Health Insurance Amendment (Professional Services Review) Act 2012 — Zoe

Commonwealth act

Health Insurance Amendment (Professional Services Review) Act 2012

In ForceCTH

Jurisdiction

Commonwealth

Act Number

76 of 2012

Collection

act

Plain English Summary

8/10 complexity

What this Act changes, in plain terms

Retroactive validation of past Panel/Deputy Director actions (Schedule 1, item 1). The Act says that acts done under Parts VAA, VB or VII of the Health Insurance Act 1973 are taken to have been valid even if a person who purported to act as a Panel member or Deputy Director was not validly appointed. That validation does not apply where the invalid appointment is currently (as at commencement) in issue before the High Court (Schedule 1, subitems (1)–(4)).
Re-referral after procedural quashing (Schedule 1, item 2). If proceedings were decided for a practitioner because of an invalid appointment, the Director may, within 12 months of that final decision, set up a fresh Committee and re‑refer the same services for review; the new Committee may consider evidence from the prior investigation and the court proceedings (Schedule 1, item 2(2)–(4)).
Compensation if the validation operates as an acquisition of property (Schedule 1, item 3). If the Schedule’s operation amounts to an acquisition otherwise than on just terms, the Commonwealth must pay reasonable compensation (Schedule 1, item 3).
New statutory concept: “prescribed pattern of services” and how it is used (Schedule 2, Part 1). The Act inserts a statutory concept called "prescribed pattern of services" (new section 82A). The regulations may define particular kinds of circumstances (for example, repeated provision or initiation of specified services across multiple days) that will constitute a prescribed pattern (Schedule 2, items 1–6 and new section 82A). If services fall into that prescribed pattern, a practitioner can be treated as engaging in "inappropriate practice" for the relevant period (new subsection 82(1A)). The Committee must consider whether exceptional circumstances applied on particular days (subsections 82(1B)–(1D)) and regulations may specify exceptional circumstances (Schedule 2, items 3 and 6).

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Deep Dive

7,255 words · generated 09/06/2026

What it does

This Act amends the Health Insurance Act 1973 and validates certain prior actions related to the Professional Services Review (PSR) scheme. Mechanically, it does four groups of things.

First, it validates past PSR actions where the validity might otherwise be challenged due to defective appointment of Panel members or Deputy Directors. Schedule 1, item 1 declares that acts purportedly done under Part VAA, VB or VII before that item commenced are to be treated as always valid to the extent they would otherwise be invalid because of appointment defects (Schedule 1, item 1(1)-(3)). That validation is subject to one exception: it does not affect rights or liabilities in proceedings for which leave to appeal to the High Court had already been given if the appointment issue is in issue in those proceedings (Schedule 1, item 1(4)). Schedule 1 also permits, in limited circumstances, a re‑referral to a Committee where proceedings were determined in favour of the practitioner on the ground of invalid appointment (Schedule 1, item 2), and creates a statutory compensation route where the validation would otherwise amount to an acquisition of property other than on just terms (Schedule 1, item 3).

Second, the Act materially changes how the PSR identifies and handles patterns of practice and which health professionals can be subject to PSR processes. It creates a statutory concept of a "prescribed pattern of services" (new s 82A inserted by Schedule 2 Part 1, item 6) and ties the Chief Executive Medicare’s duty to request a review to that concept (new s 86(1A) inserted by Schedule 2 Part 1, item 10). The definition and details of what constitutes a prescribed pattern are left to regulations (s 82A(1)-(3)). The Act also authorises the Minister to add kinds of health professionals as "practitioners" for the purposes of Part VAA and Part VB by legislative instrument (s 81(1A) and s 124B(7), Schedule 2 items 18 and 26), thus enabling allied health professions to be brought into the PSR scheme by instrument, and adjusts committee composition provisions accordingly (e.g. items 20-27).

Current sections

Direct links to the current provisions in Health Insurance Amendment (Professional Services Review) Act 2012.

Official source available

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Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.

Who pays: the Commonwealth bears the cost of compensation if the Schedule’s validation effects amount to an acquisition of property otherwise than on just terms (Schedule 1, item 3). Administrative and compliance costs (for example extra submissions, extended processes, or legal challenges) are borne by practitioners, the Director, Committees and the Determining Authority as they implement the new procedures (see Schedule 2, items 33–41, 45–49).
Who decides: the Minister (by legislative instrument) can add kinds of health professionals into the PSR scheme (new subsections 81(1A) and 124B(7), Schedule 2, items 18 and 26). The Chief Executive Medicare must request a review when a prescribed pattern of services is identified (new subsection 86(1A), Schedule 2, item 10). Committees, the Director and the Determining Authority retain decision‑making roles for investigations, reports, draft/final determinations and ratification of agreements, but the Act adds specified notice powers (sections 106GA, 106QB, 106RB) that allow those bodies to notify and cease proceedings when proper investigation or action is impossible (Schedule 2, items 44–49). Regulations (made under the Health Insurance Act) are used to define detailed matters: what circumstances count as a prescribed pattern, what counts as an appropriate person or body for referral, and how referrals must be made for certain items (new section 82A and 132A, Schedule 2, items 6, 79, 87; Schedule 3 technical items).
What behaviour the law changes (mechanically):
- It empowers the Chief Executive Medicare to trigger reviews when a regulated pattern of service provision is detected, increasing monitoring and potential review actions (new subsection 86(1A), Schedule 2, item 10).
- It expands the reach of the PSR scheme to additional health professional kinds if the Minister so determines (new subsections 81(1A) and 124B(7), Schedule 2, items 18 and 26), but limits retrospective application for periods before a ministerial determination took effect (Schedule 2, items 28–30).
- It changes what counts as a reviewable activity by including services that were "initiated" where Medicare benefit would have been payable at the time of initiation (Schedule 2, items 31–32).
- It tightens and clarifies procedural timelines for report production, submissions and determinations, while providing mechanisms to pause or extend those timelines where courts intervene or other specified events occur (Schedule 2, items 33–41).
- It requires information to be passed to state health authorities and specified regulatory bodies where a significant threat to life or health is identified (Schedule 2, items 75–81).

