Determining Officer appointed under section 106Q of the Health Insurance Act 1973 v the Hon. Mrs Margaret Lusink & Ors [1998] FCA 63 (12 February 1998)

FEDERAL COURT OF AUSTRALIA

ADMINISTRATIVE LAW - Medicare Professional Services Review Scheme - Inappropriate practice by practitioners - Health Insurance Commission empowered to refer practitioner's conduct to Director of Professional Services Review - Director decides whether to dismiss referral or set up Professional Services Review Committee to investigate conduct - Committee reports findings to Determining Officer - If Committee reports that practitioner has engaged in inappropriate practice Determining Officer prepares draft determination - Draft provided to practitioner with invitation to make submission on draft - Determining Officer prepares final determination in light of any submission - Provision for review of determination by Professional Services Review Tribunal - Minister required to forward reference, transcript of proceedings before Committee, exhibits, Committee's report and final determination to Tribunal - Review to be conducted having regard to documents forwarded - Report by Committee of inappropriate practice - Draft determination prepared - Submission by practitioner - Final determination adverse to practitioner - Determination refers to draft and submission thereon - Request for review of determination - Whether Tribunal entitled to call for draft and submission.

Health Insurance Act 1973 ss 106T, 115, 119

Minister for Health v Thomson [1985] FCA 208; (1985) 8 FCR 213 considered

McIntosh v Minister for Health (1987) 17 FCR 463 considered

Yung v Adams (unreported, 11 December 1997, Davies J) considered

Tiong v Minister for Community Services and Health (1990) 93 ALR 308 considered

Allen v Maddock [1858] EngR 379; (1858) 11 Moo PC 427 considered

DETERMINING OFFICER appointed under section 106Q of the Health Insurance Act 1973 v THE HON MRS MARGARET LUSINK, DR PETER JOSEPH and PROFESSOR DAVID TILLER constituting the Professional Services Review Tribunal No 7 and JAMES DIMITRIOS DEMIRTZOGLOU

VG 341 OF 1997

SUNDBERG J

12 FEBRUARY 1998

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 341 of 1997

BETWEEN:	determining officer appointed under section 106q of the Health Insurance Act 1973 Applicant
AND:	the hon mrs margaret lusink, dr peter joseph and professor david tiller constituting the Professional Services Review Tribunal No 7 First Respondent james dimitrios demirtzoglou Second Respondent

JUDGE:	SUNDBERG J
DATE OF ORDER:	12 FEBRUARY 1998
WHERE MADE:	MELBOURNE

THE COURT DECLARES THAT the Tribunal is not entitled to receive and take into account the draft determination made by the applicant and the submission thereon of the second respondent dated 22 September 1996.

THE COURT ORDERS THAT:

1. The first respondent resume the hearing of the review of the applicant's determination.

2. The second respondent pay the applicant's taxed costs of the application.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 341 of 1997

BETWEEN:	determining officer appointed under section 106q of the Health Insurance Act 1973 Applicant
AND:	the hon mrs margaret lusink, dr peter joseph and professor david tiller constituting the Professional Services Review Tribunal No 7 First Respondent james dimitrios demirtzoglou Second Respondent

JUDGE:	SUNDBERG J
DATE OF ORDER:	12 FEBRUARY 1998
WHERE MADE:	MELBOURNE

REASONS FOR JUDGMENT

MEDICARE PROFESSIONAL SERVICES REVIEW SCHEME

Part VAA of the Health Insurance Act 1973 , which consists of ss 80 to 106ZR, creates a scheme under which a person's conduct can be examined to ascertain whether inappropriate practice has been engaged in. If it has, sanctions can be imposed. Section 86 empowers the Health Insurance Commission, the body which maintains Medicare records, to refer a person's conduct to the Director of Professional Services Review appointed under s 83. The Director decides whether to dismiss the referral or set up a Professional Services Review Committee to investigate the conduct further: s 89. The Commission must send a copy of the referral to the person under review inviting a written submission as to why the Director should dismiss the referral without setting up a Committee: s 88. Committees are established under s 95. They conduct meetings (s 97) and hearings (s 101), and can issue notices and summonses requiring persons to give evidence and produce documents (ss 104, 106B). Oaths and affirmations may be administered (s 106A), and provision is made for the punishment of those who refuse to be sworn or to affirm or who give false or misleading answers (s 106E). At a hearing the person whose conduct is under review is entitled to be accompanied by a lawyer or other adviser, but is not entitled to be represented by any such person: s 103(1). However, the Committee may allow an adviser, other than a lawyer, to question a person giving evidence and to address it: sub-s (2). Committee members, representatives and witnesses enjoy the same protection and immunity as High Court justices and barristers and witnesses appearing in that Court respectively: s 106F.

