Summary of the Final Determination as set out by the Authority
28 The reasoning of the Authority in its Final Determination was set out as follows.
29 The Authority noted that it had relied upon and carefully considered the contents of the Committee's Final Report which it noted was very detailed and well-reasoned in relation to the findings of inappropriate practice (at [8] and [14]).
30 The Authority noted that: the applicant rendered the highest volume of item 12250 services of all active Medicare providers in Australia during the review period, in that the applicant rendered item 12250 services on 6,875 occasions to 6,875 patients; the Committee considered that this very high volume may have been a reason why the applicant's reports were not completed to an acceptable standard, including the failure to adequately review that raw sleep study data; and that as noted by the Committee, the applicant's provision of such a high volume of services is likely to have been a product of his conscious decision to change the nature of his practice, which the applicant considered to be a convenient step towards his retirement (at [15]).
31 The Authority also noted that the Committee identified other significant issues in relation to the applicant's provision of item 12250 services including that it was the applicant's practice to not see a referral from the general practitioner or the patient's history until after the investigation had been carried out and the raw sleep data had been scored, and the Committee's finding that significant aspects of each of the item 12250 services had been rendered on behalf of the applicant by technicians and scorers. The Authority indicated its agreement with the Committee's view that this was permissible under the Act but expressed its view that it is also essential that technicians and scorers are adequately supervised by the rendering practitioner, and its "serious concern" at the Committee's finding that the applicant had failed to adequately supervise the technicians and the scorers in relation to each service. The Authority noted that in a substantial proportion of the services examined, the Committee was satisfied that there was an inadequate system of supervision in place (at [16]).
32 The Authority also noted: the Committee's concerns about the applicant's technical knowledge in relation to the provision of item 12250 services; the Committee's statement that the applicant was not at all familiar with key aspects of the data that he was reviewing; the Committee's view that the applicant did not have an adequate appreciation and understanding of the technical elements of the equipment and the nature of the data to enable him to report adequately or sufficiently on any of the services; and the Committee's finding that this adversely affected the content and quality of the applicant's reports, with the consequence that another practitioner seeking to provide follow-up services for a patient would not have been able to properly understand the basis on which the applicant's reports were written (at [17]).
33 The Authority then stated (at [18]):
Having regard to the Committee's findings of inappropriate practice and the extensive reasons for those findings, the Determining Authority is satisfied that the Committee's findings reflect a very serious degree of inappropriate practice.
(emphasis added)
34 The Authority then addressed the submissions that the applicant had made to it.
35 The Authority noted that the applicant had set out his relevant qualifications and employment history and had made statements that: throughout his medical career, he had upheld the highest of medical standards and the traits of honesty, professionalism and humility; he had put the welfare of his patients ahead of anything else, often to the detriment of his personal life; he was 73 years of age and had relinquished most of his hospital responsibilities; and that to have been found to have engaged in inappropriate practice had been devastating for him (at [19]).
36 The Authority then noted the applicant's submission that in 2010 he had joined a core group of well-regarded respiratory and sleep physicians who were reporting sleep studies for Healthy Sleep Solutions and that, in reliance upon their expertise, the applicant understood that processes had been put in place that were extremely well-thought out, professional and complied with the requirements of item 12250. The Authority then indicated that it was clear that the Committee had formed a different view of the applicant's provision of such services during the review period and that the Authority was bound by those findings (at [20] to [21]).
37 The Authority then recorded the applicant's submissions that: the reports from eminent specialists tendered during the Committee's hearing process had not properly been considered; the reality of a home sleep study performed in accordance with item 12250 is that it is a sleep study to confirm obstructive sleep apnoea and is akin to a radiologist reporting on a test; and that upon receipt of the Draft Determination, the applicant was "incredibly disappointed, frustrated and disillusioned by the draft findings" (at [22]). The Authority expressed the following views in response to that submission:
(1) it agreed that item 12250 is essentially a diagnostic study. However, it was apparent from the Committee's findings and the applicant's submissions in response to the Committee's Final Report that there was a divergence of views as to what is necessary to ensure that the relevant requirements are complied with; and
(2) it was "seriously concerned about [the applicant's failure] to have an adequate system of supervision in place, to help ensure that the technicians who perform a large part of the work are properly monitored" (emphasis added). At [23] to [24], the Authority continued:
… This, along with other areas of clinical input, cannot simply be 'outsourced' to non-medical practitioners. In relation to this issue, the Determining Authority agrees with the Committee's comments that 'if in the course of rendering the service, information is obtained that highlights other important clinical concerns, the Committee is of the view that the general body of respiratory and sleep physicians would expect the practitioner to refer to, and comment upon, such information in a report, and that a failure to do so would be unacceptable'.
