Federal Court of Australia
Soryal v Director of Professional Services [2023] FCA 326
ORDERS
Applicant | ||
AND: | DIRECTOR OF PROFESSIONAL SERVICES REVIEW Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The applicant’s amended originating application filed 26 July 2022 be dismissed.
2. The applicant pay the respondent’s costs to be taxed unless otherwise agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
COLLIER J:
1 Before the Court is an application for judicial review of a decision of the respondent, the Director of Professional Services Review (Director), made under Part VAA s 93 of the Health Insurance Act 1973 (Cth) (HI Act). Relevantly, on 4 November 2021 the Director made a referral to a Professional Services Review Committee (PSR Committee) to investigate whether the applicant, Dr Paul Soryal, had engaged in inappropriate practice within the meaning of s 82(2) of the HI Act in providing services under the Child Dental Benefits Schedule (CDBS).
2 By an amended originating application filed 26 July 2022 the applicant seeks the following Orders:
(1) an order quashing or setting aside the decision with effect from the date of the order or from such earlier or later date as the court specifies;
(2) an order declaring the rights of the parties in respect of any matter to which the decision relates;
(3) such other order as the Court sees fit.
3 The applicant also seeks costs of this application.
background
4 The applicant is a registered dental practitioner under the Health Practitioner Regulation National Law, being the schedule to the Health Practitioner Regulation National Law Act 2009 (Qld) and adopted in Victoria by section 4 of the Health Practitioner Regulation National Law (Victoria) Act 2009 (Vic).
5 In September 2018 the applicant applied to the Chief Executive Medicare for a Medicare Provider Number pursuant to the Dental Benefits Rules 2014 (Cth) (Dental Benefits Rules) and Health Insurance Regulations 2018 (Cth).
6 On 8 October 2018 the Chief Executive Medicare allocated the applicant a Medicare Provider Number, which allowed the applicant to facilitate billing under the CDBS. Consequently, the applicant’s practice became subject to Part VAA of the HI Act.
7 After receiving his Medicare Provider Number the applicant entered into arrangements with Future Care Dental Group (Future Care Dental), Smiles Inclusive Limited t/as Totally Smiles (Totally Smiles) and RA Morkos Pty Ltd t/as Teeth N Smiles (Teeth N Smiles).
8 Materially, those arrangements permitted the use of the applicant’s Medicare Provider Number for mobile dental services to kindergarten and school children at locations in Victoria and New South Wales for services by Oral Health Therapists (OTHs) engaged by Future Care Dental, Totally Smiles and Teeth N Smiles. In exchange for use of the Medicare Provider Number the applicant received a flat retainer fee of $150.00 plus GST per day. In addition, the applicant agreed that he would make himself available by phone or email if any of the OTHs had questions, and would review and approve treatment notes and proposed treatment plans. Overall, the applicant received a sum of $23,925.00 from the retainer fee.
9 For the period 1 December 2018 to 30 November 2019 (Review Period) 18,623 CDBS services were rendered to 4,644 patients under the applicant’s Medicare Provider Number, resulting in $908,351.41 worth of dental benefits being paid by the Commonwealth. Predominately, those services included the following items under the CDBS:
Item 88011 – comprehensive oral examination – teeth, supporting tissues and oral tissues including recording a medical history;
Item 88111 – removal of plaque and/or stain;
Item 88114 – removal of calculus – first visit;
Item 88121 – topical application of remineralisation and/or cariostatic agents, one treatment; and
Item 88161 – fissure and/or tooth sealing – per tooth.
10 At relevant times, only registered dentists or dental specialists allocated a Medicare Provider Number were permitted to provide dental services as a “dental provider”, pursuant to s 6 of the Dental Benefits Act 2008 (Cth) (Dental Benefits Act) and rule 6 of the Dental Benefits Rules. Further, s 3 of the Dental Benefits Act provides that a “[d]ental benefit is payable if dental expenses are incurred in respect of a dental service rendered to an eligible dental patient”.
11 The term “dental expenses” is defined in s 4 of the Dental Benefits Act as “an amount payable in respect of a dental service” and the term “dental service” is defined to mean “a clinically relevant service specified in an item, being a service rendered by or on behalf of a dental provider”. Although OTHs were not dental providers capable of rendering dental services, OTHs and other classes of persons could render services “on behalf of” a dental provider under rule 7 of the Dental Benefits Rules.
12 On 28 January 2020 the Department of Health contacted the applicant to discuss concerns regarding the applicant’s billing under the CDBS. The applicant was then interviewed on 13 and 27 February 2020.
13 On 12 March 2020 the Department of Health wrote to the applicant and advised that a delegate of the Chief Executive Medicare would review the CDBS servicing under the applicant’s Medicare Provider Number and determine whether a request should be made to the respondent to review the applicant’s provision of services.
14 On 23 July 2020 a delegate of the Chief Executive Medicare wrote to the applicant and invited written submissions in relation to concerns regarding the services provided under his Medicare Provider Number in relation to the CDBS billings. The Chief Executive Medicare remained concerned that the applicant was not providing the requisite level of clinical input into every service, particularly in circumstances where, in one instance, 418 services were rendered to a minimum of 72 child patients in one day. Notably, the delegate observed:
I am also concerned at the ages of the children receiving the services. Very young children have received services such as remineralisation that require a significant degree of cooperation and would take time to perform adequately. I am also concerned at the indications for some of these in young children, such as fissure seals to a number of patients under 5 years of age.
…
Adding to my concern is the level of supervision you may have provided. It appears from your responses at the interviews with the Department’s Dental Adviser that you did not provide any direct supervision of services rendered under your provider number.
Therefore, based on your variance from peers, the ages of children receiving services and your responses at the interviews with the Department’s Dental Adviser, I am concerned that you may have rendered services under the CDBS that were not clinically relevant or did not always meet CDBS item requirements. I am also concerned that on days of higher numbers of services rendered, your peers may not cosier there was adequate clinical input into all services.
15 On 20 August 2020 the applicant made submissions to the delegate that, in summary:
he had obtained no financial benefits from the CDBS billing other than the retainer fee, and therefore had no financial incentive or interest in over-servicing patients;
in relation to the large volume of patients services in one day, some of the OTHs had worked 10-hour days;
the OTHs working with the young patients dealt almost exclusively with children and were very adept at working with them;
The OTHs worked autonomously and would rarely come to the applicant for advice. However, the applicant was available via phone or email should they have questions;
There was no express requirement for the applicant to be physically present whilst the services were being rendered; and
The Dental Board introduced a revised scope of practice guidelines and a Registration Standard on 1 July 2020 which removed the requirements for a structured relationship or supervision between a dentist and OTH and therefore any supervision relationship was superseded.
16 On 15 September 2020 the delegate of the Chief Executive Medicare made a decision under s 86 of the HI Act to request the respondent as the Director of Professional Services Review to review the provision of services of the applicant for the review period and consider whether the applicant may have engaged in “inappropriate practice” within the meaning of s 82 of the HI Act.
17 On 8 December 2020 the respondent gave notice to the applicant pursuant to s 88A(4) of the HI Act that she had decided to undertake a review under s 88A(2) of the Act, given that there was a possibility that the applicant had engaged in inappropriate practice in providing services during the review period.
18 On 31 December 2020 the applicant provided relevant documents in his possession to the respondent. On 12 March 2021 the applicant, through his legal representatives, provided submissions to the respondent. In substance those submissions were as follows:
the applicant did not provide any of the services to any of the patients during the review;
the applicant permitted the use of his Medicare Provider Number by Future Care Dental, Totally Smiles and Teeth N Smiles during the review period;
the applicant did not own Future Care Dental, Totally Smiles or Teeth N Smiles;
future Care Dental, Totally Smiles and Teeth N Smiles engaged the OHTs and received the fees;
the applicant did not initiate the services;
the OHTs performed the services as independent practitioners operating within their own personal and practitioner scope of practice;
the applicant did not receive any direct payment linked to the performance of the services, rather he was engaged as an external contractor on a per diem basis, receiving a total of $24,000;
the applicant was not the person who received payments from Medicare, nor did he have any involvement in making clinical decisions or obtaining consent, patient histories or clinical information forms;
those who initiated, rendered and actually provided the services giving rise to the issue of the item numbers to Medicare were the OTHs working for Future Care Dental, Teeth N Smiles and Totally Smiles; and
the respondent should cease her review of the applicant as there was no jurisdiction.
