Health Insurance Commission v Peverill [1994] HCA 8

High Court of Australia Mason C.J. Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ. Health Insurance Commission v Peverill [1994] HCA 8

ORDER Appeals allowed. Set aside the orders of the Federal Court. In lieu thereof, declare that the Health Insurance (Pathology Services) Amendment Act 1991 Cth is a valid Act of the Commonwealth and is not a law imposing taxation contrary to s. 55 of the Constitution, and order that the respondent pay the costs of the Health Insurance Commission in the proceedings in the Federal Court. Judgment in the proceedings for the Commission. The respondent to pay the appellant's costs.

Cur. adv vult.

The following written judgments were delivered:—

1994, March 9 Mason C.J., Deane and Gaudron JJ.

The facts and the relevant statutory provisions are set out in the reasons for judgment prepared by Dawson J. As his Honour points out, the effect of the Health Insurance (Pathology Services) Amendment Act 1991 Cth ("the Amending Act") was to reduce, with retrospective effect, the benefit of $34.50 which was previously payable under item 1345 of the schedule for what was known as the ELISA test. The Amending Act was expressed to operate retrospectively from 1 January 1980 being a date prior to the provision of those medical services by Dr. Peverill which are relevant to these proceedings. The Amending Act excluded the ELISA test from item 1345. Instead, the Amending Act inserted items 2294 and 2295 covering ELISA tests for rubella and prescribed a fee for that test of $15.40 which was amended upwards over time culminating for relevant purposes in a fee of $17.20. Hence, the amounts payable to Dr. Peverill for ELISA tests which he performed for patients were reduced retrospectively from $34.50 to the fees prescribed in item 2294.

The reason for the enactment of the Amending Act with retrospective effect, as stated by the Minister in his second reading speech, was [1] "to validate certain recommendations made by the Medicare Benefits Advisory Committee relating to the payment of Medicare benefits that were not given legal effect through failure to make necessary ministerial determinations". The Health Insurance Act 1973 Cth ("the Principal Act") provided for the establishment of that Committee to advise the Minister about the contents of the table in the schedule of benefits to that Act. A determination by the Minister on the basis of the Committee's recommendation to vary the schedule requires certain steps to be taken to give effect to the recommendation. For a period of time these steps were not taken. Nonetheless, the Commission, the public and many pathologists acted on the basis that the Committee's advices were effective to vary the table of benefits in the schedule. The advent of the ELISA test resulted in considerable time and cost savings so that, acting on the recommendations of the Committee, the Department issued in 1984 a Medicare Benefits Assessment Advice which specified items 2294 and 2295 for the ELISA test. Subsequent advices were issued for these items, generally to increase the amount of the benefit payable. In 1987 the Minister made determinations under s. 4A of the Principal Act to give effect to the recommendations but the recommendations were set aside for procedural deficiencies. In 1990, the Federal Court (Burchett J.) held that the ELISA tests fell within item 1345 not items 2294 and 2295 which offered a benefit of $4.60 [2] .