Indeed, the Determining Authority considers that in some respects, the fact that significant parts of MBS item 12250 services can be undertaken by other staff only serves to reinforce the importance of the medical practitioner adequately supervising the arrangements. The Committee's findings are particularly troubling in light of [the applicant's] apparent lack of understanding of the technical aspects of the equipment and what he was actually reporting on.
(emphasis added)
38 The Authority then stated it was not its role to go behind the Committee's findings as to whether the applicant's conduct fell short of the standards expected of his peers. The Authority noted that the Committee had taken into account the evidence from eminent specialists upon which the applicant relied, but nevertheless found that the applicant's provision of all of the services examined was inappropriate. The Authority then stated that having reviewed the Committee's Final Report and notwithstanding the applicant's submissions, it agreed with the Committee's findings, and with the reasons for those findings. The Authority noted that, in the course of doing so, the Committee did not accept the applicant's interpretation of the MBS item descriptor (at [25]).
39 The Authority then referred to the applicant's submission that although he has significantly reduced his specialist consulting practice and hours, he believes he still has much to offer and any potential period of disqualification would have a significant effect on his patients, referring doctors and the communities in both the Sutherland Shire and various rural and regional areas (at [26]).
40 The Authority opined that there is a real need for the relevant services, particularly in rural and regional areas, and acknowledged that the letters of support, from various sleep technicians with whom the applicant has worked, indicated that in their view, he was providing a valuable and effective service, particularly through telehealth arrangements (at [26]). The Authority expressed the view that, having regard to the Committee's Final Report, which was based on a thorough examination of the applicant's practice and patient records, it was essential for patient care that the relevant services be provided appropriately in accordance with the requirements for participation in the Commonwealth Medicare benefits program (at [26] to [27]). The Authority then stated (at [27]):
Noting that [the applicant] operates as part of a broader corporate model, the Determining Authority considers that there are likely to be other providers who can render MBS item 12250 services if [the applicant] is not available to do so for a period of time. In terms of [the applicant's] practice itself, a partial disqualification from one MBS item number will not prevent him from providing other necessary services.
41 The Authority then noted the applicant's submissions that he was not in any realistic position to make a significant repayment because: he was intending to retire at 75; he was suffering from prostate cancer; he was an honest, hard-working and committed medical practitioner who had dedicated his life to medicine, teaching and caring for patients; he did not have significant assets and those which he did have are heavily encumbered, due to certain unwise financial decisions and the impact of the global financial crisis; he had reduced his involvement in his consulting practice to focus on sleep study reporting and the ensuing telehealth consultations which he was able to undertake and perform at times which suited him and his family commitments; COVID-19 had had a marked impact upon his practice and he had closed the sleep clinic he established in Sutherland Hospital in 1995; and he had received only 17 per cent of the benefits paid for the item 12250 services he had rendered during the review period (at [28]).
42 The Authority noted its agreement with the applicant's submissions that:
(1) in deciding which directions to make in relation to the Committee's Final Report, the Authority needed to have regard to the findings of inappropriate practice and was not able to go behind those findings (at [29]);
(2) it was not the Authority's role to punish any practitioner who has been found to have engaged in inappropriate practice and that in deciding upon appropriate directions, the over-arching objective is to protect the integrity of the Commonwealth Medicare benefits, dental benefits and pharmaceutical benefits programs, and in doing so to protect:
(a) patients and the community in general from the risks associated with inappropriate practice; and
(b) the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice (at [30]).
