Szakall, I.G. v The Minister of State for Health, Housing and Community Services

[1993] FCA 144

Re: IMRE GYULA SZAKALL
And: THE MINISTER OF STATE FOR HEALTH, HOUSING AND COMMUNITY SERVICES
No. G 726 of 1991
FED No. 144
Number of pages - Administrative Law - Judicial Review
(1993) 30 ALD 843 (extract)

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Einfeld J.(1)

CATCHWORDS

Administrative Law - Judicial Review - optometrical services at domiciliary visits - many members of the same family or household examined at each visit - "excessive services" - not reasonably necessary for adequate care of patient - medicare benefit paid - whether service not excessive if benefit should not have been paid because service not reasonably necessary - whether decision reviewable by the Court - natural justice

Words and Phrases - "excessive services"

Administrative Decisions (Judicial Review) Act 1977 s 3(3)

Health Insurance Act 1973 (Clth) ss 106A(2)(a), 106C(b)(ii), 106F, 106FK

Prabhat Raj Sinja v. Joan Asher and Ors (1989) 22 FCR 423

Tiong v. Minister for Community Services and Health (1990) 93 ALR 308

Minister of State for Health v. Peverill (1991) 100 ALR 73

HEARING

SYDNEY, 12 August 1992

#DATE 23:3:1993

Counsel and solicitor : Mr T Hughes instructed by
for the applicant K J Minotti and Co

Counsel and solicitor : Mrs A Bennett instructed
for the respondent by the Australian

Government Solicitor

ORDER

The Court orders:

1. Application dismissed.

2. Applicant to pay respondent's costs.
Note: Settlement and entry of orders are dealt with in Order 36 of the Federal Court Rules.

JUDGE1

EINFELD J. Imre Gyula Szakall (the applicant) applies under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) to review a determination by the respondent made on 30 September 1991 (the determination) pursuant to section 106FK of the Health Insurance Act 1973 (Clth) (the Act). The determination followed and incorporated the finding of the Optometrical Services Committee of Inquiry (the Committee) that the applicant provided "excessive services" to a number of his patients as defined in section 106A of the Act.

1. The applicant graduated from the University of New South Wales with a Bachelor of Optometry degree in 1979 and has worked in Sydney as an optometrist for fourteen years in a number of clinics. He was at the time of this hearing operating a private clinic in Chatswood.

2. A large component of the applicant's business is conducted in the form of domiciliary visits, in particular at his patients' homes, with the examinations more often than not extending to the whole or many members of the family. The applicant asserted that each examination qualified as an initial or separate consultation and he claimed medicare rebates in respect of all members of the family examined. It was this aspect of the applicant's practice that brought him under the scrutiny of the Health Insurance Commission (the Commission) and is now before this Court.

3. In May 1990 an investigation into the applicant's practice was carried out by the Medicare Benefits Control section of the Commission. On 13 August 1990 the applicant was interviewed by Mrs Waldron, an optometrical consultant to the Commission, and Dr Peter O'Sullivan, a senior medical adviser to the Commission. Mrs Waldron prepared a record of this interview dated 14 August 1990 containing her and Dr O'Sullivan's questioning of the applicant on a number of his domiciliary visits. This interview substantiated that on occasions up to twelve examinations had taken place in the one home on the same day. Mrs Waldron concluded that the Commission's concerns regarding excessive servicing had not been satisfactorily resolved and that the matter should be referred to the Committee.

4. The reference was made on 6 March 1991 by a delegate of the respondent pursuant to section 106C(b)(ii) of the Act. In a letter dated 27 March 1991 the Committee notified the applicant that a hearing was to be held on 24 April 1991. In this letter the chairman of the Committee wrote:
   

You have been referred to the Optometrical Services Committee of Inquiry by Dr John Nearhos, a delegate of the Commonwealth Minister for Community Services and Health. On the basis of the material forwarded and following consideration of this matter pursuant to section 106F of the Health Insurance Act 1973, this delegate has decided that you may have rendered excessive services and that a hearing is therefore required.

