{"id":"F2009B00094","name":"Professional Services Review Scheme - Directions as to Sampling (No. 2)","slug":"professional-services-review-scheme-directions-as-to-sampling-no-2","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"repealed","isInForce":false,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":121367,"registerId":"commonwealth-F2009B00094-current","compilationNumber":null,"startDate":"2026-04-03","status":"Repealed","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Professional Services Review Scheme - Directions as to Sampling (No. 2)","content":"Health Insurance Act 1973\n\nProfessional Services Review Scheme –\n\nDirections as to Sampling (No. 2)\n\nI, CARMEN MARY LAWRENCE, Minister for Human Services and Health, acting under section 106K of the Health Insurance Act 1973, issue the following Directions, being directions that are in accordance with advice received from the Australian Bureau of Statistics, for the purposes of sections 106H and 106J of that Act.\n\nDated 31 January 1995\n\nCARMEN LAWRENCE\n\nMinister for Human Services and Health\n\n\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\n\nPART 1 – PRELIMARY\n\n1.1 This Direction may be cited as Professional Services Review Scheme – Directions as to Sampling (No. 2).\n\n1.2 This Direction sets out procedures in regard to samples of services for the purposes of Subdivision C (Findings based on statistical sampling) of Division 4 of Part VAA of the Health Insurance Act 1973 (the Act).\n\n1.3 Terms used in this Direction that are defined in Part VAA of the Act have the same meanings in this Direction as in that Part.\n\n1.4 Part 2 of this Direction sets out the procedure for producing and using a sample for the purposes of subsection 106H(1) of the Act. Part 3 sets out the procedure for increasing the size of a sample if the practitioner under review so requests under subsection 106J(2) of the Act.\n\nProfessional Services Review Scheme – Directions as to Sampling\n\n1.5 A sample produced for any purpose referred to in these Directions must be randomly selected in accordance with proper statistical sampling practice unless the contrary is specifically stated.\n\nPART 2 – SAMPLING\n\n2.1 If a referral to the Director relates to services of a class specified in the referral (“the specified class”) that may be the subject of findings under Division 4 of Part VAA of the Act, the Commission may supply a sample (“preliminary random sample “) drawn from the services included in the referral. The preliminary random sample must contain twice the number of services worked out by reading from Table 1 the number at the intersections of:\n\n(a) the row containing in its leftmost column (the column headed “class size”) the number of services of the specified class included in the referral; and\n\n(b) the column headed “50%”.\n\n2.2 If the Committee proposes to make a finding based on statistical sampling, the Committee must examine a sample of 30 services (“exploratory sample”) from the preliminary random sample and determine whether each of those services constitutes inappropriate practice or not. The Committee must then calculate the percentage of services in the exploratory sample that constitute inappropriate practice and round down the result to the next lower multiple of 5%.\n\n2.3 If the percentage worked out in the way set out in clause 2.2 (“rounded percentage”) is less than 20%, no further statistical inferences are to be made concerning the referral.\n\n2.4 If the rounded percentage is 20% or greater, the Committee must examine further cases from the preliminary random sample until it has examined the number of cases found in Table 1 at the intersection of:\n\n(a) the row containing in its leftmost column (the column headed “class size”0) the number of services of the specified class included in the referral; and\n\n(b) the column headed by the rounded percentage.\n\nThis sample (“final random sample”) may include the services that were included in the exploratory sample.\n\n2.5 The Committee must determine whether each service included in the final random sample constitutes inappropriate practice, and work out the percentage of services in that sample that constitutes inappropriate practice.\n\n \n\nProfessional Services Review Scheme – Directions as to Sampling\n\n2.6 The percentage worked out in the way described in clause 2.5 must then be reduced by ten percentage points. The resulting percentage must be taken to be the percentage of services of the same kind as the services included in the referral that constitute inappropriate practice.\n\n\\[NOTE: Call the percentage worked out as set out in clause 2.5 “x”. To a confidence level of 95%, the percentage of services in the sample that constitutes inappropriate practice is within the interval (x ± 10)%. For the purposes of the Committee’s findings, the lower limit of that interval is to be taken.