropriate practice. The Determining Authority is concerned that any reduction on the amount potentially repayable will not sufficiently deter [the applicant], and other practitioners, from engaging in inappropriate practice in the future.
(emphasis added)
89 The inconsistency is contended to be that on the one hand the Authority found (at [40(a)]) that the changes to item number 12250 did go to the reasons for the applicant’s non-compliance; but on the other hand found (at [46]) that those changes did not.
90 I do not accept this submission. The applicant seeks to construe the expression “do not go to the reasons for [the applicant’s] non-compliance” as meaning “are not relevant to the reasons for [the applicant’s] non-compliance”. Such a reading is not a fair reading when it is clear from the remainder of paragraph [40(a)] and elsewhere in the Final Determination that the Authority did take into account the changes to item 12250, but considered that such changes related to only a part of the reasons for the applicant’s non-compliance.
91 On a fair reading of [46] as a whole in the context of the Final Determination as a whole, the Authority’s reference in [46] to “do not go to the reasons for [the applicant’s] non-compliance” is an expression of a conclusion that the changes to item 12250 do not address all of the reasons for the applicant’s previous non-compliance.
Changes to the applicant’s practice
92 The applicant also contended that there was an inconsistency in the Authority’s findings concerning changes to his practice. The applicant referred to (the emphasised text below within) [40(b)] of the Final Determination:
[The applicant] submits that he is completely compliant with the current requirements and has also satisfied himself that Air Liquide Healthcare, which took over from Healthy Sleep Solutions in relation to the provision of the services, has modified practices to ensure such compliance. [The applicant] further submits that he continues to educate and supervise the sleep technicians and the data scorers, in part because of his involvement in the PSR process. [The applicant] has satisfied himself that those persons are appropriately qualified and there are ongoing quality assurance measures which are in place to review that aspect of the study. For example, if [the applicant] has any concerns about any possible scoring errors or possible interpretation of specific portions of the scored data, he will contact the scorers and request clarification.
These submissions contain a number of assertions as to how he currently operates in compliance with the MBS requirements, which the Determining Authority accepts. However, in the absence of supporting evidence in relation to the many of the stated changes, the Determining Authority considers that the further submissions provide limited reassurance as to the potential risks of inappropriate practice in the future. This is particularly so where [the applicant] continues to hold the view that he provided the services were provided appropriately in the review period.
(emphasis added)
93 The applicant then contended that the Authority on the one hand had accepted at [40(b)] that he had made changes to his practice and that these go to the reasons for his non-compliance; but on the other hand had stated at [46] that the changes to the applicant’s practice “do not go to the reasons for [the applicant’s] non-compliance in relation to the services found to constitute inappropriate practice”. He suggested that this is an inconsistency in the Authority’s reasoning.
94 I do not accept this submission. Again, the applicant construes the expression “do not go to the reasons for [the applicant’s] non-compliance” as an expression of relevance. Such a reading is not a fair reading when it is clear from the remainder of paragraph [40(b)] and elsewhere in the Final Determination that the Authority did take into account the changes to the applicant’s practice, but considered that such changes provided limited reassurance in view of the absence of supporting evidence and the applicant’s lack of acceptance of the Committee’s findings: see [32], [38] and [40(b)]. Again, on a fair reading of [46] as a whole in the context of the Final Determination as a whole, the Authority’s reference in [46] to “do not go to the reasons for [the applicant’s] non-compliance” is its way of stating that the changes do not address all of the reasons for the previous non-compliance.
95 The applicant also submitted that there was a contradiction between:
(1) the Authority’s acceptance:
(a) of the applicant’s assertions or submissions as to how he currently operates in compliance with the MBS requirements ([40](b)]);
(b) that there was no evidence to support a finding that the applicant was presently engaging in inappropriate practice ([49]); and
(2) its suggestion that the applicant was currently engaging in inappropriate practice and that he may do so in the future. In support of this submission the applicant referred to [40(c)], [46] and [48(b)] of the Final Determination and in particular to the Authority’s statement in [48(b)] that it was “not satisfied that [the applicant] would necessarily meet the current requirements for the provision of [MBS item 12250] services, noting that adequate supervision is still a key feature of the MBS item descriptor”.