19 The applicant was interviewed on 27 July 2021. During the interview, the applicant advised, in summary:
he had given use of his Medicare Provider Number as a flat fee remuneration agreement;
his involvement under the Medicare Provider Number was limited to advisory or contactable nature;
he was not involved in making clinical decisions;
that he was satisfied the treatments given were in the scope of the OHTs; and
all of the consent, patient history and clinical information forms were generated by Future Care Dental, Totally Smiles and Teeth N Smiles and that he did not have any input in this.
20 As part of the respondent’s review, an unnamed Consultant was engaged under s 90 of the HI Act, and the Consultant provided a report to the Director on 3 July 2021.
21 On 13 August 2021 the respondent advised the applicant that the review had been completed and that the respondent had decided not to take no further action under s 91 of the HI Act and invited the applicant to make submission as to the appropriate action to be taken. A report was attached to the correspondence pursuant to s 89C of the HI Act, setting out the reasons for the decision. Relevantly, the respondent observed in that report as follows:
…
5. Pursuant to s 88 of the Act, I asked Medicare to provide me with lists of patients to whom CDBS item 88011, 88111, 88114, 88121 and 88161 services were provided by you during the review period.
6. On receipt of Medicare’s lists, formal notices to produce documents were issued to four third parties under s 89B of the Act. The notices required the production of clinical records relevant to services that you provided as the above CDBS items.
….
17. As discussed in our meeting, despite issuing numerous Notices to Produce to entities, including Teeth N Smiles, Future Care Dental Group, Totally Smiles and Deloitte, we were only able to obtain approximately 60% of the records we had requested to review. It is important that patient records are maintained and managed properly to ensure continuity of care. If you have any information or the details of any relevant person(s) which may assist in locating the outstanding records, I invite you to provide that in any response to this report.
22 The respondent’s decision arose from a number of concerns, including for example:
33. I am concerned about whether there was a clinical indication for fissure seals, especially when multiple fissures were sealed on the one occasion, sometimes in children. For example, in one of the reviewed CDBS item 88161 records, eight fissure seals were performed on a patient, as part of a course of treatment including 7 other CDBS items.
(footnotes omitted)
23 The Director addressed the applicant’s concerns regarding her jurisdiction to review and refer the applicant’s conduct as follows:
Jurisdiction
19. In our meeting, your legal representative queried (without prejudice) whether I had jurisdiction to investigate or review your conduct, given that you did not personally perform any services during the review period. Notwithstanding the definition of ‘provides services’ in the Act, I am satisfied that I have jurisdiction for the following reasons.
20. As the Director of PSR, I have the functions, duties and powers conferred on me by Part VAA of the Act. Section 88A (2) of the Act provides that I must decide to undertake a review if it appears to me that there is a possibility that the person has engaged in inappropriate practice in providing the services during the review period.
…
22. A narrower reading of my jurisdiction would frustrate the object of Part VAA of the Act, being to protect the integrity of Commonwealth Medicare benefits, dental benefits and pharmaceutical benefits programme.
…
24. I consider that your practice arrangements for allowing services to be billed under your Medicare provider number constitutes “conduct” in connection with the rendering of the relevant CDBS services. I also consider that your oversight of the services, including supervision of the practitioners providing the services, constitutes “conduct” which may be considered unacceptable to the body of dental practitioners.
(bold in original, footnotes omitted)
24 On 13 September 2021 the applicant, through his legal representatives, made submissions to the respondent in response to the s 89C report. Those submissions were largely in the same form as submitted on 12 March 2021. Overall, the applicant maintained that Part VAA of the HI Act did not apply to him, and that the respondent did not have jurisdiction under the HI Act to investigate or review him.
25 On 4 November 2021 the respondent advised the applicant that she had decided to refer the applicant to a PSR Committee under s 93 of the HI Act, to be constituted by:
Dr Gregory Morris as Chairperson of the Committee in accordance with s 95(1)(a) of the HI Act, being a Deputy Director within the meaning of the HI Act;
Dr Andrew Gikas as a Panel member in accordance with s 95(1)(b) of the HI Act;
Dr Marietta Taylor as a Panel member in accordance with s 95(1)(b) of the HI Act.
26 The Director, in that correspondence, included a notice to the PSR Committee with relevant sections of the HI Act, a copy of the Director’s Report for the PSR Committee pursuant to s 93(6) of the HI Act and a copy of Medicare’s Request for Review. At this point, the Director disclosed in the Director’s Report for the PSR Committee under the heading “Material considered” that she had considered “comments from a consultant (engaged under section 90 of the Act) who is a currently practising dentist.” Relevantly, the Director commented in the Director’s Report for the PSR Committee:
Referral class size
16. In referring Dr Soryal to this Committee, I am referring the services that were provided from the location specified in the Request as ‘Location 5, Future Care Dental Group F, West Gosford NSW 2250’ (FCDF West Gosford) during the Review Period.
17. The Request identified that there were two primary practice locations, namely the New South Wales and Victorian arms of FCDG. In my attempts to source these records, it became apparent that the Victorian arm was acquired by a company named Totally Smiles Pty Ltd during the Review Period, which has since gone into voluntary administration. I was able to obtain and review the records from the New South Wales location, by issuing a Notice to produce to Teeth N Smiles, Gosford NSW as per the instruction from Dr Soryal as to who had custody of the records. However after protracted attempts I was unable to obtain records from the Victorian location in order to review those services.
18. I have therefore decided to limit the class of services referred to the Committee to only include services that were rendered at FCDG West Gosford.
27 On 5 November 2021 the applicant, through its lawyer, requested by email that the Professional Services Review Agency confirm whether the patient clinical records were the totality of the records held and considered by the respondent in the making of the decision to refer the applicant to the PSR Committee. On 8 November 2021 the Professional Services Review Agency wrote to the applicant’s lawyer confirming that the client clinical records were the totality of those relied upon in the review.
28 On 15 November 2021 the PSR Committee wrote to the applicant confirming hearing dates for the PSR Committee’s investigation on 21-22 February and 7-8 March 2022.
29 On 29 November 2021 the applicant, through his legal representatives, wrote to the respondent requesting that the respondent revisit her decision and foreshadowing the present application.
30 On 30 November 2021 the principal legal officer of the office of the Professional Services Review wrote to the applicant and confirmed that the respondent declined to revisit the decision, given that no further material had been provided and the Director was satisfied as to her jurisdiction to make the decision.
31 On 2 December 2021 the applicant filed an originating application for judicial review of the decision of 4 November 2021. Subsequently, the applicant filed an amended originating application on 26 July 2022 which is presently before the Court.
EVIDENCE
32 The applicant relied on the following affidavit material:
(1) Affidavit of Sharon Ann Win dated 2 December 2021; and
(2) Affidavit of Sharon Ann Win dated 16 June 2022.
33 As a preliminary matter, the respondent filed a schedule of objections to the affidavit of Ms Winn dated 16 June 2022. Ms Winn provided evidence on behalf of the applicant as Special Counsel in the employ of Paxton-Hall Lawyers, solicitors for the applicant. Those objections were as follows:
Paragraph 7(1) of the affidavit and pages 223 to 225 of annexure SAW3 comprising a bundle of testamurs relating to the dental qualifications of the applicant on the ground of relevance;
Paragraph 7(2) and pages 226 to 227 of annexure SAW3 comprising the registration details of the applicant on the ground of relevance;
Paragraph 7(3) of the affidavit and pages 228 to 231 of annexure SAW3 comprising an application for an additional location provider number on the ground of relevance;
Paragraph 7(4) of the affidavit and page 232 of annexure SAW3 comprising a screenshot of the applicant’s provider digital access account on the ground of relevance;
Paragraph 7(5) of the affidavit and page 233 of annexure SAW3 comprising a list of patients represented in a sample prepared by the applicant’s counsel on the grounds of inadmissible hearsay and the document being submission not evidence;
Paragraph 7(6) of the affidavit and pages 234 to 257 of annexure SAW3 comprising a brochure entitled “Your Guide to Professional Services Review” on the ground of relevance;
Paragraph 7(9) of the affidavit and page 268 to 276 of annexure SAW3 comprising the Dental Board of Australia Guidelines for scope of practice dated 1 July 2020 on the ground of relevance;
Paragraph 7(10) of the affidavit and pages 277 to 293of annexure SAW3 comprising evidence based clinical practice guidelines for the use of pit and fissure sealants on the ground of relevance;
Paragraph 7(11) of the affidavit and pages 294 to 295 of annexure SAW3 comprising a list of clinical guidelines and best practice recommendations on the ground of relevance;
34 At the hearing, the applicant conceded that the documents referrable to paragraphs 7(5), (6) and (9) in annexure SAW3 were not relevant and I do not admit those materials. When pressed the applicant conceded that the documents at paragraphs 7(4), (2), and (1) were sought to be admitted on the basis of providing background material to the Court, and that they “did not die in a ditch” over their admission.