Delegated rule‑making and discretionary determinations: the Minister may widen the cohort of regulated practitioners by legislative instrument (new subsections 81(1A) and 124B(7), Schedule 2, items 18 and 26). That shifts substantive scope decisions from Parliament to executive instruments; compliance and operational scope depend on what the Minister determines by instrument and what the regulations prescribe (section 82A and related items).
Regulatory detail by regulation: the substantive concept "prescribed pattern of services" is not specified on the face of the Act but left to regulations (new section 82A, Schedule 2, item 6). That means the practical triggers for review depend on delegated instruments rather than the primary Act.
Process workload and timing trade‑offs: Committees may extend report periods and the Determining Authority must allow and consider submissions; the scheme also contains stop‑the‑clock rules for injunctions (new subsection 106G(3), 106TB and sections 106SA–106T). These changes create predictable avenues to lengthen proceedings (for illness, suspension, court orders, failure to comply with notices), which affects how quickly matters reach final determinations and may increase administrative workload for the Director and Determining Authority (Schedule 2, items 33–41).
Judicial interaction and re‑referral: the Act retroactively validates actions but preserves ongoing High Court matters (Schedule 1, items 1(4)). Where prior proceedings succeeded because of invalid appointments, the Director may re‑refer within 12 months (Schedule 1, item 2). This creates a mechanism to re‑start review processes after courts have quashed earlier processes due to appointment defects.
Information sharing and referral to external regulators: where the Director, Committee or Determining Authority forms particular opinions about risks to life or health or non‑compliance with professional standards, they must send statements and material to state health authorities and to "appropriate" regulatory bodies identified in regulations (Schedule 2, items 75–81). That changes the flow of material from a primarily Commonwealth administrative review scheme into state/other regulatory systems.
Compensation exposure: the Commonwealth accepts potential liability for compensation where the validation operates as an acquisition otherwise than on just terms (Schedule 1, item 3). That creates a potential fiscal exposure tied to the retroactive validation measure.

Main concepts

The Act introduces and rearranges a number of statutory concepts that change who may be reviewed and how the PSR operates. Key statutory concepts established or amended by the Act are: prescribed pattern of services; practitioner/profession determination by Minister; "service" to include initiated services; powers and deadlines of Committees and the Determining Authority; notices that stop PSR processes as impossible; and regulatory referral pathways.

Prescribed pattern of services: New s 82A defines the concept as circumstances prescribed by regulation that constitute a "prescribed pattern of services" (s 82A(1)). The drafting deliberately delegates the content to the regulations, but the Act anticipates regulations that can target particular service types, professions, or groups of practitioners (s 82A(2)), and that may specify quantitative thresholds (s 82A(3)) , for example, a number of services per day on multiple days during a period. The Act then creates a statutory offence/ground for "inappropriate practice" where services were rendered or initiated in circumstances that constitute a prescribed pattern (new s 82(1A) and the amendment to the definition of "causing or permitting" in s 82(2) , items 3 and 4).

Ministerial instrument power to include practitioners and professions: The Act gives the Minister an express legislative instrument power to determine that a health professional of a particular kind is a "practitioner" for Part VAA (s 81(1A), item 18) and for Part VB (s 124B(7), item 26). That power extends to determining that a vocation engaged in by such a health professional is a "profession" for the purposes of the Part (s 81(1A)(b)). The consequence is that the PSR’s jurisdiction can be extended to allied health professionals by Ministerial instrument rather than by primary‑law amendment alone (see also items 16-27 adjusting committee membership and transitional application rules).

Meaning of service: The definition of "service" in s 81(1) is broadened to include not only services that have been rendered where Medicare benefit was payable, but also services that have been initiated, whether rendered or not, if Medicare benefit would have been payable had the service been rendered at that time (item 31). This expressly covers initiated but unrealised services as within PSR scope, effective for services initiated on or after commencement (item 32).

Procedural timelines and interruptions: The Act sets out discrete rules for time extensions and pauses. Committees can extend the six‑month reporting period for specified reasons, including illness of the person under review, disability/disqualification, failures to comply with certain notices, suspensions for injunctions or other court orders (s 106G(3) and s 106G(4A), items 33-34). The Determining Authority must invite submissions (s 106SA) and make draft determinations and ratify agreements within fixed windows (s 106T(1A), s 106R(1)). The Act contains a bespoke mechanism to stop and restart action periods where a court injunction prevents the act being done (s 106TB(1)-(3), item 41). For final determinations, the date on which they take effect is adjusted where court proceedings are instituted or appeals filed, including prescribed numbers of days after dismissal or withdrawal in different scenarios (s 106V(2), item 50).

