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Federal Court of Australia |
Last Updated: 17 February 1999
Retnaraja v Morauta [1999] FCA 80
WORDS AND PHRASES - "services provided within a specified location".
Health Insurance Act 1973 (Cth), ss 81, 82, 86, 87, 106G, 106H, 106J, 106K, 106U
Health Lesiglation (Professional Services Review) Amendment Act 1994 (Cth)
Health Insurance Amendment Act (No.1) 1997 (Cth)
Adams v Yung unreported, Full Court of the Federal Court, 15 May 1998
Yung v Adams (1997) 150 ALR 436
Tiong v Minister for Community Services and Health (1990) 93 ALR 308
Sinja v Asher [1989] FCA 167; (1989) 22 FCR 423
Romeo v Asher [1991] FCA 201; (1991) 29 FCR 343
Tiong v Minister for Community Services & Health [1989] FCA 267; (1989) 87 ALR 723
Taylor v Minister of State for Health [1989] FCA 391; (1989) 23 FCR 53
THURYRAJAH RETNARAJA v LOUISE HELEN MARGARET MORAUTA
SG 116 OF 1998
VON DOUSSA J
ADELAIDE
12 FEBRUARY 1999
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| SOUTH AUSTRALIA DISTRICT REGISTRY | SG 116 OF 1998 |
|
BETWEEN: | THURYRAJAH RETNARAJA
Applicant |
|
AND: | LOUISE HELEN MARGARET MORAUTA
Respondent |
|
JUDGE: | VON DOUSSA J |
| DATE OF ORDER: | 12 FEBRUARY 1999 |
| WHERE MADE: | ADELAIDE |
THE COURT ORDERS THAT:
1. The appeal be allowed in part.
2. The decision of the Professional Services Review Tribunal be set aside.
3. The decision of the Determining Officer be varied by setting aside the direction for repayment of $55,115.90 contained in paragraph (ii) of the Final Determination made under s 106U(1)(c) of the Health Insurance Act 1973 (Cth).
4. The decision of the Professional Services Review Tribunal and the Final Determination be otherwise affirmed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| SOUTH AUSTRALIA DISTRICT REGISTRY | SG 116 OF 1998 |
|
BETWEEN: | THURYRAJAH RETNARAJA
Applicant |
|
AND: | LOUISE HELEN MARGARET MORAUTA
Respondent |
JUDGE:
VON DOUSSA J DATE: 12 FEBRUARY 1999 PLACE: ADELAIDE
1 This is an appeal on questions of law brought under s 124A of the Health Insurance Act 1973 (Cth) (the Act) from a decision of a Professional Services Review Tribunal (the Tribunal) established under s 108 of the Act. The decision of the Tribunal is dated 3 September 1998, but it has its genesis in a referral dated 29 March 1996 made on behalf of the Health Insurance Commission (the Commission) under s 86(1) of the Act to the Director of Professional Services Review. The subject of the referral was whether the appellant, Dr Retnaraja, had engaged in inappropriate conduct in connection with the rendering of services during the referral period of 1 July 1994 to 30 June 1995. The provisions which governed the procedures which followed the referral are contained in Parts VAA and VA of the Act as they stood before the amendments effected by the Health Insurance Amendment Act (No.1) 1997 (Cth). The provisions of the Act which apply to this case are the same as those considered by a Full Court of the Federal Court in Adams v Yung unreported, Full Court of the Federal Court, 15 May 1998.
2 The decision of the Tribunal affirmed a Final Determination dated 11 August 1997 made by the respondent as a Determining Officer under ss 106T and 106U of the Act. The Final Determination directed that:
"i) in accordance with paragraph 106U(1)(b) of the Act, Dr Retnaraja be counselled by the Director, Professional Services Review or the Director's nominee;3 Dr Retnaraja is sixty-six years years of age. He graduated in medicine from the University of Singapore in 1958. He practised in Malaysia for about the next thirty years, both for the government and in private practice. In 1976 he was registered by the Medical Board of South Australia, and two years later obtained registration with the General Medical Council in London. He came to Australia in 1990. He became Vocationally Registered on 6 June 1991. At relevant times, he practiced as a general practitioner, and therefore as a specialist for the purposes of Part VAA of the Act: s 81(1). Since 1992 Dr Retnaraja has practised as a solo general practitioner at Craigmore, a suburb situated approximately twenty-seven kilometres from the centre of Adelaide. The Craigmore area has a diverse ethnic population of some 32,000 people.
ii) in accordance with paragraph 106U(1)(c) of the Act, Dr Retnaraja repay to the Commonwealth the amount of $55,115.90 being an amount equivalent to the Medicare benefits paid for 35% of the inappropriate services rendered during the period of the referral under items 23, 24, 36 and 37 in Group A1 of Part 2 of the General Medical Services Table.
iii) in accordance with subparagraph 106U(1)(g)(i) of the Act, Dr Retnaraja be disqualified for a period of 6 months from the time when the final determination takes effect in respect of the provision of all services to which an item relates in Group A1 of Part 2 of the General Medical Services Table; and
iv) in accordance with paragraph 106U(1)(h) of the Act, Dr Retnaraja be fully disqualified for a period of 2 months from the time when the final determination takes effect."
4 The Act, according to its long title, is "An Act providing for Payments by way of Medical Benefits and Payments for Hospital Services and for other purposes". Part II of the Act deals with "Medicare Benefits" which, in circumstances specified, are payable in respect of a "professional service" rendered in Australia. Part VAA (ss 80-106ZR) creates a scheme under which a person's conduct can be examined to ascertain whether "inappropriate practice" is involved, and also provides for action that can be taken in response to "inappropriate practice" to remedy situations where excessive or unwarranted professional services have been rendered.
5 Section 82(1) provides that:
"82.(1) A practitioner engages in inappropriate practice if the practitioner's conduct in connection with rendering or initiating services is such that a Committee could reasonably conclude that:"Committee" means a Professional Services Review Committee set up under s 93. The expression "service" is defined in s 81(1) to include:
(a) if the practitioner is a specialist - the conduct would be unacceptable to the general body of the members of the speciality in which the practitioner was practising when he or she rendered or initiated the services;..."
"(a) a service for which, at the time it was rendered or initiated, medicare benefit was payable;..."6 Under s 86(1) the Commission may refer to the Director of Professional Services Review (the Director) "the conduct of a person relating to ... whether the person has engaged in appropriate practice in connection with the rendering of services...". The content and form of referrals is dealt with in s 87. Of relevance to this case, s 87(1) provided:
"87. (1) The referral must specify whether it relates to one or both of the following:7 The referral concerning Dr Retnaraja relies on s 87(1)(b)(iii). Paragraph 2 of the referral reads:
(a) specified services;
(b) services rendered or initiated by a practitioner that are one or more of the following:
(i) services of a specified class;
(ii) services provided to a specified class of persons;
(iii) services provided within a specified location."
"For the purposes of section 87(1) of the Act, this referral relates to all Medicare services rendered by Dr Retnaraja from his practice location in the State of South Australia."The referral goes on to state "REASONS FOR THE DECISION TO REFER". Those reasons commence with a statement of the matters of concern to the Commission (para 3), and provide in summary form particulars of the four matters of concern (paras 4-7). Then follows at length details of the sources of information and statistics taken into account by the Commission in forming the view summarised in the particulars. That detail is supplemented with tables, graphs, reports, computer printouts and other documents comprising in all some 410 pages.