35 The respondent did not press its objection to the documents referrable to paragraphs 7(3) and (10) and I admit those documents as relevant.
36 At the hearing, I ruled the document referrable to paragraph 7(11) inadmissible.
37 The respondent relied on an affidavit of Ian Leonard Temby dated 11 March 2022. The applicant took no objection to the material filed by the respondent.
consideration
38 The professional services review scheme is set out at length in Part VAA ss 79A-106ZR of the HI Act. Relevantly, section 79A of the Act sets out the objectives of Part VAA 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.
39 In circumstances where a practitioner is found to have claimed CDBS benefits inappropriately and has engaged in inappropriate practice, he or she may be required to repay the overpayments to the Commonwealth and face further sanctions such as suspension or disqualification from billing under the Medicare scheme.
40 The main features of the Professional Services Review Scheme are:
80 Main features of the Professional Services Review Scheme
(1) This section summarises the main features of the Professional Services Review Scheme established by this Part.
(2) The Professional Services Review Scheme is a scheme for reviewing and investigating the provision of services by a person to determine whether the person has engaged in inappropriate practice.
(3) The Chief Executive Medicare can request the Director to review the provision of services by a person and the Director must decide whether to undertake a review.
(4) Following a review, the Director must:
(a) decide to take no further action in relation to the review; or
(b) enter into an agreement with the person under review; or
(c) make a referral to a Committee.
(5) If the Director enters into an agreement with the person under review, the agreement must be ratified by the Determining Authority before it takes effect. Having an agreement ratified avoids a Committee investigation.
(6) A referral to a Committee initiates an investigation by the Committee into the provision of the services specified in the referral. The Committee can investigate any aspect of the provision of the referred services and its investigation is not limited by any reasons given in a request for review or a Director’s report following a review.
(7) Committee members must belong to professions or specialities relevant to the investigation.
(8) Committees can hold hearings and require the person under review to attend and give evidence. Committees also have the power to require the production of documents (including clinical records).
(9) Committees can base findings on investigations of samples of services.
(10) If a Committee finds that the person under review has engaged in inappropriate practice, the finding will be reported to the Determining Authority. The Determining Authority decides what action to take.
(11) Provision is made throughout the scheme for the person under review to make submissions before key decisions are made or final reports are given.
(12) A Committee cannot make a finding of inappropriate practice unless it has given the person under review:
(a) notice of its intention to do so; and
(b) the reasons for the finding; and
(c) an opportunity to respond.
(emphasis added)
41 Section 81 defines a number of terms used in this Part. Crucial to this matter, s 81(1) and (2) define the terms “practitioner”, “service” and “provides services” as follows:
practitioner means:
(a) a medical practitioner; or
(b) a dental practitioner; or
(c) a participating optometrist (other than the Commonwealth, a State, the Australian Capital Territory, the Northern Territory or an authority, being a corporation, established by a law of the Commonwealth, a State or internal Territory); or
(d) an optometrist other than a participating optometrist; or
(da) a midwife; or
(db) a nurse practitioner; or
(e) a chiropractor; or
(f) a physiotherapist; or
(g) a podiatrist; or
(h) an osteopath;
(i) a health professional of a kind determined by the Minister under subsection (1A) to be a practitioner for the purposes of this Part.
service means:
(a) a service that has been rendered if, at the time it was rendered, medicare benefit or dental benefit was payable in respect of the service; or
(ab) a service that has been initiated (whether or not it has been or will be rendered) if, at the time it was initiated, medicare benefit would have been payable in respect of the service had it been rendered at that time; or
(b) a service rendered by way of a prescribing or dispensing of a pharmaceutical benefit by a medical practitioner, a dental practitioner, an optometrist, a midwife
…
Meaning of provides services
(2) for the purposes of this Part, a person provides services if the services are rendered or initiated by:
(a) the person;
(b) a practitioner employed or otherwise engaged by the person; or
(c) a practitioner employed or otherwise engaged by a body corporate of which the person is an officer.
42 Section 82 defines the term “inappropriate practice”:
82 Definitions of inappropriate practice
Unacceptable conduct
(1) A practitioner engages in inappropriate practice if the practitioner's conduct in connection with rendering or initiating services (other than a service of a kind referred to in paragraph (c) of the definition of service in subsection 81(1)) is such that a Committee could reasonably conclude that:
(a) if the practitioner rendered or initiated the services as a general practitioner – the conduct would be unacceptable to the general body of general practitioners; or
(b) if the practitioner rendered or initiated the services as a specialist (other than a consultant physician) in a particular specialty – the conduct would be unacceptable to the general body of specialists in that specialty; or
(c) if the practitioner rendered or initiated the services as a consultant physician in a particular specialty--the conduct would be unacceptable to the general body of consultant physicians in that specialty; or
(d) if the practitioner rendered or initiated the services as neither a general practitioner nor a specialist but as a member of a particular profession--the conduct would be unacceptable to the general body of the members of that profession.
…
Causing or permitting inappropriate practice
(2) A person (including a practitioner) engages in inappropriate practice if the person:
(a) knowingly, recklessly or negligently causes, or knowingly, recklessly or negligently permits, a practitioner employed or otherwise engaged by the person to engage in conduct that constitutes inappropriate practice by the practitioner under subsection (1) or (1A); or
(b) is an officer of a body corporate and knowingly, recklessly or negligently causes, or knowingly, recklessly or negligently permits, a practitioner employed or otherwise engaged by the body corporate to engage in conduct that constitutes inappropriate practice by the practitioner under subsection (1) or (1A).
Matters to which Committee must have regard
(3) A Committee must, in determining whether a practitioner's conduct in connection with rendering or initiating services was inappropriate practice, have regard to (as well as to other relevant matters) whether or not the practitioner kept adequate and contemporaneous records of the rendering or initiation of the services.
(emphasis added)
43 Division 3A of Part VAA provides for the structure of a review by the Director. Notably, ss 88A and 88B require the Director to decide, within one month of the Chief Executive’s request, whether or not to review the provision of services, and the scope of that review. Following any review, s 89C(1) dictates that the Director must either:
(a) make a decision under section 91 to take no further action in relation to the review; or
(b) give the person under review:
(i) a written report setting out the reasons why the Director has not made a decision under section 91; and
(ii) an invitation to make written submissions to the Director, within 1 month, about the action the Director should take in relation to the review.
44 Section 90 allows the Director to seek assistance in the making of her decision. Having regard to the present case, s 90(1)(b) enables the Director to consult “any consultant or learned professional body that the Director considers appropriate”.
45 After taking into account any submissions, s 89C(2) provides that the Director must, as soon as practicable, either decide to the take no further action, enter into an agreement with the person under review, or make a referral to a Committee under s 93 of the HI Act. Section 93 of the HI provides:
93 Referral to a Committee
(1A) This section applies if it appears to the Director that a person under review may have:
(a) provided services during the review period; and
(b) engaged in inappropriate practice in the provision of the services.
(1) The Director may, by writing, set up a Committee in accordance with Division 4, and make a referral to the Committee to investigate whether the person under review engaged in inappropriate practice in providing the services specified in the referral.
Note: Investigating whether the person under review engaged in inappropriate practice in providing the services may include investigating whether the services were provided by the person or another person.
(2) If the referral arises from a request made by a Committee to the Director under subsection 106J(1), the Director may, instead of setting up a Committee under subsection (1), make the referral to the Committee that made the request.
(3) Subject to this section, the content and form of a referral must comply with any guidelines made under subsection (4).
(4) The Minister may, by legislative instrument, make guidelines about the content and form of referrals.
(6) If the Director makes a referral, the Director must:
(a) prepare a written report for the Committee, in respect of the services to which the referral relates, giving reasons why it appears to the Director that the person under review may have engaged in inappropriate practice in providing the services; and
(b) attach the report to the referral.
Note: The reasons given by the Director may relate solely to the services being rendered or initiated in circumstances that constitute a prescribed pattern of services.
