Re Jack Freeman v WM Mccubbery; MA Mckenzie; RM Mclellan and GJ Royal [1985] FCA 379 (10 October 1985)

FEDERAL COURT OF AUSTRALIA

Re: JACK FREEMAN
And: W.M. McCUBBERY; M.A. McKENZIE; R.M. McLELLAN and G.J. ROYAL
No. 73 of 1985
Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Smithers J.
Lockhart J.
Jenkinson J.

CATCHWORDS

Administrative Law - judicial review - Health Insurance Act 1973 - provision of excessive medical services by a medical practitioner - whether Medical Services Committee of Inquiry must distinguish between the rendering of medical services by a medical practitioner and the rendering of medical services by a salaried qualified employee when considering whether the medical practitioner may have rendered excessive services - whether a finding that excessive medical services may have been rendered must be predicated on a finding that particular services rendered to individuals were excessive services - whether a finding that excessive medical services may have been rendered may be based upon an overview of all the medical services rendered which are relevant for consideration and a finding that only some of those services may have been rendered excessively.

Administrative Decisions (Judicial Review) Act 1977, s.5

Health Insurance Act 1973 ss.79, 80, 82, 91, 92, 93, 94, 95, 96, 104 and 106

HEARING

MELBOURNE
10:10:1985

ORDER

The appeal be dismissed with costs.

NOTE: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

DECISION

Smithers J.: This is an appeal from a judgment delivered by Northrop J. on 5 March 1985 rejecting an application by Jack Freeman (the appellant) pursuant to s.5 of the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) for an order for review of certain decisions made by the four respondents constituting the Second Medical Services Committee of Inquiry for the State of Victoria (the Committee) operating pursuant to the provisions of the Health Insurance Act 1973 (the Act).

2. The Committee is established pursuant to s.80(1) of the Act. Its functions are, inter alia, to inquire into and submit to the Minister its report or recommendations on any matter referred to it by the Minister under s.82 of the Act being a matter that is relevant to the operation or administration of the Act and which arises out of or relates to the rendering of a professional service on or after 15 April 1977 or the initiation of a pathology service.

3. The appellant is a legally qualified medical practitioner who at the material period, provided medical services from two locations in the State of Victoria.

4. The decisions sought to be reviewed are:

1. a decision made on 1 May 1984 or thereafter that it

appeared to the Committee that the appellant may have
rendered excessive services as defined in s.79(1B)(a) of
the Act to patients between 15 April 1977 and 21
September 1979 being services for which medical/medibank
benefits had become payable to the appellant (s.94).
Medibank was at that time the name of the National
System of medical benefits.

2. A decision of which notice was given to the appellant on

29 June 1984 to hold a hearing into a matter referred to
it by the Minister under s.82 of the Act, namely,
whether in rendering professional services to patients
which were specified in documents identified as annexure
A and annexure B respectively, in respect of which
medical/medibank benefits had become payable to the
appellant, the appellant rendered excessive services
within the meaning of s.79(1B)(a) of the Act (s.94).

3. A decision made to summon the appellant to attend the

hearing and produce to the Committee documents referred
to in a notice dated 4 July 1984 (s.96).

5. These decisions were made by the Committee in the performance of its functions under ss.94 and 96 of the Act in relation to a matter referred to it by the delegate of the Minister under s.82 of the Act, namely the matter specified in the decision numbered 2 above. The annexures "A" and "B" were attached to the reference.

6. "Annexure A", was headed "Summary of reference to the Second Medical Services Committee of Inquiry". It specified Jack Freeman as the practitioner with reference to whom the reference was made. It stated that Dr. Freeman practised at 44C Haines Street, North Melbourne and that he also had a surgery at 9 Princess Street, Flemington where it was likely that a salaried associate worked during the period under reference namely 15 April 1977 to 21 September 1979. The annexure contained particulars of the classes of medical services identified by the specified item number of each class of service rendered during the stated period, the number of services of each class which were rendered to patients during the period, the rate of medical benefit referrable to each of the services rendered and the total benefit referrable to the services rendered at each stated rate in respect of each item of service which was rendered.

7. Annexure B contained the name of each patient to whom a service was rendered, the identifying item number of each service, and the date of the rendering of each service. In all, 6,452 services were specified as having been rendered to more than 1,600 patients.