Paragraphs 3-7 of the referral read:
"3. The Health Insurance Commission is concerned that Dr Retnaraja has provided an inappropriately high average number of services per patient. The proportion of long consultations in respect of total services rendered is also of concern. In addition, the Health Insurance Commission is concerned that the high level of home visits and multiple servicing may be inappropriate for the care of these patients.8 It will be noted that whilst the referral related to "all medical services rendered" from the practice location, the concerns of the Commission were that "some" of the services in the four categories of service about which it stated concern had been inappropriately charged or were not medically necessary.
4. High Average Number of Services Per Patient:
In the referral period of 1 July 1994 to 30 June 1995, Dr Retnaraja provided a total of 5,513 services to 678 patients.
During the referral period Dr Retnaraja provided an average of 8.13 services per patient, which was more than the average services per patient provided by 99% of all active general practitioners in Australia. It is noted that Dr Retnaraja's highest serviced patient (who is his receptionist) received 612 services during the referral period. If this patient is excluded, Dr Retnaraja's average services per patient remains high at 7.24 or more average services per patient than 98% of all active general practitioners. The Health Insurance Commission believes that some of the services rendered by Dr Retnaraja would not be reasonably medically necessary for the care of his patients.
5. High Proportion of Long Consultations:
During the referral period, Dr Retnaraja provided 1,345 level C consultations, which equates to a rate of 24.8% of total consultations, which is a higher rate than that provided by 90% of all active general practitioners in Australia. The Health Insurance Commission believes that some of the services rendered by Dr Retnaraja would not be reasonably medically necessary for the care of his patients.
6. High Number and Rate of Home Visits:
During the referral period, Dr Retnaraja provided 1,602 home visits, more than 99% of all active general practitioners in Australia in spite of a very small number of patients. This equates to a rate of 29.5% of all consultations provided by Dr Retnaraja during the referral period, and is a higher rate than that provided by 99% of all active general practitioners in Australia. In addition, Dr Retnaraja provided home visits to two or more people listed on the same Medicare card on the same day on 266 occasions totalling 662 services. The Health Insurance Commission is concerned that some of the home visits provided by Dr Retnaraja were not reasonably medically necessary for the care of these patients.
7. High Number of Multiple Services:
During the referral period Dr Retnaraja provided consultations to two or more people listed on the same Medicare card on the same day on 796 occasions totalling 1,872 services. This corresponds to 34.5% of all consultations rendered by Dr Retnaraja. Included in this figure are 266 occasions where two or more home visits were provided on the same day. In some instances Dr Retnaraja provided consultations to as many as six people listed on the same Medicare card on the one day. The Health Insurance Commission is concerned that some of the services rendered to members of the same family on the same day may not be reasonably medically necessary for the care of these patients.".
9 After receiving the referral, and in accordance with the requirements of ss 89-94 the Director set up a Professional Services Review Committee (the Committee) to consider whether Dr Retnaraja had engaged in inappropriate practice: see s 93. Where a Committee is set up it must hold a hearing if, after considering the matters that are the subject of the referral, it appears to the Committee that the person under review may have engaged in inappropriate practice in connection with rendering or initiating the referred services: s 101(2). On 15 May 1996 the Committee gave notice of a hearing to Dr Retnaraja requiring him to appear to give evidence to the Committee on 4 June 1996 and to produce documents listed in a schedule.
10 The hearing commenced on 4 June 1996, and continued on 26 June 1996. Before the hearing Dr Retnaraja produced the documents requested in the schedule to the notice of hearing. These included clinical records in respect of a selection of services drawn randomly from preliminary random samples taken by the Commission in accordance with s 106K of the Act. At this time ss 106G-106K made provision for a Committee to base findings on the outcome of a formal sampling procedure carried out in accordance with those sections. The selected services related to the following categories of service:
* Home visits, and
* Long consultations (i.e. level C consultations).
The Committee questioned Dr Retnaraja at length, and it will be necessary to say more about the hearing later in these reasons.
11 In its Report the Committee said it based its findings of fact on all the material contained in the referral, all material tendered at the hearing, and clinical records of Dr Retnaraja including:
"a) medical records of patients seen on 18 July 1994 and 19 September 1994.12 The two days, 18 July 1994, and 19 September 1994, had been chosen by the Committee for detailed examination. The Committee's notation in relation to the selected home visits and Level C consultations makes it clear that the Committee was not following the formal sampling procedure laid down in the Act. The Committee said it also based its findings of fact on the practice appointment and day books of Dr Retnaraja, which had been produced for the whole of the referral period, and on the 1994 draft "Entry Standards for General Practitioners of the Royal Australian College of General Practitioners".
b) the medical records for 30 home visits and 30 Level C consultations.
(NB. These records were examined only to obtain a `snapshot' of the practice and the Committee was not proceeding in accordance with the formal sampling processes referred to in section 106H of the Act)."
13 Section 106L requires the Committee to give to the Determining Officer a written report setting out its findings. The Committee did so and published reasons for its findings in a Report dated 22 October 1996.
14 The Committee by unanimous decision made the following formal "Findings":
"In accordance with section 106L of the Health Insurance Act 1973 (`Act'), the Professional Services Review Committee No. 10 finds that the conduct of the practitioner under review in connection with rendering all of the services the subject of the referral from the Health Insurance Commission was, in the Committee's opinion, unacceptable to the general body of medical practitioners practising in general medical practice in Australia".15 In its Report, the Committee addressed specifically the four categories of service of concern to the Commission. It referred to the statistical information given in the particulars in paras 4-7 of the referral, the source of which was identified in the documents attached to the referral. The Committee then made findings in relation to each of those categories of service.
16 In relation to the high average number of services per patient, the Committee noted that the average services were extremely high. During the hearing the Committee sought reasons for servicing patients at such high levels. Dr Retnaraja sought to explain that his complex patient profile was responsible for the large number of services per patient, many of whom he said suffered from chronic pain and required regular relief via narcotic régimes such as pethidine. The Committee, however, found that Dr Retnaraja did not demonstrate an understanding of modern methods of management of patients with chronic pain syndromes. The Committee said:
"His attendances on many patients with chronic pain syndromes seemed to the Committee to be demand driven without any evidence of careful appraisal of the clinical need for such attendances. Dr Retnaraja was unable to give any reasonable explanation for his high number of attendances on these patients."17 The Committee found that the doctor's response to its questions indicated that he made little attempt to establish a management plan with patients with chronic pain syndromes. The Committee found that its examination of the clinical records of Dr Retnaraja and its discussions with him during the hearing did not reveal a satisfactory medical justification for his high average number of services per patient. It gave examples in respect of nine patients where the Committee considered Dr Retnaraja did not give satisfactory explanations for high levels of servicing.