(7) Within 7 days after making the referral, the Director must give a copy of the referral and report to the Chief Executive Medicare and the person under review.
(7A) The copy given to the person under review must be accompanied by a written notice setting out the terms of sections 102, 106H and 106K.
(7B) The services that may be specified in the referral are any or all of the services provided by the person under review during the review period.
(7C) Subsection (7B) is not limited by the terms of the Director's report under subparagraph 89C(1)(b)(i).
(7D) Failure to comply with subsection (7) or (7A) does not affect the validity of the referral.
(8) If, in the course of the review that gave rise to the referral:
(a) the Director formed an opinion that any conduct by the person under review caused, was causing, or was likely to cause, a significant threat to the life or health of any person and sent a statement of his or her concerns to a person or body under section 106XA; or
(b) the Director formed an opinion that the person under review failed to comply with professional standards and sent a statement of his or her concerns to an appropriate body or bodies under section 106XB;
the referral must contain a statement that the Director formed that opinion and set out the terms of the statement sent to the person, body or bodies.
(9) The Director must disregard any opinion formed as mentioned in subsection (8) when making the referral.
46 It follows in this case that the Director made a referral pursuant to s 93 of the HI Act. It is this decision that is presently before the Court. It is not necessary at this point to go into detail regarding those provisions regulating the Committee’s investigations.
47 Turning to the present application, the applicant relies on 7 grounds of review. These grounds are as follows:
1. A breach of the rules of natural justice occurred in connection with the making of the Decision because:
(1) the Respondent when reviewing the records had input and comments from an unnamed experienced and currently practising dentist she engaged in her discretion as appropriate under s. 90 of the Act:
(2) the Respondent did not to advise the Applicant:
(a) of the identity of the dentist, whether known to the Applicant or otherwise;
(b) on the expertise of the dentist, including in dealing with an independently working OHTs;
(c) about the nature of the input and comments sought by the Respondent whether related to the relationship between a dentist and OHT or otherwise;
(d) input and comments of the unnamed dentist to the Applicant (whether made before the Report dated 13 August 2021 made under s.89C of the Act or after the submissions of the Applicant dated 13 September 2020).
(e) that there were only twenty-nine (29) patient records for the five (5) services available for
(i) the Respondent: and
(ii) the Consultant: and
(iii) the Professional Services Committee
to review where the list provided to the dentist was of fifty (50) patients, of which twenty-one (21) were not provided by the Respondent to the Consultant.
(3) the Respondent did not afford the Applicant with a reasonable opportunity to be heard on the input and comments from the dentist in breach of s. 89C(1)(b)(i) of the Act if the input and comments from the dentist:
(a) was made before and incorporated in the report dated 13 August 2021 (which did not mention the dentist or draw attention to his professional views and observations);
(b) was made after the receipt and consideration of the submissions of the Applicant dated 13 September 2021;
(c) was in any event before the making of the Decision, without the Applicant knowing of the input and comment and thereby being able to put any contrary or qualified input and comment to the Respondent before she made her decision.
(4) notwithstanding the process under s. 90 of Act is intramural the reasons which the Respondent furnished in her report:
(a) make no mention of the input and comments from the dentist under s. 90;
(b) were not sufficiently comprehensive such as to afford the Applicant an opportunity to engage with the input and comments from the dentist on any critical issue addressed by the dentist including as to:
(i) the records of the OHTs;
(ii) the professional relationship between a dentist and an OHTs in the circumstance of this case.
(4A) The Applicant was not provided with the clinical records that were provided to the Consultant and the Respondent until 24 September 2021.
(5) the Applicant suffers the practical injustice of remaining in the dark as to the input and comments of dentist that persuaded the Respondent:
(a) to make the report dated 13 August 2021 (if the consultation was prior to that date); and/or
(b) to make the Decision (if the consultation was after the submissions of the Applicant dated 13 September 2021).
2. The Respondent did not have jurisdiction to make the Decision under s. 93(1) of the Act because:
(1) by s. 81(2) of the Act that the Applicant had not provided, rendered or initiated the services under review and as such was not a person who provided services as required by s. 80(2) of the Act because there was no provision of services by the applicant as defined in Part VAA of the Act.
(2) by s. 82 of the Applicant was not engaged in conduct in connection with rendering or initiating the services under review.
(3) In breach of s. 106K of the Act and the Health Insurance- (Professional Services Review – Sampling Methodology) Determination 2017 (Cth) the Respondent did not have a requisite sample because she made the Decision on a review of a list of fifty (50) patient records but only received twenty-nine (29) patient records when the sampling methodology required twenty-five (25) patient records for each for the five (5) services being reviewed.
3. The Decision was not authorized by the enactment in pursuance of which it was purported to be made for grounds 1, 2, 4, 5, 6 and 7 hereof.
4. The making of the Decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made by:
(1) taking irrelevant considerations into account in the exercise of a power, namely that:
(a) the services under review were provided, rendered or initiated by the Applicant, when they were not;
(b) the patients for the services under review were patients of the Applicant, when they were not;
(c) the billings for the services under review were the billings of the Applicant, when they were not;
(d) the Applicant had engaged in conduct in connection with rendering or initiating the services under review when he had not.
(e) the Respondent considered that the twenty-nine (29) patient records for the five (5) services were a sufficient quantity of records to be used to decide whether there was inappropriate practice in assessment of 13,941 services contrary to s. 106K of the Act and the Health Insurance (Professional Services Review – Sampling Methodology) Determination 2017 (Cth).
(2) failing to take a relevant consideration into account in the exercise of a power:
(a) the services under review were not provided, rendered or initiated by the Applicant;
(b) the patients for the services under review were not patients of the Applicant;
(c) the billings for the services under review were not the billings of the Applicant.
(d) the services were at the active practice locations which the Applicant never practised. West Gosford, New South Wales being 950 kilometres from the location of the Applicant's practice and Point Cook, Victoria being 32 kilometres from the location of the Applicant's practice.
(e) the Applicant had not engaged in conduct in connection with rendering or initiating the services under review.
(f) the Respondent did not have regard to the sampling determination that would be necessary for the Professional Services Committee to review the services under s. 106K of the Act and the Health Insurance (Professional Services Review – Sampling Methodology) Determination 2017 because the Committee could not examine all services and records in a four day hearing as originally set down on 4 November 2021.
(g) the twenty-nine (29) patient records for the five (5) services that the Respondent obtained were an insufficient number of records to be assessed in relation to the 13,941 services under review.
5. The making of the Decision was an exercise of a power that was so unreasonable that no reasonable person could have so exercised the power for grounds 1, 2, 3, 4, 6 and 7 hereof.
6. The Decision involved an error of law on the grounds:
(1) 1, 2, 3, 4, 5 and 7 hereof; and
(2) the Applicant was not a person to whom Part VAA of the Act applied because:
(a) by s. 81 (2) of the Act the Applicant had not provided, rendered or initiated the services under review;
(b) by s. 82(1 )(d) of the Act the Applicant had not engaged in conduct in connection with rendering or initiating the services.
(3) the Respondent composed the Professional Services Review Committee No. 1473 in breach of s. 95(1)(b) ands. 95(1A) of the Act because:
(a) the Applicant:
(i) did not provide, render or initiate the services under review; or
(ii) had not engaged in conduct in connection with rendering or initiating the services under review;
(b) two other panel members must be members of professions or specialties relevant to the field or field of practice of the practitioner who rendered or initiated of the referred services;
(c) the field of practice and services under review are those of OHTs;
(d) the two panel members appointed by the Respondent are Dr Andrew Gikas and Dr Marietta Taylor who are not OHTs;
(e) the Respondent failed to appoint two OHTs to Professional Service Review Committee No. 1473.
7. There was no evidence or other material to justify the making of the Decision because the Respondent was required by law to reach the decision only if:
(1) the Applicant had provided, rendered or initiated the services under review by s. 81(2) of the Act;
(2) the Applicant engaged in conduct in connection with rendering or initiating the services by s. 82 of the Act;
(3) there was no evidence or other material from which he or she could reasonably be satisfied that:
(a) the Applicant had provided, rendered or initiated the services under review; or
(b) the Applicant had engaged in conduct in connection with rendering or initiating the services under review;
(4) the Respondent based the Decision on the existence of particular facts, namely
(a) the Applicant provided, rendered or initiated the services under review and that fact did not exist; or
(b) the Applicant had engaged in conduct in connection with rendering or initiating the services under review and that fact did not exist.