1. After the hearing, the Committee reported to the respondent on 30 August 1991 that the applicant had rendered excessive optometrical services for a large number of his patients. The Committee made a number of recommendations including that the applicant repay $6,163.60 to the federal Government and that he be counselled and reprimanded. The respondent's determination was or appears to be in accordance with the Committee's recommendations.

2. What is being reviewed by the Court is the determination or decision of the respondent Minister. A question arose at the outset of this hearing, and at earlier directions hearings, as to whether any reviewable decision was made by him at all. The determination was in the following form:
   

NOW THEREFORE I, Brian Howe, Minister of State for Health, Housing and Community Services, hereby determine that in accordance with the said Committee's recommendations: i under paragraph 106FJ(2)(c) of the Act, the said Mr Imre Gyula Szakall is to be reprimanded; ii under paragraph 106FJ(2)(d) of the Act, the said Mr Imre Gyula Szakall be counselled by officers of the Health Insurance Commission; and iii under paragraph 106FJ(2)(g) of the Act, the amount of Medicare benefits referred to in paragraph (c) above, that is an amount $6,763.30 in total, herein be payable by the said Mr Imre Gyula Szakall to the Commonwealth of Australia.

1. If this decision can be seen as being limited to the issue of penalty, then it is arguable that the finding of "excessive services" by the Committee was not made by the respondent and is not reviewable by this Court. Although section 3(3) of the ADJR Act provides the Court with power to review findings, opinions or recommendations of bodies such as the Committee, there is always a question as to whether a particular case is covered by this provision. Here the question does not need to be decided because if the respondent did anything of legal import at all, he ultimately adopted the Committee's findings as his own determination. If he did not do so, my conclusions dispose of any rights the applicant might have possessed in relation to the Committee's activities. I proceed upon the assumption either that the respondent fully adopted the reasoning of the Committee as his own, including its determination that "excessive services" had been rendered by the applicant, or that the Committee's conclusion to this effect is itself reviewable.

2. Section 106F of the Act provides:
   

Where, after consideration of a matter referred to a Committee by the Minister and of any documents that accompany the reference supplied by the Minister, it appears to the Committee that -

...

(c) an optometrist (whether or not a participating optometrist) may have rendered excessive services; ...

the Committee shall -

(f) unless paragraph (g) applies - conduct a single hearing into the matter; or

(g) if it is satisfied that it is appropriate to do so - conduct 2 or more separate hearings into the matter, each hearing being a hearing into the matter in so far as the matter relates to one or more of the circumstances referred to in paragraphs (a) to (e) inclusive.

1. "Excessive services" is defined in section 106A(2)(a) as follows:
   

In this division-

(a) a reference to excessive services is a reference to optometrical services in respect of which medicare benefit has become or may become payable and which were not reasonably necessary for the adequate optometrical care of the patient concerned

1. This definition requires that a number of "limbs" be satisfied in a reference of "excessive services", namely,
   

i) that there must have been optometrical services, ii) in respect of which a medicare benefit has or may become payable, and

iii) which were not reasonably necessary for the adequate optometrical care of the patient.

1. The first limb of the definition creates no problem - the services provided by the applicant to his patients were clearly optometrical.

2. The second limb of the definition requires that the services attract medicare benefits. The applicant claimed and was paid a medicare benefit in respect of each service in issue. A question was raised as to whether a medicare benefit which has but should not have been paid because it was for a service which was not reasonably necessary for the adequate optometrical care of the patient can fall within this limb. In my opinion, if there is an ambiguity, the section should be given a purposive construction. An inquiry into excessive servicing is only initiated if the service provided is one for which a medicare benefit has been claimed and paid or is apparently payable. The optometrical services provided by the applicant were in this category. It would lead to an absurd result if such services ceased to be qualified for categorisation as excessive despite their meeting the central feature of excessive services, viz. that they were not reasonably necessary for the patient's care, merely because medicare benefits should not have been paid because the services for which they were paid were excessive.