Section 106L requires the Committee to forward a written report of its findings to the Determining Officer appointed under s 106Q. The Determining Officer must give a copy of the report to the person under review: s 106R. If the Committee has reported that the person under review has engaged in inappropriate practice, the Determining Officer must prepare a draft determination dealing with the matters set out in s 106U, and send copies thereof to the person under review, who must be invited to make a written submission "suggesting changes" to it: s 106S. When the time for making the written submission has expired, the Determining Officer must make a final determination: s 106T.

Part VA of the Act, which consists of ss 107 to 124A, deals with Professional Services Review Tribunals. The Tribunals are established under s 108. A person to whom a s 106T determination relates may request the Minister to refer the determination to a Tribunal for review. The request must set out the grounds on which it is made: s 114. Section 115(1) provides that upon receipt of a request the Minister must forward it to the President of the Tribunal, together with:

(a) a copy of the reference that gave rise to the determination;

(b) a transcript of the proceedings at the hearing conducted for the purposes of that reference;

(ba) any exhibits, or copies of exhibits, received at the hearing conducted for the purposes of that reference;

(c) the report on that reference and any documents sent to the Minister with that report; and

(d) the determination.

The word "determination" is defined in s 107 as a final determination made under s 106T. Where the President of a Tribunal receives from the Minister a request for review, the President must arrange for the determination to be reviewed "in proceedings before the Tribunal": s 116(a). The person who seeks the review is entitled to appear and address the Tribunal personally or through a representative: s 117(1). The Determining Officer is also entitled to be represented, and the representative may address the Tribunal: s 117(3). Proceedings before the Tribunal must be conducted with as little formality as a proper consideration of the matter permits: s 118(1). The Tribunal's procedure within the discretion of the President: sub-s (2).

Section 119 is in part as follows:

(1) A Tribunal that reviews a determination in accordance with a request:

(a) shall consider the matter to which the determination relates having regard to the grounds set out in the request, the documents forwarded by the Minister with the request and any address made to the Tribunal during the proceedings on the review; and

(b) shall ...

...

(ii) if the determination consists of a final determination under s 106T - affirm or set aside the determination, or set aside the determination and make any other determination that the Determining Officer is empowered to make under that section.

...

(3) If the determination consists of a final determination under s 106T, the decision of a Tribunal on a review is, for all purposes (except for the purposes of this Part), taken to be a determination of the Determining Officer.

Section 121 gives a Tribunal member the same protection and immunities as a justice of the High Court, and a person representing another person the same protection and immunities as a barrister appearing in that Court.

THE PRESENT CASE

The second respondent, Dr Demirtzoglou, is a registered general practitioner. On 31 August 1995 Dr Demirtzoglou's conduct was referred by the Health Insurance Commission to the Director of Professional Services Review pursuant to s 86 of the Act. On 22 September the Director of Professional Services Review, pursuant to s 93, set up a Professional Services Review Committee to consider whether Dr Demirtzoglou had engaged in inappropriate practice. On 14 February 1996 the Committee, pursuant to s 106L, reported that it had found that Dr Demirtzoglou had engaged in inappropriate practice. On 5 September the applicant, the Determining Officer, made a draft determination under s 106S. I have not seen the draft determination, but it was common ground that it directed that Dr Demirtzoglou be counselled, that he repay the Commonwealth $150,266 being an amount equivalent to the Medicare benefits paid for a percentage of the inappropriate services rendered by him during the period of the referral, that he be disqualified for six months in respect of the provision of certain services in the General Medical Services Table, and that he be fully disqualified for three months. In response to the draft determination Dr Demirtzoglou made a written submission on 22 September. I have not seen the submission. On 26 November the Determining Officer made a final determination under s 106T. The directions in the final determination are the same as those in the draft determination, though the Determining Officer's reasons differ from those in the draft in that they take into account Dr Demirtzoglou's submission. In his summary of Dr Demirtzoglou's submission the Determining Officer said:

The submissions focussed on and took issue with a number of findings of the Committee, but provided little or no material that went directly to the question of the appropriate determination for me to make under section 160U of the Act.

He then noted two examples:

Dr Demirtzoglou submitted that he has no control over the fact that a large number of patients come back to him. That lack of control would not in my view justify the patterns of practice that concerned the Committee and there was no indication of change.

Dr Demirtzoglou submitted that he has not dealt with Pethidine addicted patients since those considered by the Committee. If he intends to deal with those patients in the future, the submissions do not explain what new measures he would be taking to ensure the inappropriate practice is not repeated.

Under the heading "Reasons" the Determining Officer set out details of the inappropriate practice found by the Committee, and continued:

Dr Demirtzoglou submitted that a six month disqualification would destroy his practice, his patients' sense of credibility and commitment on his part. To be disqualified would be devastating for him both professionally and morally. The feelings expressed in these submissions can be understood, and I have taken them into account but I was required to view them in the context of my statutory function.