\\]\n\nPART 3 – INCREASING THE SAMPLE SIZE\n\n3.1 If a Committee proposes to make findings based o the final random sample of services, and the person under review requests that the sample size be increased, the Committee must select from the preliminary random sample a further sample containing the same number of cases as the number of cases that was included in the final random sample used in the committee’s first consideration of the referral. The latter sample is to be combined with the final random sample to make up the ‘double final random sample”.\n\n3.2 The Committee must determine whether each service included in the doubled final random sample constitutes inappropriate practice, and work out the percentage of services in that sample that constitutes inappropriate practice.\n\n3.3 The percentage worked out in the way described in clause 3.2 must then be reduced by half the number of percentage points found in Table 2 at the intersection of:\n\n(a) the row containing in its leftmost column (the column headed “class size”) the number of services of the specified class included in the referral; and\n\n(b) the column headed by the percentage calculated in clause 3.2 rounded down to the next lower multiple of 5%.\n\nThe resulting percentage must be taken to be the percentage of the services included in the referral that constitute inappropriate practice.\n\n\\[NOTES:\n\n1. Call the percentage worked out as set out in clause 3.2 “x”, and the percentage found from Table 2 “y”. To a confidence level of 955, the percentage of services in the sample that constitutes inappropriate practice is within the interval x ± ![](image.001.png). For the purposes of the Committee’s findings, the lower limit of that interval is to be taken.\n\n \nProfessional Services Review Scheme – Directions as to Sampling\n\n2. An example of the use of the process follows. This example is intended to be an illustration only.\n\nAssume the Commission includes in its referral 500 surgical excisions under the same item number. It will also include 168 of those excisions randomly selected – 84 being the size of the random sample necessary to predict with 95% confidence that a result derived from the sample will be within ±10% of the actual position in the population at a hypothesised incidence of inappropriate practice of 50% (the incidence requiring the largest sample).\n\nThe Committee will consider the first 30 such services (the exploratory sample) and make a finding as to what number, if any, of those services were inappropriate.\n\nIf the Committee decides that less than 20% (6 excisions) were inappropriate, no conclusion can be drawn as the result will not be statistically valid.\n\nIf the committee decides that 6 or more of the services were inappropriate, say 8 or 26.7%, the 26.7% is rounded down to the nearest 5%, that is 25%. From Table 1, a sample size of 66 is determined.\n\nThe Committee then considers a further 36 excisions from the random sample (the number needed to make up the final random sample) and if it finds that 18 or 27% of the 66 services it has now considered were inappropriate, it can find that 17% (27% minus the possible 10% error) or 85 of the excisions were inappropriate.\n\nAt this point the practitioner has effectively three options:\n\n- accept a finding that 17% of the excisions were inappropriate; or\n- require the Committee to consider a further 66 randomly selected excisions, thus doubling the sample size and reducing the confidence interval, so that if a similar pattern were found across the whole 132 excisions the confidence interval would drop to 13% giving an accuracy of ± 6.5% - the new confidence interval derived from Table 2. The finding then would be that 20.5% or 102.5 of the excisions were inappropriate practice. There is also the possibility that the larger sample might demonstrate that the correction should have been the other way and result in a higher percentage of inappropriate excisions, theoretically as high as 30.5% (37% minus 6.5%); or\n- take the Committee through all 500 excisions. The effect is that, if the sample is accurate, 27% or 135 inappropriate excisions would be the expected result.\\]\n\nPART 4 – REVOCATION\n\n4.1 The Directions entitled “Professional Services Review Scheme – Directions as to Sampling”¹, issued under section 106K of the Health Insurance Act 1973 on 9 May 1994, are revoked.\n\n\\[NOTE:\n\n1. The Directions were notified in the Commonwealth of Australia Gazette on 25 May 1994.\\]\n\n \nProfessional Services Review Scheme – Directions as to Sampling\n\nTABLE 1\n\nSAMPLE SIZES FOR A 95% CONFIDENCE INTERVAL\n\nOF ± 10%\n\n![](image.005.png)![](image.004.png)![](image.003.png)![](image.002.png)\n\n```html\n