8. There is no information in either of the annexures of symptoms or circumstances of health or of the nature of any injury or disease of which any of the individual patients complained in connection with which the services were rendered.

9. It was a condition precedent to the holding by the Committee of a hearing under s.94 of the Act into the matter referred to it by the Minister that, after considering the matter and the documents accompanying the reference, it should appear to the Committee that the appellant "may have rendered excessive services". In connection with the reference concerning Dr. Freeman the Committee did on 1 May 1984 consider the reference and the accompanying documents, namely annexures A and B and did decide that it appeared to it that the appellant may have rendered excessive services. Following that decision the Committee issued a statement dated 21 June 1984 pursuant to s.13 of the ADJR Act of its reasons therefor. Paragraph 9 of their statement is in the following terms:-

"9. The decision to hold an inquiry was made
because the following features were observed in
exhibit "JF5" namely that:

(a) ECG Stress Testing (Item 914) appeared to
have been performed more frequently than the
Committee considered to be reasonable.

(b) Respiratory Function Tests (Item 921)
appeared to have been performed more
frequently than the Committee considered to
be reasonable.

(c) ECG Stress Testing (Item 914), Respiratory
Function Testing (Item 921) Pathology Tests
(Items 1007, 1307 and 1308) and Chest X-ray
(Item 2625) all appeared to have been
performed together on one patient on the one
occasion more frequently than the Committee
considered to be reasonable.

The Committee considered that the features as
outlined in sub-paragraphs 9(a)(b) and (c) above
from examination of the said exhibit "JF5" were
indicative that the patients who were the
recipients of the services referred to by these
items may have been rendered excessive services
within the meaning of the Act, because such
services would not have been reasonably necessary
for the adequate medical care of the patients
concerned."

10. The Committee indicated in paragraph 8 of the statement that it spent approximately one and one half hours examining the exhibits and determining whether to hold a hearing. It stated also that:-

"The discussion related to a comparison between the
services for patients outlined in the said exhibit
"JF5" and the services which the Committee
considered were likely to be provided by a general
practice in Melbourne in the period from 1977 to
1979."

This statement was communicated to the appellant and annexed to it was an edited copy of the minutes of the meeting of the Committee held on 1 May 1984. Paragraph 2 of the minutes of meeting was in the following terms:-

"The Committee having regard to what they believed
to be the average cross section of patients in a
general practice considered that the number of
tests performed on the premises, and particularly
those performed in the common grouping of exercise
ECG's, respiratory function tests, chest X-rays
plus pathology tests for so many patients during
the period referred, was markedly high.

Accordingly after lengthy consideration of the
matter referred, it appeared to the Committee that
Dr. J Freeman may have rendered excessive services
within the meaning of Section 79(1B)(a) of the
Act.

For these reasons the Committee was unanimous in
its decision that a notice under Section 95 be
forwarded to Dr Freeman informing him of a hearing
to be held on 5 June 1984 at 5.00pm. Further,
that a summons under Section 96(1) of the Act be
served with the notice, requiring Dr Freeman to
attend and produce clinical notes and case records
on the first 30 patients under reference, at the
aforesaid hearing, the first 30 patients being
selected at this stage for the convenience of Dr
Freeman."

11. It is contended on behalf of the appellant that the
condition precedent to conducting a hearing was not satisfied and indeed, on the information available to the Committee, could not be satisfied. It is pointed out that the Committee had before it no information as to the circumstances of health of the patients to whom the services were rendered and could not, in respect of any one of the services rendered, form an opinion, as to whether it was rendered appropriately or in excess of what would have been proper. It is pointed out, also, that although the committee asserted that it appeared to it that in respect of the services rendered the appellant rendered excessive services, the information before the Committee disclosed that it was likely that, in the appellant's practice, services were rendered to patients by a salaried associate of the appellant being a qualified medical practitioner, but did not disclose, with respect to any particular service whether it was rendered by the appellant or the associate. In these circumstances, so it was said, the Committee could not, with respect to any service rendered, form any opinion, either that the service was rendered excessively or whether it was rendered by the appellant. The condition imposed by s.94 was therefore not satisfied and the holding of a hearing to inquire into the matter referred by the Minister was not authorised.