3. The third limb of the definition requires evidence that the services were not reasonably necessary for the adequate optometrical care of the patient.

4. As a member of a Full Court of this Court (Davies, Spender and Burchett JJ.) in Tiong v. Minister for Community Services and Health (1990) 93 ALR 308, Justice Davies said at 315:
   

The words "reasonably necessary" in the definition of "excessive services" refer to services which are reasonably appropriate: see per Higgins J. in Commonwealth and Postmaster-General v. Progress Advertising and Press Agency Co Pty Ltd (1910) 10 CLR 457 at 469 and per Latham C.J., Rich, Dixon, McTiernan and Webb JJ. in Ronpibon Tin (NL) and Tongkah Compound (NL) v. FCT (1949) 78 CLR 47 at 56. Thus, if a practitioner rendered services which, in his view, were not reasonably appropriate for the adequate medical care of the patient, but did so, eg for the purpose of enhancing his own income, the services rendered would not be reasonably necessary for the care of the patient. On the other hand, if the practitioner performed a service which, in his view, was appropriate for the adequate care of the patient concerned, his belief would be relevant as to whether the service was not reasonably necessary but it would not determine the matter. The committee, the Minister and the Review Tribunal each have the function of making up its or his own mind on the issue as to whether the service was reasonably necessary.

Justices Spender and Burchett separately wrote in similar terms on this aspect of the case, although Justice Burchett dissented on other matters.

1. This view was followed by another Full Court of this Court (Black C.J., Wilcox and Foster JJ.) in Minister of State for Health v. Peverill (1991) 100 ALR 73 at 87:
   

There are some differences between the various judgments in Tiong. But, as we read those judgments, all of their Honours would support four propositions. First, the question whether particular services are excessive ... is a matter which must be determined having regard to the information available to the practitioner whose conduct - whether initiation or rendering of services - is under examination. Secondly, in determining that question, the view of that practitioner, as to necessity, will be relevant but not decisive. The view of the practitioner will not be decisive because the question is an objective one and not dependent upon the personal view of the particular practitioner. Thirdly, in the case of an allegation that an unnecessary service has been rendered, it is not a complete answer that the service was rendered at the request of another practitioner. Although a request is a very material matter, which under normal circumstances may be acted upon without further inquiry, cases may occur in which even a requested practitioner may be found to have rendered excessive services. However, and this is the final proposition, such cases will be confined to those involving some "personal fault", to use the term of Davies J. and Spender J., or lack of innocence, to adopt the concept of Burchett J.

The last two propositions, being related to the rendering of services on referral from another practitioner, have no relevance to this case except to set the types of parameters appropriate to the concept and determination of "excessive services".

1. To achieve by way of judicial review a successful attack on the determination, the applicant has to show relevant legal error. The applicant first alleged that the respondent erred at law in his interpretation of "excessive services" as defined. Emphasis was placed on the definition of "excess" in the Shorter Oxford English Dictionary (1973 ed.):
   

The fact or state of being greater in amount or degree than is usual, necessary or right; an excessive amount or degree (of anything).

1. In this connection the applicant drew attention to a number of passages in the transcript of the hearing before the Committee where he was questioned on the adequacy of his services. The Committee queried the length, substance and quality of his examinations, the equipment and facilities he had at his domiciliary visits, the multitude of persons examined at each visit, the fact that these examinations were not conducted at the applicant's surgery but in his patients' homes, and his compliance with standard forms of practice. The applicant submitted on this application for review that all these matters were irrelevant. He argued that the conclusions drawn by the Committee at paragraph 20 of its report, and presumably adopted by the respondent, namely that:
   

The evidence produced has failed to convince the Committee that any substantial optometrical examination took place.

illustrated that the Committee erred at law when it found that the applicant had provided "excessive services" within the meaning of the Act. According to the applicant, this passage indicates that in reality the Committee was dealing with an underservicing or excessive charging case, not an excessive servicing case.

