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Focus: Health – February 2007

In this issue: we examine the role of the Professional Services Review; final and binding determinations made under the Medical Practice Act 1994 (Vic); recent amendments to stem cell legislation; and the treatment of a child without parental consent.

• Protecting patients and Medicare from inappropriate practices
• Board can't have two bites at doctor
• Recent amendments to stem cell legislation
• The treatment of a child without parental consent
• Discrimination in the provision of medical treatment

Protecting patients and Medicare from inappropriate practices

In brief: Lawyer Elena Tsangari examines the role of the Professional Services Review, which aims to protect the integrity of the Medicare Benefits Scheme and Pharmaceutical Benefits Scheme, and highlights some recent conduct that has been reviewed.

Background

In mid-January 2007, the media reported that some skin cancer clinics had been caught rorting Medicare by engaging in over-servicing, including removal of benign skin lesions, in order to claim Medicare benefits. It was also reported that numerous doctors had been penalised for extensive over-servicing, including one practitioner who claimed so many Medicare items that he would have had to work a 36-hour day to perform the services claimed.

The source of the reports was the Professional Services Review Paper, Report to the Professions 2005-06, a paper based on the annual report of the Director of the Professional Services Review, which was tabled to Parliament by the Minister for Health and Ageing, Tony Abbott, on 31 October 2006.

What is the Professional Services Review?

The Professional Services Review (PSR) scheme was established by the Health Legislation (Professional Services Review) Amendment Act 1993 (Cth), which amended the Health Insurance Act 1973 (Cth). In 2002, substantial amendments were made via the Health Insurance Amendment (Professional Services Review and Other Matters) Act 2002 (Cth).

The PSR's objective is to protect the integrity of the Medicare Benefits Scheme and Pharmaceutical Benefits Scheme (PBS). Essentially, the PSR reviews and investigates suspected inappropriate practice by practitioners who have rendered services attracting a Medicare benefit or who prescribe under the PBS.

In the cases of medical practitioners, inappropriate practice is considered to be 'conduct that would be unacceptable to the general body of members of the group in which the practitioner is practising'.

PSR process for review

The process for investigating alleged inappropriate practice is as follows:

1. Medicare identifies potential inappropriate practice on the basis of a practitioner's service statistics and advises the practitioner of its concerns. The conduct is reviewed and, if the concerns remain unanswered, Medicare may request the PSR Director to review the conduct.
2. The Director's review is not limited to Medicare's reasons for requesting the review and may extend to any services provided by the practitioner. The Director can request the practitioner to produce documents and can penalise non-compliance. Case officers may be appointed to assist the Director with the review.
3. At the review's completion, the Director must decide whether any further action is to be taken and provide the practitioner with a written report, inviting submissions for further action. After the submissions have been received, the Director must:

1. decide to take no further action;
2. negotiate and enter into an agreement with the practitioner in which the practitioner admits the inappropriate practice and accepts any sanctions; or
3. establish a Professional Services Review Committee (PSRC) and make a referral of the conduct to it.

4. The practitioner will be given the opportunity to appear and give evidence before the PSRC, which may also require the practitioner, or anyone else, to produce documents. If the practitioner fails to give evidence or produce requested documents, the PSRC may notify the Director, who will fully disqualify the practitioner from Medicare until the practitioner complies. Legal advisers usually assist both the PSRC and the practitioner.
5. At the hearing's conclusion, the PSRC will draft a report to the practitioner inviting submissions on its preliminary findings. The PSRC must consider any submissions from the practitioner before finalising its report to the PSR's Determining Authority.
6. If PSRC makes a finding of inappropriate practice, the Determining Authority will invite submissions from the practitioner regarding the possible sanction. The Determining Authority must impose one or more of the following:

1. a reprimand;
2. counselling;
3. repayment of a Medicare benefit; or
4. complete or partial disqualification from the Medicare Benefits Scheme and/or the PBS for up to three years.

The practitioner may at any stage seek judicial intervention or review in the Federal Court. A number of practitioners who have been reviewed have initiated court proceedings against PSR, with the most significant action currently before the court being a challenge to the constitutional validity of the PSR scheme.