18 In relation to the high proportion of long consultations the Committee after noting the statistical information said:
"While the vast majority of his services are documented, at least by date, Dr Retnaraja's records contain inadequate documentation of the nature of the service provided. Although this made it difficult for the Committee to determine whether the categorisation of his levels of consultation was accurate from the records provided, Dr Retnaraja's answers to a range of questions relating to consultation classification left the Committee in no doubt that many were incorrectly categorised and that this often resulted in a financial benefit to the practitioner."19 The Committee considered Dr Retnaraja's answers to questions at the hearing indicated that he considered time alone was the sole determinant of the level of consultation. The Committee found that Dr Retnaraja "generally exhibited little conceptual understanding of the content-based descriptor items in the Medicare Benefits Schedule". The Committee said that detailed questioning by it raised significant doubts about the content of many of Dr Retnaraja's consultations, and an example was given in the Report. The Committee concluded:
"It is likely that at least some of the attendances should in fact have been charged as Level A attendances. The Committee finds that Dr Retnaraja's conduct in charging all his home consultations as more complex consultations would be unacceptable to the general body of general practitioners in Australia.20 In relation to the high number and rate of home visits, the Committee found that it was unconvinced with Dr Retnaraja's explanation. It found that "some home attendances could not be justified on medical grounds" and "were opportunistic visiting" and two examples were given. The Tribunal concluded that "Dr Retnaraja provided many home visits which were not medically necessary".
The Committee is not satisfied that Dr Retnaraja always accurately recorded the level of service claimed..."
21 In relation to the high number of multiple services the Committee considered the number claimed to be a very large number. The Committee found that Dr Retnaraja was:
"...quite unable to explain the basis for his many multiple services...His answers to detailed questions failed to satisfy the Committee that there was any sound medical reason for many of the multiple attendances...The Committee considers that many of the multiple services rendered by Dr Retnaraja were opportunistic and medically unnecessary..."22 The Committee made no finding as to the number of individual services rendered to particular patients where Medicare claims were made for services at an inappropriate level or where there was no medical justification.
23 The Committee's Report then continued to discuss other matters under the heading "Other Problems in the Practice". This discussion commenced with the observation that:
"Although the Committee makes no findings about these matters, the Committee has major concerns about the following aspects of Dr Retnaraja's practice management in connection with his rendering of services."Then followed expressions of concern by the Committee on each of the following matters:
"(I) Staffing issues24 In the course of the appeal repeated criticism was directed by counsel for Dr Retnaraja to the formal "Findings" of the Committee. It was contended that the Findings should be construed as a conclusion that all the services rendered by Dr Retnaraja during the referral period were, in the Committee's opinion unacceptable to the general body of medical practitioners in general medical practice in Australia. In my opinion that submission misunderstands the Report, read as a whole. It is plain from the passages set out above that the Committee intended its formal Findings to relate only to the four categories of service identified in paras 4-7 of the referral. Those categories of service were provided "in connection with rendering all the services the subject of the referral" namely "all Medicare services rendered by Dr Retnaraja from his practice location in the State of South Australia": para 2 of the referral. It is clear from the Report that the finding was one of "conduct" in connection with the rendering of the four specified categories of service, and not a finding that every service performed by Dr Retnaraja during the referral period was unacceptable to the general body of medical practitioners practising in general medicine practice in Australia.
(II) Billing issues
(III) Lack of narcotic drug register
(IV) Medical records
(V) Clinical Acumen
(VI) Prescribing
(VII) Vocational Registration
(VIII) Workload
(IX) Previous Counselling"
25 On receiving the Committee's Report, the respondent Determining Officer prepared a draft determination which was given to Dr Retnaraja. Submissions were received from him. The Final Determination was then made in the terms earlier set out.
26 Dr Retnaraja's letter under s 114 of the Act requesting the Minister to refer the Final Determination to the Tribunal for review set out at length the grounds on which the Committee's decision was challenged. The grounds alleged that the Committee had failed to identify or specify in what way and in respect of which patients adverse findings had been made in respect of the four categories of service specifically addressed. This complaint included an attack on the sampling procedure adopted by the Committee.
27 The Committee's failure to make findings based on specific services and patients that had been brought to the notice of the doctor during the hearing, so that he could offer explanations, was said to render the adverse findings against Dr Retnaraja "unsafe, erroneous, ... a denial of natural justice...and ... wrong in law". The findings of the Committee were alleged to reflect a failure to give any or proper weight to Dr Retnaraja's evidence about his unique patient profile and practice. Further, it was alleged that the periods of disqualification imposed by paras (c) and (d) of the Final Determination were manifestly excessive and not warranted by the material available. In relation to the direction in para (b) that Dr Retnaraja repay $55,115.90 it was alleged that the direction was manifestly excessive, not warranted by the material available, and adopted a "broad brush" approach which was wrong on the facts, wrong in law, and contrary to the provisions of the Act.
28 The review was conducted by the Tribunal on 18 and 19 November 1997. The Tribunal's decision was delayed pending an appeal to the Full Court of the Federal Court in Adams v Yung from the decision of Davies J, delivered on 11 December 1997: now reported, Yung v Adams (1997) 150 ALR 436. The Tribunal received additional submissions on the effect of the decision in Adams v Yung, following delivery of the judgment of the Full Court on 15 May 1998.
29 Decisions of this Court, and in particular the decision of the Full Court in Adams v Yung, establish that the Tribunal's role was not confined to reviewing the appropriateness of the directions given by the Determining Officer under s 106U of the Act. Section 119(1) requires that a Tribunal that reviews a determination in accordance with a request to the Minister "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 addresses made to the Tribunal during the proceedings on the review". Section 115 provides that the Minister shall forward to the Tribunal, along with the request, (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; (c) the report on that reference and any documents sent to the Minister with that report; and (d) the determination. In Tiong v Minister for Community Services and Health (1990) 93 ALR 308 at 312 Davies J adopted the following passage from the judgment of Pincus J at first instance (reported [1989] FCA 267; (1989) 87 ALR 723 at 732-733) as correctly expressing the functions of the Tribunal. Spender J agreed with Davies J at 320, and Burchett J at 322 expressed a similar view about the role of the Tribunal. Pincus J said:
"The central task of the tribunal, as I read the Act, is to determine whether, on the evidence before the committee, its conclusions are factually correct. But in performing that task, it may take into account the opportunity or lack of opportunity for explanation of his or her actions accorded to the doctor concerned. If the tribunal was satisfied, as to a particular service, that the doctor whose conduct was in question had had no reasonable opportunity to explain his or her case, then in my opinion it would have power to vary the Minister's determination accordingly."30 In Yung's case, Davies J at first instance adhered to that exposition of the Tribunal's role, and rejected a submission that the Tribunal had no power to consider the findings of the Committee with respect to inappropriate conduct, and that its only power was to review the determination of the Determining Officer. On appeal, the majority of the Full Court, Burchett and Hill JJ, (Beaumont J dissenting on this point) held that it was open to the Tribunal to consider the evidence and the Report of the Committee, and to take a different view from the Committee on the question of inappropriate practice. The majority said:
"A tribunal is appointed to review the determination. The word `review' is a word of wide meaning but dependent upon context: Re Brindle; Ex parte F B & F A McMahon Pty Ltd (1992) 35 FCR 506 at 508ff, followed in Brandy v Human Rights and Equal Opportunity Commission [1995] HCA 10; (1995) 183 CLR 245 at 261 per Mason CJ, Brennan and Toohey JJ. Where a determination on its face would not be justified by a committee's finding, having regard to the papers before the Tribunal, the evidence and report of the Committee (including a dissenting report) is part of the `matter to which the determination relates' (s 119(1)) on which the Tribunal has made an appropriate finding of inappropriate practice. It is open, and indeed the Tribunal itself accepted this, for the Tribunal to take a different view from the Committee and set aside a determination, notwithstanding both that it is restricted to the papers before it and is reviewing the determining officer's determination."31 The Tribunal correctly understood its role, and embarked upon a consideration of the material forwarded to it by the Minister under s 115 which included all the information annexed to the referral, and the evidence and clinical records of Dr Retnaraja which had been before the Committee. Having regard to submissions that were made to it, the Tribunal said that to fulfil its obligation in the present case, it was incumbent upon the Tribunal to first ascertain that the proceedings were fair, and then to consider a number of questions including:
* did the Committee stay within the terms of the referral?
