Re Karen Ann Pullinger v Secretary To the Department of Community Services and Health and Medical Benefits Fund of Australia Limited Re Janice Maree Murray and Kenneth Wallace Murray v PR Griffin and Medical Benefits Fund of Australia Limited Re [1990] FCA 20 (6 February 1990)

FEDERAL COURT OF AUSTRALIA

Re: KAREN ANN PULLINGER
And: SECRETARY TO THE DEPARTMENT OF COMMUNITY SERVICES AND HEALTH
and MEDICAL BENEFITS FUND OF AUSTRALIA LIMITED
Re: JANICE MAREE MURRAY AND KENNETH WALLACE MURRAY
And: P.R. GRIFFIN and MEDICAL BENEFITS FUND OF AUSTRALIA LIMITED
Re: COLIN GORDON CAMPBELL and BARBARA CAMPBELL
And: P.R. GRIFFIN and MEDICAL BENEFITS FUND OF AUSTRALIA LIMITED
Nos. G101 of 1989, G1347 and G1447 of 1988
FED No. 11
Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Davies J.(1)

CATCHWORDS

Administrative Law - judicial review - Health Insurance Act - revocation of certificates that patients in need of acute care - whether error of law - meaning of "acute care".

Administrative Decisions (Judicial Review) Act 1977 (Cth) - s.5(1)(f)

Health Insurance Act 1973 (Cth) - s.3B

HEARING

SYDNEY
6:2:1990

Counsel for the applicants: Mr D.K. Catterns

& Mr R.B. Phillips

Solicitors for the applicants: Craddock, Murray & Neumann

Counsel for the
first respondent: Mr A. Robertson

Solicitor for the Australian Government Solicitor
first respondent:

Counsel for the Mr H.D. Sperling QC
second respondent: & Mr M.B. Smith

Solicitor for the
second respondent: Tress, Cocks & Maddox

ORDER

The decisions of the Delegate of the Secretary to the Department of Community Services and Health be set aside and the matters be remitted for reconsideration in accordance with law.

The respondents pay the costs of the application.

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

DECISION

In these proceedings, the applicants are challenging decisions of a Delegate to the Department of Community Services and Health revoking acute care certificates which had been issued with respect to three profoundly disabled young children, Karen Pullinger, Erin Campbell and Christine Murray.

2. At all material times Karen, Erin and Christine were in-patients at Allowah Babies' Hospital ("Allowah") which is a private hospital for a purpose of the Health Insurance Act 1973 (Cth). The second respondent, Medical Benefits Fund of Australia Limited ("MBF") is a registered medical benefits organisation under the National Health Act 1953 (Cth). As the parents of the children were insured with MBF, MBF became liable to make contributions towards the costs of the children's stay at Allowah. The level of that contribution depended, because of MBF's By-Laws, the National Health Act and the Health Insurance Act, upon whether the children were "nursing-home type patients" while they were in-patients at Allowah. Section 3(1) of the Health Insurance Act provides, inter alia:-

"'nursing-home type patient', in relation to a
hospital, means an in-patient in a hospital
who has been such an in-patient for a
continuous period exceeding 35 days, but does
not include an in-patient in respect of whom
there is in force a determination under
section 3A or a certificate given under
section 3B;"

This definition also appears in the By-laws of MBF and, by virtue of s.4(1A) of the National Health Act, it applies to that Act unless a contrary intention appears.

3. For the children's first 35 days as in-patients at Allowah, they were therefore entitled to the payment of a basic daily benefit at rates set by the Minister for Health for in-patients at approved private hospitals. After that period, the children became "nursing-home type patients" unless a s.3A or s.3B certificate was issued.