Each year, the PSR Director prepares a report to the Minister for Health and Ageing, which outlines the types of behaviours that have led to findings of inappropriate practice. The report is said to act as a guide to the profession as to their peers' understanding of inappropriate practice.¹

2005-06 reviews

In 2005-06, a total of 10 reviews were completed, with seven of those reviews being referrals from Medicare. Eight of the reviews ended with negotiated agreements, while, in the remaining two cases, PSRCs were required to be established.

The type of conduct that attracted the attention of Medicare included practitioners having very high levels of total services (above the 99th percentile of other practitioners); practitioners having a high level of services per patient; practitioners 'up-coding' of services; practitioners prescribing high levels of certain medications and practitioners having inadequate medical records.

The Director referred numerous complaints to the committee for reasons, including inadequate clinical input, the medical benefits schedule item descriptor not being satisfied, services not being medically necessary and a failure to keep adequate medical records.

Conclusion

As a result of the successful distribution of the PSR's first Report to the Professions in 2004-05, the PSR's Director has decided to publish a report each year which will highlight the types of conduct that are considered inappropriate practice and should be used as a guide by all medical practitioners.

Board can't have two bites at doctor

In brief: The Victorian Court of Appeal has confirmed that findings and determinations made by a panel in the course of a hearing under the Medical Practice Act 1994 (Vic) are final and binding. Lawyer Mark Schneider reviews the recent decision in Kabourakis v The Medical Practitioners Board Of Victoria² where the Medical Board attempted to twice investigate a doctor accused of professional misconduct.

Background

Dr Kabourakis treated a patient for pain management following an industrial accident. The patient later died as a result of what was described as an overdose of the drugs prescribed by Dr Kabourakis.

It was subsequently alleged to the Medical Practitioners Board of Victoria (the Board) that Dr Kabourakis may have engaged in professional misconduct in the treatment of the patient. It was alleged that Dr Kabourakis had:

• prescribed excessively for the patient;
• failed to obtain adequate information about the patient's history;
• failed to seek and apply suitable alternative measures of pain relief; and
• failed to take into account the patient's depression when prescribing for him.

The Board's investigation

The Board decided to conduct a preliminary investigation into the allegations under the Medical Practice Act 1994 (Vic) (the Act). Following the preliminary investigations (including correspondence with Dr Kabourakis), the Board determined to conduct an informal hearing into Dr Kabourakis' professional conduct in relation to his treatment of the patient.

The Board had earlier sought the opinions of Professor Olaf Drummer of the Institute of Forensic Medicine and a general practitioner, Dr John Summons. The Board presented the panel at the informal hearing with Professor Drummer's opinion, but did not include its correspondence with Dr Summons.

The panel found that Dr Kabourakis had not engaged in unprofessional conduct.

Following the panel's finding, there was a further complaint to the Ombudsman regarding the decision. After conducting its own investigation, the Ombudsman recommended that the Board re-open its investigation and hold a new informal hearing into the allegations.

The Board accepted the Ombudsman's recommendation and wrote to Dr Kabourakis to advise him that it proposed to hold a further preliminary hearing under section 41 of the Act. Dr Kabourakis resisted the further informal hearing on the basis that the Board had come to a final and binding determination that he had not engaged in professional misconduct and instituted proceedings for judicial review of the decision to hold the second hearing.

Decision at first instance

Dr Kabourakis submitted that the decision could not be revisited in a second preliminary hearing or otherwise except on appeal or by review for jurisdictional error. No jurisdictional error was alleged. The only basis on which it had been determined to hold a further preliminary hearing was that there had been a failure to furnish the first hearing with the opinion of Dr Summons.

The judge rejected that contention and dismissed Dr Kabourakis' application on the basis that the rule that an administrative decision made in accordance with the Act cannot be revisited for error short of jurisdictional error yields to contrary statutory intention. His Honour held that the Act intended the Board to have the power to hold a second informal hearing to correct errors made by it in a first informal hearing, consistent with the Board's duty to properly investigate a notification in the interests of good administration and fairness.

The Court of Appeal decision

The Court of Appeal held that the panel's finding was final and binding and on the proper construction of the Act, other than by appeal or in cases of jurisdictional error, the Board did not have the power to refer the matter that was the subject of the panel's finding to a second hearing.