(5) In breach of s. 106K of the Act and the Health Insurance- (Professional Services Review – Sampling Methodology) Determination 2017 (Cth) the Respondent did not have a requisite sample because she made the decision on a review of a list of fifty (50) patient records but only received twenty-nine (29) patient records when the sampling methodology required twenty-five (25) patient records for each for the five (5) services being reviewed.
(underlining in original)
48 Despite an Order made 25 July 2022 allowing the applicant to amend his originating application in the terms sought by him, the applicant at the hearing sought to rely on an eighth ground of review. That ground of review is integrated into the other amended grounds, however is particularised in a document handed up at the hearing entitled “Particulars as to Insufficient Patient Records, and Non-Randomised Patient Records”. The ground was summarised in the applicant’s outline of submissions as follows:
6. The Applicant seeks orders setting aside the Decision on the grounds of:
…
(d) the Respondent reached conclusions on a review of the patient records that were not open having asked for 50 records but only received 29 where the sampling methodology required 25 for each of the 5 services being reviewed: s. 106K(1) of the Act; Health Insurance (Professional Services Review — Sampling Methodology) Determination 2017.
…
Ground 8 (to be added to amended Application): Decision invalid because insufficient patient records reviewed
98. On 13 August 2021, the Respondent in determining whether there were grounds on which a Committee could really find that the Applicant had engaged in inappropriate practise as defined by the Act, had regards to clinical records that were provided by third parties under section 89B of the Act: page 101.
99. The only reference by the Respondent to the records in the making of the decision is paragraphs 27 to 33: pages 105 to 106 (and footnotes thereto).
100. The submissions made above for the breach of procedural fairness are repeated and relied upon for ground 8.
49 Given that the applicant requires leave pursuant to r 8.21 of the Federal Court Rules 2011 (Cth) to rely on this further ground, and the respondent opposes leave being granted on the basis that it is without merit, I will consider it at the outset.
50 Correctly, the respondent submits that applicant’s reliance on s 106K(1) is misguided as that section applies only to the PSR Committee’s investigation, once referred; see National Home Doctor Service Pty Ltd v Director of Professional Services Review (2020) 279 FCR 338; (2020) 379 ALR 513; [2020] FCA 386 at [55]. Section 106K(1) provides:
106K Committee may have regard to samples of services
(1) The Committee may, in investigating the provision of services included in a particular class of the referred services, have regard only to a sample of the services included in the class.
(emphasis added)
51 Additionally, the applicant’s reliance upon the Health Insurance (Professional Services Review – Sampling Methodology) Determination 2017 (Cth) (Determination) in this case is unhelpful. The applicant cites s 6 of the Determination which specifies:
6 Purpose
This Part specifies the content and form of a sampling methodology that may be used by a Committee in investigating the provision of services included in a particular class of referred services, where regard is to be had only to a sample of the services included in the class.
(emphasis added)
52 Further, s 3 of the Determination stipulates that the authority under which the Determination is made is in fact s 106K of the HI Act. It is difficult to see in these circumstances how the respondent has made an error pursuant to these provisions and the Determination which do not apply to the decision under review.
53 In this case, which concerns a decision made by the Director to refer the applicant to the PSR Committee, s 88B applies to the Director. In particular, I note s 88B(a) and (b) which stipulate:
88B Scope of Director’s review
If the Director decides to undertake the review, he or she:
(a) may review any or all of the services provided by the person under review during the review period; and
(b) may undertake the review in such manner as he or she thinks appropriate; and
…
(emphasis added)
54 I note the applicant’s submissions in its “Particulars as to Insufficient Patient Records and Non-Randomised Patient Records” regarding ss 93(7B), 98, 102, 105A. These provisions do not assist the applicant in its contention. In particular, s 93(7B) is referable to the services that a Director can refer to a Committee, and specifically allows the Director to refer “any or all of the services provided by the person under review during the review period”. The remainder of those sections, ss 98, 102 and 105A, are all referable to the proceedings once the Committee has been established.
55 Leave to rely on this ground is refused as the ground is without merit. I will now turn to the remaining grounds of review.
Ground 1 – Procedural fairness
56 The applicant submitted, in summary, that:
the respondent breached the rules of natural justice by denying him procedural fairness;
the applicant was deprived of the report on which the respondent relied in the making of her decision, the name of the consultant author, the briefing material supplied to the unknown consultant, and the patient file sampling methodology utilised by the unknown consultant;
the respondent was bound to bring this material to the applicant’s attention;
by failing to disclose this adverse material to the respondent the applicant was left “in the dark”; and
had the applicant been provided with the adverse material he would have been in a position to respond to specific allegations.
57 The respondent submitted, in summary, that:
the Director was not under any statutory obligation to provide the identity of the consultant who provided the report;
there can be no procedural unfairness in instances where the Director provided reasons for her decision; and
the applicant was provided with an opportunity to make submissions about the critical issues considered in the Director’s decision which were reflected in the consultant’s report.
58 The respondent relied upon a report from an unnamed consultant in the making of her decision the subject of this application for review. Relevantly, s 90 of the HI Act empowers the Director to obtain assistance during her review in the following terms:
90 Director may consult on decisions
(1) In order to obtain assistance in making his or her decision on a review, the Director may consult one or both of the following:
(a) a Panel member;
(b) any consultant or learned professional body that the Director considers appropriate.
(2) An action or proceeding, whether civil or criminal, does not lie against a person consulted for any statement made, or information given, in good faith to the Director, or a person acting on the Director's behalf, in connection with the consultation.
59 That report in question was a 4 page letter dated 3 July 2021 together with an excel spreadsheet prepared by the consultant. That letter redacts the consultant’s name, however, described the consultant as having “been in full time clinical general practice for fortyone years”.
60 The Court dealt with a similar case in Karmakar v Minister for Health (No 2) (2021) 177 ALD 83; [2021] FCA 916. In Karmakar the applicant sought review on the basis that, inter alia, the Director had breached the rules of natural justice by denying the applicant procedural fairness. Similarly, the Director in Karmakar had sought the assistance of a consultant under s 90 of the HI Act. In that case, the applicant complained that the Director ought to have provided the applicant with the name, qualifications and findings of the consultant. Ultimately the Court held that there could be no procedural unfairness. I note the following observations of Logan J:
[36] In this case, the Director took up an option offered by s 90 of the HIA so as to have the benefit of a review by a consultant, a general practitioner, of such of Dr Karmakar’s medical records as were then available to the Director. There is neither evidence nor allegation in a ground of review of any resultant abrogation by the Director in favour of that general practitioner of her decision-making function. The decision was hers.
[37] It is true that the Director declined to reveal to Dr Karmakar’s then lawyers the identity of the practitioner she had consulted, who had reviewed and at her request advised upon Dr Karmakar’s records — see the Director’s letter of 21 August 2017. Yet neither in s 90 nor elsewhere in the HIA is there any provision obliging the Director to reveal the name of any such consultant. In that same correspondence, the Director reiterated a statement already made in her s 89C(1)(b) report that the “consultant is an experienced and currently practising general practitioner”.
[38] What the Director was obliged to do, by s 89C(1)(b) of the HIA, was to give Dr Karmakar a report setting out the reasons why she had at that point decided, pursuant to s 91, not to take no further action and extending to her an invitation to make written submissions, within 1 month, about the action the Director should take in relation to the review. By a letter dated 9 August 2017, which enclosed a report of that same date, the Director at least purported to comply with that obligation.
…
[49] One submission made by Dr Karmakar was that the Director’s refusal to specify the name and qualifications of the practitioner she consulted under s 90 of the HIA was procedurally unfair, because it denied her the opportunity to make a submission as to the weight which ought to be afforded to the views expressed by that practitioner. As I understood it, the unfairness lay in an inability to ascertain whether that practitioner was, for example, known in the profession as an iconoclast, possessed of idiosyncratic views. As an abstract proposition, that submission may, in certain circumstances, have merit. But not, in my view, in the context of the scheme in Pt VAA of the HIA.
