Director, Professional Services Review v Yoong

Federal Court of Australia|2023-12-05|Before: Mr P, Rangiah J, Perry J, Collier J, Burley J

The appellant's review of services of the respondent commenced on 30 April 2019 be suspended until the final determination of this proceeding.
The costs of the appellant's interlocutory application of 13 November 2023 be costs in the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT 1 INTRODUCTION [1] 2 BACKGROUND [10] 3 RELEVANT STATUTORY PROVISIONS [27] 4 THE SUBMISSIONS [39] 5 CONSIDERATION [46] 5.1 Addendum [57] 5.2 Disposition [62]

INTRODUCTION 1 Before the Court is an interlocutory application filed by the Director, Professional Services Review (appellant), seeking orders that the appellant's review of professional services of the respondent commenced on 30 April 2019 (Review) be suspended until the final determination of the proceedings. The appellant relies on an affidavit affirmed on 13 November 2023 by Andrew Shelley, Special Counsel, Professional Services Review Agency, in support of the application. 2 The proceedings have a lengthy history and arise from a request made by the Chief Executive of Medicare to the appellant to review the provision of services by the respondent, Matthew Yoong, pursuant to s 86 of the Health Insurance Act 1973 (Cth) (HIA). The appellant decided, pursuant to s 88A of the HIA, to undertake the Review and subsequently issued a Notice to Produce pursuant to s 89B requiring that Dr Yoong produce various patient medical records. 3 Dr Yoong has challenged each of the three decisions involved in this course of events: (a) the decision by the Chief Executive of Medicare to make the request; (b) the decision of the appellant to undertake the Review; and (c) the decision of the appellant to issue the Notice to Produce. He failed in his challenge to the first two decisions (Yoong v Chief Executive of Medicare [2021] FCA 701 (Yoong 1) (Rangiah J)), but succeeded in relation to the decision to issue the Notice to Produce and a subsequent decision by the appellant under s 106ZPM(2) which had the effect of preventing Medicare benefits being payable in respect of services rendered or initiated by Dr Yoong (Yoong v Director, Professional Services Review [2023] FCA 1186 (Yoong 3) (Perry J)). 4 During the pendency of each of these proceedings, the Court made three orders pursuant to s 94 of the HIA to suspend the Review pursuant to s 88A. Such a suspension was necessary because, pursuant to s 94 of the HIA, there is a 12-month time limit for the appellant to make a decision unless the review is suspended, inter alia, because of an injunction or other court order; s 94(2)(b). 5 The first suspension was ordered by Rangiah J in the course of the proceedings before him. The second was ordered by Collier J upon an interlocutory application being made by the appellant; Yoong v Director, Professional Services Review [2021] FCA 1445 (Yoong 2). The third was ordered by Perry J on 31 October 2023 following delivery of Yoong 3, in order to permit the appellant to file a Notice of Appeal. 6 The appellant filed a Notice of Appeal on 3 November 2023, challenging the correctness of the decision in Yoong 3. That appeal has not yet been listed for hearing. However, the suspension ordered on 31 October 2023 was set to expire on 30 November 2023 (and has subsequently been extended to allow time for this decision to be made). 7 The appellant contends that unless the suspension is extended until the determination of the appeal, he will be deprived of the opportunity to conduct the Review with the benefit of documents produced in accordance with the Notice to Produce, should his appeal succeed. That is because, in short, the 12-month period under s 94 is currently set to expire on 3 May 2024. Without further suspension, the time within which the appeal can be conducted will continue to run. In the event that he succeeds in his appeal, and he is permitted to receive and review documents in accordance with the Notice to Produce, it is likely that the time for the conduct of the Review will have expired, or any time remaining will in any event be insufficient for him to review documents produced and comply with his obligations under s 89C of the HIA to consider and report upon his investigations. 8 Dr Yoong opposes the orders sought. 9 For the reasons set out below, the application is allowed.