Class

size

Percentages of services that represent inappropriate practice

20%

25%

30%

35 %

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

90%

50

29

30

32

33

33

34

34

34

33

33

32

30

29

26

22

100

40

43

46

48

49

50

51

50

49

48

46

43

40

34

27

150

46

51

54

57

59

60

61

60

59

57

54

51

46

39

30

200

49

55

60

63

66

67

67

67

66

63

60

55

49

41

31

250

52

58

64

67

70

72

72

72

70

67

64

58

52

43

32

300

54

61

66

71

73

75

76

75

73

71

66

61

54

44

33

350

55

63

69

73

76

78

79

78

76

73

69

63

55

45

34

400

56

64

70

75

78

80

81

80

78

75

70

64

56

46

34

450

57

65

72

77

80

82

83

82

80

77

72

65

57

47

34

500

58

66

73

78

81

83

84

83

81

78

73

66

58

47

35

550

58

67

74

79

83

85

85

85

83

79

74

67

58

48

35

600

59

68

75

80

84

86

87

86

84

80

75

68

59

48

35

650

59

68

75

81

85

87

88

87

85

81

75

68

59

48

35

700

60

69

76

81

85

88

88

88

85

81

76

69

60

48

35

750

60

69

76

82

86

88

89

88

86

82

76

69

60

49

35

800

60

69

77

83

87

89

90

89

87

83

77

69

60

49

35

60

70

77

83

87

90

90

90

87

83

77

70

60

49

35

900

61

70

78

84

88

90

91

90

88

84

78

70

61

49

36

950

61

70

78

84

88

91

91

91

88

84

78

70

61

49

36

1000

61

71

78

84

89

91

92

91

89

84

78

71

61

49

36

1500

62

72

80

87

91

94

95

94

91

87

80

72

62

50

36

2000

63

73

32

88

93

95

96

95

93

88

82

73

63

51

36

2500

63

74

82

89

93

96

97

96

93

89

82

74

63

51

36

3000

64

74

83

89

94

97

98

97

94

89

83

74

64

51

37

3500

64

74

83

90

94

97

98

97

94

90

83

74

64

51

37

4000

64

75

83

90

95

98

99

98

95

90

83

75

64

51

37

4500

64

75

83

90

95

98

99

98

95

90

83

75

64

51

37

5000

64

75

84

90

95

98

99

98

95

90

84

75

64

51

37

\n```\n\n![](image.002.png) \nProfessional Services Review Scheme – Directions as to Sampling\n\nTABLE 2\n\n95% CONFIDENCE INTERVAL WIDTHS FOR SAMPLES TWICE THE\n\nSIZE OF THOSE IN TABLE I\n\n```html\n