Notices making investigation, ratification or determination impossible: New sections 106GA, 106QB and 106RB allow the Director, Committee, or Determining Authority to give written notice that circumstances make proper investigation, ratification of an agreement, or making a proper draft or final determination impossible. If such notice is given, the relevant Division, section, or Subdivision "ceases to have effect" in relation to the matter and mandatory notification to Chief Executive Medicare and the person under review is required within seven days (106GA(1)-(3); 106QB(1)-(3); 106RB(1)-(3), items 44, 46, 106RA-106RB). The Act therefore provides a statutory stop‑gap where factual or legal circumstances prevent completion of the PSR procedural path.

Referral and reporting to other bodies: The Act broadens how material is shared when the PSR finds a significant threat to life or health. The Director must send the Committee or Determining Authority’s statement and material to a State or Territory body responsible for health or public safety in the jurisdiction where the conduct occurred and to "each appropriate person or body" for the person under review, as specified in regulations and having power to take action (s 106XA(2)-(4), item 79). The Act also adjusts the trigger and form of referrals to the Medicare Participation Review Committee and removes references to certain sections (Part 7 items 52-74) to recalibrate the referral pathways and disqualification categories.

Validation and compensation concept: Schedule 1 validates earlier acts done under the relevant parts insofar as they would otherwise be invalid for defective appointments, and provides compensation where that validation would otherwise amount to an acquisition of property other than on just terms (Schedule 1 items 1 and 3). It permits re‑referral in certain returned proceedings circumstances (Schedule 1 item 2).

Delegation to regulations and legislative instruments: Several of the new and amended concepts depend on secondary legislation. Prescribed patterns, appropriate persons or bodies for referral, and the Minister’s determinations are expressly by regulations or legislative instrument (s 82A(1); s 106XA(4); s 81(1A); s 124B(7); Schedule 3 items 1-9 revising multiple powers to be by legislative instrument). That structural choice shifts significant definitional and scope detail out of the Act’s text and into subordinate instruments.

Who it affects

The Act affects a defined set of actors by creating, extending, or clarifying duties and entitlements.

Practitioners (medical and allied health): The primary cohort affected is practitioners who may be subject to review under Part VAA (Professional Services Review) and Part VB. The Act expressly allows the Minister to determine by legislative instrument that particular kinds of health professionals are "practitioners" for Part VAA (s 81(1A), item 18) and for Part VB (s 124B(7), item 26). Thus, doctors and potentially allied practitioners such as chiropractors, physiotherapists, podiatrists and osteopaths (see amendments to s 124EB(2) describing committee composition, item 27) may fall within PSR processes; transitional items (28-30) limit review of services rendered before such a determination took effect.

Persons under review: Individuals who are the subject of Committee or Determining Authority action have new procedural rights and constraints. They are entitled to a written invitation to make submissions prior to a draft determination (s 106SA(1)-(2), item 36), and can apply for extensions for submissions under s 106SA(5). Where court proceedings or injunctions intervene, their timelines for making submissions and for decisions are paused and restarted in a prescribed way (s 106TB(1)-(3), item 41). They are also recipients of required notifications when a Director or Committee gives notice that a proper investigation is impossible (s 106GA(3), item 44).

Director and Committees: The Director of PSR retains investigatory functions but with procedural curbs and new reporting obligations. The Director may give the Determining Authority information only once (s 106S(2)), and must not give information after the Authority has made its draft determination (s 106S(2A), item 35). Both the Director and Committees may give notices under new sections that effectively terminate a Division or Subdivision’s effect in relation to a matter where a proper investigation, ratification or determination is impossible (s 106GA, 106QB, 106RB, items 44, 46, 106RA-RB). Committees can also extend their six‑month reporting periods for specified reasons (s 106G(3), 4A, items 33-34).

Determining Authority: The Determining Authority is given clearer, bounded duties: it must invite submissions (s 106SA), must make draft determinations within one month after the last day on which submissions are permitted (s 106T(1A), item 37), and must ratify or refuse to ratify agreements within one month of receipt (s 106R(1), item 48). It may receive information from the Director on one occasion only and must treat later Director material as grounds for giving a further invitation to the person if that information arrives after the initial invitation (s 106S(2), 106SA(4)).

Chief Executive Medicare and Minister: The Chief Executive Medicare is required to request a PSR review if they become aware that services were rendered or initiated in circumstances that constitute a prescribed pattern of services (new s 86(1A), item 10). The Minister has the power to determine, by legislative instrument, which health professionals or vocations are "practitioners" or "professions" for PSR purposes (s 81(1A), s 124B(7), items 18 and 26). The Minister also retains instrument‑making functions in a number of places reallocated to legislative instruments by Schedule 3 (see items 1-9 of Schedule 3).