[50] Whether any consultation as envisaged by s 90 occurs at all is entirely a matter for the Director. If it does, the Director’s obligation is not to disclose the assistance, if any, received or the author of any advice but rather, as s 89C(1)(b)(i) of the HIA dictates, to furnish the practitioner concerned with “a written report setting out the reasons why the Director has not made a decision under section 91”. The reasons in that report must be those of the Director, not of such person or body, if any she may have chosen to consult for assistance. There is nothing to indicate that the reasons in the report were other than those of the Director. It is to that report containing those reasons that the practitioner is expressly afforded an opportunity by invitation to respond. If those reasons reflect idiosyncratic views within the profession, that will be apparent on the face of the report itself. It would, in my view, have been permissible for the Director, if she chose, to have quoted from any advice which she received under s 90 of the HIA, naming the author, and indicating that she agreed with that advice. But she was under no obligation either expressly by statute or by implication so to do. Indeed, it would be permissible for the Director to consult under s 90 but depart from any resultant advice to her if she had a different opinion. The s 90 process is intramural. The extramural aspect of this stage of the processes for which Pt VAA provides is the report containing the Director’s reasons. The reasons which the Director furnished in her report were comprehensive. They conspicuously fulfilled her obligation to afford Dr Karmakar with an opportunity to engage with the critical issues that had not led the Director initially just to decide to take no further action under s 91 and which might persuade her to make a referral to a committee. They also enabled Dr Karmakar to address those same issues to the end of persuading the Director under s 91 that, taking her submission into account no further action ought to be undertaken.
[51] This is a case where no injustice, practical or otherwise, was visited upon Dr Karmakar by the Director. The Director discharged the procedural fairness duty imposed on her by s 89C(1)(b)(i) of the HIA.
(emphasis added)
61 The applicant submits that Karmakar is different from the present matter because:
(a) The records relied upon had not been made available to Applicant at the meeting to discuss the matter with the Director on 27 July 2021;
(b) The Director’s report does not raise all the issues that were adverse to the Applicant and these were not put to him.
(i) The Consultant alleged the ‘business model was devoted purely to a screening protocol;
(ii) The Consultant stated that “the fact that the ancillary providers universally used the [person under review]’s provider number….conveys additional responsibility”;
(iii) The Consultant stated that the statistical data defied belief;
(iv) The Consultant stated that he was confused or concerned about infection control;
(v) The Consultant specifically queried the rationale for treatments for fissure deals and sought that this be asked of the Applicant;
(vi) The Consultant specifically queried whether there were written guidelines for decision making – which is not required- and sought that this be asked of the Applicant;
(c) The Director’s report raises issues that were not of concern to the Consultant which she took into consideration in the making of her decision;
(i) The Consultant was not critical of the records, but the Respondent mentioned inadequacies as part of her report and the interview with the Applicant;
(d) The Consultant’s report was materially flawed and these flaws were not able to be addressed by the Applicant.
(i) The Consultant complained that he had not received all of the requisite records;
(ii) The Consultant complained that the records had not been obtained “from the [person under review] despite being requested” when this is incorrect as the [person under review] did not ever have access or control of the records ‘invariable supplied by the [person under review]’;
(iii) The Consultant’s view on fissure sealants is not consistent with recognised Dental Practice.
(footnotes omitted)
62 In contrast, as part of the respondent’s submissions, the respondent’s solicitors prepared a table comparing the critical issues relied on by the Director in her report, and instances where the applicant was put on notice of these issues and provided with an opportunity to respond.
63 As Griffiths J noted in National Home Doctor Service Pty Ltd v Director of Professional Services Review (2020) 276 FCR 338; (2020) 379 ALR 513; [2020] FCA 386 at [66], “the statutory PSR Scheme is rich with procedural fairness requirements”. Having regard to the reasons of Logan J in Karmakar, in my view, the applicant has failed to establish any procedural unfairness or practical injustice resulting from the redaction of the consultant’s name and report. The fact that the Director has sought assistance from a consultant who has expressed various opinions with which the applicant does not inherently mean that the Director has erred. As required under ss 88A(4) and 89C(1)(b) of the HI Act, the respondent was required to provide written reasons for her decision, which was complied with.
64 I also note the applicant’s submission that the consultant’s excel spreadsheet was based upon 29 records and therefore was, for some reason, similarly insufficient as not complying with the Determination. For the reasons I had addressed in relation to the proposed ground 8, this submission is unhelpful.
65 Ground of review 1 is dismissed.
Grounds 2, 3, 4, 5, and 7 – jurisdiction, irrelevant considerations, relevant considerations, unreasonableness and lack of evidence
66 Grounds 2, 3, 4, 5 and 7 relate to issues of jurisdiction, irrelevant and relevant considerations, unreasonableness, and a lack of evidence. The parties addressed these grounds of review together, and I will deal with them in the same manner.
67 Largely, the applicant relied on submissions he made to the respondent on 12 March 2021 and 13 September 2021. In short, those submissions were that he had not provided, rendered or initiated the services under review for the purposes of inappropriate conduct under s 82 of the HI Act, and as such was not a person who provided services as required by s 81(2) of the Act. Therefore, the applicant submitted that the issue of whether the applicant had “provided the services” was a jurisdictional fact not established by the respondent, leading to an inability of the respondent to make the decision in question.
68 It is this issue, being the construction of the expression “providing the services”, which is at the heart of the dispute between the parties.
69 The respondent submitted, in summary:
the applicant’s contention that the respondent lacked the jurisdiction to refer and establish the PSR Committee because the applicant did not personally provide the services in question should be rejected;
the statutory scheme in Part VAA of the HI Act should not be narrowly construed. Rather, principles of statutory construction favour the approach that best promotes the legislative objective of the Act;
Dental benefits were only payable if a dental service had been rendered by or on behalf of a dentist. A dental service could only be rendered by an OTH on behalf of a dentist if it was provided under the supervision of that dentist. The meaning of “provides services” in s 81(2) of the HI Act should be construed as encompassing the supervision of a service having regard to the text, structure and purpose of the relevant provisions, including in the Explanatory Memorandum relating to the introduction of the Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Act 2018 (Cth);
Matters concerning the legality and financial integrity of payments under the Medicare system have previously be held to fall within the definition of “inappropriate practice”; Selia v Commonwealth of Australia [2017] FCA 7;
Further and in the alternative, there is no jurisdictional precondition in s 93(1) of the HI Act that the Director needed to be satisfied that the applicant provided the services during the review period; and
The threshold for the decision pursuant to s 93 is low and in this case the Director was so satisfied. The Director was not required to make findings of fact.
70 I reject the applicant’s submission that the Director was required to establish that the applicant had personally provided services for the purposes of making a referral under s 93 of the HI Act, for the following reasons.
71 First, I note the Logan J’s observations in I-MED Radiology Network Ltd v Director of Professional Services Review [2020] FCA 1645:
[40] Tending back the other way, and within Pt VAA itself, it might alternatively be thought odd that s 86 contains any jurisdictional fact when:
(a) a decision by the Director to undertake a review is initiated by nothing more than “it appears to the Director that there is a possibility that the person has engaged in inappropriate practice in providing services during the review period” (emphasis added) (s 88A(2), of which more below); and
(b) the remit of the Committee upon any subsequent, consequential referral by the Director is to “investigate whether the person under review engaged in inappropriate practice in providing the services specified in the referral”: s 93(1).
“Provision of services” is mentioned in each of ss 86(1), 88A(2) and 93 but it would rather put the first stage, request cart before the later stages, appearance of possibility and investigatory horses to hold that any element of provision of services, in particular employment or engagement of a practitioner, was a jurisdictional fact at the s 86 request stage.
[41] In NHDS v The Director, at [167], Griffiths J, in what were, strictly, obiter observations, saw in the text of s 93 of the HIA, which empowers the Director to “make a referral…to investigate whether the person under review engaged in inappropriate practice in providing the services…” (emphasis added by Griffiths J), an indication that the issue of whether the person under review provided the services specified in the referral is an aspect of the question that is referred for investigation to the Committee and is not a jurisdictional fact. Also influential, at [169], in this conclusion was, “the considerable inconvenience and disruption which would follow if the matter involved a jurisdictional fact”.
[42] While I respectfully acknowledge the force of his Honour’s observations, and that they may be relevant by analogy to the construction of s 86, I expressly refrain, for the reasons given above, from expressing any concurrence with them. This aside, in NHDS v The Director, Griffiths J offers a most helpful summary, which I do not repeat, of the potential stages of scrutiny for which the scheme provides.
….
