Dimian v Health Insurance Commission [2005] FCAFC 200 (16 September 2005)

Last Updated: 16 September 2005

FEDERAL COURT OF AUSTRALIA

Dimian v Health Insurance Commission [2005] FCAFC 200

ADMINISTRATIVE LAW – Health insurance – Investigation by a Professional Services Review Committee as to whether a medical practitioner has engaged in inappropriate practice in relation to the number of services rendered by him – Whether Director of Professional Services Review failed to have regard to s 92 of the Health Insurance Act in referring the matter to a Professional Services Review Committee.






Health Insurance Act 1973 (Cth) s 92





Oreb v Willcock [2005] FCAFC 196

Dimian v Health Insurance Commission [2004] FCA 1615






RIFAAT GEORGE DIMIAN v HEALTH INSURANCE COMMISSION, ALAN JOHN HOLMES in his capacity as DIRECTOR, PROFESSIONAL SERVICES REVIEW, BERNARD KELLY, GEOFFREY DOWE and MOHAMED KEHILA constituting THE PROFESSIONAL SERVICES REVIEW COMMITTEE NO. 169, THE DETERMINING AUTHORITY ESTABLISHED BY SECTION 106Q OF THE HEALTH INSURANCE ACT 1973 (Cth)

NSD 1950 of 2004




BLACK CJ, WILCOX and LANDER JJ
16 SEPTEMBER 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1950 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	RIFAAT GEORGE DIMIAN APPELLANT
AND:	HEALTH INSURANCE COMMISSION FIRST RESPONDENT ALAN JOHN HOLMES in his capacity as DIRECTOR, PROFESSIONAL SERVICES REVIEW SECOND RESPONDENT BERNARD KELLY, GEOFFREY DOWE and MOHAMED KEHILA constituting THE PROFESSIONAL SERVICES REVIEW COMMITTEE NO. 169 THIRD RESPONDENT THE DETERMINING AUTHORITY ESTABLISHED BY SECTION 106Q OF THE HEALTH INSURANCE ACT 1973 (Cth) FOURTH RESPONDENT
JUDGES:	BLACK CJ, WILCOX AND LANDER JJ
DATE OF ORDER:	16 SEPTEMBER 2005
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The appeal be dismissed.
2. The appellant pay the second respondent’s costs of the appeal.




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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1950 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	RIFAAT GEORGE DIMIAN APPELLANT
AND:	HEALTH INSURANCE COMMISSION FIRST RESPONDENT ALAN JOHN HOLMES in his capacity as DIRECTOR, PROFESSIONAL SERVICES REVIEW SECOND RESPONDENT BERNARD KELLY, GEOFFREY DOWE and MOHAMED KEHILA constituting THE PROFESSIONAL SERVICES REVIEW COMMITTEE NO. 169 THIRD RESPONDENT THE DETERMINING AUTHORITY ESTABLISHED BY SECTION 106Q OF THE HEALTH INSURANCE ACT 1973 (Cth) FOURTH RESPONDENT

JUDGES:	BLACK CJ, WILCOX AND LANDER JJ
DATE:	16 SEPTEMBER 2005
PLACE:	SYDNEY

REASONS FOR JUDGMENT

BLACK CJ:

1 I agree with Lander J for the reasons he gives that this appeal should be dismissed with costs.

I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black.

Associate:
Dated: 16 September 2005

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1950 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	RIFAAT GEORGE DIMIAN APPELLANT
AND:	HEALTH INSURANCE COMMISSION FIRST RESPONDENT ALAN JOHN HOLMES in his capacity as DIRECTOR, PROFESSIONAL SERVICES REVIEW SECOND RESPONDENT BERNARD KELLY, GEOFFREY DOWE and MOHAMED KEHILA constituting THE PROFESSIONAL SERVICES REVIEW COMMITTEE NO. 169 THIRD RESPONDENT THE DETERMINING AUTHORITY ESTABLISHED BY SECTION 106Q OF THE HEALTH INSURANCE ACT 1973 (Cth) FOURTH RESPONDENT

JUDGES	BLACK CJ, WILCOX AND LANDER JJ
DATE:	16 SEPTEMBER 2005
PLACE:	SYDNEY

REASONS FOR JUDGMENT

WILCOX J:

2 I agree with Lander J.

I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.