12. It is true that on the information before it the Committee could not form an opinion with respect to any particular service as to whether it was appropriate or excessive or whether it was actually rendered by the appellant. However, on behalf of the respondents it is pointed out that the Committee is comprised of medical practitioners with experience covering private practice and other branches of medical practice. Pursuant to s.80(1) of the Act the members were appointed by the Minister after consultation with the Australian Medical Association. It is pointed out also that s.94 provides that the Committee shall, that is to say must, conduct a hearing into a matter referred to it if, after considering the reference and the documents accompanying it, it appears to the Committee that the medical practitioner concerned "may" have rendered excessive services. It is said that the critical event is not satisfaction of any standard of proof but a mere appearance of possibility.

13. No doubt it is required that a degree of satisfaction to the extent that it so appears to the Committee, shall be carried to the minds of the members of the Committee that, in the services rendered, some of them may have been excessive but not more than that. If the Committee felt that the services rendered did not exceed the extent of service reasonably to be expected in the practice of the appellant it would theoretically still have been possible for it to decide that it appeared to it that there may have been excessive servicing. In such a case it would be a question whether the quality of satisfaction required by the statute was established. But in this case it is to be gathered from the stated reasons for the decision that the Committee took the view that an appearance to it that there may have been excessive servicing by the appellant did arise from the circumstances disclosed in the annexures. Clearly it considered that those circumstances pointed to that possibility.

14. It was pointed out also that s.94 expressly limits the materials to which the Committee is to have regard in considering whether there is, to it, an appearance that there may have been excessive servicing, to the terms of the reference and the accompanying documents. Section 94 is in Division 3 of Part V of the Act and is headed "Medical Services Committees of Inquiry". It is part of the machinery devised to provide supervision of the claims made under Medibank in respect of the servicing of patients by medical practitioners. The information provided by practitioners to Medibank in support of claims does not disclose the circumstances under which services to patients are rendered or provide any evidence of the propriety of rendering particular services. The appropriateness of the rendering of particular services is for practical purposes in the knowledge of the practitioner alone.

15. Some control or supervision such as provided in the Act was clearly a useful and one would think a necessary part of the medibank system. Inquiries by a competent body where it appears to it that there may have been overservicing and provision for co-operation in such an inquiry by the practitioner concerned does not seem unreasonable or unfair in the public interest. So, under s.82 the Minister may refer the matter of the services rendered by a practitioner to a Committee. Not having information as to the circumstances of any of the services rendered, the Minister, in referring the matter to the Committee, stated to that Committee the identity of the practitioner concerned, where his practice was located, the nature and frequency of the services rendered, and the names of the patients to whom the services were rendered. It was for the Committee to decide on those materials whether there was an appearance to it that the appellant may have rendered excessive services. Whether, in fact, there has been excessive servicing will be considered by the Committee in the hearing which it is directed to conduct if it so decides. No doubt, it is because of the limited nature of the materials before a Committee, when it performs the task of deciding whether it appears that there may have been excessive servicing, that the standard of satisfaction upon which an inquiry is directed to be undertaken is fixed at a level which, in relation to legal proceedings, is minimal. But it is clear that the Committee is to perform that task upon only the reference and such accompanying documents as the Minister provides. Clearly, it is not contemplated that at that stage the Committee will embark upon any additional investigation of the matter referred to it.

16. Submissions by Mr. Merkel QC for the appellant may be summarised as follows:-

(a) The committee did not direct its mind to the question

whether the services specified in the annexures were
rendered by the appellant or a salaried qualified
employee.

(b) The hearing which the Committee is authorized by s.94 to

conduct, after considering the matter referred to it, is
limited to inquiring as to whether the appellant
rendered identified services to patients in respect of
which the Committee formed an opinion that there was an
appearance that they may have been excessive services
and no such opinion was formed.

(c) An inquiry with respect to all the services specified in

the annexures is not authorized at a hearing where all
that has been decided by the Committee is that, looking
at all the specified services, there is an appearance
that some of them may have been excessive services; and
the Committee did not decide more.