State and Territory bodies and regulatory authorities: When the PSR finds conduct that is a significant threat to life or health, or the Director forms a similar opinion, the Director must send the statement and material to the State or Territory body responsible for health or public safety in the jurisdiction where the conduct occurred and to each "appropriate person or body" for the person under review as prescribed by regulation (s 106XA(2)-(4), item 79). The Act therefore affects regulatory and public health agencies by conditioning their receipt of PSR material and potentially prompting their own actions.

Patients and third parties: By expanding PSR jurisdiction to "initiated" services (item 31) and by empowering regulations to require a prescribed manner of referral for Medicare schedule items (new s 132A, item 87), the Act affects how patients are referred and determines what evidence and patterns can be examined. Patients’ care pathways and documentation practices are likely to be implicated by regulations that flow from s 82A and s 132A.

The Commonwealth and litigants: Schedule 1 creates a potential compensation liability for the Commonwealth where validation of past acts would otherwise amount to an acquisition of property other than on just terms (Schedule 1 item 3). The Act also interacts with ongoing litigation in specified ways: validation does not affect proceedings where leave to appeal to the High Court has already been given and where appointment validity is at issue (Schedule 1 item 1(4)), and several provisions preserve the "old law" in relation to matters already in train at commencement (for example Schedule 2 Part 1 item 15 and Part 4 item 42).

Key duties and rights

The Act creates new duties for administrative actors and preserves and clarifies rights for persons under review. Below are the principal duties, the actors who exercise them, and the statutory rights for review subjects.

Chief Executive Medicare: mandatory request duty , new s 86(1A) requires the Chief Executive Medicare to make a request under s 86 when they "become aware that the circumstances in which services were rendered or initiated by a person constitute a prescribed pattern of services" (Schedule 2 Part 1, item 10). That is a positive duty to initiate the PSR mechanism where the statutory threshold is met. A note to s 86(3) clarifies such requests may include additional reasons beyond the prescribed pattern (item 11).

Minister: instrument power to define scope , the Minister may determine by legislative instrument that a kind of health professional is a "practitioner" and that a vocation is a "profession" for Part VAA (s 81(1A), item 18) and may do likewise for Part VB (s 124B(7), item 26). Those determinations expand the population subject to PSR processes, and they are made by legislative instrument (Schedule 3 makes a number of powers express by instrument).

Director: information and notice duties , the Director’s ability to provide information to the Determining Authority is now limited. The Director may give information under s 106S(1) on one occasion only (s 106S(2), item 35) and must not give information after the Determining Authority has made its draft determination (s 106S(2A), item 35). The Director also has express duties to prepare and send written statements and material to State/Territory bodies and appropriate regulators where the Director forms the opinion that conduct has or is likely to cause a significant threat to life or health, and in cases of failure to comply with professional standards (s 106XA(3) and s 106XB(2)(a), item 79 and 81).

Committees: extension and notice powers , Committees may extend the 6‑month reporting period under s 106G(3) where specified circumstances occur, including illness of the person under review and suspensions due to injunctions (s 106G(3) table, item 33), and may give written notice that a proper investigation is impossible (new s 106GA(2), item 44). When such a notice is given either by the Director or the Committee, the Division ceases to have effect in relation to that Committee and the Director must give copies of the notice to the Chief Executive Medicare and the person under review within seven days (s 106GA(3)).

Determining Authority: invitation and decision duties , The Determining Authority must invite the person under review to make written submissions about the directions the Authority should make in its draft determination, having regard to the Committee’s final report and any Director information (s 106SA(1)-(3), item 36). The invitation must normally give the person one month to make submissions and the Authority may extend that period on application and reasonableness grounds (s 106SA(2) and (5)). The Determining Authority must, after taking submissions into account, make a draft determination and give copies to the person and the Director (s 106T(1)-(1A), item 37). For ratification of agreements under s 92, the Authority must ratify or refuse to ratify within one month of receipt (s 106R(1), item 48).

Persons under review: submission rights and protection via court processes , Persons under review have explicit rights to be invited to make submissions before a draft determination (s 106SA(1)-(2), item 36) and to seek extensions of time to do so (s 106SA(5)). Where a court order or injunction prevents acts being done within a statutory period, the Act pauses the original action period and restarts it once the injunction or order no longer operates (s 106TB(1)-(3), item 41). Additionally, the date on which a final determination takes effect is modified when court proceedings are instituted, withdrawn, discontinued, dismissed, or determined, and prescribed numbers of days apply (s 106V(2), item 50). These provisions create predictable interactions between PSR timetables and litigation.

Rights related to property acquisition: Schedule 1 item 3 creates a right to compensation where the validation would otherwise amount to an acquisition of property other than on just terms. The Commonwealth is liable to pay reasonable compensation, and where the parties do not agree the person may institute proceedings for recovery of such compensation. The terms "acquisition of property" and "just terms" are tied to paragraph 51(xxxi) of the Constitution as defined in the Schedule (Schedule 1 item 3(3)).

Referral obligations: When certain thresholds are met, the Director must send statements and material to State/Territory public health bodies and to each appropriate person or body (s 106XA(2)-(4), item 79). The definition of an "appropriate person or body" is to be made by regulation and must be a body that has power to take action against the person under review (s 106XA(4)). The Act thereby creates an express duty to engage external regulators or public health authorities where a significant threat to life or health is found.