1. It is in my view simplistic and argumentative to describe this as an underservicing case. I agree with the way the case was summarised by the chairman of the Committee when, in response to a query by counsel for the applicant, he said at page 53 of the transcript:
   

We are of the view that if Mr Szakall is providing substandard service, then the provision of this services

(sic) may not be reasonably necessary for the adequate optometrical care of the patient ........ ...

and later on the same page:

And if ........ ... any one of the 253 services is considered by the Committee to be not reasonably necessary, even if it's on the basis of the Committee deciding that a substandard service was rendered, well we would then consider it as being an excessive service. Is that clear?

To which counsel for the applicant replied:

What you are saying to me is clear.

The questions asked and matters taken into account by the Committee to this end were all relevant to an excessive servicing case.

1. The applicant also placed some weight on the second reading speech on the Health Legislation Amendment Act 1982 which introduced the provisions in relation to excessive servicing. It was submitted that the second reading speech drew a clear distinction between overservicing and overcharging or medical fraud. The argument ran that section 106A of the Act was designed to counteract overservicing in the sense of a battery of unnecessary services provided to one person, as opposed to this case where one service was provided to a number of persons.

2. This distinction is a fine but ultimately unmeritorious one. Although there is obviously a difference in definitional terms, the intention of the legislation is clear. The parliament was interested in ensuring that the public was not required to pay out unwarranted money whether for services that were not rendered or for services that should not have been rendered.

3. Prabhat Raj Sinja v. Joan Asher and Ors (1989) 22 FCR 423 has some analogy to the present case. In the course of the relevant Committee's inquiry there, an issue arose as to whether the medical practitioner had performed the services claimed on medicare as opposed to lesser services for which no medicare benefit was payable. The issue for consideration was whether the Committee should be precluded from stating its view that doubts had arisen as to whether particular services were rendered. Wilcox J. stated at 429:
   

I do not accept this analysis. As I have already stated, the reference which was given to the Committee in the present case identified a list of services which were said to have been rendered by the applicant to various named patients. The task of the Committee was to investigate, and report upon, the question whether any of those services was excessive and, if so, to identify the excessive services. Whatever doubts might arise in the minds of Committee members, during the progress of the investigation, as to whether particular services were rendered, it remained their duty to investigate and report upon the question of excessiveness.

1. I respectfully agree with this approach to the problem. The Committee in the present case was thus justified in conveying to the respondent the conclusions in relation to the applicant which its report contained.

2. Finally, the applicant submitted that the decision of the respondent should be set aside on a natural justice ground. It was said that as the reference related to excessive servicing only, the applicant was taken by surprise when the adequacy of his services was queried and he was accordingly deprived of the opportunity to provide evidence to the contrary. This submission cannot be sustained. It became clear to the applicant in his interview by Mrs Waldon and Dr O'Sullivan and at most half way through the Committee's hearing, that the ambit of the questioning concerned the applicant's adequacy as an optometrist. At no time did counsel for the applicant ask the Committee for an adjournment or argue in any way that the applicant had been disadvantaged. That was his time to complain of surprise and procedural unfairness, not now. That he did not do so is itself relevant. I can see no grounds for upholding unfairness in any event. The transcript of the Committee's deliberations leaves no room for doubt that the applicant well knew what was being investigated and what shortcomings were being alleged.

3. In my opinion the applicant's conduct as found by the respondent in his acceptance of the Committee's findings constituted "excessive services" as defined in section 106A of the Act. Neither the respondent nor the Committee erred at law in interpreting the statutory definition, took into account any considerations irrelevant to section 106FK of the Act or denied natural justice. The application will be dismissed with costs.