43 The Authority then noted the applicant's submission that in undertaking its task, it should adopt a common-sense approach to issues concerning "mere administrative errors which are referred to by the Committee and about which findings of inappropriate practice have been made". The Authority indicated that it agreed that it should adopt a common-sense approach, but expressed the view that having regard to the Committee's findings of inappropriate practice, and the reasons for those findings, it was not satisfied that the applicant's identified failings constituted "mere administrative errors" (at [31]). The Authority also rejected the applicant's submission that the Committee had identified "one discrete issue" (at [31]).
44 The Authority then stated (at [32]):
As outlined above, the Committee found that [the applicant] did not meet the fundamental requirements for rendering MBS item 12250 services during the review period. In the Determining Authority's view, the Committee's findings cut to the very core of the appropriate provision of these services. The MBS item descriptor acknowledges that the service can be performed without personal attendance, but puts in place additional requirements to ensure that adequate supervision by a practitioner is provided to the non-medically trained persons administering components of the service. The Determining Authority considers that there needs to be a heightened attention to detail where the medical practitioner does not see the patient. The Committee was not satisfied that [the applicant] established consistent quality assurance procedures for the data acquisition or the scoring of the raw data. This is particularly important where the testing is largely patient-driven, making it more susceptible to technical uncertainties. The proposition that [the applicant's] inadequate involvement in the provision of the services constitutes 'mere administrative errors' raises serious concerns about [the applicant's] understanding of what is required, and creates genuine risk of inappropriate practice in the future.
(emphasis added)
45 The Authority then noted the applicant's acceptance that:
(1) it would be appropriate for the Authority to impose a reprimand and counselling in relation to the Committee's findings (and expressed its view that both a reprimand and counselling were warranted in the circumstances) (at [33]); and
(2) he should be directed to make some repayment of the monies paid by the Commonwealth in respect of item 12250 services found to constitute inappropriate practice; and his submission, relying on Norouzi v The Director of the Professional Services Review Agency [2020] FCA 1524, that such an amount should be limited to 10 per cent of the total amount paid for those services (at [34]).
46 The Authority then considered three reasons provided by the applicant as to why the amount should be limited to 10 per cent of the total:
(1) the first reason was that the Committee's findings relate to administrative or technical compliance errors rather than inappropriate practice per se. The Authority reiterated its rejection of the proposition that the Committee's findings related to "mere administrative errors";
(2) the second reason was that the services were provided and a significant number of patients are likely to have benefited through the diagnosis and treatment of obstructive sleep apnoea, which in turn has led to costs savings for the Commonwealth. The Authority accepted that the applicant's provision of item 12250 services may have benefited some patients and noted that this proposition was supported by the letters from the various sleep technicians with whom the applicant had worked. However, having regard to "the serious deficiencies identified by the Committee in its Report", the Authority was not convinced that this was a persuasive factor in relation to a "potential reduction" in the amount to be repaid (at [34(b)]); and
(3) the third reason was that the applicant had received only a small proportion of the amounts paid for the services found to constitute inappropriate practice. The Authority accepted that the applicant is unlikely to have received all of the monies paid by the Commonwealth for the services found to constitute inappropriate practice (at [34(c)]). It noted ([34(c)]) that:
Nevertheless, [the applicant's] inappropriate provision of those service (sic) led to the Commonwealth's expenditure, which is directly relevant to the key objective objectives of the Scheme, as outlined above.
47 The Authority then noted the breadth of its discretion as to the directions which may be made under s 106U of the Act and its agreement with the applicant's submission that it may direct that "all, or part, or none", of the amounts paid for services found to constitute inappropriate practice be repaid. The Authority then reiterated that in deciding upon appropriate directions, it must seek to achieve the over-arching objective of protecting the integrity of the Commonwealth Medicare benefits, dental benefits and pharmaceutical benefits programs; and expressed the view that compliance by practitioners with relevant Medicare requirements was fundamental to the protection of the integrity of the Commonwealth Medicare benefits scheme (at [35] to [36]).