Associate:
Dated: 16 September 2005

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1950 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	RIFAAT GEORGE DIMIAN APPELLANT
AND:	HEALTH INSURANCE COMMISSION FIRST RESPONDENT ALAN JOHN HOLMES in his capacity as DIRECTOR, PROFESSIONAL SERVICES REVIEW SECOND RESPONDENT BERNARD KELLY, GEOFFREY DOWE and MOHAMED KEHILA constituting THE PROFESSIONAL SERVICES REVIEW COMMITTEE NO. 169 THIRD RESPONDENT THE DETERMINING AUTHORITY ESTABLISHED BY SECTION 106Q OF THE HEALTH INSURANCE ACT 1973 (Cth) FOURTH RESPONDENT

JUDGES:	BLACK CJ, WILCOX AND LANDER JJ
DATE:	16 SEPTEMBER 2005
PLACE:	SYDNEY

REASONS FOR JUDGMENT

LANDER J:

3 This is an appeal from an order of a judge of this Court in which he dismissed the appellant’s application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) and s 39B(1A) of the Judiciary Act 1903 (Cth) (the Judiciary Act) for a review of decisions, which I will shortly identify, made under Part VAA of the Health Insurance Act 1973 (Cth) (the Act).

4 The hearing was interlocutory. It did not finally dispose of the issues between the parties because the application under consideration by the primary judge formed only part of the issues between the parties.

5 In those circumstances, leave to appeal from the primary judge’s order was required and was obtained from another judge of this Court. In those circumstances, the appeal is competent.

6 This appeal was heard contemporaneously with the appeal in Oreb v Willcock [2005] FCAFC 196 (‘Oreb v Willcock’). In that appeal there were two issues raised on the appeal and one issue raised on the cross-appeal. On this appeal only one of the two issues which was raised in the appeal in Oreb v Willcock was ventilated. The decision in Oreb v Willcock is determinative of the issue which was raised on this appeal.

7 The appellant is a medical practitioner who graduated from the University of Cairo. He practised as an ear, nose and throat surgeon in Egypt for 20 years before he came to Australia. He conducts a general practice in Merrylands in New South Wales.

8 On 17 December 1997, Dr Newton, a medical adviser employed by the Health Insurance Commission (the first respondent) visited the appellant at his practice and counselled the appellant in respect of the number of Medicare services he had rendered during the period 1 July 1996 to 1 October 1997.

9 During that counselling, the appellant was warned that if the practice of rendering services of standard and long consultations of the kind claimed between 1 October 1996 to 1 October 1997 continued that would ensure Professional Services Review referral.

10 On 23 January 1998, an employee of the Health Insurance Commission informed the appellant that the Case Management Committee of the New South Wales branch of the Health Insurance Commission had determined that ‘possible inappropriate practice may exist’ and that there was to be a further review of the appellant’s practice statistics in March 1998.

11 He was advised at that time:

‘If this review indicates that the Commission’s concerns have not been addressed, the Case Management Committee may forward the matter to the Manager Professional Services for consideration of referral to the Director, Professional Services Review.’

12 On 9 July 1998, the Health Insurance Commission informed the appellant that the further review of his practice had been carried out and ‘significant changes to your practice data were observed’. The appellant was advised that the Case Management Committee had reviewed these results and determined that it would not be necessary to forward the matter to the Commission’s Manager, Professional Services to consider whether the matter should be referred to the Director, Professional Services Review.

13 On 22 February 1999, the Manager, Professional Review Branch of the Health Insurance Commission (NSW) wrote to the appellant advising that his practice data had been reviewed and, although concerns existed with the high volume of rendered services and to a lesser extent the servicing rate, the Case Management Committee had again determined not to forward the matter to the Commission’s Manager, Professional Services to consider whether the matter should be referred to the Director, Professional Services Review.

14 On 8 October 1999, the Chairman, Case Management Committee, Professional Review Branch, Health Insurance Commission (NSW) informed the appellant that the Health Insurance Commission (NSW) remained concerned about the appellant’s practice profile and the matter was to be forwarded to the Medical Director to consider whether the matter should be referred to the Director, Professional Services Review.

15 On 16 May 2000 the Manager, Professional Services Branch, a delegate of the Health Insurance Commission, made an Investigative Referral No. 169 to the Director.

16 On 16 May 2000, the Manager, Professional Review Branch, who was a delegate of the Health Insurance Commission, sent the appellant a copy of the Investigative Referral No. 169 and invited the appellant to make a submission to the Director as to why the Director should dismiss the referral without setting up a committee.

17 Three days later, on 19 May 2000, the Director, Professional Services Review (the Director) (the second respondent) wrote to the appellant inviting him to make a submission. He wrote:

‘On 16 May 2000 I received a referral from the Health Insurance Commission (HIC) regarding your conduct in relation to the Medicare program.

I understand that the HIC has delivered to you a copy of the referral documentation and the relevant sections of the Health Insurance Act 1973 (the Act). In accordance with section 89(1) of the Act I must carry out an investigation of this referral. Following the investigation, I have the option to:
dismiss the referral for the reasons set out in section 91 of the Act,

enter into an agreement with you as set out in section 92 of the Act, or
refer the matter to a Professional Services Review Committee as set out in section 93 of the Act.