Limits on evidence transmission: The Act limits the opportunities for the Director to add material to the Determining Authority (s 106S(2) and (2A)). If the Director provides material after the Determining Authority’s initial invitation to the person under review, the Determining Authority must give the person a further invitation within 14 days of receiving the Director’s information (s 106SA(4)). This creates a procedural right for the person to respond to late Director material but also constrains how often material can be supplied to the Authority (s 106S(2)).

Penalties and enforcement

The Act adjusts the framework for enforcement in three principal dimensions: the scope of persons subject to sanction, the forms and durations of sanctions, and the procedural mechanisms for making and effecting sanctions.

Disqualification and other directions by the Determining Authority: The Determining Authority’s possible directions, as referenced in s 106U(1)(g) and (h), include disqualification. The Act inserts wording clarifying that disqualification can be specified "for a specified period starting when the determination takes effect" (item 61 and item 62 amending s 106U(1)(g) and (h)). The Act also sets maximum periods for disqualification depending on prior history: if the person is a practitioner who previously had an agreement under s 92 or a final determination under s 106TA take effect, the maximum disqualification period is five years; in other cases the maximum is three years (new s 92(2A) and s 106U(3) as amended by items 58 and 63). The Act repeals and replaces other related provisions and subjects to transitional rules (Part 7 item 74).

Referral to Medicare Participation Review Committee: The Act alters cross‑references to certain PSR provisions in the Medicare Participation Review Committee referral provisions (items 52-56). The practical effect is to reset which PSR outcomes will trigger Ministerial referral to that Committee and to align the referral process with the amended disqualification periods and categories. The specific paragraphs amended remove references to repealed or reworked sections such as s 124FAA and s 106X (items 52-66).

Referral to external regulatory bodies and public health authorities: The Director must prepare and send a statement and supporting material to a State or Territory body responsible for health and to each "appropriate person or body" if the Director forms an opinion that conduct has caused or is likely to cause a significant threat to life or health (s 106XA(3), item 79). The "appropriate person or body" must be specified in regulations and must have power to take action against the person under review (s 106XA(4)). The Act therefore formalises an inter‑jurisdictional reporting obligation that can trigger separate disciplinary or protective proceedings in State/Territory systems.

Non‑compliance with professional standards: The Act rewords s 106XB to make clear that if the Director forms the opinion that a practitioner has failed to comply with professional standards in the course of PSR functions, the Director must prepare and send a statement and material to relevant bodies (s 106XB(2)(a), item 81). That provision underpins enforcement by professional regulators rather than the PSR itself.

Procedural cessation of action where investigation or ratification is impossible: Where the Director, Committee or Determining Authority gives notice that it is satisfied that a proper investigation, ratification of an agreement, or a proper draft or final determination is impossible, the relevant Division or Subdivision "ceases to have effect" in relation to the matter and specified notifications must be given (s 106GA(3) and s 106QB(3), 106RB(3), items 44, 46, 106RA-RB). Practically, that stops the PSR process for the matter; any enforcement action in relation to that referral ceases under the Act’s machinery.

Interaction with court proceedings: The Act changes when final determinations take effect in the face of court proceedings. If a proceeding is instituted in a court in respect of a final determination, the determination takes effect subject to any court order at the end of prescribed periods tied to the outcome: seven days after withdrawal or discontinuance of an application instituting the proceeding; the prescribed number of days after dismissal or determination; analogous rules for appeals (s 106V(2), item 50). This mechanism gives litigants the practical effect of pausing operational enforcement until judicial resolution or specified delays.

Compensation liability: Schedule 1 item 3 imposes a financial enforcement risk on the Commonwealth where the validation of prior acts has the effect of an acquisition of property (as defined by paragraph 51(xxxi) of the Constitution) otherwise than on just terms. The Commonwealth is liable to pay "a reasonable amount of compensation," and disputes over amount may be litigated in court (Schedule 1 item 3(1)-(2)). That is a direct monetary enforcement/penalty exposure for the Commonwealth arising from the validation measures.

Technical enforcement levers: The Act delegates significant definitional and scope matters to regulations and legislative instruments (Schedule 3 items 1-9). That matters for enforcement because sanctions (for example, referral or disqualification) can be triggered by instrument‑defined thresholds such as "prescribed pattern of services" (s 82A(1)), or by instrument identification of "appropriate person or body" under s 106XA(4). Entities regulated must, therefore, monitor subordinate instruments as actively as primary Act changes to understand enforcement triggers.

How it interacts with other laws

The Act creates multiple explicit interfaces with constitutional provisions, federal administrative law, State and Territory regulatory regimes, and the PSR statutory framework itself.

Constitutional property acquisition: Schedule 1 expressly ties any compensation liability to paragraph 51(xxxi) of the Constitution. If the validation in Schedule 1 would result in an acquisition of property otherwise than on just terms, the Commonwealth is liable to pay reasonable compensation and disputes can be litigated (Schedule 1 item 3(1)-(2)). The Schedule defines "acquisition of property" and "just terms" as having the meanings given by paragraph 51(xxxi) (Schedule 1 item 3(3)). Therefore, the Act contemplates and incorporates constitutional property protections into its remedial architecture.

