Ian Clare v Health Insurance Commission

REASONS FOR JUDGMENT the nature of the application 1 This is an application, by way of a notice of motion dated 21 February 2003, for orders for discovery and inspection. Pursuant to O 15 of the Federal Court Rules ("the Rules"), the applicant, Dr Ian Clare, seeks, amongst other things, an order that the respondent, the Health Insurance Commission ("the Commission"), give discovery of the following classes of documents: "1. All documents relating to the circumstances in which the documents referred to at paragraph C3(a)(i) and (ii) of the Application and/or the information contained therein were first obtained by the Respondent. 2. All documents recording or evidencing a view as to whether the Equipment is Eligible Equipment (other than the documents referred to in paragraph C3(c)(i)(A) - (N) inclusive of the Application). 3. All documents recording, evidencing or concerning the cessation of Mr Douglas Hall's involvement in the Decision-Making Process. 4. All documents concerning the authority of Mr Douglas Marshall (the Decision-Maker) to make the Decision pursuant to s8H of the HIC Act or otherwise, including, without limitation, any instrument of delegation. 5. All documents recording, evidencing or concerning the selection and/or engagement of Mr Marshall as the Decision-Maker. 6. All documents recording or evidencing a conversation dated 18 October 2002 between Mr Condon and Mr Paul Fenton-Menzies (referred to at paragraph C4(a) of the Application. 7. All documents relating to the provision to the Respondent by Mr Peter Condon of the documents referred to in paragraph 3(a) of the Decision. 8. All documents sent to, received or created by the Decision-Maker: (a) in the course of the Decision-Making Process; and/or (b) relating to whether the Equipment was Eligible Equipment. 9. All documents sent to, received or created by Mr Hall: (a) in the course of the Decision-Making Process; and/or (b) relating to whether the Equipment was Eligible Equipment. 10. All documents sent to, received or created by Mr Fenton-Menzies: (a) in the course of the Decision-Making Process; and/or (b) relating to whether the Equipment was Eligible Equipment. 11. All document constituting the Post-Review Decisions. 12. All drafts of the Decision and the statement of reasons included therewith. 13. All documents which the Respondent may seek to rely upon at trial. 14. All documents which may be injurious to the Applicant or the Respondent." 2 The motion was supported by two affidavits, both affirmed by Mr Darren James, the applicant's solicitor. In opposition, the respondent relied on an affidavit, sworn on 28 February 2003, by Mr Alexander Norman Holcombe, the solicitor for the Commission. 3 The outcome of this application depends very much on the nature of the proceeding in which it is made and the nature of the applicant's case. In the proceeding, the applicant seeks judicial review of a decision, which was made on 9 December 2002, that Medicare benefits were not payable in respect of Magnetic Resonance Imaging ("MRI") services provided by him because the MRI scanner used by him in providing these services was not "eligible equipment" within the meaning of Rule 31 of the Health Insurance (Diagnostic Imaging Services Table) Regulations 2000. The applicant invokes the jurisdiction conferred on this Court by the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth). background 4 According to the affidavits of Mr James, the circumstances that led Dr Clare to institute this proceeding are as follows. · On 29 September 1998, Dr Clare prepared a statutory declaration, which he sent to the Commission in support of an application for approval as an eligible provider of MRI services upon an MRI scanner ("the MRI scanner") used in his radiology practice at Bundoora. GEC Australia Limited had earlier provided a quotation for the sale of the MRI scanner, which was dated 30 October 1996 ("the quotation"). A copy of the quotation accompanied Dr Clare's statutory declaration. · On 4 October 1998, Dr Clare received a letter dated 2 October 1998 from the Commission, informing him that "as of 1 September 1998 you are eligible under Provider Number 061601GX to perform MRI services that have been referred from either Specialists or Consultant Physicians". · After the receipt of this letter, Dr Clare provided MRI services to patients by means of the MRI scanner in exchange for an assignment of Medicare benefit and made claims in respect of these services. · On 24 December 1999, Dr Clare received a facsimile from the Commission, informing him that, as a result of the Commission's investigations, the Commission had evidence that the quotation was signed after 12 May 1998. In consequence, the MRI scanner was not "eligible equipment" within the definition of the Health Insurance (1998-1999 Diagnostic Imaging Services Table) Regulations and Medicare benefits were not payable for the services provided by its use. The