48 The Authority then noted that in the applicant's further submissions, provided in response to the Draft Determination, he had submitted that:
(1) the Authority had appropriately acknowledged the divergence of views in relation to the requirements of item 12250 and that the service is a diagnostic study for the purposes of determining whether a patient has obstructive sleep apnoea; and
(2) despite the Committee's disagreement with the applicant's interpretation of the item 12250 descriptor, the applicant's interpretation was one that was reasonably open to him and the applicant's view was supported by the practices of Healthy Sleep Solutions and the specialists who gave evidence on his behalf (at [37]).
49 The Authority then stated:
[The applicant] also submits that he accepts the Committee's findings, but nevertheless states that he continues to believe that his provision of the MBS item 12250 services was appropriate. It is difficult to reconcile the two positions. The Committee found that [the applicant's] provision of the MBS item 12250 services was unacceptable to the general body of consultant physicians in respiratory and sleep medicine, indicating that the Committee did not consider [the applicant's] view of what was required was reasonably open to him. Ultimately, [the applicant] indicates that he accepts that the findings were open to the Committee, but the Determining Authority considers such acceptance is heavily qualified and only goes some way towards alleviating its concerns about the risks of inappropriate practice in the future.
(emphasis added)
50 The Authority then considered the applicant's submissions as to the changes that he had made to his practice. It noted that in his original submissions, provided in response to the Committee's Final Report, the applicant submitted that in the years following the review period, he had made "substantial and appropriate" changes to his practice, demonstrating insight and acknowledging the need to improve his practice. The Authority then stated that it had carefully considered the applicant's submissions on this point, but it "was unable to identify any meaningful reference to substantial change in his practice to alleviate concerns about potential inappropriate practice in the future, apart from a reduction in his specialist consulting practice and hours" (at [39]).
51 The Authority then considered the applicant's submissions on this point made in response to the Draft Determination. At [40], the Authority stated:
In his further submissions, [the applicant] addresses this by outlining the following changes that have been made in relation to his practice, following his careful consideration of the Committee's Report:
(a) The MBS requirements for item 12250 were amended in a couple of important ways since the review period, which relate to some of the reasons for the Committee's findings of inappropriate practice and therefore lessen the risk of inappropriate practice in the future. In this regard, qualified sleep physicians are no longer required to confirm the necessity of the investigation before it takes place. In addition, the equipment now needs to be applied to the patient by a sleep technician or, if that is not possible, the patient is given instructions on how to apply the equipment by the sleep physician.
The Determining Authority has carefully considered this submission in relation to the changes to the MBS descriptor, and acknowledges that it is no longer a requirement for the sleep physician to personally assess the need for the investigation prior to it taking place. The Determining Authority also agrees that this issue did form part of the Committee's deliberations and reasons for inappropriate practice, and therefore supports a conclusion that [the applicant] is less likely to engage in inappropriate practice in the future.
The Determining Authority accepts that the relevant monitoring equipment can be applied by a sleep technician or the patient themselves if the sleep physician has given them written instructions on how to apply it. However, adequate supervision by a sleep physician remains a fundamental component of the MBS item number, as well as the 'interpretation and preparation of a permanent report by a qualified sleep medicine practitioner with personal review of raw data from the original recording of polygraphic data from the patient'. The Committee's findings of inappropriate practice, and the reasons for those findings, are clearly relevant to the current MBS requirements.
(b) [The applicant] submits that he is completely compliant with the current requirements and has also satisfied himself that Air Liquide Healthcare, which took over from Healthy Sleep Solutions in relation to the provision of the services, has modified practices to ensure such compliance. [The applicant] further submits that he continues to educate and supervise the sleep technicians and the data scorers, in part because of his involvement in the PSR process. [The applicant] has satisfied himself that those persons are appropriately qualified and there are ongoing quality assurance measures which are in place to review that aspect of the study. For example, if [the applicant] has any concerns about any possible scoring errors or possible interpretation of specific portions of the scored data, he will contact the scorers and request clarification.
These submissions contain a number of assertions as to how he currently operates in compliance with the MBS requirements, which the Determining Authority accepts. However, in the absence of supporting evidence in relation to the many of the stated changes, the Determining Authority considers that the further submissions provide limited reassurance as to the potential risks of inappropriate practice in the future. This is particularly so where [the applicant] continues to hold the view that he provided the services were provided appropriately in the review period.