BACKGROUND 10 Below is a brief chronology of events relevant to the proceedings. 11 On 15 April 2019, the Chief Executive of Medicare requested the appellant to undertake a review pursuant to s 86 the HIA. 12 On 30 April 2019, the appellant decided to commence a Review under s 88A of the HIA. 13 On 21 May 2019, the appellant issued the Notice to Produce under s 88B of the HIA. 14 On 24 July 2019, the respondent sought judicial review of the referral to the appellant under s 86 of the HIA and of the appellant's decision to conduct the Review. He did not at that stage challenge the validity of the Notice to Produce. 15 On 25 July 2019, Rangiah J ordered that the decision of the appellant to undertake a review pursuant to s 88A of the HIA be stayed until further order of the Court. 16 On 25 June 2021, Rangiah J dismissed the application for review; Yoong 1. 17 On 29 September 2021, the appellant suspended the Review for 789 days pursuant to s 94(2)-(3) of the HIA based on the period of the suspension of the Review ordered by Rangiah J plus two days based on the purported failure of the respondent to comply with the Notice to Produce. 18 On 8 November 2021, the appellant purported to disqualify Dr Yoong from receiving Medicare benefits based on his non-compliance with the Notice to Produce pursuant to s 106ZPM of the HIA (Disqualification). 19 On 16 November 2021, the respondent commenced proceedings challenging the Notice to Produce (Notice to Produce proceeding) and also challenging the Disqualification. 20 On 19 November 2021, Collier J made orders suspending the Review pending determination of the Notice to Produce proceeding. 21 On 29 June and 25 July 2022, Perry J heard the Notice to Produce proceeding. 22 On 29 September 2023, the appellant determined under s 94(2) that the Review period be extended by 678 days. 23 On 6 October 2023, Perry J delivered Yoong 3 and found that: (1) the Notice to Produce was invalid ([104]); and (2) the Disqualification under s 106ZPM(2) was invalid ([182]). 24 On 31 October 2023, Perry J made a declaration that the Notice to Produce was invalid and ordered that upon the appellant undertaking, unless orders 1 and 2 made on 31 October 2023 are set aside, in short, not to access or review the documents produced, the review period be suspended until 30 November 2023. 25 On 3 November 2023, the appellant filed a Notice of Appeal. 26 On 13 November 2023, the present interlocutory application was filed.

RELEVANT STATUTORY PROVISIONS 27 The Professional Services Review Scheme is established in Part VAA of the HIA. Its object is to protect the integrity of the Commonwealth medical benefits program, and in doing so protect patients and the community in general from the risks associated with inappropriate practice and also protect the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice; s 79A; Barnes v Director of Professional Services Review [2023] FCA 129 (Burley J) at [5]. 28 Section 86(1) of the Act provides (notes omitted): (1) Subject to subsection (1A), the Chief Executive Medicare may, in writing, request the Director to review the provision of services by a person during the period specified in the request if it appears to the Chief Executive Medicare that there is a possibility that the person may have: (a) provided services during the period; and (b) engaged in inappropriate practice in the provision of the services. 29 Section 88 of the Act provides: Director may request further information (1) If the Chief Executive Medicare requests the Director to review the provision of services by a person, the Director may request the Chief Executive Medicare to provide further information in relation to the provision of those services. Note: The Director may request further information from the Chief Executive Medicare either for the purpose of making a decision whether to undertake a review or for the purposes of a review. (2) A request under subsection (1) may relate to any or all of the services provided by the person during the review period. (3) The Chief Executive Medicare must comply with a request under subsection (1) so far as he or she is capable of doing so. 30 Section 88A of the Act provides: Director must decide whether to review (1) If the Chief Executive Medicare requests the Director to review the provision of services by a person, the Director must, within 1 month after receiving the request, decide whether or not to undertake the review. (2) The Director must decide to undertake the review if, after considering the request and any other relevant information the Director has obtained, it appears to the Director that there is a possibility that the person has engaged in inappropriate practice in providing services during the review period. (3) If the Director does not make a decision under subsection (1) within the period of 1 month specified in that subsection, the Director is taken to have decided, at the end of that period, to undertake the review. (4) The Director must give written notice of the decision to: (a) the person; and (b) the Chief Executive Medicare. (5) The notice must be given within 7 days after the decision is made but failure to give the notice within that time does not affect the validity of the decision. (6) If the Director decides to undertake the review, the notice given to the person under review under paragraph (4)(a) must set out the terms of section 89B. (7) Failure to comply with subsection (6) does not affect the validity of the decision. (8) If the Director decides not to undertake the review, the notice given to the Chief Executive Medicare under paragraph (4)(b) must include the grounds for the decision. 