The submissions did not lead me to consider that the inappropriate practice that had occurred with respect to the referred services was of any less serious concern than that indicated to me by the Committee's report and that the amount of Medicare benefit to be repaid should be reduced or otherwise changed. The submissions tended to confirm rather than dispel my view of the seriousness of the inappropriate practice formed after reading the Committee's report.

The Determining Officer then gave six examples of this tendency.

On 20 December Dr Demirtzoglou requested that the determination be reviewed by a Tribunal. The grounds upon which the request was made are that the Determining Officer erred in concluding that Dr Demirtzoglou had engaged in inappropriate practice, that the findings on material questions of fact are erroneous, and that the directions made are harsh, excessive and oppressive, and not commensurate with the facts found.

On 30 June 1997 a Tribunal consisting of the three persons described as the first respondent commenced a review of the determination. At the close of counsel for Dr Demirtzoglou's address, the Tribunal called on the Determining Officer to produce the draft determination and the written submission. Counsel for the Determining Officer declined to produce the documents. The Tribunal then directed the Determining Officer to produce them, and adjourned the review to permit him to obtain a ruling from this Court as to whether he is obliged to produce them. In its reasons for the direction the Tribunal said:

[The Tribunal's] job is to look at what the Determining Officer has done, and to right anything which is considered ... incorrect, or any decision which was considered to be incorrect. We believe that we are unable to fulfil this duty unless we have all documentation at hand.

THE ARGUMENT AGAINST PRODUCTION

The Determining Officer declined to produce the draft determination and the submission on the ground that s 115(1) lists the documents that are to be forwarded to the Tribunal, the listed documents are those to which s 119(1)(a) requires the Tribunal to have regard in coming to its conclusion on the review, and neither the draft determination nor the submission appears in the list. In particular, because of the definition of "determination" in s 107, the draft determination does not fall within par (d).

Reliance was placed on the decision of the Full Court in Minister for Health v Thomson [1985] FCA 208; (1985) 8 FCR 213 in which it was held that a Tribunal does not have power to admit new evidence. Fox J at 218-219 said that the clear implication from s 119 was that the Tribunal is not intended to accept new evidence. At 226-227 Wilcox J dealt with the matter at greater length. His Honour noted that the provisions empowering Committees to obtain information, including by evidence on oath or affirmation, have no counterparts in relation to Tribunals, and that s 121, unlike s 103(3), makes no reference to the protection of witnesses in proceedings before the Tribunal, though the sections are otherwise in the same form. His Honour also referred to ss 115 and 119(1)(a), and noted that there was no reference to further evidence in either provision. The Tribunal's task, he said, "is to review the case by reference only to the existing material, and in the light of any addresses made to it on that material". The other member of the Court, Beaumont J, did not decide whether the Tribunal could receive new evidence.

In McIntosh v Minister for Health (1987) 17 FCR 463 at 464 Davies J treated Thomson as establishing that s 119(1)(a) requires the review to be undertaken "on the papers before the Review Tribunal, namely in accordance with the request for a review, having regard to the grounds set out in the request and to the documents forwarded by the Minister with the request", and precludes the Tribunal receiving "additional evidence". In Yung v Adams (unreported, 11 December 1997) Davies J refused to allow Thomson to be reopened, saying that it bound him, and that ss 115(1) and 119(1) "are quite explicit and preclude the Tribunal from having regard to material other than that specified in the sections". Although his Honour uses the word "material", it is apparent from the context that he is referring to "new evidence". Counsel for the Determining Officer did not dispute this, but submitted that while the documents in question here were not "new in the usual sense", Wilcox J's reasoning in Thomson is based on the fact that s 115 is exhaustive of the documents that are to be before the Tribunal, and the draft determination and the submission do not fall within the section.

On the basis of these submissions the Determining Officer seeks a declaration that the Tribunal is not entitled to receive and take into account any material in addition to that provided for by ss 115 and 119, an order that the Tribunal recommence and complete the hearing without calling for production of the draft determination and the submission, and an order setting aside the decision requiring their production and remitting the matter to the Tribunal to be determined according to law. The application is made in reliance on s 39B of the Judiciary Act 1903 and the Administrative Decisions (Judicial Review) Act 1977 .

THE ARGUMENT FOR PRODUCTION

Counsel for Dr Demirtzoglou submitted that there is an implied power in the Tribunal to receive any material which was before the Committee or the Determining Officer, in order to complete the papers. In the alternative, it was submitted that the draft determination and the submission fall within s 115(1)(d). Both are referred to in the final determination, and are incorporated by reference into it. The first submission was based on s 119(1)(b)(ii), which empowers the Tribunal, inter alia, to set aside the final determination and make any other determination that the Determining Officer is empowered to make under s 106T. Section 106S(1) requires the Determining Officer to make a draft determination in accordance with s 160U. A copy must be given to the person under review, who must be invited to make a written submission "suggesting changes to the draft determination". The argument was that since the Tribunal stands in the shoes of the Determining Officer, and in particular can make any determination the Officer could have made under s 106T, the Tribunal must be entitled to have before it any submissions that have been made by the person under review suggesting changes to the draft determination, and the draft determination itself. Only then will it stand in the shoes of the Determining Officer.