52 The Authority acknowledged the applicant's statement that he had made a deliberate decision to reduce his rendering of item 12250 services since the review period. It also noted the Committee's comments concerning the applicant's reasons for previously increasing the level of his rendering of such services (at [41]).
53 The Authority noted the applicant's preparedness to accept a reprimand and counselling in relation to the Committee's findings of inappropriate practice; and his submission that the potential repayment and partial disqualification directions were unnecessary and would be punitive (at [42]).
54 The Authority then noted the applicant's submission that a number of his patients benefited from the investigation. In this regard, the Authority noted that the applicant had provided a copy of documents from two patients to support his submission; and the Authority reiterated its acceptance that the applicant's provision of the item 12250 services had benefited some patients (at [42]).
55 The Authority also noted the applicant's submission that full repayment of the monies expended on the services found to have constituted inappropriate practice would represent a "windfall gain" to the Commonwealth, because services were provided to the benefit of patients. In support of this submission, the applicant had deployed the following analogy:
A general practitioner may request a sleep study to diagnose OSA [obstructive sleep apnoea] so that he or she might then assist the patient with treatment of that. Similarly, a general practitioner may request a radiologist to perform a CT scan of a patient's lumbar spine so that he or she may assist the patient with treatment of any identified pathology. In those circumstances, the general practitioner is simply requesting a diagnostic study to assist with patient care and management.
56 In answer to this submission the Authority stated at [43] to [46]:
[43] … The Determining Authority rejects this proposition. In order for monies to be payable, it is necessary that they be rendered appropriately. While mitigating factors can lead to a reduction in the amount repayable, the Determining Authority is not satisfied that [the applicant's] further submissions would justify any reduction in this case.
[44] In particular, the Determining Authority considers that the analogy adopted by [the applicant] in his further submissions is not applicable to the provision of MBS item 12250 services. As noted above, the Determining Authority accepts that the investigation is a diagnostic study. However, when a general practitioner refers a patient to a radiologist, the patient will come back to the GP for further management. The difference with a sleep physician is that the ongoing treatment is for the sleep physician to manage, including recommendations, on the basis that it a very specialised area. The referring doctor relies on the sleep physician for appropriate treatment and management and it is essential that the investigation leading to the relevant recommendations is carried out appropriately, including through adequate supervision.
[45] The Determining Authority acknowledges that [the applicant] did not personally receive all of the monies paid for the services found to constitute inappropriate practice. This is not uncommon, particularly where practitioners operate within a corporate structure. Nevertheless, the monies were incurred. The Determining Authority also accepts that a substantial repayment would have a significant impact on his finances. The Determining Authority is not persuaded that [the applicant's] possible bankruptcy, which he suggests would lead to 'very little by way of prepayment of benefits', is a compelling reason not to seek an appropriate amount. It is a matter for [the applicant] to discuss potential repayment options with the Department of Health.
[46] For the reasons outlined above, the Committee identified significant deficiencies in [the applicant's] system of work, including a distinct lack of adequate supervision and understanding of the services performed. Whilst the Determining Authority is always open to directing a partial repayment in appropriate circumstances, the Determining Authority is not satisfied that [the applicant] has provided compelling reasons in support of a reduction in the amount that should be repaid in this case. Having regard to [the applicant's] further submissions, the Determining Authority accepts that a number of changes have been made to the MBS item descriptor and [the applicant's] practice since the review period, but they do not go to the reasons for [the applicant's] non-compliance in relation to the services found to constitute inappropriate practice. The Determining Authority is concerned that any reduction on the amount potentially repayable will not sufficiently deter [the applicant], and other practitioners, from engaging in inappropriate practice in the future.
57 The Authority then set out the repayment direction. It noted that the amount of $1,959,718.75 (being the full amount of the Medicare benefits that were paid for the item 12250 services in connection with which the applicant had been found to have engaged in inappropriate practice) was significant but found that this amount was "a product of the Committee's findings of inappropriate practice across all of the services examined, and reflected that [the applicant] was the highest biller of MBS 12250 services during the review period". The Authority then reiterated its rejection of the proposition that this decision would create a "windfall gain" for the Commonwealth, "noting that the objective of the PSR scheme is to maintain the integrity of the Medicare system and in doing so protecting the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice". The Authority noted that, as a way of meeting the objective, Medicare benefits may simply not be payable at all for services found to constitute inappropriate practice (at [47]).