Section 88(3) of the Act provides that you may make written submissions to the Director, within 14 days, as to reasons why the Director should dismiss the referral without setting up a Professional Services Review Committee. I would be pleased to receive a submission from you and would give it careful consideration along with other relevant documents or materials I may decide to obtain.

Should you wish to communicate with this office, the address and telephone numbers are detailed below. If you would prefer any further communications from this office to be directed to you at another address, I would appreciate such advice.’

18 On 25 May 2000, the appellant made a submission in writing to the Director. He wrote:

‘Dear Colleague, Dr. John Holmes;
The director of Professional Services Review,

Referring to your letter dated 19-05-00, I would like to give you full and clear explanation about the concern of the Case Management Committee regarding to my volume of rendered services and servicing rate.

1. I am working long hours everyday and also during public holidays.

2. I am the only doctor working in my practice all the time.

3. As I am the only doctor in the surgery my patients feel more comfortable to be under supervision of one doctor who is available all the time.

4. The location of my practice is in a very busy area, very close to the railway station, shopping centre, parking and chemists, which make easy access to my surgery.

5. Most of my patients have big families, and they trust my professional services.

6. Some of my cases have multiple medical or chronic problems which require continuing supervision and follow-up.

7. I will appreciate your advice, Sir.

Many thanks for your kind consideration of this matter.’

19 On 19 July 2000, the Director issued a Notice to Produce for the appellant to produce documents to him. At the same time, the Director included a brochure outlining the Professional Services Review Scheme. That brochure, which was described as a general guide only, was entitled ‘Professional Services Review’. It was clearly created to educate people who might be affected by a Professional Services Review with the working of Professional Services Review Committees. It described the wider role of the Professional Services Review:

‘The PSR Scheme authorises examination of health practitioners’ conduct to ascertain whether or not they have practised inappropriately in relation to services which attract Medicare rebates or have prescribed inappropriately under the Pharmaceutical Benefits Scheme.

Inappropriate Practice

"Inappropriate practice" means professional conduct that a committee of the practitioner’s peers would reasonably consider unacceptable to the general body of the peer group.’

20 It identified the purpose of the scheme, the scheme participants (explaining the role of each of the participants, including the Professional Services Review Committee, the Director, the Health Insurance Commission and the Determining Authority), and the process by which a matter would proceed.

21 In particular, the brochure explained the Director’s role in that process. It explained that the Director might dismiss a referral, negotiate an agreement or establish a Professional Services Review Committee.

22 Relevantly, the brochure described the process:

‘The Process

Counselling: Before referral to the Director, the HIC may offer the practitioner under review counselling and the opportunity to rectify the situation before formal action is initiated.

Referral: The HIC prepares an investigative referral to the Director. A copy is sent to the practitioner, with an invitation to make a written submission to the Director within 14 days.

Investigation: The Director may appoint case officers to investigate the referral. They may enquire into services not included in the HIC’s reasons for referral. The Director has the power to require documents to be produced: there are penalties for non-compliance. After an investigation, the Director may:

dismiss a referral;
negotiate an agreement; or
establish a PSRC.

Dismissing a referral: The Director may dismiss a referral if satisfied that a PSRC would not make a finding of inappropriate practice.

Negotiating an agreement: The practitioner may approach the Director to negotiate a conclusion of the matter. The Determining Authority must approve any agreement for it to become effective.

Establishing a PSRC: Unless satisfied that there are insufficient grounds for a finding of inappropriate practice or unless the Determining Authority has approved a negotiated agreement, the Director must establish a PSRC.’

23 The brochure identified the practitioner’s rights at any Professional Services Review Committee hearing. It described the procedure which would be followed after the hearing.

24 On 15 February 2001, the Director wrote to the appellant and advised him that he had established Professional Services Review Committee No. 169 to consider whether the appellant had engaged in ‘inappropriate practice’ and made Adjudicative Referral No. 169.

25 On 5 March 2001, the appellant wrote to the Director advising the Director that he had stopped rendering after hours emergency attendances completely. He also authorised the Director to provide Professional Services Review Committee No. 169 with a copy of his submission made to the Director on 25 May 2000.

26 On 20 April 2001, 10 May and 11 May 2001, the Professional Services Review Committee No. 169 conducted an oral hearing. On 4 September 2003, the Professional Services Review Committee provided the appellant with a draft report. On 29 September 2003, the appellant responded to that draft report by making further written submissions. He submitted that the Investigative Referral No. 169 and the Adjudicative Referral No. 169 were ‘both invalid and/or a nullity’.