96 I do not accept this submission. The Authority did not suggest that the applicant was currently engaging in inappropriate practice. Further, the submission conflates the Authority’s views as to the present and the future. As to the present, the Authority indicated at [40(b)] that it accepted various assertions made by the applicant as to how he currently operated in compliance with MBS requirements; and at [49] rejected a submission from the applicant that it was suggesting that he was continuing to engage in inappropriate practice. As to the future, the Authority expressed several times its concerns as to the risk that the applicant would engage in inappropriate practice in the future (see [75] to [76] above).
97 There is no inconsistency. It is possible to hold both the view that a person is not presently engaging in inappropriate practice (or that there is no evidence of such) and the view that there is a risk (based upon their past conduct) that they may engage in inappropriate practice in the future.
Availability of other providers of item 12250 services
98 Finally, the applicant submitted that the Authority reasoned illogically by finding that there were likely to be other providers available to provide the item 12250 services provided by the applicant if the applicant were to be disqualified, because that finding was: (1) unsupported by evidence; and (2) contrary to the evidence provided by the applicant to the Authority.
99 I am not persuaded by this submission for the following reasons.
100 First, it is not clear that the Authority made a positive finding that other practitioners were “likely” to be available. Whilst that term was used at [27], at [50] the Authority stated “there may be others”.
101 Secondly, I am not persuaded that specific evidence was necessary to establish that other practitioners were likely to be available, in circumstances where:
(1) the Authority, as constituted, included medical practitioners and in particular a practitioner within the same profession as the applicant. As such, the Authority was entitled to draw upon its own expertise and the Court would not lightly find that it acted unreasonably in doing so: see Selia at [104]; and
(2) the applicant’s own submission, as recorded at [37] of the Authority’s reasons – that his interpretation of the item 12250 descriptor was one that was reasonably open and supported by the practices of Healthy Sleep Solutions and the specialists who gave evidence on his behalf – suggests the availability of other practitioners.
102 Thirdly, to the extent that evidence was required, it was available and supported the Authority’s finding. The applicant put before the Authority evidence from a series of doctors. The applicant’s submissions to this Court summarised that evidence as follows:
(a) Tony Kelly, Managing Director of Healthy Workplace Solutions Pty Ltd, stated:
[The applicant] has been allocated to report for HSS franchisees located in regional and outer metropolitan areas due to [the applicant’s] willingness to offer telehealth consultations. The experience of HSS has been that sleep physicians are often reluctant to provide telehealth services. HSS values [the applicant’s] willingness to provide telehealth services as it increases access to healthcare for patients located in regional and outer metropolitan areas.
(b) Margaret Holt, of Air Liquide Healthcare in the Southern Highlands of NSW, stated:
If [the applicant] were unable to conduct, or was unavailable for, Telehealth Consultations, this would have a great impact on many of our patients, particularly since there is only one other Sleep Specialist operating in the Southern Highlands at this time.