17. It is true that in the records of the Health Department there are contained the addresses of the relevant patients. It is said that the addresses were not contained in the matter referred to the Committee or the annexures for the reason that the manpower time required to extract those addresses would have been very great. It is of course conceivable that during the inquiry the address of some patient or patients may have to be ascertained. Prima facie the addresses would be contained in the records of the appellant, but, there is evidence that those records may not be available. But for the purpose of enabling the Committee to decide whether there may have been excessive servicing, and for the appellant to conduct his case in that respect, it would not avail the Committee or the appellant to ascertain those addresses. If the true view were that in the performance of the task of deciding whether there was an appearance that the practitioner may have rendered excessive services it was necessary for it to decide that some particular services rendered were excessively rendered, it might have been necessary for it to go to the patients and obtain information as to the circumstances in which the services were rendered. But it is quite clear that to make the relevant decision the Committee's duty is to act on the contents of the minister's reference and the accompanying documents. On those contents it was quite within the competence of the Committee, looking at the type and value of the service and the location of the practices of the appellant, to make a decision that the appellant may have rendered excessive services. Thereupon the Committee was required to decide to conduct a hearing into the matter referred to it by the Minister. Of course, at the hearing, it may be necessary to investigate with respect to particular services whether they were rendered excessively, whether this be so or not will appear in the progress of the hearing. The regulation of the proceedings at the meeting is, according to s.91(1) of the Act, a matter for the Committee.

18. It was pointed out that if, in reporting to the Minister on the matter referred to, it expresses the opinion that the appellant has rendered excessive services, the report shall, as required by s.104, identify the excessive services. According to the construction of this provision which is ultimately adopted it may be that to perform this duty investigations of particular services rendered will have to be carried out, and it may well be that to do this, the addresses of the patients concerned will have to be ascertained. Of course all particulars as are reasonably necessary to enable the appellant to conduct his case, and of which the Committee has knowledge, in relation to the issues which arise at the hearings, must be given. But, the notice given under s.95(1) does, in my opinion, contain particulars of the matter to which the hearing relates and there is no ground for requiring particulars of addresses of any patients before the commencement of the hearing.

19. It appears therefore that there was ample ground for the Committee to decide that in the services specified in the annexures there may have been excessive servicing. But it was necessary for the Committee to decide that there may have been excessive servicing by the appellant. True it is that Dr. Freeman employed a qualified medical practitioner as an associate in his practice. But there is no suggestion that he himself was not active in the practice. There was no basis upon which it could appear to the Committee that any particular one of the services specified in the annexures was rendered by the appellant rather than by the assistant. It might be thought that a hearing under s.94(c) as to whether the practitioner may have rendered excessive services would be a hearing as to whether the practitioner or his servants or agents may have rendered excessive services. Nevertheless, once it appeared that in the total servicing of the patients of the practice during the relevant period services rendered may have been excessive services, there was inevitably an appearance that a proportion of those services which were rendered and which may have been excessive services were rendered by the appellant. Certainly, if it so appeared to the Committee that appearance could not be said to be unreasonable or unjustified. The minds concerned with considering whether there was such an appearance were those of persons having the necessary skills to assess the probabilities and possibilities and in their view it did appear that in the rendering of the total services specified in the annexures the appellant may have rendered excessive services.

20. To my mind, therefore, the first and second decisions of the Committee that the appellant may have rendered excessive services is not shown to have been invalid in any respect. On that basis there is no ground for challenging the third decision. It follows that the decision was validly made.

21. Accordingly, the conditions not only authorising a hearing, but on the fulfillment of which the Committee was commanded by the Act to conduct the hearing were fulfilled. The notice in writing of the time and place of the proposed hearing and containing the particulars specified in s.95(2) of the Act was given in accordance with the Act.

22. It is clear that investigation of some thousands of services rendered to individual patients would be a very large undertaking. Whether a proper hearing of the matter of the reference can be achieved without completing that task is a question. No doubt it is in an endeavour to bring the process within a more manageable compass that the Committee has decided to investigate at the initial hearing the services rendered to only thirty specified patients. It is, in my view, within the authority of the Committee pursuant to s.94(k) of the Act to conduct two or more hearings into the matter, each hearing relating to a limited number of the particularised services which may have been rendered by the appellant to patients as stated in the annexures A and B referred to above. Each such hearing would be a hearing into the matter, the subject of the Minister's reference, "in so far as the matter relates to one or more of the circumstances referred to in paragraphs (a) to (h)" of s.94 of the Act, namely, whether the appellant may have rendered excessive services, that being the circumstance referred to in para (c) of s.94. If there are difficulties of construction of sub-s. 94(k) it is to be observed that the provision is intended to facilitate the task of the Committee in performing the duty imposed upon it by the Act, namely, to conduct an inquiry into the matter referred to it by the Minister. It would seem that sub-s. 94(k) should be construed liberally as providing for practical requirements in the conduct of the inquiry. And in that context the decision to hold a hearing with respect to the first thirty patients mentioned in the annexures would seem reasonable and proper.

