The key issues
Dr Karmakar challenged the validity of each stage of the PSR process and sought:
- a declaration that the decision by a delegate of Medicare (the Delegate) to ask the Director of PSR Agency (the Director) to review her practice was invalid;
- a declaration that the decision of the Director to undertake that review was invalid;
- a declaration that the decision of the Director to refer Dr Karmakar to the PSR Committee (the Committee) was invalid;
- a declaration that the decision of the Committee that Dr Karmakar had engaged in inappropriate practice was invalid;
- a declaration that the decision of the Determining Authority that Dr Karmakar had engaged in inappropriate practice was invalid; and
- a declaration that section 106ZR of the Health Insurance Act 1973 (HIA) which prohibits disclosure of the deliberations or findings of a Committee or any information or evidence given to the Committee in the course of its deliberations was invalid.
The background
Following a review of Dr Karmakar’s practice, the Committee made findings of inappropriate practice regarding her provision of MBS items 54, 597, 721, 723 and 732. On 27 August 2019, the Determining Authority made a final determination that Dr Karmakar be reprimanded, counselled, ordered to repay Medicare benefits in the sum of $352,553.70 and be disqualified from rendering certain MBS services for 6-12 months.
The outcome
Dr Karmakar application to the court for declarations was unsuccessful on all grounds and was dismissed.
Notably, Dr Karmakar’s application was run on the basis that the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) was the invoked source of jurisdiction, requiring that a decision be a ‘substantive determination’ with sufficient finality to be amenable for review.
- Delegate decision for Director review
The decision of the Delegate (pursuant to s 86 of the HIA) was not a substantive determination and was instead wholly procedural. It was therefore not a decision amenable for review under the ADJR Act.
- Director decision to undertake review
Again, the decision of the Director to undertake a review at all (pursuant to s 88A of the HIA) and the initial decision not to take no further action and instead give Dr Karmakar a report of reasons and invite a response as to the action that should be taken (pursuant to s 89(1)(b) of the HIA) were not substantive determinations with the necessary quality of finality. Both decisions were therefore not amenable for review under the ADJR Act.
Importantly, there is no implication of any procedural fairness obligation (i.e. for a practitioner to be heard) before either of these two procedural decisions are made.
- Director decision to refer to Committee
Dr Karmakar alleged that the Director’s decision to refer her to the Committee was invalid because (1) the decision was based upon a ‘subjective comparison’ rather than based on an ‘objective standard’ (2) there was a failure to take into account the incompleteness of the medical records and (3) she was denied procedural fairness by not being provided with any details to a review by a GP upon which the Director had relied.
Firstly, whilst the HIA does make a subjective comparison an irrelevant consideration, the Court found there was no such comparison undertaken by the Director (or the Committee as discussed below).
The relevant standard is ‘inappropriate practice’ and “[t]hose practitioners who choose to have the benefit of participating in the scheme of the payment of public monies… also choose to subject themselves to the prospect that their conduct may come to be measured by reference to that standard”. This was a professional evaluative, and not an objective standard.
After considering Dr Karmakar response, the Director was obliged to consider whether there were ‘insufficient grounds’ on which the Committee could ‘reasonably find’ that Dr Karmakar had engaged in inappropriate practice (pursuant to s 91(i) of the HIA). The Court held that ““appears” and “satisfied” necessarily entailed a particular state of mind being held. In this sense, subjectivity, as pleaded by Dr Karmakar, is present. However, the evidence, particularly her report, discloses that the end to which the Director turned her mind as to what “appears” to her or about which she was satisfied was the possibility that a committee…could making a finding of “inappropriate practice””. This was different to the subjective comparison of Dr Karmakar with other medical practitioners as alleged.
Secondly, whether the medical records were complete was not a relevant consideration. In any event, the Director did consider the completeness or otherwise of the records, and it was not irrelevant for the Director to do so.
Thirdly, s 90 of the HIA authorises the Director to consult with a ‘Panel member’ or any consultant or learned professional body as appropriate. The Director was not obliged to reveal the name of the consultant and was only obliged to provide a report setting out the reasons why she decided to refer to the Committee.
The reasons furnished in the Director’s report were comprehensive and afforded Dr Karmakar with a proper opportunity to respond. There was no evidence nor allegation of any abrogation by the Director in favour of that GP of the Director’s decision-making function; the decision was found to be hers. This submission was rejected.
The Court found that no injustice, practical or otherwise, had occurred.
- Committee decision
The main allegations against the Committee mirrored the first two allegations against the Director’s decision to refer.
Under the HIA, it was a wholly evaluative decision which was both reasoned and rational, and no ‘objective standard’ was imposed.
On the issue of the incomplete medical records, it was clear that the Committee had taken into account the completeness of the medical records, and the reasons for why they were incomplete and the extent to which there was an inability to obtain complete records.
Based on the above, the Committee decision was valid, and there was no substance to this ground of review.
Dr Karmakar also unsuccessfully submitted that, inter alia:
- the Committee was not one of her peers because there were no junior GPs included (however, the HIA does not expressly or impliedly require that the Committee be comprised of GPs with the same number of years post-registration);
- she was denied natural justice because she was not legally represented at the hearing, (however, this was a choice by Dr Karmakar as the HIA authorises a practitioner to be legally represented and simply delineated the roles which that representative may undertake at the hearing (s 103 of the HIA));
- the Committee had a duty to inquire into the incomplete records (which, whilst accepted, the Court noted that the Committee had sufficiently exercised its powers under the HIA for this purpose).
- Determining Authority Decision
Dr Karmakar’s challenge to the decision of the Determining Authority was wholly derivative on the success of impeaching the earlier decisions in the PSR process and was therefore dismissed.
- Validity of Section 106ZR
Dr Karmakar submitted that section 106ZR of the HIA was invalid because it unreasonably burdened political communications (by preventing disclosure of deliberations or evidence) and unfairly prevented persons under review from defending themselves (by discussing the process and the evidence).
The Court found that the purpose of s 106ZR was to preserve the deliberations and findings of a Committee and preserve the professional reputation of the practitioner and privacy of the patients associated with the review. It did not prevent communication about the regime in Part VAA of the HIA itself, or its fairness or otherwise to practitioners, and was not incompatible with the implied freedom of political communications. It also did not deny practitioners an opportunity of a fair hearing, as the HIA expressly permits practitioners to call witnesses to give evidence and permits disclosure as is necessary to facilitate that purpose.
The implications
Whilst Dr Karmakar was unsuccessful, the Court made numerous insightful comments about potential areas of reform for the PSR process generally, including that:
- perhaps a general understanding of the PSR process in Part VAA should form part of the curriculum of each medical school and should form the subject of compulsory continuing professional development education; and
- the political arena, rather than the courts, should address the policy considerations which arise from:
- the inconsistencies in the guidance offered by the MBS Book, other online resources and documents produced by the Australian Medical Association.
- the fact that none of the above publications and resources are authoritative;
- the definition of ‘adequate record’ being materially vague and ultimately an evaluative judgment; and
- the corporatisation of medicine with junior medical practitioners employed by large medical service companies, who then have little (if any) control over their own billing practices.
Any practitioner billing to Medicare should ensure that he or she fully understands the requirements, stays up-to-date and complies with the MBS item criteria and appropriate practice. If you are referred to the PSR, contact your medical defence organisation or seek legal assistance.
To read the decision of Karmakar v Minister for Health [2021] FCA 916 click here.
