Draft and final reports
143 The draft report comprises 142 pages including 30 pages of reasons for the Committee's preliminary findings and over 100 pages of findings about the sample cases.
144 The final report comprises 151 pages including 39 pages of reasons for the Committee's findings and over 100 pages of findings about the sample cases.
145 Dr Hamor first referred to comments that appeared in both the draft and final reports in the table concerning sample case 17 under the heading "Inadequate clinical input". Dr Hamor acknowledged the Committee's observation that Dr Hamor regarded it as unconscionable to perform tests and sell treatment equipment. The comments about which Dr Hamor complained are contained in the following extract from the draft and final reports:
Given the complex comorbid conditions and Dr Hamor's failure to obtain a proper history, the content of Dr Hamor's report is cursory and very unsatisfactory. While Dr Hamor stated in his letter to Dr Siraparapu that he had explained the ramifications to the patient, he made no mention of what those ramifications were in his report or letter to the practitioner.
While in his report he stated that a follow up review with a sleep physician may be warranted in cases where symptoms do not improve or the patient's compliance is poor, this was an inadequate recommendation for this patient, where it should have been more firmly indicated that she be referred to a specialist.
As CPAP treatment was recommended by Dr Hamor, the report to the referring practitioner and the discussion with the patient in the subsequent consultation and the follow-up letter to the practitioner should have indicated the available options for alternative suppliers of such treatment. There is a clear conflict of interest in the same organisation, for whom Dr Hamor worked, in providing the diagnostic test and then selling the treatment device.
In the hearing, in response to that concern, Dr Hamor said:
"…the GP has the right to refer the patient to any diagnostic centre they wish. Whether that's a centre that solely provides home sleep studies or whether it's to a sleep laboratory or whether it's a sleep physician in the first instance it's up to the GP to decide what they do. Once the GP has made that referral the patient has some kind of a relationship with that person. Now, if that GP had referred the patient to some other centre who also performed home sleep studies and sells CPAP equipment exactly the same format would have occurred. What I think is more relevant and it's totally outside of the scope of this meeting or this jurisdiction is the fact that certain people, amongst our colleagues, not only diagnose but sell. And that is unconscionable, in my view, but the fact that a commercial organisation which organises a diagnostic test and provides the equipment is totally fair and reasonable - number one - and number two, the patient has the choice of going somewhere else to purchase their equipment. No one twists their arm."
Dr Hamor then said, in relation to Healthy Sleep Solutions:
"Well, what I do know is they're set up to do a service for which they receive a very small amount of remuneration in terms of doing a diagnostic test… But their major remuneration comes from selling machines… That is a business."
In these comments Dr Hamor indicated that he regarded it unconscionable that some sleep physicians practitioners perform tests and also sell the treatment equipment following a positive diagnosis resulting from the test.
The Committee is of the view that Dr Hamor is effectively working as an agent for Healthy Sleep Solutions in its business model of providing both a test and then promoting their CPAP equipment and services. The general body of respiratory and sleep physicians would expect the patient to be given truly objective and independent advice regarding the available treatment and equipment choices, which is not what Dr Hamor or the technicians who performed aspects of the service on his behalf did.
Dr Hamor was not present at any time while the technician interacted with the patients on his behalf in relation to the MBS item 12250 service, and so Dr Hamor would not know whether or not the technician, who was the owner of the Healthy Sleep Solutions franchise, might seek to influence the patient in relation to treatment options. While Dr Hamor regarded it as unconscionable for a sleep physician to profit from the treatment provided as a consequence of a diagnostic test that practitioner had performed, the technician performs part of the service on Dr Hamor's behalf and so is putting Dr Hamor in essentially the same position as a sleep physician who Dr Hamor regards as acting unconscionably. This also relates to Dr Hamor's failure to adequately supervise the technician.
146 Dr Hamor submitted:
(1) There was no basis for the Committee's finding that Dr Hamor was working as an agent for HSS.
(2) There was no evidence that HSS promoted CPAP equipment to patients who had undergone a diagnostic test.
(3) Dr Hamor performed a medical service which was billed in his name and, consistently with accepted medical practice, technicians and scorers performed part of that service.
(4) As the Committee accepted, Dr Hamor was performing a diagnostic test.
(5) The unchallenged evidence was that, in his report to the GP, Dr Hamor might make recommendations as to treatment options, such as a CPAP machine, but he did not otherwise deal with "that side of things at all".
(6) Upon receipt of a report from Dr Hamor making such a recommendation, the GP did not simply provide a CPAP machine without further expert involvement.
(7) There was no basis for the Committee to conclude that Dr Hamor did not give his patients "truly objective and independent advice". In particular, the fact that Dr Hamor did not advise patients that they should look to providers other than HSS to sell them CPAP machines did not provide a basis for this conclusion.
(8) There was no evidence that the technicians provided the patients with any advice at all, let alone advice that was neither objective nor independent. If, following the provision of a diagnostic test to the GP, a patient visited HSS to purchase a CPAP machine, it is doubtful whether the technician would be ethically required to advise the patient of other provider options.
