Lee v Kelly

Case [2005] FCA 26

FEDERAL COURT OF AUSTRALIA

Lee v Kelly [2005] FCA 26

ADMINISTRATIVE LAW - Professional Services Review Scheme - whether a medical practitioner has engaged in “inappropriate practice” in connection with the rendering or initiation of services for which Medicare benefits are payable – investigative referral – adjudicative referral – referral period - “prescribed pattern of services” – breach of the 80/20 rule – exceptional circumstances – s 92 Agreement

Health Insurance Act 1973 (Cth) - Part VAA – ss 92, 106KA

Administrative Decisions (Judicial Review) Act 1977 (Cth) – ss 11(1)(c) and 11(3)

Judiciary Act 1903 (Cth) - s 39B(1A)

Health Insurance (Professional Services Review) Regulations 1999 (Cth) – Regs 11(b)

Daniel v Kelly (2003) 200 ALR 379 referred to

Dimian v Health Insurance Commission [2004] FCA 1615 referred to

Hatcher v Cohn [2004] FCA 1548 referred to

Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 cited

Oreb v Willcock [2004] FCA 1520 referred to

IL SONG LEE v BERNARD KELLY, ELIZABETH MAGASSY and VAN PHUOC VO AND THE DETERMINING AUTHORITY AND HEALTH INSURANCE COMMISSION AND ALAN JOHN HOLMES

N 568 of 2003

JACOBSON J
SYDNEY
7 FEBRUARY 2005


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 568 of 2003

BETWEEN:

IL SONG LEE
APPLICANT

AND:

BERNARD KELLY, ELIZABETH MAGASSY
and VAN PHUOC VO constituting the Professional Services Review Committee No 348
FIRST RESPONDENTS

THE DETERMINING AUTHORITY
established by s 106Q of the Health Insurance Act 1973 (Cth)
SECOND RESPONDENT

HEALTH INSURANCE COMMISSION
THIRD RESPONDENT

ALAN JOHN HOLMES in his capacity
as Director of Professional Services Review
FOURTH RESPONDENT

JUDGE:

JACOBSON J

DATE OF ORDER:

7 FEBRUARY 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.   The finding by the first respondents that the applicant engaged in inappropriate practice and the finding that exceptional circumstances did not exist, must be set aside. 

2.   The matter should be remitted to the Director to determine whether a referral to another, differently constituted, Professional Services Review Committee should be made.

3.    The first respondent is to pay the applicant’s costs of the proceedings.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 568 of 2003

BETWEEN:

IL SONG LEE
APPLICANT

AND:

BERNARD KELLY, ELIZABETH MAGASSY and
VAN PHUOC VO constituting the Professional Services Review Committee No 348
FIRST RESPONDENTS

THE DETERMINING AUTHORITY
established by s 106Q of the Health Insurance Act 1973 (Cth)
SECOND RESPONDENT

HEALTH INSURANCE COMMISSION
THIRD RESPONDENT

ALAN JOHN HOLMES in his capacity
as Director of PROFESSIONAL SERVICES REVIEW
FOURTH RESPONDENT

JUDGE:

JACOBSON J

DATE:

7 FEBRUARY 2005

PLACE:

SYDNEY

REASONS FOR JUDGMENT

Introduction

  1. This is an application for review of decisions made by the first respondent (“Committee  348”) and the fourth respondent (“the Director”) under the peer-review based Professional Services Review Scheme (“the Scheme”) contained in Part VAA of the Health Insurance Act 1973 (Cth) (“the Act”).

  2. I described…

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Details
AGLC
Lee v Kelly [2005] FCA 26
Case
[2005] FCA 26
Decision Date

CaseChat Overview and Summary

The matter before the court involved Dr Lee, who was referred to the Director under investigative referral no 348 by the Commission. The referral was based on the allegation that Dr Lee engaged in inappropriate practice by rendering 80 or more attendances per day on 37 occasions during the referral period, which was a breach of the 80/20 rule. Dr Lee sought review of the referral, arguing that the Committee had asked itself the wrong question by considering whether his Korean patients should integrate into the Australian community instead of asking whether exceptional circumstances existed under Regulation 11(b). The court was required to determine whether the finding that Dr Lee engaged in inappropriate practice and that exceptional circumstances did not exist should be set aside, and whether the matter should be remitted to the Director to determine whether a referral to another, differently constituted, Professional Services Review Committee should be made.