23. In the result it is my opinion that the appeal should be dismissed with costs.

I agree with the reasons for judgment of Smithers J. and of Jenkinson J..

Appeal against an order dismissing the appellant's application for an order of review in respect of decisions made , and conduct proposed, by the respondents.

2. The appellant is a medical practitioner who has been engaged in private practice at several places in two adjacent Melbourne suburbs for some years. The respondents are members of a Medical Services Committee of Inquiry for the State of Victoria, which was established under the provisions of Division 3 of Part V of the Health Insurance Act 1973, and which fell under an obligation, imposed in pursuance of s.82(b)(ii) of that Act, to inquire into, and submit to the Minister of State for Health its report and recommendations on the question whether in rendering certain medical services the appellant had rendered "excessive services", within the meaning which s.79(1B)(a) of the Act assigns to that expression. The decisions and the conduct in respect of which orders of review were sought by the appellant under the Administrative Decisions (Judicial Review) Act 1977 were made or proposed by the respondents in performance of that obligation.

3. The Act uses in description of the medical services with which the Court is presently concerned the expression "professional services" : s.3(1). Section 79(1B)(a) provides:

4. "In this Division -

(a) a reference to excessive services is a
reference to professional services,
being services in respect of which
medicare benefit has become or may
become payable and which were not
reasonably necessary for the adequate
medical or dental care of the patient
concerned;"

The relevant provisions of s.82 are:

"A Committee shall inquire into, and submit to
the Minister its report and recommendations on -

.................................................

(b) any other matter referred to the Committee
by the Minister, being a matter that is
relevant to the operation or administration
of this Act or the National Health Act 1953
(other than Part VII of that Act) and
arises out of or relates to -

.................................................

(ii) the rendering of a professional
service on or after 15 April 1977,
or the initiation of a pathology
service on or after the date of
commencement of this section, in the
State for which the Committee is
established."

5. By a document called an instrument of referral and dated 1 May 1984 a delegate of the Minister referred to the Committee of which the respondents are members "for inquiry into, and submission of a report and recommendations to the Minister of State for Health on a matter relevant to the operation or administration of the said Act, which arises out of the rendering of professional services in the State of Victoria after 15 April 1977, namely, whether in rendering professional services to patients particulars of which are set out in annexures marked 'A' and 'B', being services for which medical/medicare benefits have become payable, Dr Jack FREEMAN rendered excessive services within the meaning of s.79(1B)(a) of the said Act". The annexures specified more than 6,000 "professional services" rendered to more than 1,600 patients. Not all the services were rendered by the appellant. Some of the services were rendered by medical practitioners in the course of their employment by the appellant, according to his uncontradicted evidence. Nothing in the annexures indicates the identity of any person, other than the appellant, who may have rendered any of the services. Sub-sections (3) and (4) of s.79 provide:

"(3) In this Division, a reference to a
practitioner who is employed by a person
includes a reference to a practitioner who
provides professional services for or on
behalf of that person by reason of a contract,
agreement or other arrangement for the
provision of his services between -

(a) that person; and

(b) the practitioner or another person.

(4) Where a practitioner provides a
professional service or initiates a pathology
service in the course of his employment by
another person, then, for the purposes of this
Division, that service shall be taken to have
been rendered or that pathology service to
have been initiated, as the case may be, by
that practitioner and not by that other
person."

The word "practitioner" is defined to mean a medical practitioner or a dental practitioner.

6. So much of s.94 of the Act as is relevant provides:

"Where, after consideration of a matter
referred to a Committee by the Minister and of
any documents that accompany the reference
supplied by the Minister, it appears to the
Committee that -

..............................................