4. Section 3B of the Health Insurance Act provides, inter alia:-

"3B.(1) A medical practitioner may give a
certificate in writing in accordance with the
approved form stating that, in his opinion, a
person who is an in-patient in a hospital is,
or will be, in need of acute care for at least
the period specified in the certificate, being
a period commencing not later than 14 days
after the certificate is given and ending not
later than 30 days after the commencement of
the period.
(1A) A medical practitioner may give a
certificate in writing in accordance with the
approved form stating that, in the opinion of
the medical practitioner, a person has been,
or has been and is, in need of acute care as
an in-patient in a hospital for at least the
period specified in the certificate, being a
period commencing before the certificate is
given but not before 1 February 1984 and
ending not later than 30 days after the
commencement of the period.
(5) Where a certificate has been given under
sub-section (1) or (1A), the Secretary -
(a) may, of his own motion, within 14 days
after he became aware of the giving of
the certificate; and
(b) shall, within 14 days after an
application in writing made to him by a
registered organization, being an
application made within 60 days after the
certificate was given;,
request a Committee to review the
certificate.
(6) After reviewing a certificate given under
sub-section (1) or (1A), the Committee shall,
if it is of the opinion that the certificate
should be varied or revoked, recommend to the
Secretary accordingly.
(7) Upon the receipt of a recommendation for
the variation or revocation of a certificate,
the Secretary may, by writing signed by him,
vary or revoke the certificate with effect
from the date on which the certificate was
given or such later date as he specifies, but
nothing in this sub-section requires him to
act in accordance with the recommendation.
(8) The Secretary may, in relation to each
State and each Territory, establish a
Committee or Committees to be known as the
Acute Care Advisory Committee, or the Acute
Care Advisory Committees, for the State or
Territory."

5. Karen Anne Pullinger was born on 16 April 1982 with severe physical and intellectual disabilities. Her parents looked after her at home for some time but eventually decided it would be in Karen's best interests if she was given full time professional care. Consequently, in July 1983, she was admitted to Allowah Babies' Hospital. A paediatrician attached to Allowah, Dr K.H. Walsh, said of Karen's condition, in an affidavit which was before the decision-maker:-

"Karen was admitted to Allowah with a diagnosis
of Smith-Lemli-Opitz Syndrome. She has a
congenital lack of cerebral development; that
is, a partially formed brain. She has
cerebral palsy, cortical blindness, epilepsy
and a repaired cleft palate. Her blindness is
not the result of defective eyes, but, rather,
a failure of the occipital region of the brain
to develop, thus leaving nowhere to receive
the eyes' messages.
Karen has grave difficulty with eating and
drinking. She has a pronounced 'tongue
thrust' which means that she forces food or
drink back out of her mouth whilst trying to
eat or drink. She also forces food out her
nostrils. This makes feeding a very time
consuming process with meals lasting up to an
hour and a half. She requires a special diet
so that she receives adequate nutrition.
Karen's cerebral palsy means that her limbs
have a tendency to stiffen and contract into
unnatural positions. She requires constant
physiotherapy, at least daily in order to
prevent her limbs binding up and becoming
immobile. She also needs aids such as hand
splints, special chairs, a neck brace, an
individually designed bed etc, in addition to
the physiotherapy.
Karen is very fragile and quite susceptible to
infection. She has frequent colds and flu and
urinary tract infections. The urinary tract
infections necessitate the use of continuous
prophylactic antibiotics. She is still taking
fits very regularly though these are
reasonably controlled with medication. The
ailments from which she frequently suffers can
easily, due to her generally fragile
condition, become life threatening."

6. On 28 January 1987, Dr Walsh granted an acute care certificate pursuant to s.3B(1) in respect of Karen Pullinger for the period 1-28 February 1987. Further certificates were given on 25 March 1987 for the period 1-30 April 1987, on 27 May 1987 for the period 1-30 May 1987 and on 3 June 1987, for the period 30-31 May 1987, the last two certificates being issued under s.3B(1A).