[58] In Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611, at [130], and with reference to observations made by Isaacs and Rich JJ in Bankstown Municipal Council v Fripp (1919) 26 CLR 385, at 403, Gummow J stated that, “with the object of preventing litigation on questions of jurisdictional fact, the legislature may introduce into the criterion elements of opinion or belief by the decision-maker”. Subsection 88A(2) of the HIA offers an example of this type of provision in the conditional clause, “if … it appears to the Director”.
[59] That, as a matter of fact, it appeared to the Director that, “there is a possibility that [I-MED Radiology, or as the case may be I-MED NSW] may have engaged in inappropriate practice during the Review Period” is, as I have already highlighted by reference to the pleadings, an uncontroversial given in this case. The requisite jurisdictional fact is not lacking. Rather, its existence is common ground.
[60] The “provision of services” by a person, which is defined in s 81(2) of the HIA, is not necessarily assimilated with the rendering or initiating of that service by that person. It can be, if that person is the practitioner concerned, but the reach of the scheme in Pt VAA of the HIA is wider than that. That is the whole point, as discussed above, of the expansive definition in s 81(2), and of the differentiation evident in s 82.
[61] The consequence of the possibility appearing was that the Director was obliged, by s 88A(2) of the HIA to undertake the review of the provision of services by I-MED Radiology, or as the case may be I-MED NSW. In this sense, s 88A of the HIA operates in a similar way to s 65(1) of the Migration Act 1958 (Cth) in that, once the requisite state of mind is formed by the decision-maker, an obligation to make a decision in a particular way arises per force of statute, there being no residual discretion reserved to the decision-maker.
(emphasis added)
72 The Court in that case declined to express a view on Griffiths J’s observations in National Home Doctor Service Pty Ltd v Director of Professional Services Review (2020) 276 FCR 338; (2020) 379 ALR 513; [2020] FCA 386. In my view however, the analysis of Griffiths J provides a helpful starting point for consideration in the case before me. Relevantly that analysis was as follows:
[162] NHDS contended that it is a jurisdictional fact for the exercise of the Director’s power to make a referral under s 93 that the person under review had provided the services specified in the referral.
[163] Once again, the relevant legal principles were not in dispute. They are reflected in authorities such as Gedeon v Commissioner of the New South Wales Crime Commission (2008) 236 CLR 120; 249 ALR 398; [2008] HCA 43; 236 CLR 120; Enfield City Corporation v Development Assessment Commission [2000] HCA 5; 199 CLR 135; Australian Heritage Commission v Mount Isa Mines Ltd [1997] HCA 10; 187 CLR 297; Tsvetnenko v United States of America [2019] FCAFC 74; 367 ALR 465; Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; 46 NSWLR 55and Woolworths Ltd v Pallas Newco Pty Ltd (2004) 61 NSWLR 707; [2004] NSWCA 422; 61 NSWLR 707. They may briefly be summarised as follows:
(a) Whether a fact is a jurisdictional fact (which may be a complex of elements) is a question of statutory construction.
(b) If a fact is a jurisdictional fact, the fact must objectively exist, which falls to be determined by the Court on review having regard to all the evidence before it which may be more extensive than that which was before the primary administrative decision-maker.
(c) Where a factual reference appears in a statutory formulation which includes terms involving the mental state of the administrative decision-maker (such as “opinion” or “satisfaction”), this may (although not necessarily) point against the factual reference being a jurisdictional fact, other than in the sense that the decision-maker’s mental state itself is a particular kind of jurisdictional fact. In such as case, therefore, the question is whether that mental state itself objectively existed and whether it was formed reasonably on the basis of the material before the primary decision-maker.
(d) An important consideration is whether the relevant factual reference occurs in the statutory formulation of a power to be exercised by the administrative decision-maker as opposed to necessarily arising in the course of the consideration by that decision-maker of the exercise of the power. The distinction has been expressed as whether the fact referred to is “a fact to be adjudicated upon in the course of the inquiry” as opposed to an “essential preliminary to the decision making process” (see Colonial Bank of Australasia v Willan (1874) 5 LR PC 417 at 442–443).
(e) Another consideration in determining whether or not a factual reference is a jurisdictional fact is whether the matter requires the exercise of a broad judgment in relation to which reasonable minds may differ, which points to the matter not being a jurisdictional fact.
(f) Finally, and importantly, the practical inconvenience that may arise from classifying a factual reference as a jurisdictional fact is a relevant and important matter. As Spigelman CJ said in Timbarra at [91]:
Statutes are construed on the basis that parliament did not intend to cause inconvenience, although it can do so, and often has. Was it the intention of parliament to invalidate a development application which was not accompanied by a species impact statement when, on an objective test, it should have been?
It is apposite to note the following observations of the Full Court in Grey at [179] which are to similar effect albeit that they were not directed to a jurisdictional fact argument, but were directed more generally to the PSR Scheme as it was at the relevant time:
When, as here, the Court is considering the effect of legislative provisions, having as its object the protection of the public, a holding of nullification of the whole process from its beginning for purely formal reasons would occasion public inconvenience, a consequence which the parliament would be unlikely to intend…
The nature and extent of public inconvenience produced if a fact is a jurisdictional fact, which leaves the validity of the relevant administrative action an outstanding question until a review court determines whether or not the fact objectively exists, requires a restrained approach by the Court in determining whether or not a fact is jurisdictional and requires the Parliament to clearly express an intention to make a fact a jurisdictional fact (see, for example, Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; 59 CLR 369 at 391 per Dixon J).
[164] NHDS contended that, having regard to the terms of s 93(1), it was a precondition to the Director’s exercise of the power under that provision that the person under review is the person who provided the services specified in the referral. It emphasised that s 93(1) empowered the Director to set up a committee and make a referral “to investigate whether the person under review engaged in appropriate practice in providing the services specified in the referral” (emphasis added). It submitted that whether or not the person under review provided the services is not something which the Committee investigates; rather, its role is to investigate whether the provision of services was inappropriate practice. NHDS submitted that the “provides services precondition” was a jurisdictional fact which the Director had to determine and which the Court could determine for itself in a judicial review.
[165] NHDS submitted that it did not render or initiate the referred services; rather they were rendered by the 56 practitioners identified in the referral and the related s 93 report. NHDS emphasised that only practitioners may render services which attract Medicare benefits (see the definition of “service” in s 81(1), as well as the definition of “provides services” in s 81(2)).
[166] If it had been necessary to do so, I would have rejected NHDS’s submissions on this matter for the following reasons.
[167] First, they are not supported by the text of s 93(1) (which is set out at [40] above). The power conferred upon the Director by that provision is a power to “make a referral…to investigate whether the person under review engaged in inappropriate practice in providing the services…” (emphasis added). I accept the Director’s submission that the issue of whether the person under review provided the services specified in the referral is an aspect of the question that is referred for investigation to the Committee. It is not a jurisdictional fact in respect of the Director’s power under that provision.
[168] Secondly, this view is supported by the surrounding context, with particular reference to the features of the PSR Scheme. The Director’s s 93 referral power arises for determination prior to an investigation by the Committee, which investigation includes the provision of services by the person under review.
[169] Thirdly, I take into account the considerable inconvenience and disruption which would follow if the matter involved a jurisdictional fact. In particular, the person under review could delay and disrupt a statutory investigation at a relatively early stage of the review process, noting also that the issue would involve complex questions of both fact and law. These are the sorts of considerations which the Full Court had in mind when it made the observations that it did in Grey at [79].
[170] Fourthly, NHDS’s position on this matter sits uncomfortably with the language of s 93(6)(a), which requires the Director to prepare a written report for the Committee, in respect of the services to which the referral relates, giving reasons why the Director “thinks” the person under review may have engaged in inappropriate practice in providing the services. The reference to “thinks” is scarcely consistent with the notion of the matter being a jurisdictional fact.
[171] For completeness, I should also say something briefly about NHDS’s separate submission that it is a jurisdictional fact for the exercise of the Committee’s powers that the person under review had provided the services specified in the referral. I accept the Director’s submission that this matter is premature and should not be determined at this stage of the proceeding. The Committee is yet to exercise any power under Div 4. It is entirely unclear what attitude the Committee might adopt to this issue, if and when a valid referral is made to it.