31 Section 88B of the Act provides: Scope of Director's review If the Director decides to undertake the review, he or she: (a) may review any or all of the services provided by the person under review during the review period; and (b) may undertake the review in such manner as he or she thinks appropriate; and (c) in undertaking the review, is not limited by the reasons included in the request under subsection 86(3). 32 Section 89A provides that: (1) If the Director thinks that the material before him or her indicates that the person under review may, in relation to services provided by the person during the review period, have committed a relevant offence or a relevant civil contravention within the meaning of section 124B, or a relevant dental benefits offence, the Director may send the material or a copy of the material to the Chief Executive Medicare together with a statement of the matters that he or she thinks may have constituted the offence or contravention. (2) If the Director has acted under subsection (1), he or she may: (a) continue with the review; or (b) suspend the review for such period as he or she thinks appropriate. 33 Section 89B(2) of the Act provides: Power of Director to require the production of documents or the giving of information … (2) For the purpose of undertaking a review, the Director may, by written notice given to: (a) the person under review; or (b) any other person whom the Director believes to have possession, custody or control of, or to be able to obtain, relevant documents; require the person to whom the notice is given: (c) to produce to the Director, or to a person nominated by the Director, such relevant documents as are referred to in the notice; and (d) if the person does not have possession, custody or control of, and cannot obtain, any of those documents: (i) to inform the Director or a person nominated by the Director of that fact; and (ii) if the person knows, or can readily find out, the name and address of a person who has possession, custody or control of, or can obtain, any of the documents - to give that name and address to the Director or to a person nominated by the Director. 34 Section 89C of the Act provides: 89C Director's action following review (1) Following a review of the provision of services by a person, the Director must either: (a) make a decision under section 91 to take no further action in relation to the review; or (b) give the person under review: (i) a written report setting out the reasons why the Director has not made a decision under section 91; and (ii) an invitation to make written submissions to the Director, within 1 month, about the action the Director should take in relation to the review. (2) If the Director gives the person under review a report and invitation under paragraph (1)(b), the Director must, as soon as practicable after taking into account any submissions made as mentioned in subparagraph (1)(b)(ii): (a) decide to take no further action in relation to the review in accordance with section 91; or (b) enter into an agreement with the person under review under section 92; or (c) make a referral to a Committee under section 93. 35 Section 91(1) of the Act provides: Decision to take no further action (1) The Director may decide to take no further action in relation to a review if he or she is satisfied that: (a) there are insufficient grounds on which a Committee could reasonably find that the person under review has engaged in inappropriate practice in providing services during the review period; or (b) circumstances exist that would make a proper investigation by a Committee impossible. 36 Section 94 provides: Director taken to have made a decision after 12 months (1) If: (a) the Director decides to review the provision of services by a person; and (b) before the end of the period of 12 months after making the decision, the Director has not: (i) made a decision under section 91 to take no further action in relation to the review; or (ii) entered into an agreement with the person under section 92 (whether or not the agreement has been ratified by the Determining Authority); or (iii) referred the provision of one or more of the services to a Committee; then, the Director is taken to have made a decision at the end of that period to take no further action in relation to the review. Note: Sections 92A and 106R set out time limits for the ratification of agreements made under section 92. (2) If the review is suspended: (a) under paragraph 89A(2)(b); or (b) because of an injunction or other court order; the Director may determine, in writing, that the period of 12 months referred to in subsection (1) is extended by a specified period that is not longer than the period of the suspension. (3) If a notice is given under subsection 89B(2) to the person under review, or to another person, and the person concerned fails to comply with a requirement of the notice, the Director may determine, in writing, that the period of 12 months referred to in subsection (1) is extended by a specified period that is not longer than the period during which the person fails to comply with the requirement. (4) This section does not apply in relation to a review undertaken because of section 89. 