7. On 4 February 1988, an Acute Care Advisory Committee ("the Committee"), at the request of the Secretary, reviewed these certificates and recommended that they be revoked. The minutes of the Committee's meeting state, inter alia:-

"The Committee was of the opinion that despite
intensive habilitation in an established unit
for more than 3 years, there had been no
improvement in Karen's medical condition over
a period of more than 12 months. As there was
considered to be no prospect of any future
improvement, the current treatment was
regarded by the Committee as supportive only.
Also, in the opinion of the Committee Karen's
current care needs could not be regarded as
dynamic, intensive or otherwise designed to
achieve an improvement in her medical condition."

8. A Delegate of the Secretary to the Department of Community Services and Health ("the Delegate") then considered this recommendation pursuant to s.3B(7). In addition to the Acute Care Certificates themselves and the recommendation, the Delegate had before him a letter from Mr and Mrs Pullinger's solicitors, a report from the Chatswood Child Assessment Unit and affidavits from Dr Walsh, Mr Pullinger and Rona Mitchell, who is the director of nursing at Allowah. Having considered the matter, the Delegate decided to revoke the certificates and, on 4 October 1988, signed a document to this effect. It is that decision which is challenged in the Pullinger proceedings. The recommendation itself is not the subject of challenge.

9. On 30 January 1989, the Delegate issued a statement in response to a request under s.13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). That statement states inter alia:-

"4.2 The Committee had before it the previous
representations and information provided
by the medical practitioner who had
issued the above certificates. The
Committee was also aware of the decision
of Mr Justice Northrop in Jackson v
Secretary, Department of Health and, in
particular, his comments as to the
definition of the term 'acute care'
contained in section 3B of the Act.
4.3 In my view the relevant issue to be
determined was whether Karen Ann
Pullinger's medical condition required a
level of care which could be described as
'acute care' and not whether 'acute care'
was actually provided.
...
4.8 I examined all of the evidence referred
to at paragraphs 3.1 to 3.10 above and
concluded that the treatment provided
during the period covered by the above
certificates could not be said to have
been 'dynamic or intensive care or
treatment designed to achieve an
improvement in the medical condition of
the patient.' I agreed with the views of
the Committee that the above treatment
had been essentially the same for a
period of more than 3 years and that it
was designed to maintain the patient in
her present medical condition (ie, at the
time covered by the certificates). I
considered the patient's medical
condition as referred to in the above
mentioned evidence and the treatment
required. I also considered the episodic
condition of recurrent urinary tract
infection during the period 1 May 1987 to
30 May 1987 and the treatment required.
I concluded that the care provided to
Karen Ann Pullinger during the period
covered by the above certificates was
'passive care' as referred to in the
judgement of Mr Justice Northrop. I
further concluded that the medical
condition of Karen Ann Pullinger during
the period covered by the above
certificates was such that she was not in
'need of acute care' as defined above.
Accordingly I agreed with the
recommendation of the Committee and
decided to revoke the above
certificates." (the emphasis is mine)

10. The decisions and the reasons for the decisions in the cases respecting Erin Campbell and Christine Murray are generally similar.

11. The phrase quoted by the Delegate in his reasons above came from a judgment of Mr Justice Northrop in Jackson v. Secretary, Department of Health (1987) 75 ALR 561. His Honour said at p 575:-

"In its context the use of the word 'acute' to
describe the word 'care' should refer to a
type of medical treatment under the
supervision of a medical practitioner which
connotes dynamic or intensive care or
treatment designed to achieve an improvement
in the medical condition of the patient. In
some cases, this care may involve nursing
treatment as well as treatment by other
medical or para-medical members of supportive
medical teams. In this sense 'acute care' is
to be contrasted with what may be described as
'passive care' being the care of a patient
which is not designed to achieve an
improvement in the medical condition of the
patient. This latter type of care describes
the type of care normally provided in a
nursing home." (the emphasis is mine)

12. Mr D.K. Catterns, counsel for the applicants, submitted that the Committee and the Delegate fell into error by treating the quoted passage as though it were a statutory definition. He argued that the Committee and the Delegate took the view that, as the care provided and required was not designed to achieve an improvement in the children's condition, it could not be "acute care", because of what Northrop J. had said. Mr Catterns argued that this approach was incorrect and that the phrase "acute care" could also describe care designed to prevent or slow deterioration. He suggested, for example, that terminally ill patients could be in need of acute care, even though there was no hope of that care ultimately improving their condition. Nothing in Jackson's case, he said, dictated a contrary conclusion. I agree with these submissions.