(c) Gerard Gleeson, Registered Nurse and Sleep Technician of Bundaberg, Queensland, stated that there was only one private sleep and respiratory specialist in the area and the applicant “fills a large gap in service provision for the Wide Bay Burnett and Rockhampton regions”;
(d) Alicia Chaillon of Air Liquide, Townsville, stated that the applicant provided “an invaluable service to our large population in regional Qld who otherwise would wait months just to initially access medical help in the public sector here in North Queensland” and that the population relied “heavily on the services of [the applicant]”;
(e) Karen Green, sleep technician, in the Illawarra area of NSW, stated that if it was not for the applicant’s service, her clients/patients may have to travel a considerable distance to be able to see a Sleep Physician and that his service would be “irreplaceable if it was to be taken away”;
(f) Christine Hackett, sleep technician in Mandurah, Baldivis, Busselton stated that if the applicant was not available, “patients may otherwise not be able to undergo home based sleep studies and would have to resort to the Public Health System, which has a long wait list”;
(g) The applicant’s evidence was that “patients situated predominantly in rural and remote areas of Queensland, Western Australia, South Australia and to a lesser extent NSW, and primary care physicians caring for such patients, would be seriously disadvantaged should any disqualification take place by my being prevented from accessing MBS item 12250”. That was because he provided “services to communities which otherwise would have no such access”.
(applicant’s emphasis)
103 The evidence quoted in the applicant’s submissions suggests the availability of other practitioners. In particular, Ms Holt and Mr Gleeson refer to the presence of other practitioners in the Southern Highlands and the Wide Bay Burnett and Rockhampton regions; and Ms Chaillon and Ms Hackett refer to the availability of other practitioners within the public health sector (albeit with a delay).
104 The second part of the applicant’s submission is that the finding was contrary to the evidence provided by the applicant to the Authority. The applicant’s summary of that evidence is set out at [102] above. I do not accept that the evidence, as summarised, is contrary to the proposition that other practitioners are likely to be (or may be) available.
105 Thus, to the extent that the Authority found that it was likely that other practitioners would be available such a finding was open to it.
106 For the reasons set out above, there was no lack of logic, or arbitrariness, concerning the disqualification direction.
107 The applicant submitted that the disqualification direction was actuated by an impermissible purpose of punishing the applicant rather than a permissible purpose of protecting the Commonwealth medical benefits program in accordance with s 79A of the Act. The applicant submitted that in view of the terms, scope and purpose of s 106U of the Act, the disqualification direction was so arbitrary and unjust as to fall beyond the range of lawful outcomes, citing BHL19 at 445 [137], with such punitive purpose to be inferred from:
(1) the Authority’s statement (at [51]):
Therefore, so that [the applicant] can reflect further on the Committee’s findings of inappropriate practice and allow adequate time to familiarise himself with the relevant requirements, the Determining Authority directs that [the applicant] be disqualified from rendering MBS item 12250 services for a period of 12 months starting when the determination takes effect
which paragraph the applicant submitted suggests that the purpose of the disqualification direction was to allow the applicant time for reflection and familiarisation and such a purpose makes no sense, and is logically incoherent and arbitrary in circumstances where:
(a) the applicant had submitted that he had carefully considered the Committee’s comments and findings and he had taken advice (at [48(c)];
(b) the applicant had made significant changes to his practice (at [48(c)] and had stated that he was completely compliant with the item descriptor as amended;
(c) the provision of the services in question occurred during the review period of 1 July 2014 to 30 June 2015, and item 12250 was amended shortly afterwards, such that it could not reasonably be said that the applicant had not had “adequate time” to familiarise himself with the relevant requirements;
(d) the Committee had provided the Final Committee Report over two years before the Final Determination, such that “further” reflection on the Committee’s findings of inappropriate practice was not reasonably necessary; and
(2) the hardship to the applicant that would follow from the disqualification direction and in particular by limiting his income-earning ability and future work prospects, given his particular circumstances and a lack of engagement with such consequences.
108 For the following reasons, I am not satisfied that the Authority acted with an unlawful purpose in making the disqualification direction.
109 First, the Authority correctly identified at [30] the protective and non-punitive nature of the power it was exercising under s 106U of the Act. At [35], it reiterated that in deciding upon appropriate directions it must seek to achieve the over-arching objective of protecting the integrity of the Commonwealth Medicare and pharmaceutical benefits program. Similarly, at [47] the Authority stated that “the objective of the PSR scheme is to maintain the integrity of the Medicare system and in doing so protecting the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice”.