37 Section 106ZPM provides: (1) If: (a) a person under review is required to produce a document or give information by a notice given under subsection 89B(2) or 105A(2); and (b) the person intentionally refuses or fails to comply with the requirement within the period specified in the notice; a medicare benefit or dental benefit is not payable in respect of a service rendered or initiated by the person under review, by a person employed or otherwise engaged by the person under review, or by a person employed or otherwise engaged by a body corporate of which the person under review is an officer, at a time after the end of the period specified in the notice and before the document is produced or the information is given, as the case may be. (2) If the Director considers that subsection (1) prevents medicare benefits and dental benefits from being payable in respect of services rendered or initiated by the person under review, the Director must give a notice to that effect to the person. (3) The Director must give a copy of a notice under subsection (2) to the Chief Executive Medicare. (4) If: (a) subsection (1) prevents medicare benefits and dental benefits from being payable in respect of services rendered or initiated by the person under review at a time; and (b) the Director gave a notice under subsection (2) to the person before that time; the person is taken to be: (c) fully disqualified at that time for the purposes of section 19D; …

THE SUBMISSIONS 38 The appellant submits that the Court has jurisdiction to make orders to preserve the subject matter of the appeal proceedings which should be exercised in accordance with the usual principles applicable to the grant of interlocutory relief, namely that there is a serious question to be tried, the applicant would suffer irreparable injury for which damage will not be adequate compensation unless the injunction is granted and the balance of convenience favours the grant of the injunction, citing CIP Group Pty Ltd v So (No 3) [2023] FCA 518 at [28], [31] (Derrington J). 39 The appellant submits that the effect of Yoong 3 was to declare the Notice to Produce invalid and to prevent the appellant from having regard to records produced by Dr Yoong pursuant to that notice or to obtain any further records sought by it. The time for the conduct of the Review under s 94 of the HIA will end on 3 May 2024. Unless it is suspended, the appellant will not have an opportunity properly to consider and take the steps required to complete it before that date, with the consequence that the appeal will be rendered nugatory. If the appeal is successful, the appellant's access to the records already produced by the respondent and his ability to insist upon the respondent's full compliance with the notice will be lost, because after 3 May 2024 the review will be deemed by s 94 to be at an end. 40 The appellant submits that unlike private litigation, in the present case the Commonwealth and the public interest will be prejudiced if the Review is determined by default. On the other hand, continuing an already extant suspension does not materially prejudice Dr Yoong as he will remain subject to the Review, which is the current status quo. Further, damages in favour of the appellant would not remedy the prejudice if the Review is automatically brought to an end without proper consideration of all of the clinical records which the appellant contends he is entitled to receive. The appellant submits that the Notice of Appeal discloses a serious question to be tried. 41 Dr Yoong submits in answer that the statutory purpose of s 94 is to define the period during which the appellant is to conduct the review of the provision of services by a practitioner. That 12-month period reflects Parliament's intention that reasonable expedition will attend the PSR's processes, citing Norouzi v Director of Professional Services review Agency [2020] FCA 1524 at [32] (Logan J). 42 Dr Yoong submits that, having succeeded in Yoong 3, he should not be put into a position whereby that decision is considered to be purely provisional where the statutory purpose of s 94, and the scheme of the review process in Part VAA of the HIA, is to encourage reasonable expedition of the review process. He submits that the exceptions in s 94(2) and (3) contemplate the possibility that the conduct of a review may be suspended "because of events which are beyond the Director's control" and not as a legislative sanction for the Director to seek orders restraining his own conduct of a review or suspending his review where there is nothing external to the director preventing the conduct of the review, citing Yoong 2 at [46], [49]. Section 94(2)(b) should not be construed to insulate the appellant from the effects of a successful challenge to his decision. 43 Dr Yoong submits that a suspension is not necessary for the appellant to fulfil his statutory functions and the appellant has filed no evidence to identify what steps he has taken in the 155 days that he was free of any restraint or other order to conduct the review. Most of the delay in progressing the Review was caused by the appellant's decision to issue an invalid Notice to Produce. 44 Dr Yoong submits that a refusal to grant the suspension sought would not render the appeal nugatory, because there is nonetheless a public interest in determining the validity of the Notice to Produce, which was in a standard form, adopted by the appellant, and accordingly its validity goes beyond the present controversy. Furthermore, he submits that the appellant will not suffer prejudice merely because a statutory time limit expires in circumstances where the appellant ought to have completed the Review within the 12 months allowed.