* were the concerns of the HIC expressed in the referral dealt with by the Committee in its Report?
* did the Committee follow a valid sampling procedure, either formally or informally, but in either event, sufficient for it to conduct a useful sample analysis?
* did the Committee having looked at an acceptable sample of services, examine the practitioner's conduct in respect of those services?
* did the Committee state clearly the findings of inappropriate practice which it made?
The Tribunal addressed these questions and reached an affirmative conclusion on each. The Tribunal then considered whether the Final Determination was appropriate having regard to the findings of the Committee. In doing so the Tribunal addressed arguments presented on Dr Retnaraja's behalf that the directions given by the Determining Officer were not justified by the information before the Committee, were excessive, and that the direction for repayment under s 106U(1)(c) was impermissibly based on a "broad brush" approach. The Tribunal upheld the Final Determination.
32 The questions of law upon which this appeal is now brought under s 124A of the Act, as identified in the notice of appeal and submissions of counsel for Dr Retnaraja, are:
i) were the terms of the referral invalid in failing to identify a specific location within which the services, the subject of referral, had been provided as required by s 87(1)(b)(iii) of the Act?
ii) did the Committee stray beyond the terms of the referral in the conduct of its investigation of allegations of inappropriate practice on the part of Dr Retnaraja?
iii) was Dr Retnaraja denied natural justice by the Committee in its conduct of the investigation of the referral?
iv) was the Committee required to follow the sampling procedures prescribed by Subdivision C of Division 4 of Part VAA(ss 106G-106K) once the Committee determined to adopt a sampling procedure?
v) was the approach taken to quantify the repayment pursuant to s 106U(1)(c) of the Act wrong in law?
It is convenient to deal with each of these questions in the order in which they are posed.
33 On the first question, counsel for Dr Retnaraja argued that the referral was invalid at the outset in that it failed properly to identify a location. Section 87(1)(b)(iii) requires that the referral specify "services provided within a specified location". The referral in this case was stated to relate to services "rendered by Dr Retnaraja from his practice location in the State of South Australia". It was argued that this does not identify a location within which services were provided. It was argued that this error permeated all the processes which followed with the consequence that the Final Determination was not justified by any valid finding of the Committee, and should have been set aside on review by the Tribunal. The submission was not confined to an argument that the description of the services referred, properly construed, related only to services rendered at Dr Retnaraja's surgery, and did not cover home visits.
34 This challenge to the validity of the referral was advanced before the Tribunal. The Tribunal rejected it, adopting as its reasons for doing so the following submission made by the Determining Officer (who was the respondent to the review):
"`The Determining Officer submits that this includes services rendered on home visits while practising from that location. Dr Retnaraja only had one practice location and it was the provider number for his practice at that location which he used when he billed all Medicare services included in the Referral, including home visits. These home visits were clearly services rendered from that practice location.35 The argument advanced in this submission is that the referral is clear in its terms. However, the question of law raised by Dr Retnaraja is not whether the referral was, by its terms, clear in identifying the services referred, but whether the referral, within the meaning of s 87(1)(b)(iii) specified "services provided within a specified location".
That the Referral was intended to allow the Committee to consider Dr Retnaraja's home visits is confirmed by the third reason to refer Dr Retnaraja set out in the Referral...under the heading `High Number and Rate of Home Visits'" (para 6 of the referral set out earlier in these reasons).
36 Whether the description in the referral adequately meets the statutory requirement that the referral relate to "services provided within a specific location" should be determined having regard to the terms of the referral read as a whole, and the factual circumstances of Dr Retnaraja's practice.
37 As a matter of fact, the material before the Committee established that Dr Retnaraja only had one practice with a relatively small number of patients, that he had one surgery, at Craigmore, and that, apart from home visits, he did not practice from any other location. The terms of reference were plainly intended to include home visits. As Dr Retnaraja had only one practice location the description "his practice location in the State of South Australia" could not be open to uncertainty or misunderstanding. In the factual circumstances of this case, the description "from his practice location..." also defined the geographical location within which Dr Retnaraja provided Medicare services. In my opinion the referral did not fail to specify the services the subject of the referral, and was not invalid on this ground.
38 The second question of law is whether the Committee strayed beyond the terms of the referral in the conduct of its investigation of allegations of inappropriate practice. Counsel for Dr Retnaraja contended that in reporting on the nine specific issues identified in the Report under the heading "Other Problems in the Practice" the Committee strayed beyond the terms of the referral. Even though the Committee stated that it made no findings about those issues, it was submitted that in reality the Committee did make findings, and in doing so vitiated the whole proceeding before the Committee. Counsel contended that the Tribunal erred in failing to set aside the determination for this reason.
39 The Tribunal rejected the submission that the Committee strayed beyond the terms of the referral. The Tribunal considered that the "other problems" were matters closely related to and inseparable from the matters of concern referred by the Commission for investigation.
40 In some respects, the "other problems" discussed were closely interrelated to the matters of concern referred, for example matters relating to billing. However, I am unable to agree with the Tribunal that all the matters discussed bore a close and inseparable relationship to the Commission's matters of concern stated in the referral. Comments made in relation to the inadequacy of certain of Dr Retnaraja's employed staff, his lack of a narcotic drug register, the standard of medical records, his drug prescribing habits, and his workload, are, at best, only remotely related to the specific topics of concern. However, they are matters which came to the attention of the Committee in the course of its inquiry which caused the Committee major concerns.
41 In Sinja v Asher [1989] FCA 167; (1989) 22 FCR 423 Wilcox J considered the former provisions of the Act which provided for the investigation of excessive servicing by a Medical Services Committee of Inquiry. His Honour held that the duty of the Committee in relation to its Report was limited to the question of excessive servicing which had been referred for inquiry. However, that did not preclude the Committee from stating its view that doubts had arisen as to whether the particular services were rendered even though it had no power to make any determination in relation to that question. At 428 his Honour said:
"It is a commonplace event for administrative tribunals or investigating committees to make observations upon matters arising out of their investigations about which they are not required to make findings. So long as those observations fairly arise, do not purport to be definitive findings and are relevant to the general scope and purpose of the legislation under which the tribunal or committee operates, I see no objection about that course. Obiter remarks, whether made by administrative bodies or judges, are made for what they may be worth and in an endeavour to be helpful to the parties or to advance the public interest."42 In my opinion the "other problems" discussed by the Committee in this case did fairly arise. In the course of expressing its concerns, the Committee made comments about the quality of aspects of Dr Retnaraja's practice management, and his professional skills. In a sense these could be described as findings of fact, but, especially having regard to the fact that the Committee noted that it was not making any findings on the problems it identified, I think the better construction of the Report is that the Committee was merely expressing its opinions on the problems, and was not purporting to make definitive findings on any of those matters.