The court relied on logic and common sense to decide that the Act did not intend to allow the Board the power to re-open or hold further informal hearings into the same matter because:

• the process could be abused if there were no limit to the number of informal hearings that could be held in the same matter;
• there were contrary intentions in the Act regarding limitations on the Board's power to refer matters to informal hearings;
• the Act would not have intended a situation where subsequent informal hearings could reach findings inconsistent with the findings of the first informal hearing; and
• it would be unfair if doctors and others could not rely on the findings and determinations of informal hearings .

The court considered that the requirements of good administration and the need for people affected directly or indirectly by decisions to know where they stand meant that finality was more often than not the paramount consideration. Dr Kabourakis was entitled to believe that, once the finding of the panel was published (together with comprehensive reasons), the matter had reached certainty and finality.

Conclusion

This decision gives doctors some comfort that, if the Board decides to conduct an informal hearing, the findings and determinations handed down by the panel at that hearing will be final and binding and cannot be revisited unless there is jurisdictional error.

Recent amendments to stem cell legislation

In brief: Federal Parliament passed an Act late last year that will permit the creation, development and use of human embryos for research and clinical purposes. Lawyer James Somerville reports on amendments to the Act that will take effect on 12 June 2007. 

The Prohibition of Human Cloning for Reproduction and The Regulation of Human Embryo Research Amendment Act 2006 (Cth) (the amending Act) amends the Prohibition of Human Cloning Act 2002 (Cth) (the PHC Act) and the Research Involving Human Embryos Act 2002 (Cth) (the RIHE Act). The amendments are based on the recommendations of the Lockhart Review which were considered in AAR's Focus: Health, March 2006.

Amendments to PHC Act

The PHC Act currently imposes a blanket prohibition on the creation of human embryos, except for treatment associated with assisted reproductive technology (ART). The essential amendments to the PHC Act are contained in a new Part 2 that will remove the blanket prohibition on the creation of human embryos and provide for certain activities to be permitted by licence.

Creation and development of embryos

The following activities will be permitted by licence from the National Health and Medical Research Council (NHMRC) Licensing Committee under the RIHE Act:

• creating a human embryo by a process other than fertilisation of a human egg by human sperm or the development of such an embryo;
• creating or developing a human embryo containing genetic material provided by more than two persons by a process other than fertilisation of a human egg by human sperm;
• using precursor cells taken from a human embryo or human foetus, intending to create a human embryo; and
• creating a hybrid embryo.

Undertaking any such activity without a licence will be an offence carrying a penalty of up to 10 years' imprisonment.

Relevantly, the PHC Act will no longer prohibit therapeutic cloning by the creation of embryos through technologies such as somatic cell nuclear transfer. It should be noted that the PHC Act will absolutely prohibit developing a human embryo outside the human body for a period of more than 14 days (excluding periods where development is suspended).

The RIHE Act will allow hybrid embryos to be created for the purposes of testing sperm quality in ART centres and by somatic cell nuclear transfer involving the insertion of a human nucleus into an animal oocyte.

Other amendments

The definition of 'Human Embryo' in the PHC Act will be replaced by the following definition:

Human Embryo means a discrete entity that has arisen from either: the first mitotic division where fertilisation of a human oocyte by a human sperm is complete; or any other process that initiates organised development of a biological entity with a human nuclear genome or altered human nuclear genome that has the potential to develop up to, or beyond, the stage at which the primitive streak appears; and has not yet reached 8 weeks of development since the first mitotic division..

According to the Explanatory Memorandum, this amendment has been made to reflect the position that the first mitotic division is the time at which fertilisation is complete and an embryo is formed and to include embryos created by means other than fertilisation, such as somatic cell nuclear transfer and parthenogenesis. The eight-week period of development does not include periods where development is suspended.

The title of the PHC Act will be changed to the Prohibition of Human Cloning for Reproduction Act 2002 (Cth), according to the Explanatory Memorandum, to indicate that the PHC Act will no longer absolutely ban the creation of human embryos for research and clinical purposes.

The PHC Act will be reviewed again after 12 December 2009.

