Cradle to College
Vol. 19 No 3 | Spring 2017
Women's Health
The Professional Services Review: what you need to know


This article is 7 years old and may no longer reflect current clinical practice.

The Professional Services Review (PSR) is a Commonwealth agency whose role is to safeguard the Australian public from the risk and cost of inappropriate practice within the Medicare Program and Pharmaceutical Benefits Scheme (PBS). The PSR Scheme was introduced in 1994. The agency is headed by a director, supported by multidisciplinary clinicians who are appointed as PSR Committee members and who provide peer review of those individuals referred.

Why might a clinician be investigated by Medicare?

The PSR does not initiate investigations; investigations are initiated by medical staff in the compliance branch of the Department of Health.

A clinician may come to the attention of compliance staff because of a complaint received from a member of the public, a clinician’s employee or a patient. However, the majority of cases arise from data analysis that demonstrates a deviation in MBS billing or PBS prescribing patterns that cannot be explained by patient numbers or demographics. As data analytic software becomes ‘cleverer’, deviations can be detected with greater ease. The Department plans to progressively enhance its analytic capacity.

A clinician identified through one of these processes is contacted by compliance staff and asked for an explanation of any concerns. In many cases, the explanations provided by the clinician are sufficient and the matter is resolved. In cases where the explanation does not resolve concerns, a clinician may be directly referred to the PSR (usually where a serious concern exists in relation to prescribing), or may be offered a period of time to reflect and change their behaviour. A repeat review is undertaken six or 12 months later. If concerns persist following the review period, a referral may be made to the Director of the PSR.

What happens if a referral is made to the Director of the PSR?

The Director of the PSR receives a referral from the Chief Executive of Medicare. Referrals are detailed and outline concerns in relation to claiming and prescribing by the clinician. The Director reads the referral and supporting data and decides whether to undertake a review.

If the Director decides to undertake a review, Medicare is asked to provide a random sample of services rendered or initiated as particular MBS or PBS items of concern, and the Director asks the clinician under review to provide the records of these cases. The number of records required depends upon the number of separate concerns in relation to billing or prescribing.

The PSR Scheme is based on a peer-review process. Therefore, when the records are available for review, the Director contracts with a peer clinician to read the records and provide a report. After receipt of this report, the Director will usually visit the clinician under review and outline the concerns raised in the referral to the Director and the reviewing consultant. Of note, the Director is not obligated to visit the clinician and may elect to miss this step. If concerns remain after the Director has visited the clinician, the Director then writes a letter to the clinician under review outlining all concerns. The clinician under review has a month to respond to the Director’s letter.

Once the Director receives the clinician’s response, the Director makes one of three decisions.

These are:

  • The review should end as it is unlikely there will be a finding of inappropriate practice.
  • The review can be resolved by negotiated agreement. In this case, the clinician under review voluntarily acknowledges they acted inappropriately in regard to the MBS or PBS and accepts a reprimand from the Director. A repayment order or partial disqualification from MBS or PBS will be negotiated, based on the findings of the review. Negotiated agreements might be offered to clinicians who express insight, a willingness to change practice behaviour and co-operate with the PSR process.
  • The matter may be referred to a Committee.

Of note, once a decision has been made by the Director to refer to a Committee, the opportunity for a negotiated agreement is lost.

What happens if a clinician is referred to a Committee?

The Director of the PSR will establish a Committee of peers. A Committee usually consists of three members: a Deputy Director who acts as Chair, and two members who are peers of the clinician under review. For example, if the clinician under review was an O&G, then the Deputy Director might be a general practitioner and the two members peer O&Gs. For every MBS item of concern that a Committee decides to examine, a random selection of services are identified by Medicare and up to 30 sets of records are obtained. PSR uses a random sampling and extrapolation methodology. This means that findings in relation to the sampled services are extrapolated across the entire billing for the year under review.

Committee hearings are formal and evidence is given under oath or affirmation. The PSR Committee members have access to independent legal advice and the clinician under review is strongly encouraged to also have legal representation. This is because the PSR process can have significant outcomes.
Serious outcomes can include:

  1. Repayment order – an order for a clinician to repay Medicare benefits that they received or caused to be paid.
  2. Partial/full disqualification from Medicare – a disqualification of up to three years (or five years in some circumstances) from some or all MBS items. This means the services provided to patients will not attract a Medicare benefit.
  3. Disqualification from the PBS – a disqualification of up to three years from prescribing or dispensing PBS items to patients.

The Committee will systematically discuss every medical record with the clinician under review. Hearings typically run for a total of six to eight days. To enable the clinician under review to have a break, hearings may be broken into two-day blocks. Following the hearing, the Committee prepares a draft report setting out its preliminary findings with regard to whether inappropriate practice occurred in relation to each service reviewed.

A transcript of proceedings is obtained and a report generated of the Committee’s findings. The clinician under review has the opportunity to comment on the draft report. If findings of inappropriate practice are made, the final report then goes to a separate body called the Determining Authority, which determines the consequences that should flow from the Committee’s findings of inappropriate practice.

Why might a finding of inappropriate practice be made?

In determining whether a clinician has engaged in inappropriate practice, a decision is made whether the conduct when providing or initiating MBS or PBS services would be unacceptable to the general body of a clinician’s peers.

  • A decision in regard to inappropriate practice might be made if any of the following occur:
  • The clinician has not demonstrated the clinical relevance of the service or prescription
  • The clinician has not demonstrated the service provided was clinically adequate
  • The clinician cannot demonstrate they performed the service instead of another person (for example, nurse or registrar)
  • The clinician failed to keep adequate and contemporaneous records. This can mean a number of things, including that their records
    — are illegible
    — have inadequate detail to explain the condition and/or treatment
    — do not demonstrate the clinical relevance of the service (that is, that the service provided was clinically necessary or justified)
  • The clinician’s conduct when prescribing or dispensing PBS medicines would be unacceptable to a body of peers.
  • Consent was not documented when indicated.
  • The specific requirements of a MBS or PBS were not fulfilled.

The process for conducting PSR reviews is set out in Part VAA of the Health Insurance Act 1973.


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