43 Counsel for Dr Retnaraja contends that in relation to one of the "problems" the Committee made a specific finding adverse to Dr Retnaraja upon which the Determining Officer acted. Under the heading "(II) Billing issues" the report reads:
"The Committee considers Dr Retnaraja's method of completing Medicare assignment vouchers for home visits to be unsatisfactory. He stated that all vouchers were prepared prior to a home visit and he did not take Medicare vouchers with him to home visits. If he saw additional people at the home (which happened not infrequently), he would initiate an assignment form after the attendance, on return to his surgery, and subsequently send the voucher to the patient(s) for signature."44 In the Statement of Reasons for Final Determination the Determining Officer said:
"6.1 Having studied Dr Retnaraja's submission [made in response to the draft determination given under s 106S] as well as reviewing the Committee's report and the HIC Referral, I am satisfied that the extent and scale of the inappropriate conduct engaged in by Dr Retnaraja during the Referral period was sufficiently serious to warrant a determination of substance.45 The Determining Officer was in error in describing the completion of Medicare assignment vouchers referred to in (f) as constituting "inappropriate practice found" by the Committee. There was no formal finding of inappropriate practice by the Committee in respect of that matter. The Committee simply noted that the method of completing the vouchers for home visits was "unsatisfactory". However, it is not a ground of appeal that the Tribunal erred in not setting aside the Final Determination because of this error in the Determining Officer's reasons. The question of the completion of vouchers for certain of the home visits referred to by the Committee was a matter directly related to two areas of concern, namely the high number and rate of home visits, and the high number of multiple services. The information reported by the Committee came from statements made by Dr Retnaraja in evidence. That evidence was before the Determining Officer, and could properly be taken into account in any event in making the Final Determination. The fact that the information about the completion of the assignment vouchers was misdescribed as a finding of inappropriate practice does not demonstrate a ground upon which the Tribunal should have set aside or varied the Final Determination.
6.2 The inappropriate practice found by the Committee included:
(a) claiming such a high average number of services per patient when there was no medical justification for providing some of the services;
(b) inaccurately recording the level of services as long consultations on such a high scale;
(c) claiming Medicare benefits for the high number and rate of home visits, many of which the Committee considered to be not medically necessary;
(d) charging all his home consultations as more complex consultations;
(e) claiming Medicare benefits for a number of multiple services which the Committee considered to be opportunistic and medically unnecessary; and
(f) completing Medicare assignment vouchers for certain home visits on return to his surgery rather than at the time of the consultation."
46 The third question of law is said to arise because the Committee did not give procedural fairness to Dr Retnaraja in the conduct of its hearing and investigation because at no time did the Committee give adequate notice to him of the specific services about which it might make adverse findings.
47 It is well established that the Committee must conduct a hearing that is procedurally fair. In Yung's case Burchett and Hill JJ at 14 said:
"Whether natural justice should be afforded and the contents of the rules of procedural fairness to be adopted are matters that depend upon the legislative scheme and the subject matter of the inquiry: Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 584 per Mason J and at 612 and 615 per Brennan J. We agree with the learned primary judge without reservation that in a case such as the present the Committee was bound to give notice of the findings that might be made against the medical practitioner and an opportunity for him or her to respond."48 Their Honours at 15 cited with approval the following passages from Romeo v Asher [1991] FCA 201; (1991) 29 FCR 343 per Morling and Neaves JJ at 349:
"The requirements of procedural fairness will, however, often extend beyond the specific requirements of the statute. What it is necessary for a Committee to do in order to satisfy those requirements in any individual case will, of course, depend upon the particular circumstances of that case."and from Burchett J (who dissented, but only on the facts of the case rather than the matter of principle) at 357:
"In the absence of some identification of the Committee's concerns (which may conveniently be called particulars, provided it is understood that they would not be particulars of a charge but of a finding the Committee considers may be open on the material before it), the appellants must be groping in the dark in any attempt they make to provide an answer. Except in a sense so broad as to be meaningless, they do not know the question."49 Counsel contended that in fulfilling its role as explained in the passage earlier cited from the judgment of Pincus J in Tiong v Minister for Community Services & Health [1989] FCA 267; (1989) 87 ALR 723 the Tribunal should have found that because particular services to particular patients were not identified as services of concern to the Committee, Dr Retnaraja had no reasonable opportunity to give his explanation, and that the Final Determination, based on the Committee's findings, should be set aside.
50 Central to this submission is the question of whether the Tribunal was obliged to relate findings as to inappropriate practice to specific services rendered to particular patients.
51 Part VAA was inserted by the Health Legislation (Professional Services Review) Amendment Act 1994. In the Second Reading Speech on the Bill for that Act, the Parliamentary Secretary who delivered the speech said:
"A major factor in the ability to impose penalties commensurate with the extent of a practitioner's overservicing is the current lack of power to make decisions on the extent of overservicing on the basis of generalised evidence. At present judgments about overservicing can only be made on the basis of individual services, that is, recovery of benefits and the imposition of penalties can only be made in respect of each service separately determined to have been excessive".52 Under the former scheme a Medical Services Committee of Inquiry had referred to it the question whether a practitioner may have rendered "excessive services" which were defined as "professional services, being services in respect of which medical benefit has become or may become payable, that are not reasonably necessary for the adequate medical ... care of the patient". Under these provisions a Committee was required to identify particular services to a particular patient to determine whether "excessive services" have been rendered: Taylor v Minister of State for Health [1989] FCA 391; (1989) 23 FCR 53 at 60-62.
53 Under the present scheme created by Part VAA, the subject matter for investigation by a Committee is not "excessive services" as previously defined, but whether the practitioner has engaged in "conduct" which constitutes "inappropriate practice" under s 82(1). In compliance with s 87(1), a referral will specify that it relates to "specified services", "services of a specified class", "services provided to a specified class of persons", or "services provided within a specified location".
54 In Yung's case Burchett and Hill JJ at 18-19 said, after referring to the Second Reading Speech:
"It is true that the sampling procedure introduced in the 1993 Bill to which the Second Reading Speech was addressed, permits necessary extrapolation from a sample to the referred services. It does not follow from that that a committee is not required to reach an ultimate conclusion about specified services. Its task is to consider the matter in the referral which is the conduct in respect of specified services. Although no doubt inferences can be made from a sample to a totality of services, that does not take away from the requirement of the ultimate conclusion to relate the issue of conduct either to some or all of those services."55 The references in this passage to "specified services" relate back to s 87(1). I do not understand their Honours to mean that the ultimate conclusion of the Committee must relate the issue of conduct to individual services to identified patients. Such a requirement would be inconsistent with the sampling process provided for in ss 106G to 106K enacted by the 1993 Bill.
56 Beaumont J in Yung also held that it was not necessary that the Committee's report relate findings of inappropriate practice to specific services. In Yung, (Burchett and Hill JJ at 4) the Committee, after considering in a general way the characteristics of the practitioner's practice and mode of practice had concluded:
"The view of the Committee is that Dr Yung is grossly at variance with both adjacent area practitioners (as shown by the HIC statistics), the general body of practitioners, with world opinion, with what the Committee itself considers to be reasonable and what it believes to be the opinion of Dr Yung's peers in good standing.Beaumont J at 55 said:
The Committee was asked to consider whether or not Dr Yung has practised inappropriately. The Committee finds that Dr Yung has practised inappropriately in that his professional conduct as presented in the referral and as elicited during the course of the hearing is such that it would not be acceptable to the general body of vocationally registered general practitioners."