(9) The Committee's conclusion that Dr Hamor was an agent for HSS is suggestive of a general mistrust of doctors providing home sleep studies in association with commercial operators.
147 As to submission (1), the Commonwealth did not dispute that there was no basis for the Committee's preliminary finding (and subsequent final finding) that Dr Hamor was effectively working as an agent for HSS. A central element of the legal concept of "agency" is the principal's conferral of authority on the agent (typically to affect the legal relationship between the principal and a third party). Here, there is no evidence that HSS authorised Dr Hamor to act on HSS's behalf to create or affect legal relationships between HSS and patients. A significant aspect of an agency relationship is that it is fiduciary, so that the agent owes special duties to the principal. Thus, the finding that Dr Hamor was HSS's agent tends to imply that Dr Hamor owed duties to HSS that did or might conflict with his duties to his patients. In my view, a fair-minded lay person would have understood the Committee to be making a provisional, and a final, finding that Dr Hamor owed conflicting duties to his patients and HSS because he effectively worked for HSS.
148 This finding involved an error on the part of the Committee. However, the evidence was that the relationship between Dr Hamor and HSS was a very close one and included suggestions that Dr Hamor worked for HSS. For example, in a letter dated 11 March 2016, Dr Hamor's lawyers stated relevantly:
During the Review Period, Dr Hamor reported on home sleep studies which were performed under his supervision for an organisation named 'Healthy Sleep Solutions'.
149 Further, at the hearing, Dr Hamor gave the following evidence to the effect that he was paid for his services by HSS:
DR NAPIER: So when you are billed - when you bill, head office does all of the billing with Medicare and the interaction, and then they pay you?
DR HAMOR: A very, very small sum of money.
DR NAPIER: So there is a facility fee or something that they take out of the billings.
DR HAMOR: They have to pay their technicians. I presume. They have to pay their staff, I presume. They have to pay for whatever ---
DR NAPIER: So they give you a percentage of whatever the billings are?
DR HAMOR: They give me a moiety of the total Medicare sum.
DR NAPIER: That moiety, how is that determine?
DR HAMOR: They determine it.
DR NAPIER: So do they determine it on the billings or do they determine it on - because you're a consultant, they pay you're a consultancy fee?
DR HAMOR: No. They say, "This is what we're prepared to pay you for doing your job."
DR NAPIER: The job on X-number of studies or ---
DR HAMOR: It doesn't matter whether it's one or a thousand.
DR NAPIER: Right. So it's more like a consultancy fee where they're paying you to be ---
MR …….. : Percentage per service.
DR HAMOR: Well, maybe it's a percentage per service, yes.
150 A sample letter from Dr Hamor to referring GPs stated relevantly:
I work in conjunction with Healthy Sleep Solutions, a highly regarded, Australia-wide organisation to assist with patient care throughout this process…
The team at Healthy Sleep Solutions is expert at explaining the diagnostic procedure to patients and helping them understand how to fit the study apparatus.
Healthy Sleep Solutions can also provide professional access to treatment for sleep apnoea should this be the finding of any sleep study conducted for your patients keeping you, as the primary care physician, involved every step of the way.
151 Other matters that indicated Dr Hamor's reliance on HSS, and his provision of services within a framework that involved HSS's participation, included the following:
(1) Dr Hamor said that he saw patients at Wollongong at a clinic which was a franchise of HSS. He worked there once a month. Dr Hamor said "So my practice is, I suppose, an adjunct to the clinic".
(2) The Committee's unchallenged finding that Dr Hamor said, in relation to his home sleep study referral base, that he worked with HSS, which allocated territories to him by franchisees (technicians). The technicians acquired referrals by approaching GPs. They provided the GPs with a referral pad. Dr Hamor also said that the technician received referrals from GPs.
(3) HSS provided the sleep test scorers.
(4) The technicians were trained by HSS. The Committee's unchallenged finding that Dr Hamor said that he relied on the ability of the technicians to determine the necessity of the home sleep study.
(5) Dr Hamor said that when a GP asks him to see a patient who has had a study at Wollongong, he sees the GP referral, sees the patient at Wollongong, dictates a letter, the letters are uploaded to his software in Miranda where they are typed, a copy is kept in his software, and copies go to the referring GP and to the technician who organised the clinic for him in Wollongong.
(6) The item 12250 was billed by HSS after Dr Hamor completed the report, although the service was billed in Dr Hamor's name.
152 As to submission (2), the Committee did not make a preliminary or final finding that HSS promoted CPAP equipment to patients who had undergone a diagnostic test. Rather, the Committee identified a risk that the technician might seek to influence the patient in relation to treatment options, on the basis of the opportunity for the technician to do this when interacting with the patient in Dr Hamor's absence. A fair-minded lay person would appreciate that it was relevant to consider the risks that might arise from the manner in which the relevant services were provided as part of an investigation into whether the provision of the services involved inappropriate practice.