(c) a practitioner may have rendered
excessive services;

(d) a person may have caused or permitted a
practitioner employed by the person to
render excessive services;

(e) a person, being an officer of a body
corporate, may have caused or permitted
a practitioner employed by the body
corporate to render excessive services;

(f) a practitioner may have initiated
excessive pathology services;

(g) a person may have caused or permitted a
practitioner employed by the person to
initiate excessive pathology services;
or

(h) a person, being an officer of a body
corporate, may have caused or permitted
a practitioner employed by the body
corporate to initiate excessive
pathology services,

the Committee shall -

(j) unless paragraph (k) applies - conduct a
single hearing into the matter; or

(k) if it is satisfied that it is
appropriate to do so - conduct 2 or more
hearings into the matter, each hearing
being a hearing into the matter in so
far as the matter relates to one or more
of the circumstances referred to in
paragraphs (a) to (h) (inclusive)."

Section 95(1) is in these terms:

"A Committee shall -

(a) if it proposes to hold a hearing into a
matter in so far as the matter relates to
a circumstance referred to in paragraph
94 (a) or (b) - cause to be given to the
practitioner concerned; or

(b) if it proposes to hold a hearing into a
matter in so far as the matter relates to
a circumstance referred to in paragraph
94(c), (d), (e), (f), (g) or (h) - cause
to be given to the person first referred
to in that paragraph,

notice in writing of the time and place of the
proposed hearing at least 10 days before the
date of the proposed hearing."

7. There was no evidence, or suggestion by counsel, that the Committee had decided to conduct any hearing into the matter referred to it except in so far as the matter relates to the circumstance, referred to in paragraph (c) of s.94 and in the instrument of referral, that the appellant may have rendered excessive services : it did not appear that notice in pursuance of s.95(1)(b) of any proposed hearing has been given to any person who had been employed by the appellant, or that the appellant has been given, in pursuance of that paragraph, notice of any hearing into a matter in so far as the matter relates to the circumstance, referred to in paragraph (d) of s.94, that the appellant may have caused or permitted a practitioner employed by him to render excessive services. The notice in writing to the appellant, given in pursuance of s.95(1)(b), which is the subject of the application for orders of review alleged only that it had appeared to the Committee that "you may have rendered 'excessive services'", and gave him notice of a hearing which it was asserted that the Committee proposed, "in accordance with section 94 of the Act", to hold into the "the matter". Those annexures to the notice, like the annexures to the instrument of referral of which they are copies, did not identify any of the particularised services as having been rendered by a practitioner in the course of his employment by the appellant. From all this it may be inferred that the Committee, believing that some of the particularised services were rendered by an employe, but not knowing which of them were, concluded in respect of each of them that it may have been rendered by the appellant.

8. However that may be, the evidence did indicate that it had appeared to the Committee that each service itemised in the annexures was a service in respect of which medicare benefit had become or might become payable and which may not have been reasonably necessary for the adequate medical care of the patient concerned, not by reason of the Committee's judgment of the circumstances under which that particular service was rendered, for the Committee knew nothing of those circumstances, but by reason of the Committee's judgment that in respect of each of several kinds of service the probability was low that so many services of that particular kind would be found to be reasonably necessary in the conduct of a general medical practice in Melbourne during the period under consideration. The Committee based its conclusion that each service may have been "excessive", in the sense expounded by s.79(1B)(a), upon its application of probability theory to a comparison between its perception of the incidence of the need for certain kinds of services in the conduct of a general medical practice in Melbourne and the incidence of the rendering of those kinds of services in the conduct of the appellant's practice.