58 The Authority then turned to the disqualification direction. At [48] to [51], it stated:
[48] In relation to partial disqualification, [the applicant] reiterates his previous submissions, including that it would not be appropriate to impose any period of disqualification from rendering MBS item services, following the Committee's findings of inappropriate practice. In support of this submission, [the applicant] reiterated his earlier comments that the services were provided and patients achieved some benefit from them. [The applicant] stated:
(a) The Committee's findings relate to a technical administrative concern of noncompliance.
As noted above, the Determining Authority rejects this proposition.
(b) The item descriptor for MBS item 12250 was amended shortly after the end of the review period such that the processes which were in place and which are the subject of the findings of inappropriate practice would now satisfy the new descriptor.
Having regard to both the Committee's detailed findings of inappropriate practice and [the applicant's] submissions, the Determining Authority is not satisfied that [the applicant] would necessarily meet the current requirements for the provision of those services, noting that adequate supervision is still a key feature of the MBS item descriptor.
(c) [The applicant] has carefully considered the Committee's comments and findings and he has taken advice. He has made significant changes to his practice.
The Determining Authority was unable to identify any meaningful change outlined in [the applicant's] original submissions. However, having regard to his further submissions, provided in response to the draft determination, the Determining Authority accepts that changes to the MBS item descriptor and [the applicant's] practice since the review period do lessen the risks of inappropriate practice in the future. This is so even though [the applicant] continues to believe that he acted appropriately during the review period and the relevant changes do not provide a complete answer to the Committee's very serious findings of inappropriate practice - many of which are still relevant today.
(d) The public interest would not be served but rather harmed if [the applicant] was required to make a significant repayment or was disqualified from providing MBS item 12250 services to patients who require those.
The Determining Authority is satisfied that a repayment and partial disqualification from rendering MBS item 12250 services would help protect the purposes of the PSR scheme. In the Determining Authority's view, both directions would therefore certainly be in the public interest.
[49] [The applicant] further submits that removing his ability to render MBS item 12250 services would also impact his ability to repay monies sought to be recovered in relation to the Committee's findings of inappropriate practice. In relation to these submissions, the Determining Authority rejects [the applicant's] assertion that it suggested that he was continuing to engage in inappropriate practice. The Determining Authority holds no such view, nor could it on the available evidence. Nevertheless, the Determining Authority remains concerned about risks of inappropriate practice in the future.
[50] The Determining Authority acknowledges that [the applicant] has been reporting sleep studies performed in rural and regional areas. However, it is imperative that the services be provided appropriately. That was clearly not the case during the review period and the Determining Authority is not persuaded that there has been sufficient change in [the applicant's] practice to alleviate its serious concerns about the potential for continued inappropriate practice into the future. The Determining Authority notes that, as [the applicant] operates in a corporate model, there may be others who can assist his patients during the period of partial disqualification. [The applicant] will also be able to render other MBS item services during this period.
[51] Therefore, so that [the applicant] can reflect further on the Committee's findings of inappropriate practice and allow adequate time to familiarise himself with the relevant requirements, the Determining Authority directs that [the applicant] be disqualified from rendering MBS item 12250 services for a period of 12 months starting when the determination takes effect.
59 After setting out its directions concerning a reprimand and counselling, the Authority stated (at [54] and [55]):
Directions: repayment
[54] The Determining Authority considers that due to the level of inappropriate practice as found by the Committee, [the applicant] repay the amount of $1,959,718.75, being the Medicare benefits that were paid for the MBS item 12250 services in connection with which [the applicant] was found to have engaged in inappropriate practice (subparagraph 106U(1)(cb) of the Act).
Directions: partial disqualification
[55] Having regard to the reasons for the Committee's findings of inappropriate practice, the Determining Authority considers that [the applicant] must be disqualified from rendering MBS item 12250 services for a period of 12 months starting when the determination takes effect (subparagraph 106U(1)(g) of the Act).