153 The Commonwealth did not dispute submissions (3) to (6).
154 As to submission (7), the relevant finding was made in connection with a particular patient, sample case 17, in respect of whom Dr Hamor's report contained several recommendations including urgent treatment with CPAP. The finding was not simply that Dr Hamor did not give "truly objective and independent advice"; it was that he did not give "truly objective and independent advice regarding the available treatment and equipment choices". There is a proper basis for the finding, being the earlier finding that Dr Hamor's report should have indicated the available options for alternative suppliers of CPAP, in the light of Dr Hamor's close relationship with HSS.
155 The Commonwealth did not dispute submission (8). It was not fair to the technicians to make an adverse finding about their conduct when they were not the subject of the review and were not given an opportunity to address it.
156 As to submission (9), I do not accept that the Committee's finding of agency suggests a general mistrust of doctors providing home sleep studies in association with commercial operators. However, and more specifically, the findings indicate the Committee's conclusion that the relationship between Dr Hamor and HSS in provision of home sleep studies was not consistent with the best interests of the patients who received the item 12250 services.
157 Dr Hamor next referred to the Committee's response, in the final report, to his submissions alleging an apprehension of bias on the basis of the Committee members' conduct during the hearing. The relevant passage of the final report is as follows:
128. It was submitted that the Committee members' expression of concerns, during the hearing, relating to the commercial operations of Healthy Sleep Solutions indicated bias against Mr Hamor. All that the Committee members did was to express concern based on the information before it and gave Dr Hamor an opportunity to give evidence in response.
129. The inference was open to the Committee that given the circumstances as described by Dr Hamor, including minimal supervision of the technicians, who were Healthy Sleep Solutions franchise owners or employees of Healthy Sleep Solutions, it was likely they would promote the sale of their own products rather than give patients a genuine choice. Dr Hamor stated that they were acting as his proxies in performing aspects of the services. His lack of adequate supervision of the technicians left open the likelihood that they would act in their own interests or the interest of their employer in giving advice to Dr Hamor's patients in the course of assisting Dr Hamor to render the service or the sale of individual CPAP devices, his part in the Healthy Sleep Solutions operations was integral to their business model, through which he benefited by being allocated work. If he had better supervised the technicians in their interaction with his patients, he might have been able to minimise such a conflict of interest, but he did not do so. This submission demonstrates that Dr Hamor continues to lack insight regarding this concern.
158 Dr Hamor submitted that this passage might indicate to a fair-minded lay person that the Committee held the view that, by simply providing services in association with HSS, Dr Hamor engaged in inappropriate practice. The passage appears in the context of the Committee's lengthy account of matters including the process by which Dr Hamor provided the relevant services, Dr Hamor's technical knowledge, the terms of item 12250, the issue of whether the sleep physician was required to confirm the necessity for a home sleep study and whether Dr Hamor was responsible for supervision of the technician and scorers in the tasks they performed in connection with rendering the item 12250 service. The context also includes the appendix to the report, which contains a detailed analysis of individual randomly selected services. In that context, and having regard to the Committee's repeated references to its finding that Dr Hamor did not adequately supervise the technicians who performed parts of the item 12250 services, it is not tenable to suggest that a fair-minded lay person might form the view that the Committee held such a simplistic opinion.
159 Nor do I accept that a fair-minded lay person might have concluded that the Committee's finding about "minimal supervision" reflected a predisposition against commercial providers of home sleep studies. Dr Hamor did not suggest that the finding was not open on the evidence. The finding was squarely addressed to the particular circumstances of the services provided by Dr Hamor.
160 The complaint about the Committee's finding that, with better supervision, Dr Hamor might have been able to minimise a conflict of interest goes nowhere. It is no answer to claim, as Dr Hamor does, that he could not have supervised the technicians in the relevant circumstances. It was a matter for Dr Hamor to ensure that, to the extent the services were provided by technicians, they were performed under Dr Hamor's supervision in accordance with accepted medical practice, as required by cl 1.2.8, so that item 12250 applied. The Committee was not required to explain how Dr Hamor could have met this requirement.
161 Dr Hamor contended that a lay person would doubt the Committee's claim that it merely expressed concerns during the hearing, and gave Dr Hamor an opportunity to respond, because the Committee did not engage with Dr Hamor's evidence or submissions on the issue. I do not accept that the Committee failed to engage with Dr Hamor's submissions. To the contrary, a fair-minded lay person would observe that the Committee dealt with the submissions by identifying their substance and rejecting them on the basis that its statements at the hearing were no more than expressions of concern which it was giving Dr Hamor an opportunity to address.
162 Dr Hamor also submitted that the Committee failed to take account of evidence that Dr Hamor did not make recommendations for treatment until after the item 12250 service was performed, in finding that there was a likelihood that technicians would give self-interested advice to patients whilst assisting Dr Hamor to perform the service. The relevant likelihood is set out at para 129 of the final report (at [157] above). A fair-minded lay person would not consider that the Committee's failure to advert to that timeline was indicative of a possible bias. The finding is consistent with Dr Hamor's reference to HSS's supply of treatments in his sample letter referred to at [150] above.