CONSIDERATION 45 There is no doubt that in the absence of a suspension, the appellant stands at risk of a decision being made by default pursuant to s 94(1) of the HIA. Section 94(1) imposes a strict time limit of 12 months after making the decision to conduct a review, following which the appellant is taken to have made a decision to take no further action in relation to the Review. As the chronology set out in section 2 above indicates, the present proceedings have a long history. The Review commenced in April 2019 and the Notice to Produce was issued on 21 May 2019. Since then, the proceedings leading to Yoong 1 were heard during the pandemic months of December 2020 and January 2021 and determined in June 2021. According to calculations made by Mr Shelley, the suspension ordered by Rangiah J lasted for some 789 days. During that period, the appellant was unable to take steps in the conduct of the review. Shortly thereafter, on 15 November 2021, Dr Yoong commenced proceedings to challenge the Notice to Produce and the Disqualification. As a result, on 19 November 2021, Collier J made an order suspending the appellant's review of services until determination of the proceedings, which occurred on 6 October 2023. That led to a further period of 686 days during which the appellant was unable to take steps in the review. 46 It is apparent that these events have precluded a more expeditious determination of the Review. To the extent that time was required in order for the curial process to be completed, it cannot be said that the delay was the fault of the appellant or Dr Yoong. 47 Section 94(2)(b) contemplates suspension of a review by Court order. As Collier J noted in Yoong 2 at [46], this creates the critical legislative machinery permitting the rights of the Director to remain intact while a challenge to a decision of the Director takes place. It has been enacted for the benefit of the Director and to facilitate the performance of the statutory functions and powers of the Director in circumstances of a challenge to a review decision; Yoong 2 at [49]. 48 Dr Yoong in his submissions contends that there is a regrettable absence of evidence from the appellant, explaining what steps were taken during the 155 days of the Review period that have been expended thus far. However, as the decision in Yoong 3 records at [33] to [58], that time was taken up with disputes between the parties concerning the production of documents in response to the Notice to Produce. I do not accept that further evidence was necessary to explain how it is that the appellant has not completed the steps required to complete the Review in the time available. It is apparent that the appellant sought, by the production of documents, information that he considered was necessary for the conduct of his enquiries. 49 Under s 89C(1), the Director must either make a decision to take no further action in relation to the review or give the person under review a written report setting out why he has not made a decision to take no further action and an invitation to make written submissions. The scheme of the Part VAA of the HIA plainly contemplates that the Director undertake some investigation in order to ascertain whether the matters that prompted the Review require further action to take place. Section 88B provides for a broad scope for the Review. Section 89B(2) confers powers upon the Director to require the production of documents. The importance of that power is reinforced by the coercive power conferred by s 106ZPM which operates of its own force (upon the giving of notice by the Director) to suspend payments for services rendered through Medicare for a medical practitioner and their patients pending compliance with the Notice to Produce. 50 These matters indicate that the process of conducting a review will involve the Director having an opportunity to investigate, consider and report, including by having regard to documents produced by the medical practitioner. The case advanced by the appellant here is that by reason of the decision in Yoong 3, the Notice to Produce was set aside. If it is reinstated on appeal, he will continue his investigations to the point where he can make a decision under s 89C. I accept that the materials demonstrate that the 155 days of the 365 potential days for the Review to be completed have not been sufficient to complete the necessary investigations. 51 Relatedly, Dr Yoong submits that the legislative choice made in s 94 is that, absent special circumstances "beyond the Director's control", the review must be completed in 12 months. He submits that the Director may only extend the 12-month period where the Director is unable to proceed with the review because of matters external to the Director. 52 In my view, the evident purpose of s 94(1) is to provide that the Director must in fact make a decision within the 12-month period to avoid the future conduct of the matter being taken out of the Director's hands: National Home Doctor Service Pty Ltd v Director of Professional Services Review [2020] FCA 1016; 276 FCR 382 at [57] (Griffiths J). This has the effect of promoting timely decision making. However, s 94(1) must be read with s 94(2) which contemplates a process for the suspension of the review under two circumstances, one of which, s 94(2)(b), is because of an injunction or other court order that suspends the review. If such an order is made, the Director may determine in writing that the 12-month period is suspended by an equivalent or lesser time. Those provisions do not indicate that the Review may be suspended under s 94(2)(b) only because of events beyond the Director's control. Rather, the question of the appropriateness of the suspension of the Review is left to the Court, having regard to the circumstances of the particular case and balancing the policy and purposes of Part VAA of the HIA. I do not understand the reasons in National Home Doctor Service at [58] to suggest otherwise. 