RIHE Act

The RIHE Act regulates the use of human embryos and provides the statutory framework for licenses to be issued for the creation, development and use of human and hybrid embryos. Amendments to the RIHE Act will facilitate the licensing of research and clinical treatment involving the creation, development and use of human embryos.

Use of human embryos

Currently, the RIHE Act contains an absolute prohibition on the use of human embryos, except for excess ART embryos. The RIHE Act will be amended to permit the use, by licence from the NHMRC Licensing Committee, of embryos created in accordance with the amendments to the PHC Act. Further, research or training, for the purposes of ART, that involves the fertilisation of a human egg by a human sperm up to, but not including, the first mitotic division, outside the body of a woman, will also be permitted by licence.

Using embryos in the manner permitted by the RIHE Act without a licence will be an offence carrying a penalty of up to five years' imprisonment.

Licences

As foreshadowed above, the RIHE Act will be amended to give the NHMRC Licensing Committee the power to grant licences authorising:

• use of excess ART embryos;
• creation of human embryos other than by fertilisation of a human egg by a human sperm, and use of such embryos;
• creation of human embryos other than by fertilisation of a human egg by a human sperm that contain genetic material provided by more than two persons, and use of such embryos;
• creation of human embryos using precursor cells from a human embryo or a human foetus, and use of such embryos;
• research and training involving the fertilisation of a human egg by a human sperm up to, but not including, the first mitotic division, outside the body of a human woman for the purposes of research or training in ART; and
• creation of hybrid embryos by the fertilisation of an animal egg by a human sperm and use of such embryos up to, but not including, the first mitotic division for the purposes of testing sperm quality in an accredited ART centre.

A condition of any such licence will be that proper consent must be obtained, in accordance with guidelines issued by the CEO of the NHMRC, from each responsible person before the creation or use of an embryo.

Enforcement

Provisions will also be inserted into the RIHE Act to provide for warrants to be issued allowing inspectors to enter premises for the purposes of investigating whether the PHC Act or RIHE Act have been complied with.

Review of RIHE Act

The RIHE Act will be reviewed again after 12 December 2009.

Reports

The amending Act also requires the Minister for Health and Ageing to prepare reports on the establishment of a National Stem Cell Centre, a national register of donated excess ART embryos, and the making and the feasibility of establishing a national legislative or regulatory approach for non-blood human tissue-based therapies.

The treatment of a child without parental consent

In brief: The recent New South Wales Supreme Court decision in Re Elm³ considered whether a doctor's statutory authority to carry out urgent medical treatment on a child without parental consent extends to the continuation of that treatment and whether the consent to medical treatment by a person having 'care responsibility' is effective in circumstances where the person having parental responsibility has refused consent. Lawyer Simon Cobb reports.

Facts

At the time of the proceedings, the defendant was pregnant and due to give birth in 11 days. She had tested positive for the Human Immunodeficiency Virus (HIV) and, while she had initially accepted medication during her pregnancy, she came to believe that she had been miraculously healed and had consequently refused treatment for several months. Crucially, she did not wish to give birth by caesarean section nor allow her child to receive anti-HIV medication at birth; treatment that could potentially reduce the child's risk of infection from 70 per cent to 10 per cent.

The Department of Community Services sought the following urgent declaratory and interlocutory relief:

• a declaration that the director of the neonatal intensive care unit had authority to administer the recommended treatment to the child under section 174 of the Children and Young Persons (Care and Protection) Act 1998 (NSW) (the Act) or, alternatively, by order of the court; and/or
• a declaration that the Director-General of the Department of Community Services, upon assuming 'care responsibility' for the child under s44 of the Act, had the authority to give effective consent to the recommended medical treatment notwithstanding the defendant's refusal to consent; and
• an injunction prohibiting the defendant upon birth from breastfeeding the child (an act that would increase the child's risk of HIV infection) or removing the child from any hospital without written approval.

Notably, the application was brought in the absence of the defendant for fear that notification of the application would give rise to the serious risk that the defendant would not present to hospital at all for the birth.