(emphasis in original)
73 Despite these observations being obiter only, his Honour’s reasoning is persuasive. Further, it would seem that given the present tier of review of the applicant, it was sufficient for the purposes of the respondent’s review that there was a basis for an appearance that the applicant had provided, rendered or initiated the services given that they were actually billed under his allocated Medicare Provider Number. It would be difficult to imagine a system whereby a holder of a Medicare Provider Number was absolved of all responsibility. I also note the respondent’s submissions that matters concerning the legality and financial integrity of payments under the Medicare system have previously be held to fall within the definition of “inappropriate practice”; Selia v Commonwealth of Australia [2017] FCA 7.
74 Secondly, in relation to the applicant’s submission that the Director had an insufficient sample to make the referral, the Director (as noted elsewhere in these reasons) was under no such obligation to comply with s 106K or the related Determination. Rather, this is a methodology for investigation by the established PSR Committee. The applicant appears to contend that there is no basis for the Director to have made the decision she did on such a small portion of clinical records. On the facts of this case, I do not accept that submission. The threshold as submitted by the respondent in relation to decisions made under s 93 of the HI Act is a low one. The terms “appears to the Director” and “may have” in s 93(1A) indicate as much.
75 Further, the Note to s 93(1) states:
Note: Investigating whether the person under review engaged in inappropriate practice in providing the services may include investigating whether the services were provided by the person or another person.
(emphasis added)
76 In the alternative, where a Director may decide to take no further action, s 91(1) provides the Director with a discretion upon a finding that “there are insufficient grounds on which a Committee could reasonably find that the person under review had engaged in inappropriate practice in providing the services.”
77 In this case the Director was satisfied that there were sufficient grounds that a Committee could reasonably find that the applicant may have engaged in conduct leading to inappropriate practice. I refer also to the Explanatory Memorandum for the Health Legislation (Professional Services Review) Amendment Bill 1993 (Cth) which relevantly provides:
New Section 93 – Decisions to set up Committees
This section requires the Director to set up a Committee to consider whether a person in respect of whom a referral has been made has engaged in inappropriate practice unless the Director is satisfied that there are insufficient grounds on which a Committee could conclude that the person has engaged in inappropriate practice in connection with referred services or that the Director has disqualified the person.
78 Further, the HI Act provides extensive provisions concerning the receipt and consideration of evidence once a Committee has been formed. To illustrate, s 105A provides:
105A Power of Committee to require the production of documents or the giving of information
(1) In this section:
relevant documents means documents that are relevant to the referral made to the Committee and includes clinical or practice records of services rendered or initiated during the review period by:
(a) the person under review; or
(b) a practitioner employed or otherwise engaged by the person under review; or
(c) a practitioner employed or otherwise engaged by a body corporate of which the person under review is an officer.
(2) The Committee may, by written notice, signed by a Committee member, given at any time before or during the hearing to:
(a) the person under review; or
(b) any other person whom the Committee believes to have possession, custody or control of, or to be able to obtain, relevant documents;
require the person to whom the notice is given:
(c) to produce to a Committee member, or to a person nominated by a Committee member, such relevant documents as are referred to in the notice; and
(d) if the person does not have possession, custody or control of, and cannot obtain, any of those documents:
(i) to inform a Committee member or a person nominated by a Committee member of that fact; and
(ii) if the person knows, or can readily find out, the name and address of a person who has possession, custody or control of, or can obtain, any of the documents--to give that name and address to a Committee member or to a person nominated by a Committee member.
(3) The notice must state:
(a) the period within which, and the place at which, the documents are to be produced; and
(b) the period within which a name and address referred to in subparagraph (2)(d)(ii) are to be given.
(4) The period to be stated in the notice must be a period ending at least 14 days after the day on which the notice is given.
(5) The notice is to set out the terms of whichever one or more of section 106ZPM, subsection 106ZPN(1) or (2), or section 106ZPNA is applicable to contraventions of the notice. However, a failure to comply with this subsection does not affect the validity of the notice.
(6) If a document is produced pursuant to the notice, a Committee member or a person nominated by a Committee member:
(a) may inspect the document; and
(b) may retain the document in his or her possession for such reasonable period as he or she thinks fit; and
(c) may make copies of, or take extracts from, the document.
79 Sections 106 – 106F provide further allowances for the receipt and consideration of evidence by the PSR Committee, including the power to summon a person to give evidence or produce documents.
80 Once the referral has been made, in instances where there are no clinical records, or the clinical records are missing or inadequate, the HI Act provides:
106KB Generic findings of inappropriate practice
(1) This section applies in relation to services (the relevant services) in respect of which:
(a) there are no clinical or practice records or some or all of the clinical or practice records are missing, inadequate, illegible or otherwise incomprehensible; and
(b) the Committee is unable, because of the matters mentioned in paragraph (a), to make findings under section 106K or for the purposes of subsection 82(1A) or (1B).
(2) For the purpose of making a finding in respect of the relevant services, the Committee may use any information that it is able to obtain, including information supplied by the Chief Executive Medicare, contained in the report by the Director or given in evidence at hearings held by the Committee.
(3) If:
(a) the Committee is of the opinion, based on an evaluation by the Committee of the information obtained as mentioned in subsection (2), that the person under review has engaged in inappropriate practice in the provision of some or all of the relevant services; but
(b) the Committee is not able to identify or determine the number of particular services in the provision of which the person engaged in inappropriate practice;
the Committee may nevertheless make a finding that the person engaged in inappropriate practice in the provision of some or all of the relevant services.
(emphasis added)
81 Considering the legislation as a whole, notwithstanding that the respondent was only able to obtain a small portion of the records, I am satisfied that the respondent was entitled to make the determination that she did. I can see no error on behalf of the respondent in making the decision under s 93. It is the legislative role of the PSR Committee to conduct an investigation into the referred person.
82 In addition, I note the comments produced in the Explanatory Memorandum for the Health Legislation (Professional Services Review) Amendment Bill 1993 (Cth) in relation to the definition of “inappropriate practice”:
New Proposed Section 82 – Definitions of inappropriate practice
Section 82 defines a new concept, to be known as “inappropriate practice” It encompasses the existing concepts of excessive rendering and excessive initiating but also introduces the concept of excessive prescribing. In addition, it will allow a Committee to examine, where relevant, aspects of a practitioner’s practice broader than purely the excessive servicing of patients. A Committee will have the capacity to consider the conduct of the person under review in his or her practice and determine whether that conduct is acceptable to the general body of his or her profession or speciality.
(emphasis added)
83 Finally, the applicant’s submission that “Part VAA of the [HI Act] does not refer to [Medicare Provider Number]” is superfluous. Section 79A of the HI Act sets out the objective of the act as to “protect the integrity of the Commonwealth medicare benefits, dental benefits and pharmaceutical benefits programs. Items under the CDBS cannot be claimed without the provision of the relevant services, which could not be done without the applicant’s Medicare Provider Number.
84 The respondent’s decision was not unreasonable. Although the respondent was only able to obtain, in the statutory timeframe, a small portion of records, for the reasons provided by the respondent this was sufficient to support a concern that the applicant may have engaged in inappropriate practice, so as to justify a referral for investigation; see for example NHDS at [120].
85 These grounds of review have no merit and are dismissed.
Ground 6 – Constitution of Panel of PSR Committee
86 This ground of review related to the constitution of the panel of the PSR Committee. Similarly to the preceding grounds of review, the applicant’s case is that the applicant did not provide, render or initiate any of the relevant services. Therefore, in the applicant’s submission, as it was the OTHs that provided the services, the panel should have consisted of an OTH in accordance s 95(1A) of the HI Act.
87 Relevantly, s 95(1) and (1A) provide:
95 Constitution of Committees
(1) A committee set up under section 93 in connection with a referral consists of the following members appointed by the Director:
(a) a Chairperson who is a Deputy Director; and
(b) 2 other Panel members; and
(c) if subsection (6) applies – not more than 2 additional Panel members.
(1A) If the person under review is not the practitioner who rendered or initiated all of the referred services, the Panel members referred to in paragraph (1)(b) must be members of professions or specialities relevant to the field or fields of practice of the practitioner or practitioners who rendered or initiated the services.
88 The respondent submitted that the applicant’s complaint is misguided, particularly where it can be established that the services were rendered by the applicant and therefore satisfactorily comprised of the applicant’s peers.
89 Given my findings in relation to grounds 2, 3, 4, 5 and 7, I am satisfied that this ground of review has no merit. It follows that this ground of review is also dismissed.
conclusion
90 For the reasons I have outlined above, the applicant’s application is dismissed. Costs follow the event, to be taxed unless otherwise agreed.
I certify that the preceding ninety (90) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Collier. |
Associate:
