Commonwealth of Australia (as represented by the Chief Executive Officer of Medicare Australia) v Banting [2009] ACTSC 32 (27 March 2009)

COMMONWEALTH OF AUSTRALIA (as represented by the Chief Executive Officer of Medicare Australia) v THOMAS PETER BANTING

MEDICAL PRACTITIONERS – Medicare – radiologist – musculoskeletal ultrasound – radiologist failing to attend upon and examine patients – whether claims for benefits contained false or misleading statements – benefits paid recoverable by Commonwealth from radiologist

BETWEEN: COMMONWEALTH OF AUSTRALIA (as represented by the Chief Executive Officer of Medicare Australia)

1. Judgment be entered for the plaintiff in the sum of $48,604.20 plus interest of $15,280.92 to the date of judgment.

1. Medicare Australia is an instrumentality of the Commonwealth, established under the Medicare Australia Act 1973. It was originally established as a statutory corporation named the Heath Insurance Commission. Following legislative amendment it is no longer an independent legal entity, but part of the Commonwealth, in whose name this action is brought.

2. The defendant is a specialist radiologist. He made claims on Medicare between November 2003 and September 2005 for, inter alia, a large number of musculoskeletal ultrasound services. The plaintiff paid benefits amounting to $48,604.20 in respect of claims for those services.

3. The plaintiff claims under a statutory entitlement to recover that sum conferred by section 129AC(1) of the Health Insurance Act 1973. That subsection is in the following terms:

(1) Where, as a result of the making of a false or misleading statement, an amount paid purportedly by way of benefit or payment under this Act exceeds the amount (if any) that should have been paid, the amount of the excess is recoverable as a debt due to the Commonwealth from the person by or on behalf of whom the statement was made, or from the estate of that person, whether or not the amount was paid to that person, and whether or not any person has been convicted of an offence in relation to the making of the statement.

4. The plaintiff does not assert that all or any of the payments made pursuant to the claims were made to the defendant. It appears that most if not all were probably paid to the proprietor of the radiology practice in which the defendant was employed: some payments may have been made to patients. As is clear from the section, it is not necessary for the plaintiff to establish that any payments were made to or received by the defendant, if the other elements of the section are satisfied.

5. The plaintiff relies on two further causes of action under the general law. Firstly, the plaintiff asserts that the payments were made as a result of the plaintiff’s mistaken belief that the defendant had rendered the services; and that in the circumstances the payments were made “without parliamentary authority, were ultra vires and as such are recoverable by the plaintiff”. Secondly, the plaintiff claims that it paid the amounts to the defendant by way of Medicare benefits which the individual patients had assigned to the defendant such that the defendant obtained payment of Medicare benefits to which he was not entitled, and that it would be unjust for the defendant to retain the payments.

6. As to the claims in mistake and restitution, it seems to me that these are capable of succeeding only to the extent that the plaintiff can establish that payments were received by the defendant himself. If such payments were received by patients or by the plaintiff’s employer, it appears to me that in order to succeed, claims on those causes of action would need to be made against the patients and the employer. The evidence does not enable me to be satisfied that any of the amount claimed was paid to and received personally by the defendant. In those circumstances the claims in mistake and restitution must fail.

7. The statutory claim does not suffer from the same limitation. A Medicare payment made as a result of a false or misleading statement is recoverable from the person by or on behalf of whom the statement was made, whether or not the amount was paid to that person.

8. It is necessary to identify what has been admitted by the defendant on the pleadings. In his defence, the defendant has admitted paragraphs 9 and 10 of the statement of claim, which are in the following terms:

9. During a period commencing on or about 10 November 2003 and ending on or about 30 September 2005 (“Period”), the Defendant claimed to have performed musculoskeletal ultrasound services listed in the [Health Insurance (Diagnostic Imaging Services Table) Regulations] DIST to various patients.

(a) A schedule of the claim items was sent to the Defendant’s solicitors, TressCox Lawyers under cover letter dated 29 January 2007 from Clayton Utz (“Schedule”).

(b) The Schedule contains claims in respect of items 55800, 55804, 55808, 55812, 55816, 55820, 55824, 55828, 55832, 55836, 55840 and 55844 contained in the DIST.

10. During the Period, statements were made by or on behalf of the Defendant to the effect that the Defendant had rendered musculoskeletal ultrasound services, being the items particularised in the Schedule, and claiming payment to or on behalf of the Defendant of Medicare benefits in the total amount of $48,604.20.

11. The said statements were false or misleading as the musculoskeletal ultrasound service rendered by the Defendant did not fall within the DIST items claimed.

(a) The Defendant, who was responsible for the conduct and report of each of the examinations, did not personally attend during the performance of each scan and personally examine each of the patients as required under rule 14 of the Rules of Interpretation in Part 2 Schedule 1 of the DIST.

12. The false or misleading statements were made when the Defendant caused or allowed his health service provider number to be stated on the Medicare claim forms to make claims on his behalf upon Medicare Australia for the payment of Medicare benefits.

13. As a result of the making of the said false or misleading statements, Medicare benefits totalling $48,604.20 were paid and are recoverable from the Defendant as the person by whom or on whose behalf the statements were made pursuant to section 129AC of the Act.

10. A copy of the schedule of claim items referred to in paragraph 9(a) of the statement of claim was tendered by the plaintiff without objection. The schedule is not entirely self-explanatory, and it was not further explained to me in the course of the evidence. It appears to be a computer printout of payments made by Medicare in relation to patients seen by the defendant. There is a line for each service, with columns I interpret as follows: date of payment, date of service, Medicare item number, benefit amount paid by Medicare, the defendant’s provider number, the patient’s Medicare number, and the name, address, and date of birth of the patient. There are two other columns headed “BT” and “CLAIM ID” which were not explained to me but are probably not material to the plaintiff’s claim.

(a) the medical practitioner responsible for the conduct and report of the examination personally attends during the performance of the scan and personally examines the patient: or

(b) the service is performed, because of medical necessity, in a location that is more than 30 kilometres by the most direct road route from another practice where services that comply with paragraph (a) are available.

12. There is no suggestion that paragraph (b) of the Regulation has any application in the circumstances of the present claim. The plaintiff’s case is that the defendant did not personally attend during the performance of the scan and personally examine the patients in the instances listed in the schedule and that accordingly the items mentioned in the Regulation did not apply to the services.

13. Part 3 of the Regulations lists under item numbers the various diagnostic imaging services referred to in the tendered schedule, and the benefit amount applicable to each item. By way of illustration, item 55800 reads as follows:

55800

Hand or wrist, 1 or both sides, ultrasound scan of, where:

(a) the service is not associated with a service to which an item in Subgroup 2 or 3 applies; and

(b) the patient is referred by a medical practitioner; and

(c) the referring practitioner is not a member of a group of practitioners of which the providing practitioner is a member (R).

$109.10

14. The other items relate to ultrasound scans of other parts of the body. The amounts payable for the services vary.

15. In December 2005 two investigators employed by Medicare attended at premises in the suburbs of Melbourne where the defendant was employed. He participated in a question-and-answer interview with them. There was initially an objection by his counsel to their evidence about this, on the basis that they did not caution the defendant that he did not have to say anything or inform him that anything he did say might be used in evidence. I am satisfied that the investigators were not required to caution the defendant within section 139 of the Evidence Act 1995. I accepted the oral evidence of each of them that neither formed a belief at any relevant time that there was sufficient evidence to establish that the defendant had committed any offence. Nor is it suggested, even now, that he might have done so. I accordingly admitted the evidence of the interview.