110 Secondly, the disqualification direction – relating to one item for a period of 12 months – is not, on its face, punitive rather than protective.
111 Thirdly, the text of the Final Determination reveals that the Authority was motivated by a protective purpose. In particular:
(1) as explained at [63] above, the Authority considered the Committee’s findings and as a result held grave concerns about the applicant’s conduct. Indeed the wording of the disqualification direction itself indicates that it was made “[h]aving regard to the reasons for the Committee’s findings of inappropriate practice” (at [55]); and
(2) as explained at [75] to [76] above, the Authority considered there to be a risk that the applicant would engage in inappropriate practice in the future, including risks directly arising from the applicant’s non-acceptance or begrudging acceptance of the Committee’s findings including:
(a) at [32], where the Authority stated:
The proposition that [the applicant’s] inadequate involvement in the provision of the services constitutes ‘mere administrative errors’ raises serious concerns about [the applicant’s] understanding of what is required, and creates genuine risk of inappropriate practice in the future.
(b) at [38], where the Authority stated:
[The applicant] also submits that he accepts the Committee’s findings, but nevertheless states that he continues to believe that his provision of the MBS item 12250 services was appropriate. It is difficult to reconcile the two positions. The Committee found that [the applicant’s] provision of the MBS item 12250 services was unacceptable to the general body of consultant physicians in respiratory and sleep medicine, indicating that the Committee did not consider [the applicant’s] view of what was required was reasonably open to him. Ultimately, [the applicant] indicates that he accepts that the findings were open to the Committee, but the Determining Authority considers such acceptance is heavily qualified and only goes some way towards alleviating its concerns about the risks of inappropriate practice in the future.
(c) at [40(b)], where the Authority stated:
These submissions contain a number of assertions as to how he currently operates in compliance with the MBS requirements, which the Determining Authority accepts. However, in the absence of supporting evidence in relation to the many of the stated changes, the Determining Authority considers that the further submissions provide limited reassurance as to the potential risks of inappropriate practice in the future. This is particularly so where [the applicant] continues to hold the view that he provided the services were provided appropriately in the review period.
(emphasis added)
112 Fourthly, there is no indication in the text of the Final Determination that the Authority considered that the power it was exercising was punitive; or that it sought to punish the applicant.
113 Fifthly, I do not accept the applicant’s submission that [51] of the Final Determination is evidence of a punitive purpose. A purpose of allowing the applicant further time to reflect on the Committee’s findings of inappropriate practice and to familiarise himself with the relevant requirements is a protective purpose when considered in the context of the Final Determination as a whole and in particular the Authority’s grave concerns about the applicant’s conduct (see [63] above) and its assessment that there was a risk that the applicant would engage in inappropriate practice in the future including by reason of its concerns that the applicant had not understood or had downplayed the significance of such conduct (see [75] to [76] above).
114 Sixthly, whilst it may be accepted that the applicant had made submissions that: (1) he had carefully considered the Committee’s comments and findings, and had taken advice; (2) he had made significant changes and was completely compliant with the item descriptor as amended, the Authority did not (and was not bound to) accept those submissions. Further, the applicant’s submission that sufficient time had passed for him to reflect upon the changes to item 12250 and the Committee’s findings is misconceived, when the Authority’s conclusions reflected its concerns as to the applicant’s understanding at the time he was making submissions to it. In other words, despite the passage of time, concerns remained.
115 Seventhly, for the same reasons I do not accept the applicant’s submission that the purpose stated at [51] was logically incoherent and arbitrary or made no sense; and thus that it should be inferred that the actuating purpose was punitive.
116 Finally, I do not accept the applicant’s submission that the making of the disqualification direction despite the applicant’s submissions as to hardship is evidence of a punitive purpose. It was open to the Authority to make the disqualification direction for a protective purpose despite the contended hardship. It is clear that the Authority considered the applicant’s submissions concerning hardship (see [117] to [119] below). The Authority also considered the matters described above, which are clearly of a protective nature. Thus, it does not follow that the making of the disqualification direction despite the applicant’s submissions as to hardship was actuated by a punitive purpose.