9. The evidence of the appellant included material by reference to which the Committee's reasoning to its conclusion could be attacked : his evidence was that there were characteristics of his medical practice which were not found in other general medical practices in Melbourne, so that the comparison made by the Committee could not support the conclusion drawn from it. But for the purposes of the appeal counsel for the appellant was not concerned to show that the Committee's reasoning was at fault in point of fact except in one respect, consideration of which it is convenient to defer. His submission was rather that the reasoning failed to satisfy the requirements of s.94(c). Upon its proper construction that paragraph requires, in the submission of counsel for the appellant, that the hearing be into the matter referred to it by the Minister in so far as - and no further than - the matter relates to a medical service rendered by a practitioner in respect of which it has appeared to the Committee, upon a consideration of the circumstances attending the rendering of that service by that practitioner, that the service may have been "excessive", in the sense expounded in s.79(1B)(a). Mr. Merkel Q.C., who appeared with Mr. I. Miller for the appellant, was not concerned to contend that the word "may" in s.94(c) required any high degree of probability that the service had been excessive. But he insisted that only by forming a judgment that a particular service to a patient may not have been reasonably necessary for the adequate medical care of that patient could the Committee fulfil the condition which s.94(c) imposed. Such a judgment could not be reasonably formed, according to Mr. Merkel's primary submission, without some consideration, however cursory, of the circumstances in which the particular service was rendered. The decision by the Committee to conduct a hearing, based as it was on no consideration of those circumstances, lacked "evidence or other material to justify the making of the decision" (s.5(1)(h) of the Administrative Decisions (Judicial Review) Act 1977), and "involved an error of law" (s.5(1)(f) of that Act), according to the submission. Alternatively, if a conclusion that a particular service may have been "excessive" could reasonably be based on reasoning of the kind the Committee adopted, it was submitted that in this particular case the Committee had fallen into error in its reasoning. The statement in writing furnished by the respondents pursuant to s.13(2) of the Administrative Decisions (Judicial Review) Act in response to the appellant's request showed, according to Mr. Merkel's submission, that it was in respect of only some of the several kinds of services rendered that the Committee compared its appreciation of what would be the normal incidence in general practice with the incidence in the appellant's practice. If, contrary to Mr. Merkel's primary submission, such a comparison could reasonably justify an inference that each of the services of the kinds which were the subject of comparison may have been a service not reasonably necessary for the adequate medical care of the patient to whom it was rendered, the comparison did not justify the further inference that services of other kinds, not the subject of comparison, may have been "excessive". Yet every service to which the annexures referred had been made the subject of the proposed hearing. According to this alternative submission, the ground of review specified in s.5(1)(h) was established in relation to the decision to conduct a hearing concerning those medical services which were not of a kind to which the Committee's comparison related : there was no evidence or other material to justify the making of the decision.

10. Mr. Merkel supported his submission as to what s.94(c) required by reliance on the terms of s.79(1B)(a) : the reference in that paragraph to "care of the patient concerned" demonstrated, he said, that a judgment whether a service was, or a judgment whether it may have been, excessive could be formed only upon a consideration of the medical condition of the patient to whom it was rendered and a consideration of the appropriateness of the service in the care of a patient in that condition. The possible consequences for a practitioner of a decision to conduct a hearing of the kind contemplated by s.94 were so serious that the construction of s.94(c) advanced on the appellant's behalf gave effect to what it could be expected that the legislature would require, it was further submitted. Those possible consequences are prescribed by ss. 95, 96, 104(a), 105(2), 106 and 106AA. Those sections contemplate that the hearing may result in a conclusion by the Committee that the practitioner has rendered excessive services; that in that event the services will be identified in the Committee's report to the Minister; that the Committee may make in the report recommendations that the practitioner be reprimanded and that the medicare benefit payable in respect of a service or a specified part thereof cease to be payable and that the medicare benefit paid to the practitioner or payable to another person in respect of a service or a specified part thereof be payable by the practitioner to the Commonwealth; that the Minister may make a determination in accordance with such a recommendation; and that a statement setting out particulars of the determination may be published in the Gazette and laid before each House of the Parliament. Not only did his submission concerning the proper construction of s.94 draw support from a consideration of the gravity of the possible consequences of a decision to conduct a hearing of the kind which that section contemplated, Mr. Merkel argued, but also from a consideration of the provisions the legislature had made to ensure that a medical practitioner was afforded opportunities of defence against, and review of, a conclusion that he had rendered excessive services. Section 95 requires that he be given notice of the hearing and "particulars of the matter to which the hearing relates". Sections 96A and 96B confer on him the right to attend and to be represented at the hearing, to give evidence, to call witnesses, to examine witnesses and to address the Committee. Provision is made in Part VA for review of a determination by the Minister in accordance with a recommendation by a Committee and, if a medical practitioner exercises a right of review conferred by that Part, the determination takes effect only if, and to the extent that, it is consistent with the judgment or order made on review. (See s.106(3).) All this is confirmatory, in Mr. Merkel's submission, of a construction of s.94 which imposes, as a condition of conducting a hearing into the question whether a service was excessive, a requirement that it should appear to the Committee that that particular service may have been excessive.