The decision

The court was not prepared to authorise the director of the neonatal care unit to administer the recommended treatment on the basis of s174 as that provision required the relevant medical practitioner (not the court) to form the requisite opinion that the treatment was necessary, as a matter of urgency, to save the child's life or prevent serious damage to their health. The court did, however, consider that notwithstanding that the proposed treatment was to continue for a period of four weeks following the child's birth, this did not deprive the treatment of the requisite 'urgency' required under s174. Accordingly, this decision suggests that a doctor's statutory authority to carry out urgent medical treatment on a child without parental consent can extend to the continuation of that treatment, at least so long as its continuation remains necessary to save the child's life or prevent serious damage to their health.

Section 44 of the Act provides that the Director-General may, on suspecting on reasonable grounds that a child is at risk of serious harm, assume the care responsibility of the child by means of an order in writing signed by the Director-General and served on the person. The Act further provides that a person having care responsibility for a child under the Act has, among other powers, the authority to consent to certain medical treatment on the advice of a medical practitioner. The issue before the court was whether a medical practitioner could safely act on the authority of a person having 'care responsibility' for a child under the Act (here, the Director-General) and administer recommended treatment in circumstances where the child's parent had expressly refused consent to the treatment.

In interpreting the Act, the court was of the opinion that the person having care responsibility under s44 'has so to the exclusion of those having parental responsibility from whom care responsibility has been removed'. Moreover, the court concluded that even if this interpretation of the Act was erroneous and those having parental responsibility retained their authorities, a person having care responsibility 'has at least concurrent authority to consent to medical treatment on the advice of a medical practitioner... '. Accordingly, the consent of a person with care responsibility is effective 'notwithstanding that those having parental authority do not, or refuse to, consent' to the treatment.

The court, by making the declaration sought, enabled the doctors to administer medical treatment to the child in accordance with the consent of the Director-General under the Act without fear of any wrongdoing on their part.

The court was also prepared to order the injunctive relief to prevent the defendant breastfeeding the child or removing it from any hospital in order to prohibit potential tortious conduct.

Finally, notwithstanding some reservations concerning the dangers of making orders in the absence of the defendant, the court considered the benefits of doing so greatly outweighed the disadvantages in the case, given the risk that the defendant would fail to attend any hospital if notified of the application.

Conclusion

The court's decision demonstrates a sensibly broad interpretation of medical treatment required as 'a matter of urgency' to save the life or prevent serious damage to a child or young person. In addition, the confirmation of the exclusive, or at least concurrent, powers of those persons with 'care responsibility' logically reflects the ability of two parents to exercise their parental duties, powers and rights separately.

Discrimination in the provision of medical treatment

In brief: Senior Associate Alana Petty reviews the decision of Wood v Calvary Heath Care ACT Ltd⁴, where the court had to consider whether a hospital discriminated against a patient by refusing certain medical treatment on the basis of the patient's history of drug use and morphine dependency.

Background

The Calvary Hospital (the hospital) offered a nursing program called Calvary at Home (the CAH scheme), which enabled patients to be treated at home by a visiting nurse rather than being admitted to the hospital.

In this case, the patient presented at the hospital suffering from pneumonia and was prescribed intravenous antibiotics to be followed by a course of oral antibiotics. While her doctor recommended that she be admitted for treatment, the patient advised that she did not wish to be admitted. A CAH nurse spoke with the patient and took her medical history. The patient advised that she had a history of intravenous drug use and was morphine-dependent. The patient was later advised by the hospital that she could not be treated at home because of her history of drug use and the associated occupational health and safety risks to the nurses who would be treating her.

The patient complained to the Human Rights and Equal Opportunity Commission, alleging that the hospital had unlawfully discriminated against her on the ground of her disability (being her past drug addition). The complaint resulted in an application being filed in the Federal Magistrates Court.

The decision of the Federal Magistrates Court

It was not disputed that the patient did in fact have a disability as defined in the Disability Discrimination Act 1992 (Cth) (the Act) by reason of her past intravenous drug use and morphine dependency. The issue for the Federal Magistrates Court was whether the hospital had discriminated against the patient by refusing to provide the services of the CAH scheme to the patient contrary to the provisions of section 24(1)(a) of the Act which provides as follows:

It is unlawful for a person who, whether for payment or not, provides goods or services, or makes facilities available, to discriminate against another person on the ground of the other person's disability ... by refusing to provide the other person with those goods or services ...