(3) Failure to engage with the hardship that the disqualification direction would cause to the applicant
117 The applicant submitted that the Authority acted unreasonably by failing to engage with the question of the hardship that the disqualification direction would cause to the applicant, in circumstances where: (1) the Authority did not doubt the applicant’s account of his current circumstances (at [19] and [28]); and the Authority was obliged to afford meaningful consideration to the applicant’s representations on this issue, given that this was a significant matter raised in the representations, and to engage in an active intellectual process with reference to those representations by reason of s 106TA(l) of the Act and Minister for Home Affairs v Omar [2019] FCAFC 188; (2019) 272 FCR 589 at [34(i)] and [36(d)].
118 I do not accept the submission that the Authority failed to engage meaningfully with the applicant’s submissions as to his hardship. It is clear from the Final Determination that it did so. As noted at [77] above the applicant’s submissions as to his financial position were recorded in some detail by the Authority, together with a submission that he was not in any realistic position to make a significant repayment. The Authority explicitly accepted that the repayment amount of $1,959,718.75 was “substantial” and would have a “significant impact” upon the applicant’s finances (at [45] and [47]). The Authority also acknowledged that a possible consequence was the bankruptcy of the applicant. It noted that it was open to the applicant to discuss potential repayment options with the Department of Health (at [45]).
119 Further, and specifically in relation to the effect of the disqualification direction (separately from the repayment direction), the Authority noted (at [27]) that:“[i]n terms of [the applicant’s] practice itself, a partial disqualification from one MBS item number will not prevent him from providing other necessary services”.
120 I turn now to the repayment direction.
121 The applicant submitted that the repayment direction was legally unreasonable for the following reasons:
(1) the Authority erroneously assumed that it should make a direction that the full amount of the benefits paid to the applicant be repaid, unless a “reduction” in that amount could be justified;
(2) the Authority otherwise employed a logically unsound process of reasoning in support of the repayment direction; and
(3) the direction was not made consistently with the protective purpose of ss 106TA and 106U of the Act and was, in effect, punitive.
122 These grounds are considered in turn below.
(1) The Authority erroneously assumed that it should make a direction that the full amount of the benefits paid to the applicant be repaid, unless a “reduction” in that amount could be justified
123 The applicant submitted that the Authority erroneously started from the position that it should make a direction for the repayment of all monies paid by the Commonwealth for services for which findings of inappropriate practice had been made, unless the applicant could persuade it to do otherwise; and thereby placed an onus on the applicant to satisfy the Authority that a repayment direction for the repayment of all monies paid by the Commonwealth should not be made. The applicant relies upon the following statements in the Final Determination:
(1) “However, having regard to the serious deficiencies identified by the Committee in its Report, the Determining Authority is not convinced that this is a persuasive factor in relation to a potential reduction in the amount to be repaid” ([34(b)]);
(2) “While mitigating factors can lead to a reduction in the amount repayable, the Determining Authority is not satisfied that [the applicant’s] further submissions would justify any reduction in this case” ([43]); and
(3) “Whilst the Determining Authority is always open to directing a partial payment in appropriate circumstances, the Determining Authority is not satisfied that [the applicant] has provided compelling reasons in support of a reduction in the amount that should be repaid in this case” ([46]).