13. It will be noted that in each case the Committee had concluded that, "As there was considered to be no prospect of any future improvement, the current treatment was regarded by the Committee as supportive only" and that the child's current care needs "could not be regarded as dynamic, intensive or otherwise designed to achieve an improvement in her medical condition." The Committee thus adopted the words of Northrop J., as did the Delegate, who in para 4.8 of the statement above, after setting out these words, used the expression "as defined above." In his oral evidence to the Court, the Delegate expressed himself rather more broadly but, nevertheless, said of Northrop J.'s words, "I take them as part of the definition of what acute care is ..., which rather than just to maintain the condition should have some hope of improvement." This is the crux of the present cases.

14. The analysis made by Northrop J. of the term "acute care" in Jackson's case is a valuable one; but I do not read his Honour as defining the term. As Northrop J. pointed out, the term "acute care" has no recognised meaning in the medical or nursing professions and it is not a term of common parlance. The words "acute" and "care" are well understood words of the English language; but "acute care" is not a recognisable concept. It takes its meaning from the context in which it appears.

15. It is relevant to note that the term is not defined in the Acts, although terms such as "nursing home", "nursing home care" are defined in the National Health Act and the words "hospital", "hospital patient", "hospital treatment", "in-patient", "medical practitioner", "nursing care" and "professional attention" are defined in the Health Insurance Act.

16. The critical point is that stated by Northrop J. at p 575, namely:-

"What is 'acute care' in any particular case
depends upon the treating medical
practitioner's clinical judgment. Opinions
may differ. It is well known that, in
medicine, a general practitioner often refers
a patient to a specialist for the opinion of
the specialist. The obtaining of a second
medical opinion is quite common."

His Honour then discussed the function of the Committee and said at pp 576-7:-

"The function of the committee, composed as it
is of medical practitioners, is to place
itself in the position of the certifying
medical practitioner. It should consider the
medical condition of the contributor, the type
of care proposed, whether that care is acute
care in the sense discussed above and whether
the contributor is in need of that care.".

His Honour made an order of review in Jackson's case simply because the Committee had failed to exercise that function and, at p 577, said that the Committee:-

"... failed to take into account a relevant
matter, namely whether the applicant was in
need of the care described in the certificate
and whether that care was acute care within
the meaning of that phrase in s3B(1), and had
regard to the nature of the illness of the
applicant and not of the care proposed by Dr
Beacheam (the treating psychiatrist)"

17. As his Honour pointed out, the question turns on the needs of the patient and the care required, and this is primarily a medical question to be considered, in the event of a dispute, first by an Acute Care Advisory Committee and then by the Secretary or his Delegate. In the present cases, the Committee, by adopting the advisory words of Northrop J. as if they were a definition, appears not to have exercised its own independent medical judgment as to whether in respect of each of the children s.3B certificates should have issued. And the Delegate appears to have treated the advisory remarks of Northrop J. as a definition, which they were not intended to be.

18. As a matter of law, a patient may be in need of "acute care" notwithstanding that no improvement in the patient's condition is expected. The care may be required to prevent or inhibit deterioration. Whether in each case such care is required and should be given is primarily a medical question to be determined in the light of the patient's condition and the nature of the care required.

19. There was, therefore, in each case, an error of law in the decision making process. The decisions under review must therefore be set aside and the matters remitted for reconsideration according to law. This will not preclude the Secretary from sending the matters again to an Acute Care Advisory Committee for its recommendation, if he considers that course to be appropriate.

20. The respondents should pay the costs of the application.