Notwithstanding that the federal magistrate accepted the evidence of the patient that she had been told she could not be treated under the CAH scheme because of her history of drug use, the question of fact central to the application was whether the CAH scheme was closed at the time the patient had sought to be included in it. The hospital had led evidence that the CAH scheme had been closed at the relevant time because of the illness of the nurse responsible for the home visits. In the circumstances, the hospital argued that there could be no discrimination because the patient was unable to be accepted into the program whether or not she had a disability. The magistrate accepted the argument and concluded that there must be a service available to be offered before the service could, in any meaningful sense, be said to have been refused contrary to s24.

Appeal to the Federal Court

The patient appealed the decision to the Federal Court.

First, the patient contended that the finding that the CAH scheme was unavailable was wrong and contrary to the weight of evidence: the fact that staff may not have been available for the next couple of shifts could not be considered evidence of any general closure or unavailability of the CAH scheme.

The Federal Court accepted that it was conceivable that a nurse may have been available to treat the patient at her home on the afternoon following her initial visit to the hospital. However, the difficulty for the Federal Court in accepting the proposition was that the hospital's witness had not been cross-examined to establish whether there would have been a nurse available the following afternoon. Neither had the patient attempted to establish at the trial that the closure of the CAH scheme was qualified or limited. In the circumstances, the Federal Court could not be satisfied that the magistrate erred in finding that the CAH scheme was closed due to staff shortages.

Secondly, the patient argued that, even if the CAH scheme was unavailable, it did not follow that there had been no breach of s24(1)(a) of the Act. It was said that the availability of the service, at least where it was established that the service generally existed and the would-be service provider held itself out as providing that service, was an issue relevant to reasons for the act to which s10 of the Act applied. Section 10 provides that, if an act is done for two or more reasons and one of the reasons is the disability of a person then, for the purposes of the Act, the act is taken to be done for that reason.

In considering the interpretation to be given to s24(1)(a), Justice Moore noted that, in his opinion, the section did not cease to apply where a discriminator was for some reason temporarily unable to provide the goods or services. Accordingly, His Honour concluded that it may well be that the identification of the patient's prior drug use as a reason for not offering her treatment at home was an unlawful consideration.⁵

Ultimately, the Federal Court concluded that the finding that the CAH scheme was closed could only sensibly lead to the conclusion that the patient was treated no differently than a person without the disability would have been treated – neither of them would have been provided with the service. From comments made by Justice Moore, it seems that the outcome might have been different had the patient sought to lead evidence at the trial that the CAH scheme was only temporarily unavailable and that the service could have been provided to her in the immediate future.

Conclusion

This case serves as a reminder to medical practitioners that it is unlawful to discriminate against another person on the ground of a disability in the provision of medical services. 'Disability' is defined extremely widely to include a disorder, illness or disease that affects a person's thought processes, perception of reality, emotions or judgment or that results in disturbed behaviour and includes a disability that presently exists, previously existed but no longer exists, may exist in the future or is imputed to a person.

Footnotes

1. PSR Report to the Professions 2005-2006; p15.
2. [2006] VSCA 301.
3. [2006] NSWSC 1137.
4. [2006] FCA 1433.
5. His Honour did, however, note that this characterisation was conditional because of the defence of unjustifiable hardship raised by the hospital had not been considered.

For further information, please contact:

• Adam ThatcherPartner, Brisbane
  Ph: +61 7 3334 3157
  Adam.Thatcher@aar.com.au
• Andrew WisemanPartner, Sydney
  Ph: +61 2 9230 4701
  Andrew.Wiseman@aar.com.au
• Tony PymanPartner, Melbourne
  Ph: +61 3 9613 8891
  Tony.Pyman@aar.com.au
• Dr Trevor DaviesPartner, Allens Arthur Robinson Patent & Trade Marks Attorneys, Sydney
  Ph: +61 2 9230 4007
  Trevor.Davies@aar.com.au
• Niranjan ArasaratnamPartner, Melbourne
  Ph: +61 3 9613 8324
  Niranjan.Arasaratnam@aar.com.au

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