53 There is no dispute that the Notice of Appeal raises a prima facie case that the decision in Yoong 3 was incorrect. Dr Yoong submits that the prospects of the appeal are "tepid". Whatever adjective is used, having regard to the arguments put by counsel for the appellant in the course of the hearing, in my view the grounds sit comfortably in the realm of a prima facie case. It is unnecessary for me to address the merits of the appeal beyond that point. 54 I am conscious that the period since the commencement of the Review is very lengthy. I also take into account the likelihood that in further suspending the Review, Dr Yoong will suffer a personal and professional toll. I also take into account the fact that Dr Yoong has succeeded in his argument in Yoong 3 and that the Court has set the Notice to Produce aside, and this balances in his favour and represents a change in circumstances beyond that under consideration by Collier J in Yoong 2. However, set against these matters, one must take into account the policy and purposes of Part VAA of the HIA. The object is to protect the integrity of the Commonwealth medical benefits program. The Notice of Appeal has been recently filed and there is no certainty that the matter will be listed in the February 2024 Full Court sittings. Unless suspended, the period for the conduct of the Review will continue to count down. In the present case, all of the days of the suspension of the Review have been taken up by the conduct of legal proceedings challenging decisions of the Director. It cannot be said that the Director has been dilatory in the conduct of the Review, rather the suspension of the Review has been to enable the parties to test the legality of decisions made. If a further suspension of the Review is not granted, in my view it is probable that, in the event that the appeal succeeds, the appellant will not be in a position to fulfil his statutory obligation to complete the Review within 12 months. 55 Taken together, these matters persuade me that it is appropriate to order that the appellant's review of professional services of the respondent commenced on 30 April 2019 be suspended until final determination of the proceedings.

5.1 Addendum 56 After hearing argument and reaching the conclusion set out above, counsel for the appellant notified my chambers that the Health Insurance Amendment (Professional Services Review Scheme No 2) Bill 2023 (Cth) (Amendment Act) received Royal Assent on 24 November 2023 (the Friday before the hearing on Monday 27 November 2023). 57 The Amendment Act amends s 94 by adding a new subsection 94(2A) in the following terms: If: (a) during the period of 12 months referred to in subsection (1), or that period as extended, court proceedings are commenced in relation to the review; and (b) subsection (2) does not apply to the review; the Director may determine, in writing, that the period of 12 months referred to in subsection (1), or that period as extended, is extended, or further extended, by a specified period that is not longer than the period for which the proceedings are on foot. 58 I invited counsel to provide a short, written submission as to the relevance of the Amendment Act to the proceedings. The appellant submitted that for the duration of any suspension ordered by the Court, s 94(2A) has no effect because, by operation of 94(2A)(b), subsection (2) continues to apply to the review. However, if the appellant's application is refused, then s 94(2A) would apply such that the power of the Director to extend the period in s 94(1) would be enlivened. Dr Yoong submits that the question of the construction of the Amendment Act and new s 94(2A) should not be the subject of debate or determination in this application. He submits that if the Court declines to grant the suspension of the review sought, it is undesirable for the Court to construe the new provision on a hypothetical, without having the benefit of further argument. 59 I have expressed the view that the orders sought in the interlocutory application should be granted. It appears to me that the introduction of s 94(2A) tends to reinforce the view that I have expressed, insofar as it indicates an intention on the part of Parliament to ensure that a suspension of a review is appropriate in circumstances where court proceedings are commenced in relation to that review. Prior to the Amendment Act, it was left to the Court to determine whether such a suspension should be permitted. After the Amendment Act, leaving aside the exception in s 94(2A)(b), the matter of whether an extension of the 12 month period is apparently left in the hands of the Director. 60 Nevertheless, it is in the interests of certainty that I determine the outcome of the application, notwithstanding the introduction of s 94(2A).

5.2 Disposition 61 I will order that the appellant's review of services of the respondent commenced on 30 April 2019 is suspended until the final determination of this proceeding. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Burley.

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