Interaction with State/Territory regulation and public health law: Where Committee or Determining Authority material indicates a significant threat to life or health, the Director must forward the statement and material to a State or Territory body responsible for administration of health services or protection of public health and safety in the jurisdiction where the conduct occurred (s 106XA(2)(a) and (3)(c)(i), item 79). The Act also requires forwarding to "each appropriate person or body" for the person under review, and defines that expression by regulation to mean bodies with power to take action against the person (s 106XA(4)). This formally links federal PSR findings to State/Territory regulatory enforcement powers, creating a statutory reporting route that may prompt independent disciplinary or public health action under State law.

Judicial processes and stays: The Act explicitly accounts for court orders and injunctions. Where injunctions operate to prevent acts being done within prescribed periods, the "original action period" stops and a new action period of the same length starts on the day after the end of the injunction or order (s 106TB(2), item 41). The Act also adjusts when final determinations take effect if court proceedings or appeals are instituted, withdrawn, discontinued or dismissed (s 106V(2), item 50). These provisions create a statutory interface between PSR timelines and court processes, enabling courts to exercise influence over the operational effect of PSR determinations.

Interplay with PSR statutory rights: The Act amends various internal PSR provisions by changing definitions and processes. For example, the definition of "service" is aligned with Medicare benefit eligibility and now includes initiated services (s 81(1) amendment, item 31). The Chief Executive Medicare is given a duty to request review where a prescribed pattern of services is identified (s 86(1A), item 10). Those changes modify the substantive scope of PSR review and create regulatory dependencies on delegated instruments.

Delegation to subordinate law: The Act uses regulations and legislative instruments to define multiple operative terms and thresholds, shifting content from primary legislation to delegated instruments. Prescribed patterns (s 82A), appropriate persons or bodies for referral (s 106XA(4)), and the Minister’s determinations of practitioner kinds and professions (s 81(1A) and s 124B(7)) are examples. Schedule 3 also converts several ad hoc or written powers into powers exercisable by legislative instrument (Schedule 3 items 1-9). This increases the number of cross‑instruments a practitioner or regulated body must consult to determine compliance.

Transitional and savings interactions with existing PSR matters: The Act contains multiple transitional clauses preserving the old law for requests or reports already in train. For example, Part 1 item 15 of Schedule 2 preserves the old law for requests to review services made under s 86 before the commencement of the amendments. Part 4 item 42 preserves the old law for draft or final determinations where Committee final reports were given before commencement. Part 7 item 74 preserves the old law for requests to review services made before that Part’s commencement. These transitional rules prevent retrospective application of some changes to matters already advanced in the PSR process.

Intersections with Medicare billing law: The redefinition of "service" to include services "initiated" where Medicare benefit would have been payable (item 31) brings initiated referrals and orders into PSR review scope even where the service was not actually rendered. That potentially interacts with Medicare billing and benefits law by aligning review scope with Medicare benefit eligibility rather than mere performance of a service. The Act also authorises regulations to require a "manner of patient referrals" when a Medicare schedule item specifies a referred service (s 132A(1), item 87), creating a point of intersection with Medicare schedule administration.

Amendment history

This Act itself is an amending Act to the Health Insurance Act 1973 and includes three Schedules. Its own commencement and the commencement of the Schedules are specified in s 2, and the Schedules set out discrete groups of amendments.

Commencement (s 2): Sections 1-3 and any part not elsewhere covered commence on the day of Royal Assent, 27 June 2012 (s 2(1) table, Column 2). Schedule 1 also commences on that same day (s 2 table). Schedule 3 commences the day after assent, 28 June 2012 (s 2 table). Schedule 2 commences on a day to be fixed by proclamation, but if not commenced within six months of assent it commences the day after that period ends (default 27 December 2012). These staged commencements are codified in s 2 and the table that forms part of it.

Schedule 1 (Validation): Effective 27 June 2012. Item 1 validates acts done under Part VAA, VB or VII before commencement that would otherwise be invalid for defects in appointment of Panel members or Deputy Directors; it preserves rights where High Court leave already given on appointment issues (Schedule 1 item 1(4)). Item 2 allows re‑referral to a Committee where proceedings were decided in favour of the practitioner on appointment grounds, within 12 months of final determination (Schedule 1 item 2). Item 3 creates a compensation regime tied to constitutional just terms for any acquisition of property effect of the validation (Schedule 1 item 3).

Schedule 2 (Amendments relating to the PSR scheme): Commencement by proclamation within six months (or default date). Divided into Parts:

Part 1 (Prescribed pattern of services): Adds prescribed pattern concept (new s 82A, item 6), ties Chief Executive Medicare’s duty to request reviews to this pattern (s 86(1A), item 10), and edits other textual references (items 1-15). Application clause preserves old law for requests made before the Part’s commencement (item 15).
Part 2 (Allied health practitioners): Inserts Minister’s instrument powers to determine practitioner/profession for Part VAA and Part VB (items 16-19, 24-27). Modifies committee composition provisions and transitional rules preventing review of services before a determination took effect (items 28-30).
Part 3 (Meaning of service): Rewrites the s 81(1) definition of "service" to include services initiated where Medicare benefit would have been payable (items 31-32).
Part 4 (Extension of time): Replaces s 106G(3) with an explicit extension table, allows multiple extensions (s 106G(4A)), changes Director information rules to the Determining Authority (items 33-41), and creates s 106TB to pause time when injunctions operate (item 41). Transitional clause retains old law where Committee final reports were given before commencement (item 42).
Part 5 (No further action in certain circumstances): Replaces s 106G(6) and creates s 106GA giving Director or Committee power to notify that a proper investigation is impossible, with required notifications (items 43-46).
Part 6 (Date of effect for final determinations): Modifies s 106V(2) concerning the timing of effectiveness of final determinations when court proceedings are brought (items 50-51). Transitional application for determinations made before commencement (item 51).
Part 7 (Referrals to Medicare Participation Review Committee): Multiple amendments aligning referral triggers and disqualification provisions, including setting maximum disqualification periods depending on prior history (items 52-74). Transitional clause preserves old law for requests made before the Part’s commencement (item 74).
Part 8 (Referrals to appropriate regulatory bodies): Broadens recipients of significant threat statements to State/Territory bodies and "appropriate persons or bodies," and clarifies Director obligations when professional standards are breached (items 75-81).
Part 9 (Disqualified practitioners): Changes wording from "partly" to "fully" in cross‑references and makes consequential amendments (items 82-86).
Part 10 (Patient referrals): Inserts new s 132A permitting regulations to prescribe the manner in which a patient is referred to a practitioner for services that require referral under an item (items 87-88).

Schedule 3 (Technical amendments relating to legislative instruments): Commenced 28 June 2012. Converts a number of powers to be exercised by legislative instrument, by inserting "by legislative instrument" in several subsections and repealing old textual provisions to relocate exercise of functions to the legislative instrument model (Schedule 3 items 1-9). It also adds a clarifying note to s 124FAA referencing agreements taken to be final determinations (Schedule 3 item 9).

Transitional and savings: Multiple items preserve the prior law’s application for matters already active before commencement, as set out in several parts (Schedule 2 Part 1 item 15, Part 2 items 28-30, Part 4 item 42, Part 7 item 74, Part 6 item 51). These transitional rules ensure that in‑flight matters are not re‑opened or altered by the amendments.

Minister’s Second Reading Speech: The Act’s parliamentary history is recorded in the printed Act as including the Minister’s second reading speech made in the House of Representatives on 9 May 2012 and the Senate on 10 May 2012; the statutory text records that but does not import the speech into the law (final printed note).

Litigation history

The Act itself contains multiple provisions that engage litigation risk, judicial processes and the interaction of PSR decisions with courts. It does not, in the text provided, cite any judicial decisions; rather, it structures how ongoing and future litigation interfaces with PSR proceedings.

Validation and High Court leave exception: Schedule 1 validates past acts that might otherwise be invalid because of defective appointments. That validation is subject to a narrow exclusion: it does not affect rights or liabilities of parties to proceedings for which leave to appeal to the High Court of Australia has been given on or before commencement if the appointment issue is in issue in those proceedings (Schedule 1 item 1(4)). Practitioners and litigants with leave to appeal to the High Court retain the ability to litigate appointment legality despite the validation for other matters.

Re‑referral after favourable court outcome: Schedule 1 item 2 creates a procedural route where prior proceedings were finally determined in favour of the practitioner on appointment grounds. In that case, despite s 94 of the Health Insurance Act 1973 (which would otherwise prevent referral), the Director may re‑refer the matter to a Committee within 12 months after those proceedings are finally determined, and the Committee may take into account previous evidence (Schedule 1 item 2(1)-(3)). That provides a legislative pathway to restart review where previous determinations were vacated or set aside on procedural appointment grounds.

Court proceedings and effect of determinations: The Act modifies when final determinations take effect where court proceedings have been instituted (s 106V(2), item 50). In particular, if proceedings are instituted before the 35th day following a final determination (the baseline effective point), the final determination’s operational effect is deferred and only takes effect after defined periods depending on whether the application is withdrawn, discontinued, dismissed, or determined, and analogously for appeals (s 106V(2)). This provision formalises how judicial proceedings operate as practical stays on PSR determinations, creating predictable timelines for practitioners engaged in litigation.

Injunctions and statutory timeframes: The Act provides a statutory mechanism to pause statutory action periods where an injunction or other court order prevents acts required or permitted by the Subdivision (s 106TB(1)-(3), item 41). The "original action period" is suspended during the injunction, and a "new action period" of the same length begins after the injunction lapses. Subsection 106TB(3) treats submissions made during the original action period as made during the new action period for the purposes of the Subdivision. This reduces uncertainty about whether a person loses procedural rights because of a court‑ordered stay.

Limitations on evidence flow and timing: The Director may give information to the Determining Authority under s 106S on one occasion only (s 106S(2), item 35), and s 106S(2A) bars giving information after the Determining Authority has made its draft determination. If the Director wants to provide material after the initial invitation has been given to the person under review, the Determining Authority must give a further invitation within 14 days (s 106SA(4), item 36). These rules channel the evidence flow to the Determining Authority in a way that interacts with litigation strategy; for example, a party litigating in court may find the timing of Director material relevant to their ability to respond before a draft determination is made.