THE NATURE OF A S 119 REVIEW

The review contemplated by s 119(1) is a review on the merits. The ambit of the review is however qualified by the fact that it is conducted "on the papers", that is to say upon the request for review and the documents forwarded to the Tribunal under s 115(1), in the light of any submissions made during the proceedings.

In McIntosh, in reviewing a Committee's decision, the Tribunal had confined itself to enquiring whether on any reasonable view of the evidence the Committee's decision could be supported. It had eschewed making up its own mind on the evidence before it. Davies J held that the Tribunal was wrong to adopt this judicial review approach. His Honour said, at 467-468:

A Medical Services Review Tribunal has a much wider function than that. Although it is limited to a consideration of the documentary material forwarded to it by the Minister, a Review Tribunal has the duty ... itself to exercise the function which the Minister himself performed, namely to determine whether or not to accept the recommendation made by the Committee of Inquiry. It does not exercise the function of review on a point of law, it exercises the function of review on the papers. Save that the Review Tribunal was limited to reviewing the documentary material, taking into account the addresses made to it, it was entitled itself to reconsider any matter contained in the report and recommendation of the Committee of Inquiry.

In Tiong v Minister for Community Services and Health (1990) 93 ALR 308 at 312 Davies J, with whom Spender J agreed, approved the primary judge's description of the Tribunal's function, which was "to determine whether, on the evidence before the committee, its conclusions are factually correct". The other member of the Full Court, Burchett J, said the Tribunal's function was "to review the actual decision on the merits, though upon evidence restricted to that which had been before the committee": at 321-322. In Yung Davies J said that the changes in the legislation since Thomson and McIntosh were decided had not altered the role of the Tribunal, which is to "consider the whole matter for itself and to do so on the papers". Its duty is "to review the matter for itself and independently to arrive at its own conclusions".

THE PRESENT REVIEW

Dr Demirtzoglou will seek to persuade the Tribunal that the finding that he had engaged in inappropriate practice is wrong. If he fails so to persuade the Tribunal, he will contend that the sanctions imposed are excessive. Dr Demirtzoglou is entitled to appear in person or by a representative. He can put to the Tribunal any submissions that bear on the issues before it. He may choose to repeat the whole or part of the written submission he made to the Determining Officer, he may supplement it, or he may craft an entirely new submission. But a full opportunity will be afforded him to attack the final determination, which is the only determination that has legal effect and is susceptible of review. Since the Tribunal's task is to come to its own conclusion on inappropriate practice and sanctions in the light of the documents forwarded by the Minister and any address made to it during the proceedings, I do not think it correct to say, as the Tribunal did, that it cannot perform its task without having Dr Demirtzoglou`s submission to the Determining Officer and the draft determination. The submission was directed to a draft determination which has been superseded by the final determination.

In any event, in the face of the clear words of ss 115 and 119, I do not consider it possible to imply a power in the Tribunal to receive material in addition to that contemplated by those provisions. The fact that they deal only with the final determination suggests to me an express legislative intention to exclude the draft determination from the Tribunal's consideration. Such an intention should not surprise, for the draft has been superseded by the final determination. I do not accept the argument that s 119(1)(b)(ii) requires that the Tribunal be in possession of all the material that was before the Determining Officer. That overstates the effect of the provision. Section 119(1) must be read as a whole, and par (a) is inconsistent with such a construction of par (b)(ii). Nor do I think it possible to treat the final determination in s 115(1)(d) as including the draft determination and the submission simply because they are referred to in the final determination. The matter was not explored before me, but my own researches have not disclosed any general doctrine of incorporation by reference that will achieve the result for which Dr Demirtzoglou contended. Under the doctrine of incorporation by reference that applies to wills, a testator may incorporate into a duly executed will the terms of an informal document, so long as the document is in existence at the time of execution of the will, the will refers to it as an existing document, and clearly identifies it. See Allen v Maddock [1858] EngR 379; (1858) 11 Moo PC 427. But so far as I have been able to discover, that doctrine is peculiar to wills, and is not a particular instance of a principle of general application.

CONCLUSION

In my view the Tribunal was not entitled to insist on production of the draft determination and the submission as a condition of continuing with the review. It should resume its consideration of the matter.

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg

Associate:

Dated: 12 February 1998

Counsel for the Applicant:	R M Henderson
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the second Respondent:	R Niall
Solicitor for the second Respondent:	Holding Redlich
Date of Hearing:	3 February 1998