FEDERAL COURT OF AUSTRALIA Selim Oreb v Lele [2005] FCA 24 ADMINISTRATIVE LAW - Professional Services Review Scheme - whether a medical practitioner has engaged in "inappropriate practice" in connection with the rendering or initiation of services for which Medicare benefits are payable – s 92 Agreement Administrative Decisions (Judicial Review) Act 1977 (Cth) – ss 5, 6, 11(1)(c), 11(3) Health Insurance Act 1973 (Cth) Part VAA, ss 82, 92 Health Insurance (Professional Services Review) Regulations 1999 (Cth) – Regs 10, 11 Judiciary Act 1903 (Cth) - s 39B(1A) Daniel v Kelly (2003) 200 ALR 379 referred to Dimian v Health Insurance Commission [2004] FCA 1615 applied Oreb v Willcock [2004] FCA 1520 referred to Lee v Kelly [2005] FCA 26 applied Pradhan v Holmes [2001] FCA 1560 referred to ASHRAT THABIT SELIM V VINAYAK (VINOO) LELE, PATRICK TAN AND DAVID RIVETT AND THE DETERMINING AUTHORITY AND HEALTH INSURANCE COMMISSION AND ALAN JOHN HOLMES N 1723 of 2003 JACOBSON J SYDNEY 7 FEBRUARY 2005 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1723 of 2003 BETWEEN: ASHRAT THABIT SELIM APPLICANT AND: VINAYAK (VINOO) LELE, PATRICK TAN AND DAVID RIVETT constituting the Professional Services Review Committee No 309 FIRST RESPONDENT THE DETERMINING AUTHORITY Established by Section 106Q of the Health Insurance Act 1973 (Cth) SECOND RESPONDENT HEALTH INSURANCE COMMISSION THIRD RESPONDENT ALAN JOHN HOLMES in his capacity as Director of Professional Services Review FOURTH RESPONDENT JUDGE: JACOBSON J DATE OF ORDER: 7 FEBRUARY2005 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed; and 2. The applicant pay the respondents' costs. 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 N 1723 of 2003 BETWEEN: ASHRAT THABIT SELIM APPLICANT AND: VINAYAK (VINOO) LELE, PATRICK TAN AND DAVID RIVETT constituting the Professional Services Review Committee No 309 FIRST RESPONDENT THE DETERMINING AUTHORITY Established by Section 106Q of the Health Insurance Act 1973 (Cth) SECOND RESPONDENT HEALTH INSURANCE COMMISSION THIRD RESPONDENT ALAN JOHN HOLMES in his capacity as Director of Professional Services Review FOURTH RESPONDENT JUDGE: JACOBSON J DATE: 7 FEBRUARY 2005 PLACE: SYDNEY REASONS FOR JUDGMENT Introduction 1 This is an application for review of decisions made by the fourth respondent ("the Director") and the first respondent ("Committee 309") under the peer review-based Professional Services Review Scheme ("the Scheme") contained in Part VAA of the Health Insurance Act 1973 (Cth) ("the Act"). 2 I described the Scheme in my decision in Oreb v Willcock [2004] FCA 1520 ("Oreb") at [28] – [70], handed down on 30 November 2004. I also set out most of the relevant provisions of the Act. I will not repeat what I said in Oreb about the Scheme or the Act. As in Oreb, the relevant provisions are those in the Act as it stood in 1999. 3 The applicant ("Dr Selim") seeks review of the decisions under ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") and s 39B(1A) of the Judiciary Act 1903 (Cth)("the Judiciary Act"). 4 On 18 December 2001, the third respondent ("the Commission") made Investigative Referral No 309 ("the investigative referral"). The referral period for Dr Selim's services was 1 January 2000 to 31 December 2000. Dr Selim does not seek review of the Commission's decision to make the investigative referral. Accordingly, the Commission was joined unnecessarily as a party to these proceedings. 5 Dr Selim seeks review of an adjudicative referral ("the adjudicative referral") made by the Director on 10 May 2002. He claims that by reason of the jurisdictional error in this adjudicative referral, Committee 309 had no authority or power to make its final report. 6 In its final report, Committee 309 found that Dr Selim's conduct in connection with the rendering of some of his services during the referral period would be unacceptable to the general body of medical practitioners and, therefore, constitutes inappropriate practice under s 82 of the Act. The adjudicative referral and the finding of inappropriate practice were not based upon a breach of the "80/20 rule", contained in Regulation 10 of the Health Insurance (Professional Services Review) Regulations 1999 (Cth) ("the Regulations") which Ryan J described in Daniel v Kelly (2003) 200 ALR 379 ("Daniel") at [8]. Rather, they were based upon Dr Selim's high volume of services and lack of clinical input. 7 The final report of Committee 309 was dated 10 October 2003. The application was filed on 5 November 2003. The application for a review of the decision of Committee 309 was filed within the time limited by ss 11(1)(c) and 11(3) of the ADJR Act. An extension of time under the ADJR Act or an exercise of my discretion under the Judiciary Act is required for any order of review of the adjudicative referral. That decision was made eighteen months before the date of the application. 