Notices that cease PSR effect and consequent litigation openings: The Act allows the Director, Committee or Determining Authority to give a written notice that proper investigation, ratification, or determination is impossible (s 106GA, s 106QB, s 106RB, items 44, 46, 106RA-RB). When such notice is given, the relevant process ceases to have effect in relation to the matter and notifications must be made. The legal consequence is that statutory PSR remedies no longer apply to that referral, which may leave the practitioner to seek other remedies or may be the prelude to administrative or judicial review of the propriety of issuing such a notice.

Compensation claims in courts: Schedule 1 item 3 provides a route for persons to seek compensation from the Commonwealth where the validation causes an acquisition of property otherwise than on just terms. If Commonwealth and person disagree, the person may "institute proceedings in a court of competent jurisdiction" for recovery of compensation (Schedule 1 item 3(2)). That provision anticipates litigation over valuation and just terms.

Transitional savings and litigation: Multiple transitional clauses preserve existing procedural rights and obligations for matters already in the PSR pathway before commencement. For example, the changes to Director/Authority information and Determining Authority timing do not apply where the Committee’s final report was given to the Determining Authority before commencement (Part 4 item 42). Parties engaged in ongoing litigation at the time of commencement must microscopically check the transitional provisions that apply to their matter.

Gotchas

Several features of the Act are easy to overlook and carry practical consequences. The following are concrete "watchouts" grounded in the text.

Substantial delegation to regulations and instruments: The Act creates key concepts by reference to subordinate instruments. The meaning of "prescribed pattern of services" is wholly a matter for regulations (s 82A(1)). The "appropriate person or body" for referral is prescribed in regulations (s 106XA(4)). The Minister’s power to designate practitioners and professions is by legislative instrument (s 81(1A) and s 124B(7)). Schedule 3 converts several ministerial or other functions to exercise by legislative instrument (Schedule 3 items 1-9). Practitioners and advisers must therefore monitor subordinate instruments as vigorously as the Act itself, because crucial thresholds and recipient lists will be set there.

"Initiated" services broaden scope of review: The amendment to the definition of "service" (item 31) includes a service initiated when Medicare benefit would have been payable. That covers cases where a referral, order, or claim was made but the service was not ultimately performed. This inclusion substantially expands the PSR’s factual territory: acts that fall short of rendering a service (but where benefit would have attached) can be reviewed. Practitioners should be aware that initiating processes create exposure.

Director’s limited opportunities to provide information to Determining Authority: The Director may give information to the Determining Authority only once (s 106S(2)), and must not give information after a draft determination (s 106S(2A)). If the Director later obtains material, the only mechanism is for the Determining Authority to give a further invitation to the person under review within 14 days (s 106SA(4)). The practical effect is that late Director material can delay draft determination timelines (because of the further invitation requirement) but the Director cannot continuously supplement the Authority. Parties should plan evidence provision timing around these constraints.

Validation with an exception for High Court leave: Schedule 1 validates prior acts for appointment defects but explicitly preserves litigation where leave to appeal to the High Court had already been given and appointment validity is in issue (Schedule 1 item 1(4)). If a party had already obtained High Court leave before commencement, the validation will not sterilise that litigation. Conversely, practitioners whose matters had not reached that stage may find prior procedural challenges extinguished.

Notices that stop investigations: The Director, Committee or Determining Authority can issue notices that make proper investigation, ratification or determination impossible and thereby terminate the relevant Division or Subdivision in relation to the matter (s 106GA(1)-(3), 106QB(1)-(3), 106RB(1)-(3)). Such notices must be given in writing and copied to the Chief Executive Medicare and the person under review within seven days. For practitioners, the issuance of such a notice halts PSR action but does not per se preclude other regulatory or legal action. Advisers should check whether the notice itself is amenable to judicial review or whether other remedies exist.

Time pauses for court orders are specific: Section 106TB pauses the "original action period" during the suspension period of a court order or injunction and restarts a new period of the same length after the suspension ends (s 106TB(2)). But the application is strictly limited to acts required or permitted by that Subdivision within a particular period and is "subject to any order of a court" (s 106TB(2)). Parties should note that injunctions can suspend time but that the operation is subject to judicial orders and may not cover every PSR deadline.

Mandatory duty on Chief Executive Medicare for prescribed patterns: If the Chief Executive becomes aware that services constitute a prescribed pattern, they "must" make a request under s 86 to review those services (s 86(1A), item 10). That converts surveillance findings into a mandatory referral, removing discretionary filtering at that point. Whether a matter proceeds will then depend on the Committee and Determining Authority processes.

Patient referral manner may be prescribed: New s 132A allows regulations to prescribe the "manner" in which a patient is referred for an item specifying a referred service (item 87). That can have practical impacts on billing, documentation and the legality of claims for Medicare benefits: failing to meet a prescribed referral manner could render a service out of scope for the item.

Transitional limits with Minister determinations for allied health: The Act prevents retrospective review of services rendered or initiated before a Ministerial determination takes effect that brings an allied health professional into Part VAA (transitional item 28) and ensures Part VB does not apply to acts and omissions before a determination for that Part takes effect (item 29). This is a narrow but important protection for those whose status changes mid‑period.

Compensation exposure to Commonwealth: Where Schedule 1 validation constitutes an acquisition of property other than on just terms, the Commonwealth is liable to pay compensation and the recipient can litigate the amount (Schedule 1 item 3). Entities considering challenges to the validation or to historic PSR acts should be aware the validation carries this contingent public liability.