124 I am not persuaded that the Authority started from the position that all of the benefits paid in respect of the inappropriate practice were to be repaid unless the applicant could justify a reduction in that amount. Rather, on a fair reading of the Final Determination, the Authority:
(1) was clearly aware that it had a broad discretion with respect to the directions that it might make; that the discretion might be for the payment of an amount equivalent to the whole, part or some of the amounts paid for services found to constitute inappropriate practice; and that in deciding upon an appropriate direction it was to be guided by the over-arching objective of protecting the Medicare benefits program (at [35] to [36]). Further, the Authority stated at [46]: “Whilst the Determining Authority is always open to directing a partial repayment in appropriate circumstances, …”;
(2) formed the view that the applicant had engaged in conduct of such gravity that he should be ordered to repay all of the moneys that had been paid out by the Commonwealth in respect of the services rendered by the applicant for which findings of inappropriate practice had been made, unless there were mitigating factors; and
(3) considered whether there were mitigating factors and decided that there were not.
125 The use of the expressions “persuasive factor” and “compelling reasons” is a reflection of the Authority’s assessment of the gravity of the applicant’s conduct and does not reflect the adoption of a universal starting position of complete repayment, or the imposition of any onus upon the applicant.
(2) The Authority otherwise employed a logically unsound process of reasoning in support of the repayment direction
126 The applicant submitted, in summary, that the Authority:
(1) reasoned illogically by finding, inconsistently with the evidence and with its earlier findings, that the changes made to the item descriptor and to the applicant’s practice “do not go to the reasons” for the applicant’s noncompliance. For the reasons discussed at [87] to [94] above, I am not persuaded that the Authority’s reasoning was illogical;
(2) found, without evidence, that the ongoing treatment of a patient to whom an item 12250 service was provided is for the sleep physician to manage and relied upon this finding when rejecting the applicant’s submission that the Authority should take into account the benefits patients gained from the applicant’s services. I disagree. As noted above, the Authority, as constituted, included medical practitioners and in particular a practitioner within the same profession as the applicant and as such, the Authority was entitled to draw upon its own expertise and the Court would not lightly find that it acted unreasonably in doing so: see Selia at [104].
127 The applicant also submitted that there was illogicality in the Authority’s finding at [46] that a direction to repay less than the full amount of Medicare benefits the applicant received would not deter the applicant, or other practitioners, from engaging in inappropriate practice in the future was unreasonable or irrational in circumstances where:
(1) there was no evidence that the applicant would not be deterred from inappropriate practice in the future by a partial repayment direction;
(2) the Authority had accepted the applicant’s assertions as to how he currently operates in compliance with the MBS requirements (at [40(b)]) and had stated that it could not form a view on the available evidence that he was engaging in inappropriate practice at present (at [49]);
(3) the nature of any direction made would remain subject to the secrecy provision in s 130 of the Act, unless the Director of Professional Services Review decided to publish the directions under s 106ZPR of the Act, which was a discretionary matter for the Director, such that a full repayment direction may not have any deterrent effect on others in any event;
(4) the full repayment direction was for $1,959,718.75, and it was unreasonable to conclude that a direction to repay a portion of that amount, say 50 per cent or approximately $1 million, would not have a sufficient deterrent effect; and
(5) the applicant’s financial and personal circumstances were such that it could be inferred that a partial repayment direction would have a significant deterrent effect.
128 I do not accept these submissions for the following reasons.
129 First, the Authority did not make a finding that a direction to repay less than the full amount of Medicare benefits the applicant received would not deter the applicant, or other practitioners, from engaging in inappropriate practice in the future. At [46], the Authority stated:
The Determining Authority is concerned that any reduction on the amount potentially repayable will not sufficiently deter [the applicant], and other practitioners, from engaging in inappropriate practice in the future.
130 Thus, the Authority was expressing its concern, not making a finding.
131 Secondly, in any event, there was nothing illogical about the Authority forming such a concern in view of the findings of the Committee and the submissions that the applicant had made to the Authority, and in particular the Committee’s findings as to the scope of the applicant’s conduct; the gravity of such conduct and the applicant’s submissions to the Authority which it found to reflect a failure by the applicant to appreciate the gravity of such conduct.