8 Dr Selim relies on an amended application for an order of review filed on 29 October 2004. The amended application raises, in addition to the grounds of judicial review, three Constitutional questions. I made an order on 29 October 2004 severing the Constitutional questions and providing for the hearing of the claims for judicial review before the hearing of the Constitutional questions. 9 On 24 November 2004, I granted leave to Dr Selim to file a further amended application which adds claims for relief on the Constitutional issues. The further amended application does not relate to the questions which were heard on 29 October 2004. 10 Dr Selim's core contention may be described as "the s 92 question". His submission is in the same terms as contended by Dr Dimian in Dimian v Health Insurance Commission [2004] FCA 1615 ("Dimian"). That is, the Director erroneously construed s 92 of the Act as requiring Dr Selim to make an admission of guilt and requiring him to invite recourse to s 92 as a precondition of the exercise of the Director's discretion. The jurisdictional error is therefore said to be an error of law going to jurisdiction or a denial of procedural fairness by reason of the Director's failure to put those views to Dr Selim. The Facts 11 Dr Selim is a general practitioner who conducts a practice in Punchbowl, NSW. He is a graduate of the University of Cairo, Egypt, and is a vocationally registered general practitioner. 12 In January 2001, the Commission advised Dr Selim that it had conducted a review of his practice profile and was considering referral to the Director in relation to his high volume of services. Dr Selim made submissions in response to the possible referral. In September 2001 the Commission refered Dr Selim's conduct to the Director in Investigative Referral 274. In December 2001, the Director decided to take no further action, due to its similarity to the referral which was the subject of the decision in Pradhan v Holmes [2001] FCA 1560. 13 On 18 December 2001, the Commission made the investigative referral. The delegate who made the referral stated that during the referral period, Dr Selim rendered 60 or more services per day on 141 occasions and 80 or more services per day on 4 occasions. His total services rendered were above the 99th percentile when compared with all active general practitioners in Australia. The Commission was concerned that Dr Selim may have rendered or initiated services that were not necessary; not provided an appropriate level of clinical input to the services; or not provided appropriate 'professional services' to his patients. 14 On 21 December 2001, the Director wrote to Dr Selim inviting him to make written submissions to the Director within 14 days stating why the Director should dismiss the referral without setting up a Committee. The letter was in precisely the same form as the letter sent to Dr Dimian; see Dimian at [22], and to Dr Oreb; see Oreb at [92] and [107]. For completeness, I will set out the letter which is as follows:- "On 18 December 2001 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 at another address, I would appreciate such advice." 15 On 2 January 2002, Dr Selim's solicitors responded to the Director's letter stating that it was impossible for Dr Selim to make submissions without 'further and better particulars of the allegations which are made against him'. 16 On 17 January 2002, the Director wrote to Dr Selim's solicitors advising them that he was not in a position to provide the information they sought. He again described the task of the director, pursuant to sections 91, 92 and 93 of the Act, as he did in his letter of 21 December 2001, and he observed that much of the information sought by Dr Selim's solicitors would only emerge during the Professional Services Review Committee process. 17 On 21 February 2002, the Director wrote to Dr Selim enclosing a notice to produce documents under s 89B of the Act. The letter also enclosed a brochure outlining the scheme. The brochure was in the same form as the brochure to which I referred at [75] – [76] of my judgment in Oreb and [26] of Dimian. It included the following paragraph:- "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." 18 In correspondence to the Director dated 3 April 2002, Dr Selim's solicitors submitted that the investigative referral was invalid as the conduct specified did not relate in a 'meaningful way' to the information in the referral. They submitted that there had been a failure to afford Dr Selim procedural fairness and objected to the fact that the 'most of the allegations made against Dr Selim were not raised with him in the Counselling period'. Dr Selim's solicitors also requested that the Director refer to Dr Selim's submissions in relation to Investigative Referral 274. 19 The Director responded to this correspondence in a letter dated 17 April 2002. He once more described the differing functions of the Director and the Committee, observing that his role was limited to establishing whether, pursuant to section 91, there were insufficient grounds on which a Committee could find inappropriate practice. Therefore, he expected any submissions from the person under review to go to that issue. 