16. The investigators asked the defendant during the interview whether he made a practice of attending personally on patients when musculoskeletal ultrasounds were conducted, and he said that he did not. Patients were attended by a sonographer, and the defendant examined and reported upon the ultrasound films subsequently. A sonographer is a registered and qualified technician but is not a medical practitioner. The defendant told the investigators that the practice he worked in, which I gather was called Bell Imaging, had three sets of rooms in different areas of suburban Melbourne. Ultrasound scans were conducted at each of the three rooms, but the defendant generally attended at only one of them, and the films were brought to him for opinion and report. The defendant told the investigators that he had a vague notion that a radiologist was required to be in attendance at the rooms where the service was provided, but he was unaware of any requirement for the radiologist to examine the patient in person. Informed that this was stated in the medical benefits schedule provided to doctors by Medicare, he asked them to send him a copy of the schedule and they agreed to do so. I was provided with a copy of page 482 of the medical benefits schedule, which states unequivocally that “Medicare Benefits are only payable for a musculoskeletal ultrasound service (items 55800 to 55854) if the medical practitioner responsible for the conduct and report of the examination personally attends during the performance of the scan and personally examines the patient”.

17. Although the defendant did not give evidence, I have no reason to doubt that he was genuinely unaware of the requirement, one which does not apply to many other radiological services. Indeed, what I might describe as the default position as to diagnostic imaging services is set out in Regulation 4 of the DIST Regulations: unless the contrary intention appears, items relating to diagnostic imaging services apply whether the service is provided by a medical practitioner, or by a person who is employed by the medical practitioner and provides the services under the practitioner’s supervision. Regulation 14 in relation to musculoskeletal ultrasound appears to me something of an exception to the general rule.

18. Following a letter demanding payment of the amount claimed, the defendant in February 2006, some might think understandably, expressed surprise that reimbursement was sought from him rather than from the principals of the practice he worked for. He noted that all of the patients had been referred by a medical practitioner and assessed and examined by a sonographer, and that he had reported on the films.

19. The evidence of the investigators establishes to my satisfaction that the defendant admitted that he did not, in any of the cases under consideration, personally attend upon and examine the patient. The defendant admits on the pleadings that he claimed to have performed musculoskeletal ultrasound services as set out in the tendered schedule, which identifies the dates, patients, items numbers and amounts. The defendant admits that statements were made by him and on his behalf to Medicare, to the effect that he had rendered the services, and claimed payment.

20. I am satisfied that the claims amounted to representations by the defendant to Medicare that he had carried out services in relation to which he had complied with Regulation 14 of the DIST Regulations. The making of the claims amounted, in the circumstances, to the making of a false or misleading statement within section 129AC of the Health Insurance Act.

21. I am satisfied that the defendant was not entitled to any Medicare benefit in respect of musculoskeletal ultrasound services where he had not attended upon and examined the patient, notwithstanding that he had carried out the work, applying his training and experience, of reporting upon the ultrasound films. In the circumstances I am satisfied that all of the amounts paid by Medicare claimed in the action are recoverable from the defendant, being the person by or on behalf of whom the false or misleading statement was made. The plaintiff is entitled to recovery of the amount claimed.

22. I should make it clear that this is not a case which fails within what is often called Medicare fraud, or even overservicing. No patient, to my knowledge, has complained about the service received, nor is it suggested that any patient has anything to complain about. There is no suggestion of greed on the defendant’s part, still less of incompetence. His liability arises from requirements contained in Commonwealth regulations which he failed to comply with: I have no reason not to accept his explanation that he was unaware of the requirements.

23. There will be judgment for the plaintiff for the amount claimed, $48,604.20. That amount attracts interest from the date of payment. Because payments were made in small amounts over an extended period, the plaintiff has helpfully agreed to limit its claim for interest to the period from 30 September 2005, the date of the last of the payments in question. The prescribed interest rate is 9% per annum. I allow interest of $15,280.92. The defendant is to pay the plaintiff’s costs.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Solicitors for the defendant: TressCox Lawyers by their Canberra agents Bradley Allen Lawyers

Supreme Court of the ACT

Commonwealth of Australia (as represented by the Chief Executive Officer of Medicare Australia) v Banting [2009] ACTSC 32 (27 March 2009)