"The Act requires, as has been said, a consideration of the practitioner's `conduct'. True, the conduct must be in relation to services specified in the manner prescribed by s 87(1). But s 87(1), s 86(2) and s 87(2), were complied with here.57 Subject to the argument yet to be addressed that the Committee erred in the sampling procedure that it followed, the Committee was entitled to reach its ultimate conclusion that the practitioner had engaged in inappropriate practice by relating the conduct constituting the inappropriate practice to its finding that some of the services referred would be unacceptable to the general body of the members of the specialty in which the practitioner was practising at the relevant time.
It is also true that the process must otherwise treat the practitioner fairly. Yet this was done here. The Referral made it plain, in my view, that given the high volume of services regularly rendered by Dr Yung at Kirrawee, there was cause for concern that Dr Yung could not deliver a sufficient level of clinical input to his patients generally.
It appears that Dr Yung sought to dispel these concerns by advancing a number of general arguments. For instance, in his solicitor's final written submission dated 8 August 1995, it was argued that although Dr Yung worked long hours, `[this] is for the regulatory authorities to control...the Committee must now allow itself to become the instrument of the... Commission by effectively ruling that medical practitioners cannot work 16, 18 or 20 hours a day'.
In this kind of context, `global' findings of the type made by the Committee were, in my view, legally appropriate as a matter of approach. Whether the findings were factually correct is not a question for this Court, either at first instance or now on this appeal. Judicial review is only available here on a question of law.""
58 In my opinion the Committee was not required to relate its finding of inappropriate practice to specific services, or to the provisions of services to specific patients. The Committee was entitled to approach its task by making more general findings of the type which it did make in relation to each of the categories of service about which the Commission expressed concern in the referral. It follows, in my opinion, that it was not incumbent upon the Committee before making adverse findings of inappropriate practice to notify Dr Ratnaraja that it had identified particular services, or specific patients to whom services had been rendered, that could be the subject of adverse findings.
59 The obligation resting on the Committee was to ensure that in the circumstances of the case the hearing which it conducted was procedurally fair. That required the Committee to ensure that Dr Ratnaraja had notice of findings that might be made against him, and an opportunity to respond. The referral dated 29 March 1996 was not the first notification which Dr Retnaraja had received about the concerns of the Commission. He first came to the attention of the Commission during 1993. At that time the Commission's records showed that Dr Retnaraja had 5,774 patients. In March 1995 Dr Retnaraja received a letter from Dr Williams, one of the Commission's medical advisers, setting out concerns of the Commission relating to his practice profile, namely about a rate of reservicing of patients, a high figure for benefits per patient, and "data which reflects an extraordinary rate of family servicing, in a number of instances".
60 Dr Retnaraja consulted his solicitor and after correspondence, a meeting was held on 11 April 1995 between Dr Retnaraja, his solicitor, and Dr Williams. A written record of that meeting was prepared by Dr Williams and forwarded to Dr Retnaraja on 24 April 1995. At the meeting the family names of the most frequently serviced families were provided to Dr Retnaraja. The record of the meeting shows that Dr Retnaraja was informed of the concerns of the Commission.
61 On 9 June 1995 Dr Retnaraja's solicitors wrote to Dr Williams. In part the letter said:
"In the context of our client's instructions to us it should be made clear that our client does not agree or concede in any way that his servicing of patients has been wrongful or unwarranted having regard to the circumstances of each case. Nonetheless our client has taken steps to implement changes to seek to meet areas of the Health Insurance Commission's concerns without prejudicing patient care.62 The letter then made specific comments on seven of the families which had been identified as the most frequently serviced families. The comments indicate an understanding by Dr Retnaraja of the concerns of the Commission on that topic.
As a generalisation our client has sought in his practice to provide a home visit focus in circumstances where it is proper to do so. Our client will in future pay particular attention to proper ways of reducing this focus by more critically appraising patient requests regarding the frequency of home visits and attendances generally."
63 On 23 June 1995 the Commission wrote to Dr Retnaraja saying, in part:
"The matters which led to your being counselled, and the comments made in the written submissions, have been subsequently considered by the State Case Management Committee. It is the Committee's opinion that inappropriate practice may have existed, and whilst the Committee may take further advice in due course, should there be a continuation of those matters of concern expressed to you, it would be our intention to refer those concerns to the Director of the Professional Services Review Scheme."64 On 4 September 1995 Dr Retnaraja was informed by letter from the Commission that a review of his practice profile for the June 1995 quarter had occurred. The Committee considered there was insufficient evidence of change to allay the Commission's concerns about inappropriate practice. Dr Retnaraja was informed that the matter was being forwarded to the Medical Director in Canberra with a recommendation that the Commission's concerns be referred to the Professional Services Review Committee.
65 Dr Retnaraja received a copy of the referral with all of the documents which were attached to it. These explained in detail the reasons for the Commission's continuing concerns.
66 At the commencement of the hearing on 4 June 1996 the Chairman of the Committee outlined in clear terms the procedure which the Committee proposed to follow, and the steps which could follow in the event that a finding of inappropriate practice was made. The Committee then proceeded to question Dr Retnaraja obtaining information about his background and his practice. The Committee investigated Dr Retnaraja's understanding of the table of services and fees contained in the Health Insurance (1994-1995) General Medical Services Table, and in particular his understanding of when it was appropriate to charge consultations at particular fee levels. The records of a number of patients were discussed. At the conclusion of the day's hearing the Chairman made a lengthy statement to Dr Retnaraja. He referred to the four matters of concern which had led to the decision to establish the hearing. He informed Dr Retnaraja that the Committee remained concerned about each of the high average number of services per patient, the proportion of long consultations, the number of home visits and the number of multiple service provisions. The Chairman said that the Committee had determined to hold a second hearing on 26 June 1996, and invited Dr Retnaraja to provide any further written material which he would like the Committee to consider in the meantime. Dr Retnaraja was also invited to bring to the Committee's attention "any other cases at all that you feel might give us a better understanding of your general management of medical conditions over the period of reference. We are giving you the opportunity to pick the most favourable".
67 On the resumed hearing a written submission sent to the Committee by Dr Retnaraja was considered. That submission commenced by referring to the concerns of the Committee expressed at the conclusion of the hearing on 4 June 1996, and then addressed them in a general way. At the end of the second hearing day the Chairman informed Dr Retnaraja that the Committee still had ongoing concerns about his provision of services in each of the four categories about which the Commission expressed concern in the referral. The Chairman informed Dr Retnaraja that if there were anything further he wished to submit he should do so within the following ten days.
68 In the course of the two days of hearings, although the Committee had available to it numerous clinical and other records of the practice, the Committee in its questioning of Dr Retnaraja referred to only a few patients by name and discussed in detail only a few consultations. Nevertheless the doctor was aware that the Committee was specifically examining all the medical records of patients seen on 18 July 1994 and 19 September 1994, and the records relating to thirty home visits and thirty long consultations. Moreover, the Committee informed Dr Retnaraja of the names of the families whose high level of servicing was causing the Committee concern, and gave the total number of services for each family. This information appeared in documents annexed to the referral. There is no need in these reasons to repeat the names of the patients, but the effect of the information was as follows:
|
Patient | Number of Services |
| Family 1 | 833 |
| 2 | 255 |
| ... 3 | 188 |
| ... 4 | 175 |
| ... 5 | 114 |
| ... 6 | 112 |
| ... 7 | 104 |
| ... 8 | 145 |
| ... 9 | 150 |
70 I am unable to accept the submission of counsel for Dr Retnaraja that the Tribunal erred in its conclusion that the Committee's proceedings were procedurally fair. The areas of the Commission's concern had been identified and apparently understood by Dr Retnaraja even before the referral occurred. The referral in detail identified the basis of the Commission's concerns in relation to four specified categories of service. Dr Retnaraja knew that the Committee would be examining that information contained in the referral, and he knew which of the clinical records the Committee was examining. He was clearly informed at the conclusion of the hearing that, having looked at those records, the Committee entertained the concerns which it expressed to him. In my opinion this process gave him a fair opportunity to respond and to seek to persuade the Committee that his conduct in respect of the rendering of services in the four categories did not constitute "inappropriate practice".
71 On the fourth question of law, counsel for Dr Retnaraja contended that the Committee was obliged to follow the sampling procedure contained in ss 106G to 106K. These sections have since been repealed by the Health Insurance Amendment Act (No. 1) 1997 (Cth), but were in force at the time of the Committee's deliberations. The sections applied to a review of services provided within a specified location: s 106G. Section 106H provided that in making findings on the conduct of a person under review in connection with the referred services, the Committee "may" base its findings wholly or partly on its findings on his or her conduct in connection with a sample of those services, provided that the procedural requirements of the sections were complied with.
72 Section 106H was expressed in terms which indicates that the power to make findings based on samples was discretionary. The Committee was empowered to reach findings based on a sample taken in accordance with the sections, but was not necessarily required to do so. This was the construction applied to s 106H by the Full Court in Adams v Yung. Beaumont J at 56 said:
"Although the Committee could have used a statutory sampling procedure (since repealed) if it wished, the Committee was not bound to do so. Provided it acted fairly, the Committee was entitled by s 106(2) to act informally in its administrative inquiry. Use of the sampling procedure was not mandatory. At the same time, since the merits of the sampling procedure used went to the facts, it was equally open to the Tribunal, as a matter of law, to hold that, on the facts, the sampling process was flawed. The merits are not, of course, an issue for judicial review."and Burchett and Hill JJ at 17 said:
"In a case where the allegation of conduct is failing to give appropriate care to patients, having regard to the number of services the doctor has performed, a committee if it is to consider the totality of the services referred must, on the legislation presently under consideration, of necessity engage in a proper sampling procedure. It is difficult to see how the proceedings could otherwise be conducted. While the sampling procedure in s 106H (which has now been repealed by the Health Insurance Amendment Act (No. 1) 1997) is not made mandatory by the section that precedent provides a sure guide, and the only sure guide, to the resolution of the problems such as arose in the present case."73 The majority held that the Committee in Dr Yung's case did not attempt to make any useful sample analysis. It appeared to have considered only the patients seen on one day in the whole twelve month referral period, and even in respect of that day did not examine every service performed. Although questions were asked by the Committee of the doctor about patients seen at other times it does not appear that medical records were examined other than in respect of the one chosen day.
74 Counsel for Dr Retnaraja argued that whilst the majority recognised that the sampling procedure in s 106H was not mandatory, as it provided "the only sure guide" it should nevertheless be followed. I do not accept this submission. In my opinion the sampling procedure in s 106H was not mandatory. Whilst the statutory sampling procedure might have given a sure guide, it was a complex procedure (and apparently found in practice to be unworkable, hence its repeal). The Committee was entitled to adopt a less formal sampling procedure, provided that the sample used was sufficiently broad to justify the ultimate conclusion that a practitioner had engaged in inappropriate conduct. In the present case the total services rendered in the referral period were 5,513. The Committee examined the records of seven of the top nine families which received services, together with services on two days and in respect of thirty long consultations and thirty home visits chosen from the randomly selected lists in the referral. This covered a substantial proportion of the services rendered and a significant number of services in each of the four categories of service under investigation. In my opinion the number of records and services examined by the Committee provided a sufficient and useful sample to justify its general conclusions of inappropriate practice in respect of each of the categories of service.
75 In respect of the final question of law, counsel for Dr Retnaraja contends that the direction in the Final Determination for repayment of $55,115.90 was wrong in law as it was arrived at by a broad brush approach which finds no justification in the Act.
76 The referral was in respect of all Medicare services rendered by Dr Retnaraja from his practice location during the referral period. The finding of inappropriate practice made by the Committee was based on findings that in each of the four categories of service some services were either inappropriately charged at a higher level than was justified, or lacked medical justification. The Committee made no finding as to the number of such services in any particular category of service. Nor did the Committee, based on its informal sampling process, assess a percentage of the services rendered in each category that was either not necessary or was not properly charged.
77 In the Statement of Reasons for Final Determination the Determining Officer said:
"Repayment of Medicare Benefits78 Items 23, 24, 36 and 37 in Group A1 of Part 2 of the Health Insurance General Medical Services Table relate to consultations and home visits which comprised 98.53 per cent of all services rendered by Dr Retnaraja in the referral period. Documents annexed to the referral show the break down of these services to be as follows:
6.7 Due to the serious nature of this matter, I have decided that the determination will require some repayment to the Commonwealth of an amount equivalent to the Medicare benefits paid for inappropriate services.
6.8 In deciding the amount of the repayment I have had particular regard to the number and Medicare cost of the inappropriate services rendered by Dr Retnaraja during the period of the reference:
- 5,513 services to 678 patients at a Medicare benefit cost of $159,533.25. Dr Retnaraja's average services per patient of 8.13 placed him above the 99th percentile of all active non-VRGPs in Australia.
- 1,602 home visits, more than 99% of all active general practitioners in Australia in spite of a very small number of patients. There were 266 occasions when two or more home visits were provided on the same day.
- consultations provided to two or more people listed on the same Medicare card on the same day on 796 occasions totalling 1,872 services. This corresponds to 34.5% of all consultations rendered by Dr Retnaraja. In some instances Dr Retnaraja provided consultations to as many as six people listed on the same Medicare card on the one day.
6.9 My concerns about the above matters have been balanced, to some extent, by the explanations and statements provided by Dr Retnaraja in his submission concerning the draft determination. The fact remains that Dr Retnaraja did engage in inappropriate practice during the referral period and a repayment of Medicare benefits is warranted.
6.10 I have, therefore, decided to not require Dr Retnaraja to repay the full amount of Medicare benefit paid for inappropriate services. In view of the other directions I have decided to make under section 106U and the matters above, I direct that Dr Retnaraja repay to the Commonwealth an amount equivalent to the Medicare benefits paid for 35% of the inappropriate services rendered during the period of the referral under items 23, 24, 36 and 37 in Group A1 of Part 2 of the General Medical Services Table.
6.11 The amount has been calculated in accordance with the table at Attachment 2."
|
Item Number | Description | Services | Benefits |
| 23 | Level B consultation | 2,612 | $53,929.50 |
| 24 | Level B home visit | 1,475 | $51,961.90 |
| 36 | Level C consultation | 1,218 | $45,336.15 |
| 37 | Level C home visit | 127 | $6,588.60 |
79 Attachment 2 of the Final Determination records that the total benefits paid in respect of those items in the referral period were $157,816.15. The sum of $55,115.90 is said to be a computation of 35 per cent of the number of services for each item.
80 Section 106U(1)(c), as it stood before amendment by the Health Insurance Amendment Act (No.1) 1997, provided for a determination to contain a direction:
"(c) that the person under review repay to the Commonwealth an amount equivalent to any medicare benefit payable for inappropriate services (whether or not the medicare benefit was paid to the person), and that any medicare benefit that would otherwise be payable for those services cease to be payable."81 The obvious purpose of such a direction is to enable the recovery of Medicare benefit which should not have been paid, and to prevent payment where Medicare benefit is not rightly due.
82 The expression "inappropriate service" is defined in s 106U(5) to mean a service in connection with which the person under review is stated in a Committee's Report under s 106L to have engaged in inappropriate practice.
83 "Service" has the meaning given to it in s 81(1) and relevantly means a service for which Medicare benefit was payable. A reference to a "service" is therefore a reference to a specific service and in the definition of "inappropriate service" carries that meaning. In the present case the Committee has not sought to quantify by reference to a number of services, or a percentage of all services in a category, the number of services which were inappropriately charged or for which there was no medical justification.
84 In determining whether a practitioner has engaged in inappropriate practice within the meaning of s 82(1) the Committee is concerned with the practitioner's conduct in connection with the rendering or initiation of services. As discussed above, it is not necessary in that context for the Committee to identify particular services rendered to an identified patient, or a number of services rendered to an identified patient. The power in s 106U(1)(c) is a power to direct repayment of Medicare benefit paid for "inappropriate services", not a general power to direct repayment of all Medicare benefits paid for services of a particular category in a case where the Committee finds that the practitioner has engaged in inappropriate practice in relation to the provision of some services in that category. In my opinion it is a prerequisite to the exercise of the power under s 106U(1)(c) to identify by number, or by a percentage of a total, services which constitute the "inappropriate services".
85 This identification provides the starting point for the calculation of Medicare benefits which should not have been paid.
86 In the present case no findings made by the Committee in its Report enabled this identification to occur for the purpose of quantifying Medicare benefit that was wrongly paid.
87 Where a Committee follows a sampling process and bases general findings about a practitioner's conduct on the findings in the sample, the nature and extent of the sample may in the circumstances of the case justify a finding by the Committee that, as a matter of probability, a particular percentage of services rendered in a particular category of service were not medically justified, or were charged at one rate rather than another. A finding of this kind would enable the necessary quantification of wrongly paid benefit for the purpose of s 106U(1)(c). In this case, however, the Committee did not make such a finding.
88 I do not have a sufficient understanding of the material that was before the Committee to ascertain whether it might have supported findings that certain percentages of services in each of the categories attracted wrong payments of benefit. Statistical evidence that the number of services rendered in each category greatly exceeded the expected norm could not alone establish the extent of benefits that were wrongly paid. But whether there was other material as well that might have led to such a finding is now beside the point. The quantification of services in respect of which Medicare benefits were wrongly paid was not a topic of investigation before the Committee. It was not a topic on which Dr Retnaraja was given an opportunity to respond. In these circumstances it was not open to the Determining Officer, or the Tribunal, to review the material and endeavour to make findings that would enable the quantification of wrongly paid benefit.
89 In my opinion the reasoning process adopted by the Determining Officer to arrive at the direction to repay $55,115.90 was not open. Apart from the consideration of procedural fairness just mentioned, the provisions of s 106U(1)(c) do not authorise the Determining Officer to direct repayment of the whole, or a discretionary part of the whole, of the Medicare benefit paid for a category of service rendered in a referral period where only some of those services are found to be inappropriate. In the present case the Determining Officer directed repayment of only a percentage of all benefits paid for four categories of service, but the reduction from 100 per cent was not made in an attempt to distinguish between services that were appropriate and those which were not, or between payments of benefit rightfully made and payments wrongly made. Rather, the reduction was justified on other grounds which proceeded, on the wrong assumption that s 106U(1)(c) authorised a direction in the discretion of the Determining Officer to repay up to the total sum of $157,816.15.
90 For these reasons I consider that the direction for repayment was not authorised by s 106U(1)(c) as that section stood at the time of the Final Determination.
91 Section 106U(1)(c) was substantially amended by the Health Insurance Amendment Act (No. 1) 1997. The subsection no longer refers to "inappropriate services". As amended, s 106U(1)(c) now provides:
"(c) that the person under review repay to the Commonwealth the whole or a part of the medicare benefit that was paid (whether or not to the person under review) in respect of services that:92 The Tribunal dismissed the challenge made by Dr Retnaraja in respect of the repayment direction saying, simply:
(i) were rendered by:
(A) the person under review; or
(B) an employee of the person under review; or
(C) an employee of a body corporate of which the person under review is an officer; and
(ii) are services in connection with which the person under review is stated in a report under section 106L to have engaged in inappropriate practice;
and that any medicare benefit that would otherwise be payable for the services cease to be payable."
"Section 106U(1)(c) having now been repealed, former doubts about what may be ordered by way of a refund have been removed."93 Section 4 of the Health Insurance Amendment Act provides that the amendments made by certain items in the schedule to the Act do not apply to matters referred under s 86 of the Health Insurance Act 1973 before the commencement of this Act. The amendment to s 106U(1)(c) was not made by one of the items specified in s 4, but by another item in the schedule. It follows, so it is contended by the respondent, that the amendment to s 106U(1)(c) has retrospective effect and applies to a referral made before the amendment commenced. In the absence of argument on the point I shall accept that the amendment to s 106U(1)(c) has a retrospective effect in the manner the respondent contends. Even so, I do not think that the provisions in their new form could justify the repayment order made in the Final Determination. In my opinion the purpose of s 106U(1)(c) remains the same, namely as a power to direct the repayment of wrongly paid benefit. In my opinion, under the amended provisions the power to direct repayment can be exercised only in respect of services in respect of which Medicare benefit was wrongly made, and a valid direction under the section requires that those services be quantified.
94 The reason given by the Tribunal for dismissing the challenge to the direction for repayment seems to be directed to the insertion of the words "the whole or a part of the medicare benefit" which removed any doubt that may have existed under the former s 106U(1)(c) as to the power of the Determining Officer to direct repayment of less than the whole amount of the benefit wrongly paid. That is a different point to the one argued on Dr Retnaraja's behalf.
95 In my opinion the Tribunal erred in law in upholding the direction for repayment. I consider that part of the Final Determination should be set aside. There would be no utility in remitting the matter to the Tribunal for further consideration of issues arising under s 106U(1)(c) as the quantification of services where Dr Retnaraja received an inappropriate Medicare payment was not a topic raised with him by the Committee during the hearing.
96 For these reasons I consider the appeal should be allowed in part. The determination of the Tribunal should be varied so as to set aside paragraph (ii) of the Final Determination. In all other respects the decision of the Tribunal to affirm the Final Determination should be affirmed.
97 I will hear the parties on the question of costs.
|
I certify that the preceding ninety-seven (97) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable
Justice von Doussa. |
Associate:
Dated: February 1999
|
Counsel for the Applicant: | Mr T L Stanley with Mr T R Groom |
| Solicitor for the Applicant: | T R & K Groom |
| Counsel for the Respondent: | Ms R M Henderson |
| Solicitor for the Respondent: | Australian Government Solicitor |
| Date of Hearing: | 11 December 1998 |
| Date of Judgment: | 12 February 1999 |
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