Commission further informed Dr Clare that it "will cease paying Medicare benefits for MRI services … with effect from 14 January 2000". The Commission advised Dr Clare that he was "free to make any written submissions, before that date, on why the Commission should not cease the payment of MRI benefits, from that date". · Dr Clare consulted solicitors, who entered into correspondence with the Commission on his behalf. On 11 February 2000, Mr James, who by this time was acting for Dr Clare, received a letter from the Commission stating, amongst other things, that: No decision has been made to reject payments outright. No decision has been made that Dr Clare is no longer an eligible provider. … Consequently, and as originally advised, any claims for MRI services from Bundoora Radiology will be pended, until you have made written submissions and then this matter will be further considered in the light of those submissions. … · On 12 May 2000, Mr James applied to the Commission for access to documents under Freedom of Information Act 1982 (Cth) ("the FOI Act"). · On 20 September 2000, the Commission faxed to Mr James a document purporting to be a "Notice of Decision under section 26 of the Freedom of Information Act 1982". · On 27 September 2000, the Commission published a media release, which stated amongst other things: The Director of Public Prosecutions has advised the Health Insurance Commission (HIC) with regard to the MRI investigations that there is insufficient evidence to meet the test in the Prosecution Policy of the Commonwealth that there be a prima facie case with reasonable prospects of conviction for a prosecution to proceed. This decision has been made in respect of all of the briefs submitted by the HIC in relation to the Magnetic Resonance Imaging investigation. … Now that the DPP's position in relation to criminal matters is known to the HIC, it has considered whether any of the eight cases referred to in the HIC report of December 1999 as being possible civil cases, should be the subject of civil proceedings. In this connection all but six of the uninstalled machines lost their entitlement to claim Medicare rebates by reason of the Government's decision to render ineligible those metropolitan machines that were ordered in the period of 10 February to 12 May 1998 (three ordered to 10 February and the other were rural). The HIC is pending claims on two providers who continue lodging claims and in respect of which there is believed to be no entitlement. As at 14 August 2002, 28 October 2002 and 16 December 2002, a search of the respondent's website permitted access to this media release. · On 20 April 2001, Mr James received a letter from the Commission, which was signed by Mr Doug Hall, the Commission's Secretary, constituting his decision, on internal review, of Dr Clare's FOI application. Pursuant to this decision, Mr Hall released additional documents. · After Dr Clare filed, in the Administrative Appeals Tribunal, an application challenging the Commission's FOI decision, the Commission released further documents to him. · On 26 September 2001, the Senate disallowed the Health Insurance (Diagnostic Imaging Services Table) Amendment Regulations 2001. If these regulations had been effective, Dr Clare's MRI scanner would have ceased to be "eligible equipment" and Dr Clare would have ceased to be an "eligible provider" of MRI services. · On 28 January 2002, Mr James received a letter from the Commission, which was dated 24 January 2002. It stated in part that: The HIC has obtained independent legal advice from Senior Counsel in relation to the eligibility of the MRI scanner operated by Bundoora Radiology. On the basis of this advice, the HIC does not consider that the scanner satisfies the regulations and has therefore deemed the scanner ineligible equipment. … The HIC however invites Bundoora Radiology to make submissions of all materials that it wishes to be taken into consideration for the purpose of determining scanner eligibility. … · On 21 February 2002, Mr James sent the Commission the applicant's submissions and a number of witness statements concerning Dr Clare's status as an "eligible provider". · On 27 May 2002, Mr James received a facsimile from the Commission, signed by Mr Hall, requesting additional information. The facsimile indicated that he would be the decision-maker and that, for the purpose of making the decision, he was considering contacting Mr Condon (who was a signatory to the quotation). Amongst other things, Mr Hall stated that: I have not reviewed any relevant material obtained by HIC under section 8P … of the Health Insurance Commission Act 1973. I do not propose to review such material in the course of making my decision. Until I reviewed your submissions, I was not familiar with the detail of this matter. In a schedule that accompanied this letter, Mr Hall asked many questions. Some of these questions reflected a view that was adverse to Dr Clare, at least on a preliminary basis.