132 Thirdly, the matters described at [127(2) to (5)] above do not establish any illogicality in the Authority’s reasoning. At best, those matters may be relevant to the exercise of the Authority’s discretion. The applicant’s submission is in substance a submission which invites impermissible merits review.
(3) The repayment direction was not made consistently with the protective purpose of s 106TA and 106U of the Act and was, in effect, punitive
133 The applicant invites the Court to infer, from various matters, that the repayment direction was made for a punitive, rather than a protective, purpose and as such for a purpose beyond the purposes of the Act.
134 The first matter is that the repayment direction required the applicant to repay moneys disbursed by the Commonwealth regardless of whether he received the benefit of those moneys. However, such an outcome is expressly contemplated by s 106U(1)(cb) of the Act, which provides:
(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 …
(emphasis added)
135 That is, the sub-section operates by reference to the amounts paid by the Commonwealth “whether or not to the person under review” and contemplates repayment, by the person under review, of the whole or part of the total of Medicare benefits paid in connection with services found to have been provided by the person under review as part of an inappropriate practice.
136 The second matter relied upon by the applicant is his submission that the relevant question is whether the repayment direction is appropriate to protect the integrity of that program, having regard to the circumstances of the case; and the Authority did not address that question and instead (at [34(c)]) focussed upon whether the applicant’s provision of services caused Commonwealth expenditure . Contrary to the applicant’s submission a fair reading of the Final Determination reveals that the Authority considered this very question.
137 In any event, s 79A(b) of the Act specifically identifies that part of the object of Pt VAA of the Act is the protection of the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice.
138 For the same reasons, I reject the applicant’s submission that the protection of the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice is not an object of Pt VAA of the Act.
139 The third matter relied upon by the applicant is his submission that it was open to the Authority to conclude that the integrity of the scheme could be achieved by directions requiring the applicant to pay back moneys he actually and personally received for services provided as a result of inappropriate practice, had it considered this; and instead the repayment direction required the applicant to “repay” moneys, not only moneys he actually received but also the remainder of the moneys paid by the Commonwealth . This submission invites merit review. Whether the integrity of the scheme could have been achieved by a direction that the applicant repay only the moneys he had received was a matter squarely within the decisional freedom of the Authority. It decided that a full repayment was appropriate and that decision was well open to it, particularly in view of the wording of ss 79A(b) and 106U(1)(cb) of the Act discussed above.
140 The fourth matter relied upon by the applicant was that in the course of rejecting the applicant’s submission that the Authority should make a direction requiring only part repayment, the Authority stated (at [36]) that it:
… considers it fundamental to protecting the integrity of the Commonwealth medicare benefits scheme that practitioners are required to comply with relevant Medicare requirements.
141 The applicant submitted that:
(1) in circumstances where the Authority has no power to direct a practitioner to comply with Medicare requirements the above statement contains a non-sequitur;
(2) while it is unclear what the Authority means, the sub-text of the statement appears to be that, because the applicant did not comply with Medicare requirements, the applicant should be directed to repay the full amount of benefits received; and
(3) however, the power to make a direction is only enlivened where a practitioner has engaged in inappropriate practice. The argument is therefore circular and seems to involve an assumption that a practitioner should be required to repay the full amount of benefits paid unless there are first compelling reasons for not making such a direction.
142 In my view, paragraph [36] is unremarkable. It does not depend upon the Authority having power to direct compliance and it is not expressed in that way. It is clear that the Authority has power to make directions dealing with the consequences of non-compliance and that paragraph [36] is directed to that end and the effect that such directions may have on future compliance by deterring practitioners from non-compliance.
143 The fifth matter relied upon by the applicant is the proposition that protection of the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice is not an object of Part VAA of the Act, as such; and that, rather s 79A of the Act indicates that such protection may be achieved through the protection of the integrity of the Commonwealth Medicare benefits program. The appellant submitted that the Authority erred and acted unreasonably to the extent that it treated protection of Commonwealth funds as a stand-alone object .