27 In support of the contention that the Adjudicative Referral No. 169 was invalid and/or a nullity, the appellant wrote:

‘31. The inadequacy of the Investigative Referral and the Director’s failure to request the referral of further services resulted in the Director’s failing to properly consider whether an alternative to making an adjudicative referral, such as dismissal under S.91 or an agreement under S.92 of the Act, may have been appropriate in the circumstances. Thus the Director failed to take relevant considerations into account in making his decision and denied me procedural fairness. The Adjudicative Referral is therefore invalid and must be dismissed.’

28 On 6 January 2004, the Professional Services Review Committee handed down its final report in which it found that:

‘... the conduct of the practitioner under review, Dr Rifaat George Dimian, in connection with his rendering of some of the Medicare Benefits Schedule (MBS) item 53, 54 and 97 services that were the subject of the adjudicative referral from the Director of Professional Services Review (the Director) would be, in the Committee’s opinion, unacceptable to the general body of medical practitioners.’

29 On 5 February 2004, the appellant commenced proceedings in this Court seeking a review of:

‘(i) The decision, conduct or action of the First Respondent on or about 16 May 2000 to make an investigative referral under s 86 of the Health Insurance Act 1973 (Cth) (‘the Act’) to the Second Respondent in respect of conduct of the Applicant (hereinafter referred to as ‘the Investigative Referral’).

(ii) The decision, conduct or action of the Second Respondent on our [sic] about 15 February 2001 to set up a Committee comprising the Third Respondents and to make an adjudicative referral to them under s 93 of the Act in respect of the conduct of the Applicant (hereinafter referred to as ‘the Adjudicative Referral’).

(iii) The decision, conduct or action of the Third Respondents in preparing and giving to the Fourth Respondent’s Final Report (‘the Report’) dated 6 January 2004 regarding the conduct of the Applicant.’

30 In due course, an amended application was filed seeking a review of:

‘(i) The decision, conduct or action of the Second Respondent on our [sic] about 15 February 2001 to set up a Committee comprising the Third Respondents and to make an adjudicative referral to them under s 93 of the Act in respect of the conduct of the Applicant (hereinafter referred to as ‘the Adjudicative Referral’).

(ii) The decision, conduct or action of the Third Respondents in preparing and giving to the Fourth Respondent a Final Report (‘the Report’) dated 6 January 2004 regarding the conduct of the Applicant.’

31 There were two issues before the primary judge, one of which was not pursued on this appeal and need not be mentioned.

32 The sole issue on appeal was that the decision by the Director (the second respondent) to set up the Professional Services Review Committee No. 169 (the third respondent) without first giving the appellant an opportunity to enter into an agreement with the Director, pursuant to s 92 of the Act, was contrary to s 92 and should be quashed.

33 The Director is not obliged to offer to enter into a s 92 agreement with a medical practitioner whose conduct is under review. Section 92 permits, but does not require, the Director to enter into such an agreement but only if the medical practitioner acknowledges that the medical practitioner’s conduct during the referral period constituted engaging in inappropriate practice.

34 In any event, the claim lacks a factual basis. When the Director wrote to the appellant on 19 May 2000 the Director brought to the appellant’s attention the Director’s obligations on completing his investigation. In that letter he advised the appellant that one of those options was to enter into an agreement with the appellant as set out in s 92 of the Act.

35 The appellant responded to that letter, as I have said, on 25 May 2000. Nowhere in his response did he advert to an agreement pursuant to s 92 or in any way suggest that he wished to enter into such an agreement.

36 Moreover, the Director, when writing to the appellant on 19 July 2000, provided the appellant with the brochure to which I have referred. The appellant did not approach the Director following upon receipt of that brochure to negotiate an agreement.

37 The first time that the appellant made mention of s 92 was in the submission made by the appellant on 29 September 2003 and then only for the purpose of seeking to impugn the adjudicative referral upon the ground that the Director had failed to take relevant considerations into account and thereby denied the appellant procedural fairness.

38 There is no evidence to support the claim made by the appellant that the Director failed to have regard to s 92 in making his decision to set up the Professional Services Review Committee to inquire into the appellant’s conduct.

39 For the reasons given in Oreb v Willcock, this appeal must be dismissed. The appellant must pay the second respondent’s costs.

I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

Associate:

Dated: 16 September 2005

Counsel for the Appellant:	Mr M A Robinson, Mr C Jackson
Solicitor for the Appellant:	Tress Cox Layers
Counsel for the Respondents:	Mr P Hanks QC, Ms R Henderson
Solicitors for the Respondents:	Minter Ellison
Date of Hearing:	10 May 2005
Date of Judgment:	16 September 2005