11. I think it unnecessary to express an opinion as to whether that is the proper construction of s.94 or whether, on the other hand, the committee is required by the section to conduct a hearing into each question whether a particular service was excessive which the matter referred to the Committee raises if it appears to the Committee that one (or, perhaps, more than one) of those services may have been excessive. If the construction for which Mr. Merkel contends be adopted, yet error is not in my opinion demonstrated in the Committee's decisions. The language of s.94(c) leaves the Committee free, in my opinion, to find the condition expressed in that paragraph fulfilled upon a probability lower than 0.5 that any particular service was rendered by the appellant and not by one of his employes, and upon a probability lower than 0.5 that the service was excessive. (See R. M. Eggleston : Evidence, Proof and Probability, Ch. 2.) The comparison which the Committee made of what its members regarded as the normal incidence of certain kinds of service in the appellant's practice was not shown by any of the evidence to be incapable of sustaining the inference which the Committee drew that there may have been in the appellant's practice excessive rendering of those kinds of services, or the further inference which it must be concluded the Committee also drew (although the reasons furnished by the Committee in pursuance of s.13 of the Administrative Decisions (Judicial Review) Act 1977 do not expressly state the inference) that there may have been in the appellant's practice excessive rendering of the other kinds of services comprehended in the annexures. The first inference, although not drawn as more probable than not, may have led the Committee to draw from its medical expertise and its experience of doctors' behaviour a further inference that a propensity to render excessive services of certain kinds would be likely to be associated with a propensity to render excessive services of other kinds. No doubt the Committee was confident that not every service specified in the annexures had been excessive, and that not every service had been rendered by the appellant. But it could in my opinion reasonably have appeared to the Committee that each service may have been excessive and may have been rendered by the appellant. At all events, the contrary was not shown, in my opinion.

12. The indications in the Health Insurance Act 1973, to which Mr. Merkel directed attention, of legislative concern to afford a medical practitioner the means of protecting himself from an unfounded, or an insufficiently proved, conclusion that he had rendered a professional service not reasonably necessary for the adequate medical care of his patient, show also in my opinion that the concern found legislative expression in provisions relating to the conduct of a hearing, and to events subsequent to a hearing, upon which a Committee had resolved in pursuance of s.94. I find nothing in the Act, outside s.94, to influence the construction of that section to achieve the further protection of a requirement that a decision to conduct a hearing into the question whether a particular service was excessive should rest on a finding that that particular service may have been excessive. But if that be the proper construction of s.94, there is nothing in the Act, in my opinion, which could justify denying the Committee recourse to a process of reasoning to such a finding on the ground merely that in that process the particular circumstances in which the service had been rendered were not considered, or on the ground merely that from a propensity to render excessive services of certain kinds was inferred a propensity to render excessive services of other kinds, or on the ground merely that the probability of the existence of the former propensity was less than 0.5. None of those grounds exposes, in all the circumstances which the evidence discloses, reasoning that no reasonable person skilled in the arts and science of medicine, as the respondents were, could reasonably have employed to reach such a finding, in my opinion.

13. The other subject of the application which was canvassed on the appeal was the failure of the Committee to cause the appellant to be furnished with the address recorded in the Department of Health of each of the patients named in the annexures. Section 95 of the Health Insurance Act 1973 requires that the notice which that section prescribes "shall give particulars of the matter to which the hearing relates". It was submitted that the requirement was not satisfied unless the address were furnished. Alternatively, natural justice was denied the appellant unless the address were furnished, according to Mr. Merkel's submission. It was said on behalf of the respondents that it would be very expensive to retrieve the addresses from the Department's records. On behalf of the appellant it was said that his records of the addresses of many of the patients had been destroyed before he had notice of the hearing and that he needed the addresses in aid of his search for patients for the purposes of the hearing.

14. In my opinion s.95 does not require that the address be furnished of a patient to whom the hearing relates. As to what natural justice may require, that cannot in my opinion be determined until after the hearing has commenced and the course which it is to take has appeared.

15. I would dismiss the appeal with costs.