Class

size

Percentages of services that represent inappropriate practice

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

90%

50

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

100

8%

7%

5%

4%

2%

0%

0%

0%

2%

4%

5%

7%

8%

10%

11%

150

11%

10%

9%

9%

8%

8%

8%

8%

8%

9%

9%

10%

11%

11%

12%

200

12%

11%

11%

10%

10%

10%

10%

10%

10%

10%

11%

11%

12%

12%

13%

250

12%

12%

11%

11%

11%

11%

11%

11%

11%

11%

11%

12%

12%

13%

13%

300

12%

12%

12%

12%

12%

11%

11%

11%

12%

12%

12%

12%

12%

13%

13%

350

13%

12%

12%

12%

12%

12%

12%

12%

12%

12%

12%

12%

13%

13%

13%

400

13%

13%

13%

12%

12%

12%

12%

12%

12%

12%

13%

13%

13%

13%

13%

450

13%

13%

13%

13%

12%

12%

12%

12%

12%

13%

13%

13%

13%

13%

13%

500

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

14%

550

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

14%

600

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

14%

650

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

14%

700

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

14%

14%

750

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

14%

14%

800

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

14%

14%

850

14%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

14%

14%

14%

900

14%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

13%

14%

14%

14%

950

14%

14%

13%

13%

13%

13%

13%

13%

13%

13%

13%

14%

14%

14%

14%

1000

14%

14%

13%

13%

13%

13%

13%

13%

13%

13%

13%

14%

14%

14%

14%

1500

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

2000

14%

14%

14%

14%

14%

14%

1-1%

14%

14%

14%

14%

14%

14%

14%

14%

2500

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

3000

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

3500

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

4000

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

4500

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

14%

5000

14%

14 %

14%

14%

14%

14%

14%

1.4%

14%

14%

14%

14%

14%

14%

14%

\n```\n\n\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_\\_","sortOrder":0}],"analysis":{"kimi_summary":{"_metrics":{"model":"kimi-k2.5","source":"moonshot-realtime","completionTokens":2648},"content_quality":"ok","complexity_score":7,"scope_assessment":{"changed":false,"description":"This instrument replaces earlier 1994 Directions with the same fundamental purpose. It refines the statistical methodology for sampling under the Professional Services Review Scheme but does not expand beyond the original scope of setting sampling procedures for determining inappropriate practice."},"complexity_factors":["Multi-stage conditional sampling process (exploratory vs final vs doubled samples)","Mandatory lookup tables (Table 1 and Table 2) for sample sizes and confidence intervals","Mathematical adjustments including rounding down to nearest 5% and deducting 10 percentage points or half-interval values","Cross-references to Health Insurance Act 1973 sections 106H, 106J and 106K","Statistical confidence interval methodology (95% confidence level)"],"plain_english_summary":"These Directions let investigators use random sampling rather than checking every file to estimate what share of a doctor’s Medicare services were billed inappropriately. If initial sampling suggests more than a threshold of problems, a larger final sample is checked and the resulting error rate is conservatively reduced by 10 percentage points for the official finding.\n\nDoctors can request the sample size be doubled to narrow uncertainty. The outcome can affect Medicare billing privileges and lead to penalties or practice restrictions."},"flash_summary":{"complexity_score":7,"scope_assessment":{"changed":false,"description":"These Directions do not extend the statutory reach of Division 4 of Part VAA; they prescribe procedural detail for sampling under subsections 106H and 106J of the Health Insurance Act 1973 and revoke an earlier (1994) directions instrument. In substance they replace prior sampling procedures with updated numerical tables and stepwise rules but leave unchanged which referrals may be considered or the Committee's statutory authority to make findings."},"complexity_factors":["Multiple-stage conditional sampling procedure (preliminary random sample → 30-case exploratory sample → final sample → optional doubled sample) (clauses 2.1–3.2).","Dependence on large numeric lookup tables (Table 1 and Table 2) to determine sample sizes and adjustment widths (clauses 2.1, 3.3 and embedded tables).","Discrete rounding rules (round down exploratory percent to next lower multiple of 5%) and fixed adjustments (subtract 10 percentage points; halve a Table 2 value) that change inference logic (clauses 2.2, 2.6, 3.3).","Statistical assumptions and confidence-level interpretation (95% confidence interval used to justify the fixed adjustments) embedded in procedural law (clauses 2.6 and notes).","Interplay with statutory subsections (106H and 106J) — legal thresholds and rights (e.g. practitioner's right to require a larger sample) must be mapped to the numerical steps (Part 2–3).","Operational requirements: mandatory random selection 'in accordance with proper statistical sampling practice' and need for ABS advice compliance (clause 1.5 and preamble).","Document formatting and typographical ambiguities in the notes/tables increase interpretive burden for implementers (source text contains partial/garbled notes)."],"plain_english_summary":"These Directions set the statistical procedure the Professional Services Review Committee must use when making findings from samples of claimed services under the Health Insurance Act 1973. They prescribe random selection, an initial 30-case exploratory sample with a 20% trigger, lookup tables for final sample sizes, a 10 percentage-point downward adjustment (95% confidence), and an option for the practitioner to double the sample. The rules affect practitioners under review, the Commission/Committee that examines cases, and administrative staff who must apply the tables and calculations."}},"importantCases":[],"_links":{"self":"/api/acts/professional-services-review-scheme-directions-as-to-sampling-no-2","history":"/api/acts/professional-services-review-scheme-directions-as-to-sampling-no-2/history","analysis":"/api/acts/professional-services-review-scheme-directions-as-to-sampling-no-2/analysis","conflicts":"/api/acts/professional-services-review-scheme-directions-as-to-sampling-no-2/conflicts","importantCases":"/api/acts/professional-services-review-scheme-directions-as-to-sampling-no-2/important-cases","documents":"/api/acts/professional-services-review-scheme-directions-as-to-sampling-no-2/documents"}}