20 The Director made the adjudicative referral on 10 May 2002. He stated in it that he did not dismiss the investigative referral under s 91 of the Act because he was not satisfied that there were insufficient grounds on which a Committee established under s 93 of the Act could reasonably find that Dr Selim had engaged in inappropriate practice. 21 The adjudicative referral states that, pursuant to s 93(1) of the Act, the Director established Committee 309 on 10 May 2002 to consider whether Dr Selim's conduct constituted inappropriate practice. 22 The referred services were stated to be all Medicare benefits services for specified items provided by Dr Selim from his practice at 287 The Boulevard, Punchbowl NSW, for the period from 1 January 2000 to 31 December 2000. 23 The reasons stated by the Director for the adjudicative referral were Dr Selim's high volume of services and significant lack of clinical input. Reference was also made to Dr Selim's inadequate record keeping. 24 There was no reference in the adjudicative referral to any consideration of the possibility of a s 92 agreement. 25 By letter dated 16 May 2002, the Director notified Dr Selim of the adjudicative referral and enclosed a copy of it. 26 Committee 309 held hearings on 3 July and 21 August 2002. Dr Selim was examined at the hearings. He was accompanied by a solicitor who was present at the hearings to advise Dr Selim. 27 Dr Selim provided written submissions to the Committee on 1 July 2002. It is not necessary to refer to the contents of the submission. 28 On 16 July 2003, Committee 309 provided Dr Selim with a copy of its draft report. The draft included a lengthy schedule setting out a summary of the evidence given by Dr Selim for each service randomly sampled, including a transcript reference thereto, and the Committee's reasons in respect of each such sample. The reasons were stated in bullet point form, and were presented in support of the Committee's preliminary finding that Dr Selim had engaged in inappropriate practice. 29 The Final Report of Committee 309 was dated 10 October 2003. It found that the conduct of Dr Selim in connection with the rendering of some of the referred services would be, in the opinion of Committee 309, unacceptable to the general body of medical practitioners. This was a finding of inappropriate practice under s 82. The Section 92 question 30 The claim that the adjudicative referral was affected by jurisdictional error by reason of the Director's erroneous construction of s 92 or denial of procedural fairness is identical to the claim made in Oreb. As in Dimian (see [45] – [51]), it must be rejected for the reasons which I gave in Oreb at [181] – [182] and [187], subject to the qualification that no inference arises from the failure to mention s 92 in the adjudicative referral; see Lee v Kelly [2005] FCA 26 at [42]. 31 The Director put to Dr Selim in the letter of 21 December 2001, set out at [14] above, the option of entering into a s 92 agreement. The Director again referred to the option of a s 92 agreement in letters dated 17 January 2002 and 17 April 2002, referred to at [16] and [19] above. 32 So too, Dr Selim was informed in the brochure forwarded to him on 21 February 2002 that he may approach the Director to negotiate a conclusion of the matter. 33 There was nothing in Dr Selim's submissions of 2 January 2002 and 3 April 2002 which remotely suggested the possibility that he may wish to enter into a s 92 agreement. 34 Nor did Dr Selim approach the Director to negotiate an agreement after receiving the brochure in February 2002. 35 The Director did not give evidence before me. However, any inference which Dr Selim seeks to draw from this cannot assist him. This is because, in my opinion, having referred to the possibility of a s 92 agreement in his letters of 21 December 2001, 17 January 2002, and 17 April 2002, the Director had no further occasion to consider it in view of Dr Selim's failure to raise the possibility with the Director. 36 No inference arises from the failure to refer to s 92 in the adjudicative referral. This is because s 92(6) of the Act provides that the Director must not disclose to a Panel member the content of any communication between the Director and the person under review in relation to proposals for an agreement under s 92. 37 In view of my findings on the s 92 question, the extension of time issue does not arise. Orders 38 It follows from my rejection of the contention raised by Dr Selim that the application must be dismissed with costs. I certify that the preceding thirty eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate: Dated: 7 February 2005 Counsel for the Applicant: Mr M Robinson Solicitor for the Applicant: Tress Cox Counsel for the Respondent: Miss R Henderson Solicitor for the Respondent: Minter Ellison Date of Hearing: 29 October 2004 Date of Judgment: 7 February 2005