The court found that the Committee had erred in its consideration of whether Dr Lee's Korean patients should integrate into the Australian community instead of asking whether exceptional circumstances existed under Regulation 11(b). The court held that the Committee had failed to consider whether exceptional circumstances existed under Regulation 11(b) by reason of the characteristics of Dr Lee's patients. The court also found that the Director had failed to consider the relevant factors when deciding whether to refer the matter to a Professional Services Review Committee. The court held that the findings of the first respondents should be set aside and that the matter should be remitted to the Director to determine whether a referral to another, differently constituted, Professional Services Review Committee should be made.

The court ordered that the finding by the first respondents that Dr Lee engaged in inappropriate practice and the finding that exceptional circumstances did not exist, must be set aside. The matter was to be remitted to the Director to determine whether a referral to another, differently constituted, Professional Services Review Committee should be made. The first respondent was also ordered to pay the applicant's costs of the proceedings. The court held that the Committee had failed to consider the relevant factors when deciding whether to refer the matter to a Professional Services Review Committee, and that the Director had also failed to consider the relevant factors. The court further held that the findings of the first respondents should be set aside and that the matter should be remitted to the Director to determine whether a referral to another, differently constituted, Professional Services Review Committee should be made.

Orders

Orders of the court

1. The finding by the first respondents that the applicant engaged in inappropriate practice and the finding that exceptional circumstances did not exist, must be set aside.

2. The matter should be remitted to the Director to determine whether a referral to another, differently constituted, Professional Services Review Committee should be made.

3. The first respondent is to pay the applicant’s costs of the proceedings.

Background

Background to the litigation

Dr Lee also contends that Committee 348 asked itself the wrong question by considering whether his Korean patients should integrate into the Australian community instead of asking whether exceptional circumstances existed under Regulation 11(b) by reason of the characteristics of Dr Lee’s patients.The Factual Background On 3 June 2002, the third respondent (“the Commission”) referred Dr Lee’s conduct to the Director under investigative referral no 348. The referral period was 8 January 2001 to 12 October 2001. The Commissioner considered that Dr Lee had engaged in inappropriate practice by reason of a prescribed pattern of services under s 106KA of the Act and Regulation 11. The prescribed pattern of services to which the Commission referred was that Dr Lee had rendered 80 or more attendances per day on 37 occasions during the referral period. This was a breach of the 80/20 rule to which Ryan J referred in Daniel v Kelly (2003) 200 ALR 379 at [8]. The Further Amended Application in these proceedings seeks review of the investigative referral but this was pursued only in a formal way in the written submissions. It was not addressed at the hearing. On 5 June 2002 the Director wrote to Dr Lee informing him of the investigative referral. The letter was in the same form as the letters to which I referred in Oreb at [92] and [107] and in Dimian at [22]. However, for completeness, I will set it out in full as follows:-“On 4 June 2002, I received Investigative Referral No 348 from the Health Insurance Commission (the HIC) regarding your conduct in relation to the Medicate program.I understand that the HIC has delivered to you a copy of the referral documentation and the relevant sections of the Health Insurance Act 1973 (the Act). In accordance with subsection 89(1) of the Act, I must carry out an investigation of this referral. Following the investigation, I have the option to:· dismiss the referral for the reasons set out in section 91 of the Act,· enter into an agreement with you as set out in section 92 of the Act, or· refer the matter to a Professional Services Review Committee as set out in section 93 of the Act.Subsection 88(3) of the Act provides that you may make written submissions to the Director, within 14 days of the day when you were sent the referral, as to reasons why the Director should dismiss the referral without setting up a Professional Services Review Committee. I would be pleased to receive a submission from you and would give it careful consideration along with any other relevant documents or materials I may decide to obtain.Should you wish to communicate with this office, the address and telephone numbers are detailed below. If you would prefer any further communications from this office to be directed to you at another address, I would appreciate your written advice.If you have any questions, please contact the Administrative Officer, Mrs Belinda Steward, during business hours on 02-62819155.” Dr Lee did not respond to the letter.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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