A skin cancer doctor, who claims the director of the Professional Services Review (PSR) denied him natural justice when she referred him for investigation, has failed in his bid to have the decision overturned.

The Sydney-based GP, who has a special interest in skin cancer, was referred to a PSR committee for investigation into possible inappropriate practice in October 2021 following a review of his Medicare claims at a northern beaches skin cancer and cosmetic clinic . 

However, his application for a judicial review of the decision was dismissed in the Federal Court of Australia last month [link here]. 

The PSR director had initially received a request from the Chief Executive Medicare in February 2021 to review services rendered by the GP between June 2019 and May 2020.

The request flagged four MBS items.

• MBS item 14100 in respect of laser radiation in the treatment of vascular abnormalities of the head or neck.
• MBS item 30192 in respect of treatment by ablative technique of 10 or more premalignant skin lesions.
• MBS Item 30196 in respect of removal by serial curettage, carbon dioxide laser or erbium laser excision with any associated cryotherapy or diathermy of malignant neoplasm of the skin or mucous membrane.
• MBS item 45201 in respect of the repair of a surgical excision made in the removal of a skin legion with a muscle, myocutaneous or skin flap.

As part of her review, the director contacted a specialist medical practitioner with knowledge in the field to act as a consultant and provide her with advice.

The consultant wrote to agency staff in May with initial observations, stating that “essentially, the clinical notes I have seen so far are appalling” and that the GP was “utterly stuffed” without some other form of clinical record such as photos.

A few weeks later he sent another email to employees.

“I am fairly convinced that there is very deliberate fraud occurring, on a level different to the usual ‘crimes of omission’ (or just general ignorance of the MBS) that I usually see,” he wrote. 

The activity appeared to be a ‘crime of commission’, whereby the doctor was allegedly altering clinical notes and pathology requests with the specific aim of fraudulently claiming item 30196, the consultant wrote.

“I have now seen this in three out of the 10 patients being audited for 45201 claims, when I looked back at their pathology reports and consultations immediately prior to their surgeries.”

The consultant also provided the PSR director a 21-page spreadsheet setting out the disputed Medicare items and his commentary, which included lack of documentation on which lesions had been treated and their clinical indication. 

A file note stated that the PSR director had informed the doctor that his rendering of three of the MBS items had placed him in the 99th percentile of all other doctors, while his rendering of the remaining item placed him second highest. 

She also raised a concern that his records did not accurately reflect what had happened in the consultations, considering there were a number of instances where he had written identical entries when billing MBS items 23 and 30192. 

These entries simply stated: “Cryo 11 AKs. Advice re sun protection with avoidance, clothing, UV creams”. 

The director pointed out to the GP that it was unlikely that exactly 11 actinic keratosis were identified and treated each time. 

But the GP explained he used “Cryo 11 AKs” as shorthand because he understood 11 lesions to be the minimum number required to satisfy the MBS descriptor, but he would often treat many more patches at a time.

In his application for judicial review, the doctor accused the PSR director of failing to afford him or his solicitor the opportunity to discuss the possibility of entering into a section 92 agreement before referring him to a committee. 

Such an agreement would have avoided  further investigation for the GP but resulted in action taken against him, such as a reprimand, repayment of benefits or a period of partial or full disqualification from the MBS or PBS. 

He also took aim at the director’s considerations of the consultant’s comments without fully disclosing the substance of them to him and allowing him a “reasonable opportunity” to respond to them in his submissions. 

He concluded that the PSR director had denied him procedural fairness or natural justice in determining what action to take and her final decision had been “legally unreasonable”.

However, his application for judicial review was thrown out on the basis that the PSR director had no obligation to offer to enter into an agreement with him, and couldn’t do so without him admitting to inappropriate practice.

The judge also said the PSR director had set out her concerns in a report to which the GP could respond, which did not include the allegations of fraud.

This might infer that she did not consider the allegations to be of relevance, the judge added.

“Procedural fairness does not require that the decision-maker disclose what she is minded to decide so that the parties may have a further opportunity to criticise her mental processes before she reaches a final decision,” Honourable Justice Burley wrote in his judgement on 24 February. 

The doctor was ordered to pay the costs of the Commonwealth.