144 I do not accept these submissions. Protection of the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice is clearly part of the object of Part VAA of the Act (see s 79A(b)) and thus was a matter properly taken into account. Further, it was not the only matter taken into account – as is clear from the Final Determination the Authority also took into account the protection of patients and the community in general from the risks associated with inappropriate practice (s 79A(a)) and the protection of the integrity of the medical benefits program (s 79A chapeau).
145 The final factor relied upon by the applicant was the proposition that the repayment direction, would cause the applicant significant hardship, given his circumstances. For the reasons set out at [117] to [119] above, the Authority properly took into account the applicant’s submissions concerning his contended hardship. That this factor did not prevent the imposition of the repayment direction is not evidence that that direction was activated by an improper purpose.
146 None of the matters raised by the applicant individually or collectively, demonstrate that the repayment direction was activated by an improper purpose.
(4) Failure to engage with the hardship that the repayment direction would cause to the applicant
147 The applicant also submitted that the Authority failed to engage with the hardship that the repayment direction would cause to the applicant. The applicant submitted, in summary that:
(1) the material before the Authority disclosed that the applicant was a doctor in his seventies suffering from prostate cancer who had intended to retire in two years; he had practised as a doctor since 1971 and considered that he had upheld the highest of medical standards and been held in the highest regard by colleagues; he stated that to have had his character and integrity questioned by a finding of inappropriate practice had been “incredibly devastating”; the applicant’s assets were heavily encumbered and his income reduced; the applicant had submitted that the repayment direction would have the effect of financially crippling him, and possibly leading to him declaring bankruptcy; and he was at a time in his life and in a state of health where he had little scope for building any financial security for his retirement;
(2) the Authority was obliged to give meaningful consideration to the applicant’s representations on the issue of hardship, given that this was a significant matter raised by him, and to engage in an active intellectual process with reference to those representations: s 106TA(l) of the Act; Omar at [34(i)] and [36(d)]. This is particularly important where the consequences of the considerations have serious human consequences, as they did for the applicant (Navoto v Minister for Home Affairs [2019] FCAFC 135 at [87];
(3) genuine consideration of the human consequences demands honest confrontation of what is being done to people: Hands v Minister for Immigration and Border Protection [2018] FCAFC 225; (2018) 267 FCR 628 at [3];
(4) the Authority failed to confront this, or to take into account the applicant’s submissions as it was required to do under ss 106T(l) and 106TA(l);
(5) the Authority failed to engage with the question of the hardship to the applicant which would be caused by the repayment direction other than to state that it accepted “that a substantial repayment would have a significant impact on his finances” and that his possible bankruptcy was not “a compelling reason not to seek an appropriate amount” (at [45]); and
(6) apart from failing to confront the direct personal impact of its decision on the applicant, the Authority failed to consider that any potential repayment options would be exceedingly limited for a person with his serious health issues who was also planning to retire at age 75.
148 For the reasons set out at [118] and [119] above, I do not accept that the Authority failed to engage with the hardship that the repayment direction would cause to the applicant.
149 I am not satisfied that the repayment direction was attended by legal unreasonableness.
150 The Authority’s disqualification and repayment directions each had a logical and intelligible basis. The Authority was concerned as to the gravity and extent of the applicant’s inappropriate conduct as found by the Committee. It was also concerned that the applicant had not accepted or appreciated the gravity of the Committee’s findings. It concluded that there was a risk that the applicant would engage in inappropriate conduct in the future. In imposing the disqualification direction and the repayment direction, the Authority took into account the above matters, together with the objects of Part VAA of the Act. It also gave consideration to the applicant’s submissions including his submissions as to the effect that the disqualification direction and the repayment direction would have upon him. The directions that it made were
open to it and the applicant has not established that either direction was attended by legal unreasonableness. The application should be dismissed, with costs.
I certify that the preceding one hundred and fifty (150) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman. |
Associate:
