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Federal Court of Australia - Full Court Decisions |
Last Updated: 16 May 2002
Health Insurance Commission v Grey [2002] FCAFC 130
ADMINISTRATIVE LAW - judicial review of conduct of Professional Services Review Committee - medical practitioner - "inappropriate practice" - clinical input - form of referral - jurisdiction of Committee - whether primary Judge erred in holding that Committee be prohibited from proceeding to inquire whether respondent had engaged in "inappropriate practice" on the basis of any conduct other than by failing to provide an appropriate level of medical care - whether primary Judge erred in holding referral not invalid - whether primary Judge erred in holding Pt VAA of Health Insurance Act 1973 (Cth) not invalid on constitutional grounds.
WORDS & PHRASES - "inappropriate practice"
Health Insurance Act 1973 (Cth)
Adams v Yung (1998) 83 FCR 248 cons
Bar Association (NSW) v Evatt [1968] HCA 20; (1968) 117 CLR 177 cited
Clyne v Bar Association (NSW) [1960] HCA 40; (1960) 104 CLR 186 cited
Holmes v Mercado [2000] FCA 1848 cons
Mercado v Holmes [2000] FCA 620 cons
Pradhan v Holmes [2001] FCA 1560 not followed
Precision Data Holdings Limited v Wills [1991] HCA 58; (1991) 173 CLR 167 cited
Re Ranger Uranium Mines Pty Limited; Ex parte Federated Miscellaneous Workers' Union of Australia [1987] HCA 63; (1987) 163 CLR 656 cited
Retnaraja v Morauta [1999] FCA 80; (1999) 93 FCR 397 cons
Tankey v Adams [2000] FCA 1089; (2000) 104 FCR 152 followed
Tisdall v Health Insurance Commission [2000] FCA 97 cons
THE HEALTH INSURANCE COMMISSION, ALAN JOHN HOLMES (as Director of Professional Services Review), CHING TSIANG (as Chairperson of Professional Services Review Committee No 126), JOHN GARNER (as a Member of Professional Services Review Committee No 126), BRUCE INGRAM (as a Member of Professional Services Committee No 126) AND LOUISE MORAUTA (as the Determining Officer) V JOHN HOWARD GREY
NO. V 1112 OF 2001
BEAUMONT, SUNDBERG & ALLSOP JJ
15 MAY 2002
SYDNEY (HEARD IN MELBOURNE)
IN THE FEDERAL COURT OF AUSTRALIA |
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VICTORIA DISTRICT REGISTRY |
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1. The appeal be allowed.
2. The orders made at first instance be set aside; in lieu thereof, order that the proceedings below be dismissed.
3. The cross-appeal be dismissed.
4. All costs reserved. Liberty to the parties to file and serve written submission on costs within twenty-eight days.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA |
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VICTORIA DISTRICT REGISTRY |
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JUDGES: |
BEAUMONT, SUNDBERG & ALLSOP JJ |
DATE: |
15 MAY 2002 |
PLACE: |
SYDNEY (HEARD IN MELBOURNE) |
THE COURT:
INTRODUCTION
1 The Health Insurance Act 1973 (Cth) ("the Act") established a scheme for the payment of medical benefits, known as "Medicare benefits". Part VAA of the Act created an administrative scheme of review described as the "Professional Services Review Scheme" which existed from 1994 until its amendment in 1999. (The 1999 amendments do not apply to the instant case - cf. Pradhan v Holmes [2001] FCA 1560, considered below.) Under the scheme, a practitioner's conduct could be examined to ascertain whether the practitioner had engaged in "inappropriate practice". The Act provided for action to be taken in response to a finding of "inappropriate practice". In that event, a person could be directed by the Determining Officer to be reprimanded, counselled, repay Medicare benefits to the Health Insurance Commission ("the Commission"), or be disqualified from the provision of services under the Medicare scheme for a limited period.
2 The respondent, John Howard Grey, is a medical practitioner who conducts a general practice from his surgery at Frankston, Victoria. A Committee ("the Committee"), set up under s 93 of the Act, is considering whether Dr Grey engaged in "inappropriate practice" in connection with the rendering of certain services for which Medicare benefits were payable. Relevantly, a practitioner engages in "inappropriate practice", "if the practitioner's conduct in connection with rendering or initiating services is such that [the] Committee could reasonably conclude that ... the conduct would be unacceptable to the general body of general practitioners" (s 82).
3 Dr Grey instituted proceedings in this Court, claiming, on constitutional grounds, that the Committee did not have any jurisdiction to consider whether he had engaged in "inappropriate practice". Dr Grey claimed, alternatively, that if the Committee did have this jurisdiction, it had been exceeded. He asked for a declaration that the Committee was not lawfully entitled to continue with its inquiry, and sought a writ of prohibition to prevent its continuation.
4 A Judge of the Court rejected Dr Grey's challenge to the constitutional validity of Part VAA, but upheld his claim that, to an extent, the Committee had threatened to exceed its powers. His Honour ordered that the Committee be prohibited from further proceeding to inquire whether Dr Grey had engaged in "inappropriate practice" (within the meaning of s 82) in connection with the rendering of services to his patients during the relevant period (1 January 1996 to 31 December 1996) on the basis of any conduct other than that Dr Grey had engaged in "inappropriate practice" by failing to provide an appropriate level of medical care to those patients.
5 The Commission, and the members of the Committee, now appeal from that part of the judgment which bears upon the scope of the Committee's jurisdiction. For his part, Dr Grey has now filed a notice of contention challenging one aspect of his Honour's decision, in which the primary Judge held that a preliminary step in the process ("the Referral") was valid. Dr Grey has also cross-appealed from his Honour's rejection of Dr Grey's argument that the material provisions of the Act are beyond the limits of constitutional power.
THE LEGISLATIVE SCHEME
6 The legislative scheme, including the Regulations, is relevantly as follows:
7 Division 1 of Part VAA (s 80 - 82) deals with "Preliminary" matters, including definitions (s 81 - 82). For present purposes, the following definitions in those, and related provisions should be noted:
"Inappropriate Practice" is defined, in the case of a general practitioner, as "conduct in connection with rendering ... services ... such that a Committee could reasonably conclude that if the practitioner rendered or initiated the referred services as a general practitioner - the conduct would be unacceptable to the general body of general practitioners...": (s 82(1)(a)).
A "service" is defined, relevantly, as a service for which at the time it was rendered or initiated, Medicare benefit was payable (s 81(1)).
Services for which Medicare benefits are payable are picked up in the provision of the Act which provides that where medical expenses are incurred in respect of a professional service rendered in Australia to an eligible person, Medicare benefit calculated in accordance with s 10(2) is payable subject to and in accordance with the Act in respect of that professional service (s 10(1)).
"Professional service" is defined as "a service ... to which an item relates, being a clinically relevant service that is rendered by or on behalf of a medical practitioner..." (s 3).
A "clinically relevant service" is defined as a service rendered by a medical practitioner that "is generally accepted in the medical ... profession ... as being necessary for the appropriate treatment of the patient to whom it is rendered" (s 3).
"Item" is defined as an item in the table (s 3).
"Table" is defined as the general medical services table (s 3).
"General medical services table" is defined as the table prescribed under s 4 (s 3).
8 By s 4 of the Act, it is provided that the regulations may prescribe a table of medical services that sets out the items of medical services; the amount of fees applicable in respect of each item; and rules for interpretation of the table. The table of medical services prescribed in the regulations is published annually as the "Medicare Benefits Schedule Book". The Book provides, relevantly, as follows.
9 Billing procedures are regulated thus:
* Where the doctor bills the patient for medical services rendered, the patient needs a properly itemised account/receipt to enable a claim to be made for Medicare benefits (6.1.1).
* Under the provisions of the Act and Regulations, Medicare benefits are not payable unless there is recorded, on the doctor's account or receipt, particulars including a description of the professional service sufficient to identify the item that relates to that service (6.1.2).
* Under the Assignment of Benefit (Direct-Billing) Arrangements, if a medical practitioner direct-bills, he or she undertakes to accept the relevant Medicare benefit as full payment for the service. The doctor must cause the particulars relating to the professional service to be set out on the assignment form (6.5.1).
* Items 3 to 51 (Items 36 ("Level "C") and 44 (Level "D"), explained below, are especially material here) cover four categories of general practitioner attendance based largely on the tasks undertaken by the practitioner during the attendance on the patient rather than simply on the time spent with the patient (A.4.2).
* The attendances are divided into four categories relating to the level of complexity, namely -
Level A - (10 relative value/units)
Level B - (21 relative value/units)
Level C - (38 relative value/units)
Level D - (54 relative value/units) (A.4.3)
10 The descriptor for Items 36 and 44 of the Medicare Benefits Schedule Book (which relate to services provided by a general practitioner) sets out the following components:
"Item 36 - Level C (surgery consultation)Professional attendance involving taking a detailed history, an examination of multiple systems, arranging any necessary investigations and implementing a management plan in relation to one or more problems, and lasting at least 20 minutes, OR a professional attendance of less than 40 minutes duration involving components of the service to which item 44, 47, 48, 50 or 51 applies." [Fee: $44.25]
"Item 44 - Level D surgery consultation
Professional attendance involving taking an exhaustive history, a comprehensive examination of multiple systems, arranging any necessary investigations and implementing a management plan in relation to one or more complex problems, and lasting at least 40 minutes, OR a professional attendance of at least 40 minutes duration for implementation of a management plan." [Fee: $65.20]
11 The following notes and examples, inter alia, are provided in respect of the various levels, whilst acknowledging that the fact that a particular case is used as an example does not mean that such cases would always be claimed at the level used in the example; other modifying circumstances might prevail and each case must be treated on its merits (A.4.4).
12 In respect of Level "A", it is said that these items are for the obvious and straightforward cases and the practitioner's records would reflect this. An example is Triple Antigen or Tetanus Immunisation.
13 In relation to Level "B", it is said that the essential difference between this and Level "A" is complexity rather than time. An example of Level "B" is Otitis media presenting as earache.
14 In relation to Level "C", it is said that further levels of complexity are implied here by the introduction of "taking a detailed history" and "examination of multiple systems". The wording of Levels "B" and "C" allow for the situation where an attendance involves some components of a more complex level, but the time taken is less than specified in the high level. Benefit is claimable at the appropriate lower level, e.g. if an attendance involved a detailed history and examination of multiple systems, arranging investigations and implementing a management plan, but the time taken was less than 20 minutes, it would constitute Level "B". An example of Level "C" is essential hypertension presenting as headache.
15 Level "D" items are said to cover the difficult problems where the diagnosis is elusive and highly complex, requiring consideration of several possible differential diagnoses, and the making of decisions about the most appropriate investigations and the order in which they should be performed. These items also cover cases which need prolonged discussion. Physical attendance of at least 40 minutes is necessary to qualify for a Level "D" attendance. Examples of Level "D" include: migraine with peripheral neurological signs; depression presenting as insomnia or headaches; complex psychological or family relationship problems.
16 Division 2 of Part VAA (s 83 - 85) deals with the Director of Professional Services Review and the Professional Services Review Panel.
17 The Minister may appoint a medical practitioner to be the Director of Professional Services Review (s 83(1)).
18 The Professional Services Review Panel consists of practitioners appointed by the Minister (s 84(2)).
19 Division 3 of Part VAA, dealing with the referrals by the Commission (s 86 - 94) is central for present purposes, and provides, relevantly as follows.
20 The Commission may, in writing, refer to the Director of Professional Services Review "the conduct of a person relating to ... whether the person has engaged in inappropriate practice in connection with rendering of services ..." (s 86(1)(a)) (emphasis added). The referred services must have been rendered during the two years preceding the referral (s 86(2)). (Nothing turns on this time limit here.)
21 The referral must specify whether it relates to one or both of (a) specified services; and (b) services of a specified class, services provided to a specified class of persons, services provided within a specified location, or services provided within a specified period (s 87(1)). The Minister may make guidelines about the content and form of referrals (s 87(3)) and the content and form of the referral must comply with any such guidelines (s 87(2)).
22 The Minister made guidelines, dated 9 May 1994. Nothing mandatory was prescribed by the guidelines, so that non-compliance with the guidelines does not arise. However, the guidelines provided that information of a kind then specified may be included in a referral, including the following (and information of this kind was included in the present Referral):
"9. The average number, or distribution by item or combination of items, of services per patient or class of patient...
12. The actual number of services, classified according to Table classification of the item that describes the service, for each of one or more patients identified by name
13. The average number or distribution of services per patient for whom services were rendered or initiated or both, classified according to Table classification of the item that describes the service
...
16. The total Medicare benefits paid or payable for services rendered or initiated or both
17. The total Medicare benefits paid by item or service
18. The total Medicare benefits paid, by Table classification of the item that describes the service" (Emphasis added)
23 The Commission must send a copy of the referral to the person under review within forty-eight hours of sending the referral to the Director (s 88(1)); and invite written submissions to the Director, within fourteen days, stating why the Director should dismiss the referral without setting up a Committee (s 88(2)). (No question of any failure to comply with these provisions arises.)
24 The Director must set up a Committee to consider whether the person under review has engaged in "inappropriate practice" unless (a) the Director is satisfied that there are insufficient grounds on which a Committee could reasonably find engagement in "inappropriate practice"; or (b) the Director has, pursuant to s 92, disqualified the person from the provision of services under the Medicare scheme (s 93).
25 Within twenty eight days after receiving the referral, the Director must: (a) dismiss the referral if satisfied that there are insufficient grounds on which a Professional Services Review Committee could reasonably find that "inappropriate practice" had been engaged in; or (b) unless so satisfied, set up a Committee to consider whether the practitioner has engaged in "inappropriate practice" (s 89(1) and s 93(a)). The Director must then give written notice of his decision to the person under review and to the Commission (s 94(1)).
26 Division 4 of Part VAA (s 95 - 106F) deals further with Professional Services Review Committees.
27 A Committee set up under s 93 consists of a chairperson and (ordinarily) two other panel members, who must be practitioners who belong to the practitioner's profession (s 95(1) and (2)).
28 The Committee may regulate its own proceedings (s 98(1)) and may, for the purposes of its inquiry, inform itself in any manner it thinks fit (s 98(3)).
29 The Committee may hold a hearing, and must hold a hearing if it appears that the person under review may have engaged in "inappropriate practice" (s 101). (A hearing was held here.)
30 If there is to be a hearing, the Committee must give to the person under review fourteen days written notice of the hearing (s 102(1) and (2)). The notice must give particulars of the matter to which the hearing relates (s 102(3)).
31 The person under review is entitled to attend the hearing with a lawyer (or another adviser) but is not entitled to be represented (s 103(1)). However, the Committee may allow the person under review or adviser (but not a lawyer) to question any witness and address the Committee (s 103(2) and (3)).
32 The conduct of the hearing is at the discretion of the Committee member presiding at the meeting in question (s 106(1)). The Committee is not bound by the rules of evidence, and may inform itself on any matter in any way it thinks appropriate (s 106(2)).
33 At the conclusion of the hearing, the Committee must give the Determining Officer a written report setting out its findings on whether, in its opinion, the practitioner engaged in "inappropriate practice" in connection with the referred services (s 106L(1)). With the practitioner's consent, the report may include recommendations for disqualification (s 106L(3)).
34 The report must be given to the Determining Officer within 120 days after the Committee was set up (s 106M(1)); however, there is power to extend time (s 106M(4)).
35 Division 5 of Part VAA (s 106Q - 106X) deals with determinations by the Determining Officer.
36 Upon receipt of the report, the Determining Officer must decide what action should be taken in the event of a finding of "inappropriate practice" (s 106S and 106T).
37 If the report contains a finding of "inappropriate practice", the Determining Officer must make a draft determination in accordance with s 106U, give copies to the practitioner and the Director and invite the practitioner to make written submissions suggesting changes to the draft determination (s 106S(1) and (2)). Thereafter, the Determining Officer must make a final determination in accordance with s 160U (s 106T(1)).
38 A determination must contain one or more of the following directions: (i) that the Director reprimand the practitioner; (ii) that the Director counsel the practitioner; (iii) that the practitioner repay to the Commonwealth the whole or part of the Medicare benefit paid in respect of services in connection with which the practitioner is stated in a report under s 106L to have engaged in "inappropriate practice"; and (iv) that the practitioner be disqualified fully or partially from the provision of services for which Medicare benefit was payable (s 106U(1); and see s 81(1) above, for definition of "service").
39 Subject to any request for review by a Tribunal, the final determination takes effect twenty eight days after the Determining Officer gives a copy of it to the practitioner (s 106V(1)).
40 Where a final determination under s 106T that an amount be payable to a person by another person takes effect, the amount specified in the determination is recoverable by the payee from the other person as a debt due to the payee (s 129AD).
41 Part VA (s 107 - 121) deals with Professional Services Review Tribunals.
42 The person to whom a determination relates may request the Minister to refer the determination to a Tribunal for review (s 114(1)). The members of the Tribunal (other than its President) must belong to the same profession as the practitioner (s 115(2)(b)).
43 Parties may appear before the Tribunal in person, or be represented, and shall be given the opportunity to address the Tribunal (s 117(1)).
44 The Tribunal's procedure is within the President's discretion (s 118(2)).
45 The Tribunal shall, upon consideration, affirm or set aside the determination, or set it aside and make any other determination that the Determining Officer is empowered to make (s 119(1)(b)(ii)). The Tribunal's decision is then taken to be a determination of the Determining Officer (s 119(3)).
46 A member of the Tribunal has, in the performance of his or her office, the same protection and immunities as a Justice of the High Court (s 121(1)). A person representing another before a Tribunal has the same protection and immunities as a barrister appearing for a party in proceedings in the High Court (s 121(2)).
THE FINDINGS AND REASONING AT FIRST INSTANCE
(a) The constitutional validity of s 94 - 106F
47 Dr Grey had submitted that s 94 and following purported, impermissibly, to vest the exercise of federal judicial power in the Professional Services Review Committee. In truth, the argument went, the Committee had no jurisdiction to exercise that power, because it was not a court constituted under Chapter III of the Constitution.
48 The Judge said that a similar issue had already been considered by a Full Court in Tankey v Adams [2000] FCA 1089; (2000) 104 FCR 152, where the Full Court was required to determine whether the Professional Services Review Tribunal, in exercising its power to review decisions of the Determining Officer, was exercising judicial power. The Full Court held that the Tribunal was exercising administrative power, so that Ch. III was not applicable. A number of factors led the Full Court to that conclusion. First, the Tribunal was not concerned with the ascertainment of legal rights and obligations. Secondly, the Full Court said, the determination whether a practitioner had engaged in "inappropriate practice" is not a traditional judicial inquiry: "[I]t is a concept which depends for its application on peer review which is, of its nature, a delegated administrative function of government rather than the exercise of judicial power": Tankey v Adams at 162. Thirdly, the Full Court drew attention to the fact that any determination by the Tribunal was not directly enforceable by it.
49 His Honour was of the opinion that these observations applied with equal, if not greater, force to the findings of the Committee. The primary Judge observed that the Committee makes no determination of any kind, its function being limited to making findings and reporting them to the Determining Officer. It is the Determining Officer who decides what directions should be given to the practitioner. On the authority of Tankey v Adams, his Honour held, the sections under attack are a valid exercise of Commonwealth legislative power.
50 The primary Judge went on to reject a further contention of Dr Grey, that the Act purported to confer, impermissibly, the judicial power of the Commonwealth on the Determining Officer. His Honour held that, for this argument to succeed, it would be necessary for Dr Grey to have Tankey v Adams overturned. His Honour could not accept the argument.
(b) The scope of the Committee's jurisdiction
51 Addressing next Dr Grey's alternative allegation that the Committee did not have jurisdiction to inquire into his conduct, his Honour made the following preliminary observations about the powers of the Director and the Committee.
52 First, the power of the Director to establish a Committee to consider whether a practitioner has engaged in "inappropriate practice" depends upon the existence of a lawful referral. Thus, if on the face of a referral, the Commission raises for consideration conduct which could not amount to "inappropriate practice" (as defined), the Director would not have jurisdiction to set up a Committee to inquire into the matter. Other conditions for the validity of a referral may include compliance with provisions such as s 87 dealing with the form and content of a referral and s 102(3) dealing with the obligation imposed upon a Committee, if it proposes to hold a hearing, to give, in its notice of hearing, particulars of the matter to which the hearing relates. (His Honour observed that the parties had argued the case on the assumption that if the Commission's Referral did not comply with s 87 or s 102(3), it would be invalid; and that since it was at least possible that their assumption was correct, his Honour would not depart from the parties' common position.)
53 Secondly, if the Director decides to set up a Committee to consider whether a practitioner has engaged in "inappropriate practice", the referral will define the jurisdiction of the Committee. In Adams v Yung (1998) 83 FCR 248, the majority (Burchett and Hill JJ) of the Full Court had said (at 298) of a reference under s 86 that it "is not intended to open for consideration by a committee ultimately convened any aspect at all of the referred person's conduct in the referral period. What is contemplated is that it be an inquiry into specified conduct as dealt with in the reference rather than conduct at large." In a later passage, his Honour noted, the Full Court had said (at 299): "The function of the Committee therefore and the hearing it is required to undertake on the evidence given and documents produced, is limited to considering the matters that are the subject of the referral."
54 Turning to the circumstances of the present case, the primary Judge noted that the initial step that had led to the establishment of the Committee to consider whether Dr Grey had engaged in "inappropriate practice", was the Commission's Referral dated 20 November 1997, referring to the Director "the conduct of Dr John Howard Grey relating to whether he has engaged in inappropriate practice within the meaning of section 82 of the Act in connection with rendering and initiation of services" (emphasis added). The referred services were those "rendered and initiated by Dr John Howard Grey ... during the two year period preceding the date of [the] referral [being] the services provided [at] ... 196 Karingal Drive, Frankston [within the] specified period ... 1 January 1996 to 31 December 1996." (Nothing turns here upon these specifications of the material period of time and location.)
55 The Referral noted "Relevant information is attached". The attached information amounted to some 69 pages, the first page of which was headed "Summary of Health Insurance Commission Concerns", as follows:
"High Volume of Rendered ServicesIn the referral period 1 January 1996 to 31 December 1996, Dr Grey provided 24,774 services of which 54 were level A consultations (item 3), 22,230 were level B consultations (item 23) and 946 were level C consultations (item 36). Dr Grey's services are above the 99th percentile of all active vocationally registered general practitioners in Australia (16,042 services). The Health Insurance Commission data shows that Dr Grey practised for 49 weeks of the referral year. During this period Dr Grey provided between 61 and 80 services per day on 67 occasions, between 81 and 100 services per day on 78 occasions, between 101 and 120 services per day on 60 occasions, between 121 and 140 services on 27 occasions and between 141 and 160 services per day on 2 occasions (see table 7) in his apparent average surgery working day. Time calculations based on the Entry Standards of the Royal Australian College of General Practitioners (RACGP) suggest that Dr Grey would have needed to spend between 10.2 and 26.7 hours of direct patient contact per surgery working day to provide quality care at a standard acceptable to the RACGP. The Health Insurance Commission believes that the appropriate level of clinical input may not be able to be maintained at this high servicing rate on a regular and continuing basis (see F)."
56 The summary was followed by background information about Dr Grey, statistical information concerning the servicing patterns of general practitioners, notes of an interview with Dr Grey, correspondence from Dr Grey and details of medical services provided by Dr Grey. "Details of Health Insurance Commission Concern" were provided, stating that Dr Grey had been presented with statistics suggesting that he had "rendered more services than 99% of all active vocationally registered general practitioners in Australia"; and that "[d]uring the referral period, Dr Grey rendered more than 60 services per day on 234 days." Based on the time it would take to provide so many services, the Commission asserted that "Dr Grey would have needed to have spent between 10.2 and 26.7 hours per day in direct patient contact." A summary of the Commission's assessment of Dr Grey's practice was provided.
57 In dealing with Dr Grey's argument that the referral was invalid because it did not refer for consideration any conduct that was capable of being characterised as "inappropriate practice", the Judge said that it was necessary to bear in mind that the referral comprised not only its formal part; all the attached material was included. So much was not in dispute, and is established by the authorities.
58 In the primary Judge's opinion, the Referral did identify conduct which, if it had occurred, could amount to "inappropriate practice" for the purposes of s 82. The Referral identified the Commission's concern about the high volume of rendered services, and the possibility that, by rendering so many services, Dr Grey could not provide an appropriate level of "clinical input". The question was then said by his Honour to be whether Dr Grey was providing adequate treatment to his patients in view of his high workload. There can be no doubt, his Honour said, that if Dr Grey was not providing proper treatment to his patients, this would amount to "inappropriate practice". The Judge noted that this Referral was similar to that considered in Mercado v Holmes [2000] FCA 620, and neither Heerey J, nor on appeal the Full Court (Holmes v Mercado [2000] FCA 1848), had expressed any doubt about the validity of that referral. The referral was also similar to that in Adams v Yung, which was held to have satisfied the statutory requirements: see Adams v Yung at 279.
59 His Honour noted (at [18]) that the following particulars of the subject matter of the Referral had been provided by the Committee in its notice of hearing:
"Particulars of the Committee's concerns as at the date of this notice:* whether you were able to provide an appropriate level of clinical input into the services rendered during the Referral Period with particular reference to your rendering of the services covered by Medicare Benefits Schedule items 23, 36 [i.e. Level "C"] and 44 [i.e. Level "D"];" (Emphasis added)
60 The primary Judge then addressed, but rejected, a claim by Dr Grey that the Committee had failed to provide him with sufficient particulars of the subject matter of the Referral.
61 Dr Grey's final complaint, his Honour said, arose in the following circumstances. During its hearing, the Committee had considered the treatment Dr Grey had provided to 30 randomly selected patients, being patients who had been charged for either item 36 (Level "C") services or item 44 (Level "D") services. (The relevant provisions of the general medical service Table have been set out in pars [10] - [15] above.) Following the hearing, the Committee prepared a draft report setting out its proposed findings. On 25 October 2000, Dr Grey was provided with a copy of the draft. He was informed that he could make submissions on the proposed findings. He was directed to lodge those submissions within a specified period and informed that they would be appended to the Committee's final report. The draft report recorded the following proposed finding:
"[T]hat the practitioner under review, Dr John Howard Grey, has engaged in inappropriate practice in connection with the rendering of some of the services that were the subject of a referral from the Health Insurance Commission".
62 The draft report noted that:
"At the conclusion of the hearing on 23 June 2000, Dr Grey was informed that, unless he had further evidence to convince it to do otherwise, the Committee was likely to find that he had engaged in inappropriate practice in the rendering of his item 36 and item 44 services during the Referral Period. In this regard, the Committee indicated that, in its opinion, the available evidence pointed to a level of clinical input into the rendering of these services that was insufficient to meet the requirements of the relevant item descriptions." (Emphasis added)
63 In a section of the draft report headed "Consideration of the Evidence", the Committee said that it "considered...thirty randomly selected services from items 36 and 44". It then explained how it approached its assessment of the treatment of those patients as follows:
"Item 36 - Level C surgery consultationFirstly, the Committee considered the content of the service. It then went on to consider whether the content of the service satisfied the item description in the Medicare Benefits Schedule as it was at the time the service was rendered. It also considered qualitative aspects of the service in regard to the specific patient problem. These included whether:
* an appropriate history had been taken;
* an appropriate examination had been made;
* an acceptable management plan had been formulated;
* any investigations ordered had been necessary and appropriate to the patient's problem; and
* any treatment given had been appropriate for the patient's condition.
Item 44 - Level D surgery consultation
In its examination of Dr Grey's item 44 services the Committee considered the similar criteria to that for item 36." (Emphasis added)
64 His Honour said that it was apparent that, as a result of its investigation, the Committee had serious concerns about the lack of information appearing in Dr Grey's medical records. In its draft report, the Committee made the following observations about these records:
"Clinical NotesA recurring issue throughout the hearing was the standard of Dr Grey's record keeping. Indicative of the problems the Committee had in endeavouring to ascertain what had been involved in the rendering of particular services was the following exchange:
DR GREY: .... Now, if that went down as an item 44 and if I charged that as an item [44] was an item 44. I won't entertain that any more. That is an item 44.
DR GARNER: Dr Grey, the evidence before us is that you haven't recorded anything of what you have just said and I think that is really the evidence that we have ...
DR GREY: As I said before, my histories are an aide memoir. They're my notes, in my style, along the way that I do things. Now, this is four odd years ago. If I put down item 44 that item fulfils exactly what it is. And I just reiterate that I regard our practice is certainly ethical and honest, and if these items are struck up, well, that's what they are. They depict exactly what was done.
DR INGRAM: Why did you question whether it might have been an item 36 when we first started this conversation, and now you're adamant it's an item 44?
DR GREY: Well, I'm not. If it's an item 44 I could easily justify that. It could easily be an item 36. It could be a long item 36 or just over the border into an item 44. There's no significance to that. I'm going to question all these statistics; I've got a lot of reason to question the statistics.
...
While the Committee accepts that it is unrealistic to expect a general practitioner to record everything that occurs during a consultation, it considers that Dr Grey omitted from most of his records a considerable amount of relevant clinical information. The fact that, during much of the hearing, Dr Grey was forced to resort to explain his rendering of particular services with an introductory `I would have' statement simply underscored the Committee's belief that his record keeping was inadequate."
65 His Honour noted that the draft report also contained the Committee's proposed findings in relation to each of the thirty randomly selected patients whose cases were examined, each patient being identified by a service number. It was necessary, the primary Judge said, to consider the nature of findings the Committee proposed to make, as follows.
66 In some instances, his Honour held, the Committee intended to make a finding that Dr Grey charged a fee that was not justified in the circumstances. For example in relation to services no. 1 and 12, the Committee had indicated that it would make the following findings:
"Service No. 1The clinical record for this service showed `See CT chest' and that Dr Grey had requested `sputum M/C/S cytology x 3' after which the patient was to `start tetracycline' (which the patient thought she could take) and to have extensive `physiotherapy'. The record also showed that Dr Grey had examined the patient's chest and found a small band of fine creps in her lower right anterior lung. There had been no change on coughing and no pleural rubs. Air entry was quite acceptable.
...
Committee finding: As the Committee was not satisfied that Dr Grey had provided the clinical input required under the description of item 36, it considered that Dr Grey's conduct in connection with the rendering of this service would [be] unacceptable to the general body of general practitioners practising in Australia. This was a follow up consultation which did not require the taking of a detailed history or an examination of multiple systems. Dr Grey merely ordered a sputum examination and prescribed an antibiotic.
...
Service No. 12
The clinical record for this patient showed that she had recently been discharged from Monash Medical Centre after the excision of cysts from the left lung and that Dr Grey had redressed her wound.
Committee finding: The Committee noted that Dr Grey had essentially done no more than redress a wound. In light of [there] being no written evidence that Dr Grey had provided the level of clinical input required under the description of item 36, the Committee considered that Dr Grey's conduct in connection with the rendering of this service would be unacceptable to the general body of general practitioners practising in Australia."
67 In other cases, his Honour noted, the Committee had proposed to find that Dr Grey did not provide any services to the patient, yet charged a fee. The following was an example:
"Service No. 2The clinical record for this patient showed `HIV negative. Still complaining of lower central abdominal soreness. Needs barium enema'.
...
Committee finding: In light of [there] being no written evidence that Dr Grey had provided the level of clinical input required under the description of item 36, the Committee considered that Dr Grey's conduct in connection with the rendering of this service would be unacceptable to the general body of general practitioners practising in Australia. Dr Grey provided no evidence of having assessed this patient['s] clinical condition and no evidence to support his ordering of a barium enema."
68 The primary Judge said that the Committee also intended to make findings that, on some occasions, Dr Grey charged an incorrect fee, a typical example being service no. 8, the subject of the following observations by the Committee:
"The clinical record for his patient showed that the patient had presented with a painful index finger. Dr Grey stated:`Right. ...... this is one I find hard to explain - `20 June '96 query fractured right index finger. X-rayed, no fracture seen.' At that stage we were X-raying in our own unit but I wasn't doing X-rays. I can't justify that as a 36. That would be a 23. Just on what's written there. Unless something else came up at the time, but, again, June '96. That's 4 years ago. Unless he asked a lot of questions. I know this fellow fairly well.'
Committee finding: In light of Dr Grey's admission, the Committee considers that, in claiming an item 36, Dr Grey's conduct in connection with the rendering of this service would be unacceptable to the general body of general practitioners practising in Australia."
69 His Honour held (at [27]) that the subject matter of the inquiry before the Committee was confined to whether Dr Grey had engaged in "inappropriate practice" by failing to provide appropriate treatment to his patients: the Committee was not charged with the responsibility of considering whether Dr Grey had rendered medical services that were not necessary for the care of a patient (sometimes known as over-servicing), nor whether Dr Grey had charged for services that he did not in fact provide, nor whether Dr Grey had engaged in "inappropriate practice" by failing to keep proper records. In inquiring into these matters, the Committee was going beyond its reference.
70 A similar problem, his Honour said, had arisen in Mercado v Holmes. There, the referral resulted from the high volume of services rendered by the practitioner. The referral stated the Commission's belief "that the appropriate level of clinical input may not be able to be maintained at this servicing rate on a regular and continuing basis." The Committee, to which the matter was referred, proposed to investigate whether the services rendered by the practitioner during the referral period "were reasonably medically necessary for the care of the patients to whom they were rendered". The practitioner alleged that the Committee did not have jurisdiction to consider that issue. Heerey J had agreed, saying (at [72] and [73]):
"The document identified high volume of rendered services as the subject matter of enquiry. This is a substantially different subject matter from what is colloquially referred to as overservicing - the rendering of medical services that are not reasonably medically necessary for the care of the patient. A practitioner can engage in overservicing without an excessive throughput of patients, and vice versa. As forms of conduct unacceptable to the general body of general practitioners they are quite distinct - albeit that a practitioner may engage in both. Moreover, overservicing would usually suggest ethical failing in a way that high volume servicing does not. Yet the notice of hearing of 21 December 1999 gave overservicing as one of the Committee's `concerns' and also indicated that `(f)urther concerns may emerge during the hearing'. The validity of such an exercise was defended by Senior Counsel for the first respondent. He argued that in any event overservicing was within the referral because the Committee is charged with examining the `referred services' (s 106L); a `service' is `a service for which medical benefit was payable' (s 81(1)), only a `professional service' attracts a medicare benefit (s 10) and `professional service' means a `clinically relevant service' (s 3(1)) which in turn is a service `necessary for the appropriate treatment of the patient' (s 3(1)). This line of reasoning is said to support the `fundamental premise' of the enquiry that the referred services were `actual as opposed to purported services'.The short answer is that it has never been suggested that the applicant has obtained medicare benefit for non-existent services. The Act requires the Committee to examine conduct in relation to `inappropriate practice' as that term is defined in s 82(1)(a). For the reasons already mentioned, high volumes of service and overservicing are different forms of conduct. The notice of 21 December 1999 recognises this. If both are to be examined, that should be clearly stated in the referral." (Emphasis added)
71 Heerey J had found that the reference was confined to high volume of services, and this finding was not challenged on the appeal.
72 Finkelstein J said (at [29]):
"In this case, the Commission has identified as its areas of concern the high volume of services rendered by Dr Grey, and the possibility that with such a large workload he may not be able to provide proper medical treatment to his patients. That is the only subject matter of the referral, and the only issue which the Committee has jurisdiction to determine. The Committee is not entitled to delve into any other aspect of Dr Grey's conduct that might constitute inappropriate practice. Of course, other aspects of Dr Grey's conduct may require investigation if they have a bearing on the matter that is within the Committee's jurisdiction. But those matters can only be examined, if at all, as an incident of the main inquiry, and not as a separate subject. In the result, it will be necessary to make declarations defining the proper scope of the investigation by the Committee ...." (Emphasis added)
73 His Honour declined to grant Dr Grey declaratory relief, but instead, as previously mentioned, made an order by way of prohibition, restraining the Committee from inquiring into any conduct, except "failing to provide an appropriate level of medical care". (Standing alone, a question might have arisen as to the meaning of the exception to the operation of this prohibition, and in particular, as to the meaning of "appropriate level" of care in this context. In other words, was it intended that there be excepted from the restraint, (mis)conduct, say, in the form of a claim for benefits by reference to a particular level (e.g. "C") when, in fact, level "B" was appropriate? If so, Dr Grey's claim for judicial review would, to all intents and purposes, have failed. However, when the order is read in the context of the whole of his Honour's reasons for judgment, it is apparent that the order was intended to exclude only issues of the adequacy of medical treatment independently of any question of the scale of benefits to be applied.)
THE CROSS-APPEAL (THE CONSTITUTIONAL QUESTION)
74 As mentioned, Dr Grey has appealed against his Honour's rejection of Dr Grey's claim of constitutional invalidity of Part VAA. Accordingly, it will be convenient to consider the cross-appeal first.
(a) The argument in support of the cross-appeal
75 On behalf of Dr Grey, it is submitted that the authority vested by Parts VAA and VA of the Act in the Committee (under s 93), the Determining Officer (under s 106Q) and the Tribunal (under s 108) respectively, was judicial power purportedly vested in a non-judicial body, contrary to s 71 of the Constitution; and that, accordingly, the enactment of s 94 - s 106F, and of s 106M - 121, was beyond the Commonwealth's legislative power.
76 Specifically, Dr Grey contends:
* Parts VAA and VA of the Act create a tiered scheme by which judicial power is invested in the decision-makers thereby appointed as follows:-
(a) The first level of decision-making involves a Committee set up under s 93 as the tribunal of fact, and the Determining Officer appointed under s 106Q, as the tribunal imposing the penalty.
(b) It is important that in the entire process of review (as it is called) under Parts VAA and VA, the practitioner has but one opportunity only to have a full hearing on the merits before a decision affecting him is made.
(c) At the least, a finding by a Committee that the practitioner has engaged in "inappropriate practice", is a finding that the practitioner has been guilty of engaging in conduct which would be unacceptable to the general body of general practitioners (s 82(1)(a)) which requires that he be reprimanded and/or counselled (s 106U(1)(a) and (b)). But, upon the making of that finding, much more serious penalties may be imposed, which require the practitioner to pay to the Commonwealth a substantial amount and/or (for all practical purposes) which may destroy his medical practice by disqualifying him from the provision of services under the Act. The finding alone must damage his professional standing and reputation, whether or not it is communicated outside the walls of the Commission.
* The creation by the Parliament of a scheme, whereby a finding may be made against a medical practitioner that he has engaged in "inappropriate practice", and whereby one or more decisions must be made in reliance upon that finding, including decisions of serious, enduring and adverse consequences, is a grant, to the person or persons concerned, of judicial power. This must be so, regardless of whether the bodies or persons making findings of fact are other than the persons making decisions upon those findings. That one of the decision-makers in this scheme does not make the decisions upon penalty is irrelevant to the question of whether or not there has been an impermissible grant of judicial power under the Professional Services Review Scheme.
* The decision of the Full Court in Tankey v Adams, above, rejecting a more limited constitutional challenge, that the power conferred on the Tribunal under Part VA is an impermissible grant of judicial power, is plainly wrong and ought not to be followed. Alternatively, the decision in that case must be distinguished as applying only to questions related to the duties and functions of the Tribunal, when considered in isolation from the overall scope and intent of the Professional Services Review Scheme created by Part VA.
(b) Conclusions on the cross-appeal
77 We cannot accept that either Part VAA (i.e. the Committee and Determining Officer) or Part VA is invalid on any of the grounds suggested. Moreover, in our respectful opinion, Tankey was plainly a correct decision, applying as it did a well-settled course of authority in the High Court.
78 A similar argument was recently rejected by Tamberlin J in Tisdall v Health Insurance Commission [2000] FCA 97. His Honour said (at [128] - [130]):
"This was not argued before me because it was agreed that I am bound by the Full Court decision in Tankey v Adams [2000] FCA 1089 which held that a Committee established under the Health Insurance Act was not exercising judicial, as opposed to administrative power. In my view, this conclusion is correct and it is binding on me.Having regard to the well-settled principles as to what constitutes an exercise of the judicial power of the Commonwealth, set out in detail in Tankey, there is no exercise of judicial power by the Committee in this matter.
The Committee Report does not amount to a decision which will affect rights or obligations. It makes a finding as to the character of certain specified conduct. Further action on the Report will depend on the decision of the Determining Officer, which is subject to review and thereafter to appeal to the Court. The Committee has no power to enforce its determinations. It simply makes a finding on conduct measured against the practice of the general body of practitioners. It may give rise to circumstances which might, if other action were taken, affect the practitioner but this is not sufficient to constitute an exercise of the judicial power of the Commonwealth."
79 We respectfully agree.
80 In the present connection, it will be convenient to consider collectively the respective positions of the Committee, the Determining Officer and the Tribunal under the statutory Scheme.
81 As has been mentioned, the ultimate statutory function of the Committee is that, upon duly making its inquiry, it "must give to the Determining Officer a written report setting out its findings on whether, in its opinion, the person under review engaged in inappropriate practice in connection with the referred services" (s 106L(1)); the ultimate statutory function of the Determining Officer is, after making and giving a draft, to make a determination containing one, or more, directions (s 160U(1)).
82 The Tribunal's ultimate statutory function is, upon review, to affirm or set aside (etc.) the determination (s 119(1)).
83 In Tankey, as has been noted, the Full Court (Ryan, O'Connor and Weinberg JJ) rejected an argument that the Tribunal was a repository of judicial power. In our opinion, their Honours were correct in their decision, for the reasons they gave, which we will explain below. Moreover, as Finkelstein J held here, the position of the Committee is at least analogous to that of the Tribunal for present purposes.
84 In Tankey, the Full Court relied (at [19]) upon frequently cited observations of the High Court in the Re Ranger Uranium Mines Pty Limited; Ex parte Federated Miscellaneous Workers' Union of Australia [1987] HCA 63; (1987) 163 CLR 656 (at 665 - 666) for the proposition that -
"... the fact that [a body - there the Tribunal] was involved in the determination of facts and the application of concepts like `inappropriate practice' which have been defined by statute, does not entail that the [body] was exercising judicial power. It is necessary ... to identify the purpose for which the [body] has been required to exercise its power of inquiry and determination".
85 In our view, these remarks, although directed at the Tribunal's position, are also apposite in the case of the Committee and the Determining Officer.
86 The Full Court in Tankey went on (at [21]) to cite other frequently cited observations of the High Court in this area in Precision Data Holdings Limited v Wills [1991] HCA 58; (1991) 173 CLR 167 at 188 - 189, that is to say, that functions may be classified as either judicial or administrative "according to the way in which they are to be exercised" (emphasis added). Thus, "if the ultimate decision may be determined not merely by the application of legal principles to ascertained facts but by consideration of policy also, then the determination does not proceed from an exercise of judicial power" (emphasis added).
87 The Full Court in Tankey proceeded (at [23]) to hold that the Tribunal "was not concerned with the ascertainment of legal rights and obligations". Whilst acknowledging the Determining Officer's statutory power to direct repayment (s 106U), the Full Court observed that such a direction "was not predicated upon the ascertainment of any existing liability in the practitioner".
88 We agree with these observations, which are expressly applicable in the case of the Tribunal and the Determining Officer, and implicitly extend to the analogous situation of a Committee in this context.
89 The Full Court in Tankey went on to say (at [24]):
"Another consideration which militates against regarding the power conferred on the Tribunal as judicial is that the Tribunal was required to review a determination of the Determining Officer based on a report by a Committee that a practitioner had engaged in `inappropriate practice' as defined in s 82(1). That is not a phrase which has any parallel with `traditional judicial concepts' as Windeyer J called them in The Queen v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd [1970] HCA 8; (1970) 123 CLR 361 at 399. Rather, it is a concept which depends for its application on peer review which is, of its nature, a delegated administrative function of government rather than the exercise of judicial power; see also Reg v Spicer; Ex parte Australian Builders' Labourers' Federation [1957] HCA 81; (1957) 100 CLR 277 per Kitto J at 305. This impression is reinforced, first, by the fact that an examination of a practitioner's conduct could only be initiated by reference from the Health Insurance Commission. It was, in no sense, able to be initiated in vindication of a private or individual right; see Tasmanian Breweries (supra at 402)." (Emphasis added)
90 We agree. It follows, in our view, that the Committee was not exercising judicial power.
91 So far as concerns the functions of the Director and the Tribunal under the statutory scheme, the Full Court in Tankey went on to say (at [25]), in a passage with which we also agree, that -
"... the debt to the Commonwealth which came into existence upon the giving of a direction under s 106U(1)(c) was not directly enforceable by the Director or the Tribunal. It had to be sued for in a court of competent jurisdiction. By contrast, the facility to make a determination which is immediately binding or conclusive between the parties is a characteristic aspect of judicial power."
92 Their Honours added (at [27]):
"A related indication of the absence of judicial power is that the armoury of directions which might be made under s 106U in consequence of a determination includes directions for reprimand and counselling which are foreign to the exercise of judicial power, even for the punishment of criminal offences. It is true that all of the directions available under s 106U(1) have a disciplinary flavour but that does not entail that they could only be given in the exercise of judicial power. Even a power to impose a fine, if exercisable as part of a disciplinary scheme applicable to members of a identifiable class by virtue of their relationship with the Commonwealth, is not inherently judicial."
93 Again, we concur.
94 It follows, in our opinion, that none of the functions exercised under Part VAA or part VA involved the exercise of judicial power. Accordingly, the cross-appeal must be dismissed.
95 We turn now to the appeal itself.
THE COURSE OF AUTHORITY ON THE INTERPRETATION OF PARTS VAA AND VA
96 In order to understand the parties' respective arguments here, it is necessary to refer, inevitably (for reasons which will appear) at some depth, to the reasoning in the decided cases in this area, some of which were decided after the judgment of the primary Judge in this matter.
(1) Yung v Adams (1997) 80 FCR 453 (Davies J)
97 This was an appeal from the Tribunal to this Court under s 124A on a question of law only. The Tribunal had affirmed in part a final determination of the Determining Officer, made, as the statute required, after the Committee had reported. (It will be recalled that, in the present case, this stage has not been reached and that only a draft report has been provided to Dr Grey by the Committee). Davies J observed (at 454) that, having regard to the submissions made, it was necessary, however, to discuss also the Commission's referral, the Committee's decision under s 106L and the Determining Officer's determination under s 106T, adding (at 455) that "[s]ome of these reasons necessarily express obiter dicta about interesting irrelevancies".
98 In addressing the issue "Natural justice", his Honour noted (at 455) that one question of law there was whether the law required that procedural fairness be provided to the practitioner throughout the processes which led to the Tribunal. Another such question was whether the procedures actually adopted satisfied the law's requirements of procedural fairness insofar as the Tribunal's findings were concerned.
99 Davies J held (at 455) that the proceedings "were in effect disciplinary proceedings", and the law required "substantial procedural fairness", that is, adequate notice of the findings which might be made and a fair opportunity to respond.
100 (It may be noted here that the Commission accepts the validity of these general propositions, which were thus not put in issue before us.)
101 Davies J went on to say (at 458):
"... although the process undertaken by a Professional Services Review Committee is essentially investigative and the Committee does not in itself make an order of a disciplinary nature, the principles of natural justice apply so that, except in a simple case where the ambit of the investigation and the subject matter of possible findings are defined by the reference which has initiated the inquiry, the Committee should at some stage make it clear to the medical practitioner whose affairs are under investigation what are the possible findings which are the subject of the investigation and what are the grounds on which those findings might be made. The medical practitioner should be given a fair opportunity to explain why those findings should not be made.
In a complex case such as the present, where 17,331 services were the subject of the referral, it would be very desirable that, at some stage, the issues and the grounds being investigated should be formulated in writing so that there be no misunderstanding about them. The formulation of such matters in writing would also be useful to give a structure to the investigation and so avoid problems such as those which arose in Freeman's case.
Section 102 of the Act provides that the notice of hearing `must give particulars of the matter to which the hearing relates.' However, compliance with that requirement does not end the responsibility of the Committee to provide information in the nature of particulars. At the beginning of the inquiry, the Committee may well not have formulated likely or possible findings or the grounds upon which they might be made. As the inquiry proceeds, the Committee should give such further particulars or information of a like nature as is necessary to make it clear to the medical practitioner what are the matters to which he or she should respond." (Emphasis added)
102 (Again, as we followed the Commission's arguments, these general propositions were not disputed before us.)
103 Turning next to the topic "Inappropriate practice", Davies J, observing (at 459) that, under Pt VAA, the power to discipline in this connection must be understood as a power to discipline in relation to conduct which is related to the payments which are made by way of medical benefits and the like, said (at 459):
"Accordingly, the reference to `inappropriate practice' in s 82 refers to conduct in relation to which Commonwealth benefits were paid or payable and in respect of which the medical practitioner failed in some way to meet the standards of the general body of the members of the profession in which the services were rendered. The Commonwealth's interest is to see that the services which are provided by a medical practitioner and for which a Commonwealth benefit is or may be claimed are services in respect of which the medical practitioner provides due care and skill, that a claim if made is brought under the correct item and that overservicing does not occur." (Emphasis added)
104 (Again, as we followed the arguments, these matters were, in principle, accepted by both sides.)
105 Davies J went on to say (at 459 - 460):
"Because the proceedings are of a disciplinary nature, it clearly would not be appropriate for a decision maker merely to conclude that the medical practitioner engaged in inappropriate practice some time during the period which is specified in relation to some of the referred services. The services in respect of which the finding of inappropriate practice is made must be identified. I do not suggest that, where 17,331 services were the subject of the reference, it was necessary for the decision-makers to examine each and every service and to make a finding of `inappropriate practice' about each. When dealing with issues of excessive servicing, the Court has rejected that approach and has taken the view that if, for example, 3 attendances would have been sufficient during a period to deal with a particular complaint, whereas the medical practitioner attended the patient 6 times, then a finding of excessive servicing could be made without identifying which of the 6 attendances were excessive. See eg. Taylor v Minister for Health [1989] FCA 391; (1989) 23 FCR 53 at 58-9. But what must be done is to examine at least an appropriate sample of services in detail, to identify the elements of `inappropriate practice' arising from the services in that sample and to apply the findings statistically to the whole of the referred services, provided of course, that it be statistically valid to do so." (Emphasis added)
106 (Our understanding is that neither side disputes this approach here.)
107 Later in his reasons, in considering the statutory function of the Determining Officer in giving a "disciplinary" direction under s 106U, Davies J referred to Clyne v Bar Association (NSW) [1960] HCA 40; (1960) 104 CLR 186 at 201 - 202, and Bar Association (NSW) v Evatt [1968] HCA 20; (1968) 117 CLR 177 at 183 - 184, and said (at 472):
"As those cases show, directions under s 106U with respect to a reprimand, counselling, the repayment of benefits and disqualification are not imposed as a punishment. They are imposed with a view to protecting patients and the Commonwealth against abuse of the system. Any reformation which the medical practitioner has made in the nature of his practice therefore is a highly relevant factor to which regard should be had in exercising the discretion which s 106U confers." (Emphasis added)
108 Turning then to the topic of the referral, Davies J noted that it mentioned that in one year, the general practitioner had provided 19,622 services of which 17,331 were provided over three days; that one guideline postulated average times of not less than ten minutes; and that using this guideline, in order to provide 100 services, the practitioner should have worked continuously for at least 16.7 hours. The referral went on to state that, for these reasons, the Commission "is concerned that the appropriate level of clinical input could not be maintained for such long hours on a regular and continuing basis...".
109 Davies J said (at 461):
"... the referral turned its attention to a relevant matter, namely, whether Dr Yung had given the appropriate level of clinical input in the services which he had rendered. However, the referral contained an inherent defect. The concern of the Commission that the appropriate level of clinical input could not be maintained on a regular and continuing basis for the long hours worked by Dr Yung could not readily be translated into an allegation of `inappropriate practice' in relation to specified services. The fact that Dr Yung saw what was considered to be an excessive number of patients a day was not a basis for concluding that Dr Yung gave inadequate care and attention to all his patients, to any particular proportion of patients or to any particular patient. Where, as in the present case, a referral relates to all the services rendered by the medical practitioner within defined premises, it may be difficult to investigate the matter referred unless the content of the reasons for referral shows that the cause of the concern is a matter relating to all patients, such as inadequate or dirty premises or records which were wholly inadequate or some like matter. That was not the present case." (Emphasis added)
110 (It will be recalled that similar language was used in the Referral in the present case. It may be noted here that the subject Referral contained a definition provision which, inter alia, defined "clinical input" as meaning "... an approach to common and serious conditions which is broadly consistent with approaches adopted by the wider profession.".)
111 Davies J added (at 462 - 463) that the referral stated that Level "B" ($24.30) consultations were by far the major part of the 17,331 services. However, the Commission did not purport to identify any particular service in respect of which the item may have been inappropriate, and did not suggest overservicing. Although statistical material was attached, the Commission did not engage in, or recommend, a process of sampling. The referral did no more than point to a fact which suggested that "inappropriate practice" in the nature of insufficient clinical care in relation to at least some of the services would have occurred. The referral suggested, in effect, that the practitioner was a "suspicious person".
112 Davies J said (at 463):
"Dr Yung would have been unable to glean from the referral what were the details of inappropriate care which he ought to answer. It is common for a referral by the Commission to set out what are, in effect, the allegations in respect of which the disciplinary proceedings are brought. That did not occur in this case. Unless examples of cases in respect of which it is alleged that the medical practitioner has failed to provide a sufficient level of clinical input are pointed to, so that the medical practitioner can analyse and explain what occurred and thereby respond to the allegation of inappropriate practice, it is almost impossible for a medical practitioner to deal with the matter." (Emphasis added)
113 Turning then to the role of the Committee, Davies J observed (at 465) that its notice of its hearing did not direct Dr Yung's attention to any specific issue, and would not have assisted him to understand the matters to which he had to respond. Moreover, at the hearing, the Committee did not formulate in writing any issues or charges, and did not engage in statistical sampling in accordance with the sampling procedures dealt with in s 106G to s 106K.
114 Davies J went on (at 466 - 467) to note that the Committee's Report stated, inter alia, that Dr Yung was -
"... grossly at variance with both adjacent area practitioners [as shown by (the Commission's) statistics] the general body of practitioners, with world opinion, with what the Committee considers to be reasonable and what it believes to be the opinion of Dr Yung's peers in good standing."
115 Observing that the Committee did not relate these comments to specific services, but rather to Dr Yung's practice as a whole, Davies J said (at 467):
"I would have expected in the present case that any finding of inappropriate practice in the nature of insufficient care and attention would be related to identified services, save where it was appropriate to adopt a proportion, as where a sampling process was undertaken in accordance with s 106G to s 106K of the Act, in which case the sampling procedure adopted would identify the class or proportion of cases to which the findings drawn from an examination of a sample could be applied."
116 For this, and other particular reasons then given (at 467 - 470), his Honour concluded (at 470) that procedural fairness had not been accorded in the Committee's proceedings and report.
117 (As has been said, it is common ground here that, in principle, Dr Grey was entitled to procedural fairness from the Committee.)
118 Davies J went on to hold (at 482) that the Tribunal's reasons were inadequate; and further (at 483), that it was fundamental to the validity of the Tribunal's decision that it is based on findings in respect of which the principles of natural justice have been satisfied, which was not the case there.
119 Accordingly, his Honour (at 487) set the Tribunal's decision aside and remitted the matter to a differently constituted Tribunal, to be heard and decided again.
120 (It will be noted that his Honour made no declaration of invalidity of the referral. If that had been his view, there would have been no live issue remaining to be remitted to the Tribunal, as, on that hypothesis, the whole of the proceedings would have been a nullity.)
(2) Tang v Holmes (1998) 51 ALD 121 (Sundberg J)
121 After the decision of Davies J in Yung, and before the appeal in that matter (explained below) was dealt with, Sundberg J decided this application for judicial review of a decision of a Director to set up a Committee. The referral there was also expressed in language similar to that here, and in Yung. It suggested that by taking the number of services rendered in a year (17,926), Dr Tang, who was a general practitioner, would have to spend between 10.2 and 16.7 hours of direct patient contact per surgery working day to provide quality care at a standard acceptable to the Royal Australian College of General Practitioners. The referral then stated that the Commission believed that the appropriate level of clinical input may not be able to be maintained at this servicing rate on a regular and continuing basis.
122 Turning to the terms of the referral, Sundberg J said (at 127):
"It was contended for the applicant that the decision to set up the Committee was not authorised by s 89 because the document containing the referral did not refer any `conduct' of the applicant to the Director. It was submitted for the applicant that the referral consists only of the material appearing under the headings `Referral' and `Referred Services', and since that material does not specify, describe or otherwise identify any behaviour, actions or practice of the applicant, no conduct of his has been referred to the Director. There is no substance in this submission. In my view the referral consists of the whole of Books 1 and 2. At the very least it consists of the first twenty-six pages of Book 1. It is on page 26 that the Director signs and dates the reference introduced under the `Referral' heading on page 1. When those pages are read as a whole (especially the material under the `Reasons' heading), it is clear that the applicant's conduct that is referred is described in terms of behaviour engaged in during the referral period. Indeed the contrary was barely suggested by the applicant's counsel." (Emphasis added)
123 His Honour considered, and rejected, a number of suggested grounds for judicial review, including a "no evidence" ground, saying, of this ground (at 130):
"It was submitted for the applicant that there was no evidence to support the decision to refer because it was based on the false premise that the applicant could not have satisfied the ten minute standard. The applicant rendered 17,926 services in the referral period. Based on his working week of 61.75 hours (giving available consultation time of 3145.7 hours or 188,742 minutes a year), he devoted an average of 10.5 minutes to each consultation. But this approach is in my view unsound. The Director's case that on numerous occasions the applicant could not have satisfied the ten minute standard is not answered by showing that if the services be spread over a whole year the standard is satisfied. That approach obscures the fact, for example, that on particular dates the applicant rendered 81 services in an available consultation time of 10.5 hours, giving an average time of 7.77 minutes.There was material before the Director on the basis of which the view could reasonably be formed that on 89 days the applicant had rendered more services than were consistent with the ten minute standard. That represents about 34 per cent of the full days he worked in the relevant year. The Director also had before him the transcript of an interview in which the applicant said that he could `push through ten patients per hour if he was busy'. On the basis of all this material it was in my view open to the Director not to be satisfied that there were insufficient grounds on which a Committee could reasonably find that the applicant had engaged in inappropriate practice in connection with the referred services. In those circumstances he was obliged by s 93 to set up a Committee."
124 Noting that the applicant placed considerable reliance upon Yung, Sundberg J said (at 131):
"In the course of his judgment Davies J made observations relevant to decisions of Committees and Tribunals. But their tasks and powers differ from those of the Director under s 93, and I have not found Yung of assistance in relation to the attack on the Director's decision in the present case."
125 The application for judicial review was accordingly dismissed.
(3) The Full Federal Court appeal in Yung: Adams v Yung (1998) 83 FCR 248 (Beaumont, Burchett and Hill JJ)
126 The majority (Burchett and Hill JJ) identified (at 294) several questions of law arising on the appeal, two of which are presently material, as follows.
127 The first was, accepting as the Committee did, a requirement to afford natural justice, whether the Tribunal had, in fact, afforded the doctor natural justice and whether the Tribunal was restricted to considering the subject matter of the referral, or rather could consider any matter affecting conduct in the referral period, without the need to give particulars or prior notice.
128 Burchett and Hill JJ, noting (at 297) a submission by counsel for the Determining Officer that the Committee "could range outside the matters in the referral, for its role was investigatory", said (at 298) (in a passage which, as has been seen (see [53], above), was cited and relied on by the primary Judge here):
"However a referral is not merely the instrument which initiates the series of administrative inquiries which in the present case were undertaken. It also provides the framework in which those inquiries are to be held. While it is true that the legislation confers upon the Health Insurance Commission no enforceable investigatory powers, the legislation does not contemplate that the Health Insurance Commission will make a reference under s 86 without making some inquiry. It did so in the present case, both in the process of counselling it adopted and in the information technology application which identified what was thought by the Commission to involve too high a level of consultation.The referral while expressed to be of conduct is not conduct in isolation. It is conduct relating to the issue whether the person has engaged in inappropriate practice in connection with rendering of services. Section 80(1) makes clear the legislative scheme is to examine whether inappropriate practice as defined in s 82 is involved. That inappropriate practice is conduct in connection with specified services. They are called `the referred services' - see ss 91, 93 and the definition in s 81(1). While those services may include all or some services within the referral period, the reference is not intended to open for consideration by a committee ultimately convened any aspect at all of the referred person's conduct in the referral period. What is contemplated is that it be an inquiry into specified conduct as dealt with in the reference rather than conduct at large." (Emphasis added)
129 Their Honours went on to say (at 298 - 299) that this conclusion was reinforced from the fact that the Director must make various decisions on the referral (including its dismissal) based on the contents of the referral.
130 Burchett and Hill JJ said (at 299) that the function of the Committee is limited to considering the matters that "are the subject of the referral" (citing the wording of s 101(2) in relation to a hearing).
131 (It may be noted that the Commission has not sought to argue before us that it can "roam" beyond the subject of the Referral. For his part, Dr Grey, in his notice of contention, contends that the Referral was invalid because, inter alia, it was too wide and uncertain.)
132 Their Honours went on to say (at 299):
"The fact that the doctor in the present case is in the 99th percentile of doctors in comparable positions clearly enough raised a question for consideration, for that statistical outcome involves comparing the time that he spent (under 10 minutes per patient) with the time spent on average by other practitioners. But it does not follow from the fact that an adverse conclusion might well be drawn that it necessarily must be. It will be the task of the Committee to examine the practitioner's conduct in respect of those services and to determine the issue. Sampling will be the obvious mode of proceeding. No question of burden of proof arises in the context.In the present case, the Committee did not attempt to make any useful sample analysis. Indeed it appears to have considered only the patients seen on one day in the whole 12 month period although it asked the doctor questions about patients treated in two months." (Emphasis added)
133 On this first issue, Burchett and Hill JJ expressed their conclusion thus (at 300):
"In our view the proceedings before the Committee miscarried not so much because it failed to particularise various matters against the doctor in respect of conclusions which it reached or that it failed to indicate adverse conclusions which might be reached, although both these matters occurred. Rather it failed to confine itself to the very reference which was before it. It also failed to consider the issue in that reference which related to conduct in respect of the referred services by only considering the one day which it did." (Emphasis added)
134 (It will be noted that their Honours did not hold, nor was it argued, that the referral was invalid.)
135 The second issue identified by their Honours (at 294) was whether the Tribunal was bound to investigate specified services and whether its task was to consider conduct; and whether the Committee could look at the matter in a generalised way, without considering either the whole of the services or a statistically acceptable sample.
136 Burchett and Hill JJ said (at 300):
"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. That is not a matter to which the Committee addressed itself. Nothing in the explanatory memorandum which accompanied the Health Legislation (Professional Services Review) Amendment Bill 1993 suggests the contrary." (Emphasis added)
137 As to the appropriate form of order on the appeal, whilst Burchett and Hill JJ agreed with Davies J (at 302 - 303) that the Tribunal's decision be set aside, at least on the ground that its reasons were inadequate, their Honours did not agree with Davies J's order for remitter. On the contrary, Burchett and Hill JJ held that because of the statutory time limits in this area, the matter should not, as a matter of discretion (not validity) be referred back. To this limited extent, the appeal was allowed.
138 Beaumont J, noting (at 278) that it had not been suggested that the referral or the Director's decision to set up the Committee were invalid, said (at 279 - 280):
"[T]he Referral and the Director's decision to set up the Committee should, in the absence of any contrary suggestion, and in accordance with the ordinary presumptions of regularity and validity, be treated as legally effective.As has been seen, the learned primary Judge noted that the Referral `turned its attention to a relevant matter, namely, whether Dr Yung had given the appropriate level of clinical input...'. I respectfully agree. For this reason, the Referral was, in my view, valid.
However, his Honour went on to mention `an inherent defect' in the Referral, namely that `[t]he concern of the Commission that the appropriate level of clinical input could not be maintained on a regular and continuing basis for the long hours worked... could not readily be translated into an allegation of `inappropriate practice''. If by `inherent defect' his Honour meant that the Referral was invalid for this reason, then I could not agree. No authority was cited for this proposition. But, in contrast, his Honour's statement should not, perhaps, be understood in that way. In any event, the question is, with all respect, not one of law, but a factual issue: if Dr Yung regularly saw an excessive number of patients working excessive hours, as a matter of ordinary logic, the conclusion would be open on the facts that there had been professional conduct which peer review may assess or judge to amount to `inappropriate practice' in the statutory sense. The Referral was not, in my view, bad in law on this account. His Honour's reasons appear to proceed upon the footing that the legislative scheme may only operate upon an inquiry into specific, individual services. With respect, I cannot accept this. In my view, it is possible, subject to statutory safeguards, for there to be an inquiry into conduct in a more general fashion. This question has been considered in other jurisdictions in analogous contexts, and reference is made below to these cases. Moreover, the approach taken in other jurisdictions is consistent with one of the objects of the present legislation as explained in the Second Reading Speech."
139 (The authorities cited below (at 285 - 287) included Peatfield v General Medical Council (1986) 1 WLR 243, 248 (PC); and Duncan v Medical Practitioners Disciplinary Tribunal (1986) 1 NZLR 537, 546, 549 (NZCA).)
140 With respect to the Committee's notice of its hearing, Beaumont J said (at 280):
"Did the present notice of hearing give particulars of the subject matter of the Referral? In my opinion, it did. It specified the relevant services as those rendered at the Kirrawee Medical Centre in the year commencing 1 January 1994. They were particulars of the matter for the purposes of s 102(3), so that its provisions were complied with."
141 Beaumont J went on to say (at 280 - 281):
"[I]t is common ground between the parties that a person under review was entitled to the protection of the rules of natural justice. In my opinion, it is both explicit and implicit in the Act, properly construed, that before the Committee the practitioner will be treated fairly in the natural justice sense: the procedures laid down in the statute are clearly designed to achieve a fair treatment of the practitioner, consistently with the need to protect the public interest in the proper discharge of the practitioner's professional responsibilities to patients. Moreover, in assessing whether a person under review has been fairly treated, it will no doubt be borne in mind that in some cases, at least, the exact details of the facts to be examined will, to some extent, lie within the knowledge of the practitioner, and would not be known to the Commission, and not even be readily available, in detail, to the Commission or to the Committee. In the present context, it could hardly be seriously supposed that fairness required that the detail of the treatment of each of some 17,000 patients be scrutinised."
142 Beaumont J observed (at 283 - 284) that, in the context of that case, "generally expressed" or "global" findings were "legally appropriate" as a matter of approach.
143 Beaumont J, agreeing with Davies J that the Tribunal was bound to give adequate reasons, said (at 288):
"I am further of the view that the Tribunal did not adequately explain the basis for Dr Yung's disqualification for six months, as distinct from another period; or whether a reprimand or counselling were appropriate penalties."
144 Beaumont J would have dismissed the appeal accordingly (at 289).
(4) Retnaraja v Morauta [1999] FCA 80; (1999) 93 FCR 397 (von Doussa J)
145 The Full Court decision in Adams v Yung was considered here, in an appeal under s 124A from a Tribunal decision, where, inter alia, challenge was made to the validity of the referral on the ground (not here material) that the relevant location was not adequately specified.
146 Dr Retnaraja also contended (at 410) that the Committee had not been procedurally fair, by failing to give him adequate notice of the specified services about which it might make adverse findings.
147 Von Doussa J referred to the observations of Burchett and Hill JJ at 300 (cited above at [136]) and said (at [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." (Emphasis added)
148 Von Doussa J went on (at 411) to note that Beaumont J had held (at 283 - 284) that it was not necessary that the Committee's Report relate findings of "inappropriate practice" to specific services.
149 Von Doussa J said (at [58] - [59]):
"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.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." (Emphasis added)
150 Von Doussa J went on (at 418) to hold that it was 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 practice". This identification provided the starting point for the calculation of Medicare benefits which should not have been paid. His Honour said (at [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)..." (Emphasis added)
(5) Mercado v Holmes [2000] FCA 620 (Heerey J)
151 In Mercado at first instance, Heerey J observed (at [70]) that the referral "must identify the conduct being referred and the alleged `inappropriate practice' relevant to the specified services and contain sufficient detail to make the Committee review process workable". In observations relied upon by the primary Judge here (see [70] above), Heerey J said (at [72]) that the referral there "identified high volume of rendered services as the subject matter of the enquiry ... [which is something] ... substantially different from ... overservicing - the rendering of ... services that are not reasonably medically necessary for the care of the patient". Yet the notice of hearing there gave overservicing as one of the Committee's "concerns", and (at [73]) it had never been suggested that the practitioner had obtained Medicare benefits for non-existent services. Since the referral was on its face, "confined to high volume of services", the Committee had "failed to recognise the limits of its jurisdiction" (in embarking upon a consideration of the question of overservicing).
152 Heerey J went on to consider and uphold, a claim by Dr Mercado that there was a reasonable apprehension of bias (which is not, of course, an issue in the present case).
153 Turning then to the question of relief, Heerey J (without, it seems, considering that the referral was invalid, but rather approaching the question as one of discretionary relief, presumably upon the basis of a denial of natural justice or procedural fairness in the particular circumstances of that case) said (at [94] - [95]):
"The initiating application sought a number of declarations and orders. But because of the course the litigation took the essential question became whether a permanent injunction should go to restrain further hearings. Therefore I think it will be sufficient if relief is granted in those terms. The first respondent did not raise as a possible outcome an injunction limiting the Committee to the high volume of services matter. But in any case, my findings as to reasonable apprehension of bias strengthen the case for a permanent injunction against any further hearings.There will be an order that the second, third and fourth respondents be restrained from hearing any referral under the Health Insurance Commission Act 1976 (Cth) involving the applicant." (Emphasis added)
(6) Holmes v Mercado [2000] FCA 1848 (on appeal from Heerey J) (Full Court: Wilcox, Merkel and Weinberg JJ)
154 The Director successfully appealed to the Full Court, but only in relation to the ruling on bias - there was no challenge to Heerey J's determination of the ambit of review (see Holmes v Mercado [2000] FCA 1848 at [36]).
(7) Pradhan v Holmes [2001] FCA 1560 (Finn J)
155 In submitting that the primary Judge should have held that the referral here was invalid, counsel for Dr Grey relies principally upon the reasoning of Finn J here, a case (decided after the first instance judgment here) concerned with the operation of Part VAA, but (as distinct from the present case) after amendments to that Part in 1999. Accordingly, it will be necessary to analyse the case in some depth.
156 In Pradhan, the referral expressed two concerns (at [63]). The first related to Dr Pradhan's high volume of rendered services with high daily servicing - total services were above 99th percentile of all active ophthalmologists. The concern expressed was that Dr Pradhan "may not be able to provide an appropriate level of clinical input when consistently rendering a high volume of services on a regular and continuing basis". The second concern was that some of the services rendered "may not be reasonably medically necessary for the care of [Dr Pradhan's] patients".
157 The material attached to the referral included a summary of an "Analysis of Appropriateness of Practice" as follows (at [64]):
". The results of this analysis has shown that for most item numbers the services provided were excessive, were not evidence based and were not consistent with the incidence of the disorder in the population ie inappropriate practice.. Dr Pradhan's mode of practice showed a significantly greater likelihood of providing a service for specific conditions compared to other ophthalmologists. In particular for certain items the data suggest that services were provided for other than the item descriptor ie fraud.
. There is evidence that unnecessary services were provided for relatively minor disorders for which a simpler less invasive method was appropriate. A major concern is whether by unnecessarily exposing patients to a greater risk of adverse outcomes Dr Pradhan is failing to exercise an accepted degree of professional skill and learning ie malpractice." (Emphasis added)
158 Finn J considered (at [89]) the effect of s 93(6), inserted in 1999, which provides that if the Director makes an "adjudicative referral" to a Committee, the Director will, inter alia, prepare a written report giving reasons why the Director thinks that conduct in connection with rendering (etc.) the services may have constituted engaging in "inappropriate practice". Finn J held that both the report and the reasons "necessarily require the identification of the conduct that may have constituted engaging in `inappropriate practice'".
159 With respect to the 1994 referral scheme (i.e. the scheme applicable in our case) Finn J said (at [95]):
"The four-corners of what the Director could refer to the Committee were set by the Commission's referral to the Director. For this reason Burchett and Hill JJ in Adams v Yung (at 298) could state that `a referral is not merely the instrument which initiates the series of administrative inquiries.... It also provides the framework in which those inquiries are to be held'."
160 Finn J found (at [83]) that the conduct referred by the referral was "unspecified and unlimited".
161 Noting (at [96]) that case law on the 1994 scheme "has consistently held or assumed that what was referred under s 86(1) was such conduct of the person under review as was identified and described in the referral", Finn J cited (at [97]) the observations by Burchett and Hill JJ in Yung at 298 - 299 previously quoted (at [128] above).
162 Finn J next (at [98]), referring to Mercado, Tang and the present case, said:
"In Mercado v Holmes, above, in applying Adams v Yung, Heerey J commented (at [70]) that the `referral must identify the conduct being referred and the alleged inappropriate practice relevant to the specified services and contain sufficient detail to make the Committee review process workable': see also Tang v Holmes, above, at 127; Grey v Health Insurance Commission, above. Significantly for present purposes, His Honour also commented (at [66]) that a document similar in content to the one page `Investigative Referral' document used in the present case and which is set out at [61] above could not by itself `constitute a valid referral in accordance with the Act'. It would lack the requisite identification of the conduct referred and the inappropriate practice alleged."
163 Finn J said (at [109]):
"It is a matter of no little significance that the PSR scheme is a disciplinary one that can lead to significant sanctions being imposed upon a practitioner who has been found to have engaged in inappropriate practice: s 106U; Adams v Yung, above, at 294; on disciplinary proceedings see generally Forbes, Disciplinary Tribunals (2nd Ed, 1996). The 1999 scheme, much more so than the 1994 scheme, evidences a heightened legislative appreciation of the implications of this in the significantly enhanced procedural fairness safeguards introduced in the 1999 amendments. Those safeguards are now part of the skeletal structure of the PSR scheme and are, as will be seen, useful for the light they throw on the proper construction of the referral processes of the scheme itself."
164 (His Honour's reference to Yung was to the following passage in the reasons of Burchett and Hill JJ:
"The steps which were taken in what the learned judge below referred to, not inappropriately, despite submissions to the contrary by counsel for the determining officer, as `disciplinary proceedings' commence with s 86 of the Act."
165 Forbes, op. cit. at 152 - 153, explains the principle that disciplinary orders are "protective sanctions", citing (as Davies J had done (see [107] above)) Clyne and Evatt.)
166 After noting the Commission's submission that the earlier authorities cited need to be understood in the light of the 1999 amendments, Finn J said (at [111] - [112]):
"The present significance of Adams v Yung is this. The majority judgment of Burchett and Hill JJ characterised the referral made under s 86(1) in the 1993 scheme as being circumscribed in two ways: the one, by the services actually referred; the other, by the conduct specified in the referral. It was not open to the Committee to inquire into services not referred, nor conduct not so specified. As to the latter limitation, their Honours made plain that they were not merely considering how the `rules of natural justice' would impact on an inquiry into conduct that was in terms unlimited. Rather the limitation inhered in the statutory nature of a reference. What the statute contemplated was `that it be an inquiry into specified conduct as dealt with in the reference rather than conduct at large': above, at 298; see also Mercado v Holmes, above, at [66]-[70].The 1999 amendments did not alter the terms in which the power to make an investigative referral was conferred on the Commission by s 86(1). The power remained one to `refer ... the conduct of a person' etc (emphasis added). Contrary to the respondents' submission that this reference to conduct should be seen as no more than a generic description of conduct in respect of services, the Adams v Yung characterisation that what is referred under s 86(1) is specified conduct is, in my view, emphasised by the statutory imposition of a procedural fairness requirement on the Commission in making a referral. The referral must `set out the reasons why the Commission considers the person under review may have engaged in inappropriate practice': s 86(4)(b). When regard is had to the definition of `inappropriate practice' in s 82(1), those reasons necessarily must relate to identified conduct in relation to which the prescribed judgment is made - albeit it may be identified in terms of some generality (eg `high volume of rendered services': Mercado v Holmes, above)." (Emphasis added)
167 Having held (at [124]) that a referral "specifying both the conduct and services referred provides the framework in which the Committee's inquiry is to be held" and that the Act did not "mandate a roving commission", Finn J said (at [128]):
"I conclude that, in the case of each referral, there has been a non-compliance with the requirements of s 86(1) and s 93(1) respectively. Given that both referrals are framework documents for the respective processes they initiate, and given the disciplinary setting and purpose of the referrals, that non-compliance must necessarily entail the invalidity of the references made: cf Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at 388ff. The referrals were incapable of enlivening the respective jurisdictions of the Director and of the Committee to embark upon the inquiries envisaged by the HI Act."
(In Project Blue Sky, McHugh, Gummow, Kirby and Hayne JJ observed (at 389) that, in deciding whether an act done in breach of a condition regulating the exercise of a statutory power is invalid "depends upon whether there can be discerned a legislative purpose to invalidate ... ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. ... There is no decisive rule that can be applied...". Their Honours referred (at 389) to the distinction, traditionally recognised, between acts done in breach of "an essential preliminary to the exercise" of a statutory power (regarded as "going to jurisdiction", and "mandatory", and failure to comply "will result in invalidity) on the one hand; and, on the other, acts done in breach of "a procedural condition for the exercise" of a statutory power (regarded as "directory rather than mandatory"). Their Honours went on to remark (at 392) that "courts have always accepted that it is unlikely that an act done in breach of a statutory provision should be invalid if public inconvenience would be a result of the invalidity ..." (emphasis added). However, their Honours added (at 393) that "[a]lthough an act done in contravention of the legislative provision is not invalid, it is a breach of the [statute] and therefore unlawful. Failure to comply with a directory provision `may in particular cases be punishable'. That being so, a person with a sufficient interest is entitled to sue for a declaration that the [authority] has acted in breach of the [statute] and, in an appropriate case, obtain an injunction restraining that body from taking any further action based on its unlawful action".)
168 Finn J went on to make declaratory orders that the Investigative Referral was invalid for non-compliance with s 86(1); and that the Adjudicative Referral was invalid for non-compliance with s 93(1).
(8) Tisdall v HIC [2002] FCA 97 (Tamberlin J)
169 Reference should also be made to Tisdall, another case decided after the judgment at first instance here. Tisdall was decided under the 1994 scheme, and presumably for that reason, Pradhan was not referred to. The referral in Tisdall expressed the "concern" of the Commission that "the high total volume of services, services per patient and prescribing may be inappropriate, contain insufficient clinical input, or may not be reasonably, medically necessary for the care of his patients" (at [30]).
170 In rejecting Dr Tisdall's argument that the referral fell outside the Act, Tamberlin J said (at [62] - [63]):
"In the reasons for referral, the delegate of the Commission has given detailed particulars of the high volume of rendered services, the high average number of services per patient and the high level of prescribing. These matters are said to provide the basis for considering that there has been inappropriate conduct referred to in s 86. The three specific headings which are in the Referral together with the numerous annexures express the detailed concerns to be investigated only in so far as they constitute conduct in connection with the matters referred to in s 86. The attachments are part of the Referral: see Ratnaraja v Morauta [1999] FCA 80; (1999) 93 FCR 397, Mercado v Holmes [2000] FCA 620, on appeal [2000] FCA 1848. The concerns referred to in the headings, namely, the high volume of rendered services, the high average number of services per patient and the high level of prescribing, are not referred for investigation as conduct which is itself inappropriate in its own right but rather only in so far as they have the necessary connection with the rendering and initiating of defined services.Accordingly, I do not accept the submission that the Referral in terms is outside power or invalid. It does not, in terms or substance travel beyond the provisions of the Act."
171 Tamberlin J went on (at [72] and following) to consider an argument by Dr Tisdall, relying upon the decision at first instance here, that in its inquiry, the Committee went outside the terms of the Referral and the particulars provided in the notice of hearing. Tamberlin J said (at [75] - [77]):
"In the present case Counsel for the Commission submits that the inquiries were within the terms of the reference, which was broader than that in the Grey case and, in addition, the consideration of record keeping, rendering necessary services and charging for work which had not been carried out were incidental and appropriate to consider when addressing the question posed. Alternatively, Counsel submits that Grey was wrong in law. In view of the difference of the facts in this case it is not necessary for me to express an opinion on this. Counsel for the Commission points out that in the present case the Commission did not find that charges had been made in respect of any item or circumstances where no work had been carried out.In this case the Referral extended beyond the referral in Grey in so far as the concerns in that case expressed related only to the high volume of rendered services. In Grey, the referral did not express concern as to any of the services being rendered or initiated which were not reasonably necessary. The Grey referral did not refer to any concern by the Commission that the high rate of prescription of drugs might be excessive. In the present case these concerns were spelt out as being the reasons as to why the practitioner's conduct in connection with the rendering of medical services may constitute inappropriate practice. The Commission submits that the inquiries made in the present case were appropriate to determine whether the conduct of the applicant was within the language and substance of the particulars. It submits that inquiry into the quality and quantity of the services and the level of prescriptions was proper and reasonably incidental to enable the Committee to perform its function in making a determination as to the appropriateness of the conduct. The investigations made were incidents of the main inquiry and were not themselves independent inquiries into behaviour and non-performance in their own right. In the present case, for reasons given, I consider that the inquiries made did not travel beyond the Referral or the particulars and that the inquiries were sufficiently related to the principle function of the Committee.
Both the Referral and the particulars make reference to the notion of `clinical input'. This is a wide, undefined expression capable of including quantity, quality and the need for, or appropriateness, of the service in respect of which a claim is made. So long as there is this nexus with the subject matter of the inquiry it is open, in my view, for the Committee to make inquiry into these matters."
172 (It will be recalled that in the Referral in the present case, "clinical input" was defined to mean "an approach to common and serious conditions which is broadly consistent with approaches adopted by the wider profession".)
173 As has been seen from the foregoing analysis, the cases record consensus in the interpretation of this legislation in the following areas at least:
(1) Although disciplinary powers are conferred under the legislative scheme, the purpose or object of the statute is to protect both patients and the Commonwealth against abuse of the system. That is to say, as "public protective" legislation, Parts VAA and VA should not be narrowly interpreted.
(2) At the same time, at all stages of the process, the legislation ensures that the practitioner is afforded procedural fairness and, in particular, is given an adequate opportunity to meet any concerns that may be raised. This, for instance, is the rationale of s 102(3), requiring that the Committee's notice of hearing "must give particulars of the matter to which the hearing relates". Moreover, as Davies J observed in Yung (at 458), responsibility does not end there. As the inquiry proceeds, the Committee may need to provide further information on an ongoing basis. This obligation would extend to amending particulars previously provided, should further and better information come to hand. With the exception of Pradhan, where the referral was held invalid from its inception, in all other cases where relief has been granted, the cause of action has been a failure, after the reference is made, to provide procedural fairness, contrary to the specific statutory requirements.
(3) Making a claim under an incorrect item is capable of constituting conduct which amounts to "inappropriate practice".
CONCLUSIONS ON DR GREY'S CONTENTION THAT THE REFERRAL WAS INVALID
174 It will be convenient to consider first Dr Grey's notice of contention, which was filed, by our leave, during the hearing of the appeal. As has been noted, the validity of the Referral was not disputed at trial. But Dr Grey now contends: (1) The Referral was invalid because, on its proper construction, none of the referred conduct was capable of constituting "inappropriate practice"; and (2) the language of the Referral was too wide and uncertain, whether or not one has regard to its attachments. It is then said, for Dr Grey, that the Committee should now be restrained from reporting at all.
175 It should be remarked, at the outset, that it is accepted by the parties, correctly in our view, that the attachments are to be treated as part of the Referral for present purposes.
176 The present question, being a claim of initial invalidity, necessarily falls to be determined as at the point of making of the referral (see e.g. Williams v Keelty [2001] FCA 1301; (2001) 111 FCR 175 per Hely J at 211). It must follow that the contention of invalidity is to be considered on the face of the Referral.
177 For present purposes, it will be necessary to recall (see [55], [56] above) some of the salient features of the Commission's "Summary of Concerns", being part of the "relevant information" attached to the Referral, where mention was made by the Commission to its concerns, on the information then available to it, by reference to the following:
* "High Volume of Rendered Services": of the 24,774 services rendered in 1996, 54 were Level "A", 22,340 were Level "B" and 946 were Level "C".
* Dr Grey had rendered more services in the year (more than sixty per day on 234 days) than 99 per cent of general practitioners.
* Time calculations based on the College's Standards suggested that Dr Grey "would have needed to spend between 10.2 and 26.7 hours of direct patient contact per surgery working day to provide quality care to the College's Standard, and the Commission "believe[d] that the appropriate level of clinical input may not be able to be maintained at this high servicing rate on a regular and continuing basis".
* The total of Dr Grey's benefits ($572,620) were in excess of the 99 percentile (i.e. $357,122).
178 On behalf of Dr Grey, it is submitted that a referral "is of the nature of a charge". Reliance is placed upon the observations of Burchett and Hill JJ in Yung at 299 (mentioned at [128], above); and upon the remarks of Davies J at first instance at 461 (cited at [109] above).
179 Whilst, as has been noted, we accept that at all stages of the Parts VAA and VA processes, the Act requires that the practitioner should be treated fairly in procedural terms, we do not accept that a referral is to be framed as a charge or indictment. Nor, upon analysis, do we understand any of the four Judges in Yung to have so held. On the contrary, as Davies J, in the passage cited above at [101] observed, at the beginning of the inquiry, the Committee itself (let alone the Commission) "may well not have formulated likely or possible findings or the grounds upon which they might be made". Both Davies J and the Full Court emphasised procedural fairness. But this is a different, albeit very important, consideration. Although Finn J in Pradhan interpreted Yung to stand for a wider proposition, namely invalidity, we cannot, with respect, agree. When all the judgments in Yung are considered, it appears that the only relevant ground relied on for judicial review was a denial of natural justice (see [127] above). As was explained in Blue Sky (see [167] above) - a breach of a statutory requirement may be unlawful and may be liable to be enjoined, if appropriate so to order, in the Court's discretion. But this is not to say that a referral was invalid or illusory or void, or a nullity, a very different thing. When, as here, the Court is considering the effect of legislative provisions, having as its object the protection of the public, a holding of nullification of the whole process from its beginning for purely formal reasons would occasion public inconvenience, a consequence which the Parliament would be unlikely to intend. To this extent, we cannot, with respect, accept the general approach taken by Finn J in Pradhan.
180 On the other hand, we accept his Honour's approach (at [167] above) that the legislature did not mandate a "roving commission". We further accept, as Burchett and Hill JJ put it (at [128] above), that there is to be "an inquiry into specified conduct as dealt with in the reference rather than conduct at large". But we do so, not because a referral must be framed as a specific, immutable charge, but because the statutory procedures, especially the requirement to give particulars before a hearing (s 102(3)) have themselves achieved procedural fairness as the inquiry proceeds through its several stages.
181 In this regard, it is significant, we think, that at the stage of the making of a referral of conduct, the Act in s 86 speaks in the language of posing a question -
"The Commission may ... refer ... the conduct ... relating to ... [the question] ... whether the person has engaged in inappropriate practice in connection with rendering of services."
182 The statutory ingredients are thus clearly stated: what is referred, for inquiry, is the question whether, by conduct in connection with rendering certain services, a person has engaged in "inappropriate practice". At this initiating stage, the whole matter rests in inquiry, rather than charge. A charge may never eventuate. For one thing, the Director's initial capacity to dismiss may be invoked (s 89(1)(a) and s 93(a)).
183 The nature of "the conduct" the subject of the reference to the Director in s 86 is illuminated by paraphrasing the relevant parts of the definition of "inappropriate practice" in s 82(1) into s 86. The conduct the subject of this inquiry (the reference to the Director) is conduct relating to whether the person (that is, the practitioner) has engaged in conduct in connection with rendering or initiating services which would be unacceptable to the general body of practitioners. The conduct of Dr Grey which relates to the question whether he has engaged in the type of conduct falling within the terms of s 82(1) is described in the reference. It included the descriptive and statistic contents of the reference and its attachments as well as the commentary of the Commission expressing its then concerns. All of this formed the body of material comprising the subject matter of an inquiry as to whether, within those boundaries, within this universe of discourse, there was conduct that satisfied the definition of inappropriate practice. In due course, and as the statutory regime for handling the reference and subsequent steps contemplated by the Act unfolded, procedural fairness would have to be accorded to the practitioner in dealing with the question as to whether the conduct of the practitioner (for s 86) had within it conduct of the kind contemplated by s 82(1). These considerations of the inter-relationship between s 86 and 82 reinforce the view expressed earlier that the reference under s 86 is not in the nature of a charge or indictment.
184 In our opinion, the concerns expressed by the Commission elaborated in the attachments to the Referral formed a permissible basis or subject matter for an inquiry by a Committee into the question whether Dr Grey had, in the specified period, and at the specified location, in connection with rendering the 24,774 specified services, engaged in conduct, such that a Committee could conclude that the conduct would be unacceptable to the general body of practitioners. In our view, as a statement of a subject-matter for an inquiry, there is nothing vague, unintelligible, too wide, unspecified, unlimited or otherwise uncertain or indefinite in this language.
185 The Commission's concerns were based on information provided by Dr Grey from Dr Grey's own records in respect of the location and period specified, and compared with the College's standards. This was an appropriate subject of a referral.
186 We reject the arguments advanced by the notice of contention. In our view, the primary Judge correctly held (at [16]) that the Referral properly raised the possibility that by rendering so many services Dr Grey could not provide an appropriate level of "clinical input". Implicit in this expression of the Commission's concern was acceptance, albeit a necessarily provisional acceptance at that stage, of the accuracy of Dr Grey's numbers and of the classification of the services in terms of appropriate levels. If it were to turn out that Dr Grey had wrongly described (and thus misrepresented, even by an innocent mistake) an item, it could hardly follow that the Referral was thereby invalidated from the beginning. Dr Grey would be estopped from relying on his misrepresentation. Another answer would be that Dr Grey would be seeking, impermissibly, to take advantage from his own default (see, e.g. Akbarali v Brent London Borough Council [1983] 2 AC 309 at 344).
187 In any event, to ask whether the Referral was void or voidable can distract attention from the real point and that is that "an administrative decision has only such force and effect as is given to it by the law pursuant to which it was made" (per Gaudron and Gummow JJ in Minister for Immigration & Multicultural Affairs v Bhardwaj [2002] HCA 11 at [46]). Here, the Referral did, and purported to do, no more than refer a question for inquiry.
THE SCOPE OF THE COMMITTEE'S JURISDICTION
(a) The argument in support of the appeal
188 The Commission submits:
* A Committee established under the Act is authorised to inquire into whether the conduct of a practitioner, in connection with the rendering of services for which a Medicare benefit is payable, constitutes "inappropriate practice". The terms of a referral, read in the context of any particulars contained in a notice of hearing, define the jurisdiction of the committee to inquire. At first instance, the Referral was found to identify conduct which, if established, could amount to "inappropriate practice". His Honour said (at [16]):
"In my opinion the referral does identify conduct which, if it has occurred, could amount to inappropriate practice for the purposes of s 82. The referral identifies the Commission's concern about the high volume of rendered services, and the possibility that by rendering so many services Dr Grey could not provide an appropriate level of `clinical input'."
* However (as has been noted), his Honour went on to define the jurisdiction of the Committee as follows:
(1) "The question is whether Dr Grey was providing adequate treatment to his patients in view of his high workload. There can be no doubt that if Dr Grey was not providing proper treatment to his patients that would amount to inappropriate practice" (at [16], emphasis added); and, later -
(2) "The subject matter of the inquiry before the Committee is confined to whether Dr. Grey had engaged in inappropriate practice by failing to provide appropriate treatment to his patients" (at [27], emphasis added); and, again -
(3) "In this case, the Commission has identified as its areas of concern the high volume of services rendered by Dr. Grey, and the possibility that with such a large workload he may not be able to provide proper medical treatment to his patients. That is the only subject matter of the Referral, and the only issue which the Committee has jurisdiction to determine" (at [29], emphasis added).
* But the jurisdiction of the Committee is not in truth, so defined. Its jurisdiction is to ascertain whether Dr. Grey's conduct in connection with the rendering of identified services constituted "inappropriate practice"; that is, whether his conduct in connection with the rendering of the services was such that it would be unacceptable to the general body of general practitioners, in particular by reference to whether Dr. Grey provided an appropriate level of clinical input into the services. (Emphasis added)
* The proposed findings of the Committee in relation to the identified services, including the findings relating to services 1, 12, 2 and 8 (held at first instance to fall outside jurisdiction), do, in truth, fall within its jurisdiction as defined by the terms of the Referral, when read in the context of the particulars provided.
* The Committee was entitled to take into account the inadequacy of Dr Grey's clinical records, in considering whether Dr Grey had engaged in "inappropriate practice" as defined, in respect of the identified services. It did not make a finding that Dr Grey had engaged in inappropriate practice by failing to keep adequate records, thereby exceeding its jurisdiction.
* The Referral alleged that Dr Grey had rendered 24,774 services during the Referral period, well over the 99th percentile (16,042) for all vocationally registered general practitioners in Australia. After setting out details of the rendered services in the Referral, the Commission expressed its concern that "the appropriate level of clinical input may not be able to be maintained at this high servicing rate on a regular and continuing basis". Thus, the conduct the subject of the Referral was expressed in terms of the appropriate level of clinical input into services rendered by Dr Grey. As mentioned, Finkelstein J found the Referral was within power, identifying conduct which, if established, could constitute "inappropriate practice".
* The particulars provided were held to be within the scope of the Referral. By the terms of the relevant particular, the subject matter of the inquiry included whether Dr Grey had engaged in "inappropriate practice" in connection with the rendering of some or all of the Medicare Benefits Schedule item 23, 36 and 44 services during the Referral period by reference to whether Dr Grey was able to provide an appropriate level of clinical input into those services. The Committee ultimately confined itself to an inquiry into this particular, the adequacy of the clinical input, and ultimately made draft findings in respect of that particular, in respect of item 36 and 44 services only.
* The proposed findings of the Committee are findings in relation to each of the randomly selected item 36 and 44 services rendered by Dr Grey during the Referral period, and are findings as to the adequacy of clinical input into each of those services. One aspect the Committee had regard to, and was entitled to have regard to, in assessing the adequacy of clinical input, was the Medical Benefits Schedule description of the components of item 36 and 44 services.
* The Committee, as has been seen, had to inquire into Dr Grey's conduct in connection with the rendering of identified services. As has been noted, the Act establishes a definitional chain, from "service", to "professional service" and "clinically relevant service"; so that for a service to be one in respect of which a Medicare benefit is payable under s 10, it must be a service - (a) to which an item relates, by reference to the components of the item in the item descriptor in the Medical Benefits Schedule; and also (b) which is clinically relevant, that is to say, "necessary for the appropriate treatment of the patient" (s 3).
* The Committee's draft report considers each element, where relevant to a particular service. Some draft findings are made on the first element, namely whether the service actually provided conformed to the item descriptor in the Medical Benefits Schedule, and not on the second, namely, whether it was necessary for the appropriate treatment of the patient. In considering the first element in relation to a service, the degree of disconformity with the item descriptor which would warrant a finding of "inappropriate practice" is measured by the extent to which the general body of general practitioners would consider it to be unacceptable. Put another way, a finding by a Committee that a particular service did not satisfy the item descriptor for the service justifies a finding of "inappropriate practice". The level of non-compliance with the item descriptor is a matter for the Committee in its judgment to consider, that is, whether it is such as to satisfy it of "inappropriate practice" in relation to a particular service.
* The Committee's jurisdiction was not necessarily, nor solely, to determine whether Dr Grey had failed to provide appropriate treatment to his patients. That is an aspect of the second element of "service", but may not be part of the first element, namely whether the service actually rendered conformed with the item descriptor. "Appropriate treatment" is a different test from adequacy of clinical input into a particular service having regard (amongst other things) to its components. So, whilst a finding of inadequate clinical input into a particular item 36 or 44 service may carry with it a finding of failure to provide appropriate treatment, it may not. The issue is the adequacy of the clinical input into the particular service, by reference to the components of the service and whether what was done was necessary for the appropriate treatment of the patient. Such an examination may reveal that the treatment was appropriate, but that the level of clinical input was inadequate, having regard to the components of the item contained in the Medical Benefits Schedule. (Emphasis added)
* Specifically, his Honour's characterisation of the Committee's individual findings in respect of services 1, 12, 2 and 8 was, with respect, in error for the following reasons:
Service 1
Whilst it is a corollary of a finding that there was insufficient clinical input into the service provided, that the fee charged for the service was not justified, and that the Medicare benefit paid should not have been paid, the Committee's finding remains a finding that the service lacked the clinical input required for such a service. The consequence of a finding of lack of clinical input is, for the Committee, the basis for a finding of "inappropriate practice". That is a finding within power, falling squarely within the terms of the Referral and particulars. Such a finding, if unchanged in the final report, may provide a basis for the Determining Officer, in the exercise of that Officer's powers, and discretion, to direct repayment of the Medicare benefit paid for the service. However, that is a different issue, to be determined by a different decision-maker. But his Honour has focused on the consequence of a finding of inadequate clinical input, rather than on the finding itself.
Service 12
Again, this finding is a finding that there was insufficient clinical input into the service provided. The stated reasons for the finding were that there was no need for, nor evidence of, the taking of a detailed history, examining multiple systems and implementing a management plan for the problem presented. The reasons support the finding that the service provided lacked the clinical input prescribed for an item 36 service. Again, the criticism of the finding by the primary Judge concentrates on the consequence, and not on the finding itself.
Service 2
The Committee's finding was that Dr Grey had not provided the level of clinical input required for an item 36 service. Its reasons were based on the lack of evidence to support the taking of a history or the conduct of an examination, and was thus a case of no evidence to demonstrate any clinical judgment sufficient to justify the ordering of the test. The finding was therefore not a finding that Dr Grey did not provide any services to the patient, yet charged a fee; rather it was a finding that, whatever service was provided by Dr Grey, it was not a service which satisfied the requirements for an item 36 service.
Service 8
This finding is, in truth, a finding that Dr Grey did not provide sufficient clinical input to satisfy the requirements of an item 36 service. The support for the finding came from Dr Grey himself, who acknowledged that the service did not have sufficient clinical input for an item 36 service. Again, the consequence of the finding may be characterised in terms of Dr Grey's charging an incorrect fee; but, the finding is itself within the terms of the Referral and particulars.
* None of the findings referred to by his Honour was characterised by him, or the Committee, as findings that Dr Grey had rendered services which were not necessary for the care of the patient. Thus, his Honour's observations in relation to the jurisdiction of the Committee to make findings about unnecessary services, do not apply so as to impugn any of its findings.
* Similarly, the Committee did not make any findings of "inappropriate practice" based on Dr Grey's failure to keep proper records. Again, the observations made by the primary Judge in relation to findings of "inappropriate practice", based on failure to keep proper records, do not apply to impugn any findings of the Committee. In examining the individual services, the Committee had regard, as it was entitled to do, to the adequacy of Dr Grey's clinical records.
(b) Conclusions on the appeal
189 In our opinion, the Commission's arguments are sound and should be accepted. It should not be forgotten that Dr Grey's claim, upheld by the primary Judge, was that the Committee had exceeded its jurisdiction when it continued its inquiry (originally valid as we have held) in circumstances where it emerged, in the course of the inquiry, that information previously provided to the Commission was incorrect in a material respect, viz. Dr Grey's description of the appropriate "Levels". As has been said, it may give rise to an estoppel against Dr Grey, or this may be a case of an impermissible attempt by Dr Grey to take advantage of his own default. But, on any analysis, the emergence of the truth, of a matter very much bound up, or interrelated, with the subject of the Referral could hardly operate to place that field of inquiry beyond the limits of the Committee's purview. Put differently, given the obvious importance in the legislative scheme of correct item description, it is impossible that an inquiry in that area could be beyond power. True, concerns about procedural fairness may conceivably arise, but that is not the present question. No report has yet been made by the Committee and Dr Grey has already been informed of the precise matters raised for his response.
190 In our opinion then, the Committee was not acting beyond its Referral when it inquired into the area of item misdescription. In other words, in our view, the Committee was entitled, in the course of its inquiry and in its draft report, to have regard to the components of the item described in the Medical Benefits Scheme.
191 As earlier discussed, no issue arises here as to the adequacy of particulars of the item misdescriptions of concern.
192 It follows that the appeal must be allowed. We will reserve all costs, both at trial and before us.
ORDERS
193 Accordingly, we make the following orders:
1. Appeal allowed.
2. Set aside the orders made at first instance; in lieu thereof, order that the proceedings below be dismissed.
3. Cross-appeal dismissed.
4. Reserve all costs. Liberty to the parties to file and serve written submission on costs within twenty-eight days.
I certify that the preceding one hundred and ninety-three (193) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. |
Associate:
Dated: 15 May 2002
Counsel for the Appellants: |
Ms F Hampel SC Mr S Moloney |
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Solicitor for the Appellants: |
Minter Ellison |
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Counsel for the Respondent: |
Mr B Monotti Mr P Lithgow |
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Solicitor for the Respondent: |
Grundy Maitland & Co |
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Date of Hearing: |
11 and 12 February 2002 |
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Date of Judgment: |
15 May 2002 |
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