1 February 2022

PSR Stage 3: the Final Determination

KnowCents Medicolegal

This is crunch time, when a Determining Authority decides your penalty. The next steps you take are crucial.


Once a practitioner completes their journey through stage 1 and 2 of the Professional Services Review process, it would be fair to say that the naivety, innocence and confidence they may have had as a clinician are probably gone.   

By this time you are like a well-oiled engine, either ready to impart lots of knowledge from the experience you endured or “over it” and wanting to just somehow move forward from this ordeal.   

So, let’s talk about the very last stage of the this journey: the Stage 3 Determining Authority.  

The Determining Authority is an independently appointed body of peers with two basic functions: to ratify the negotiated agreements between the Director and the practitioner and to determine what sanctions to apply against the practitioner based on the committee findings of inappropriate practice.   

When you have gone through a committee hearing and there has been a finding of inappropriate billing, the DA will give you an opportunity to make submissions for the findings, and then prepare a draft determination. The sanctions the DA can impose are: a reprimand, counselling, partial or full disqualification from claiming a Medicare benefit for no more than three years, an order for repayment of any Medicare benefits for services provided in the review period that have been found as being provided inappropriately and/or a full disqualification from the PBS for no more than three years.   

In response to the draft determination, practitioners can make submissions and then after the DA considers the material within the submissions, the members make their final determination. This appropriately sinister-sounding step is the end of the PSR process, unless the decisions are challenged in the court system.   

A note on the importance of submissions  

Make sure you take time and engage expertise to make these submissions.  Do not follow advice that “they won’t take much into consideration so what’s the point?” or “submissions mean nothing, we are done anyway”.  

This kind of advice can actually cost you a whole Federal Court case. One of the reasons my own personal Federal Court case was fully dismissed was having had exactly this advice from my previous solicitor. The judge even said during his decisions that had I provided more detailed submissions in the DA stage perhaps I had a chance of getting up on certain points.   

Do not make the same mistakes – make sure you engage a professional to make the right moves from the start! 

Once a determination amount of inappropriate billing is made, the Department of Human Services will be in touch, letting you know that an invoice has been issued against your name, owing the Commonwealth $XYZ. Most of us will not have the hard cash to payback the amount immediately so you will need to contact two key people: your solicitor and your accountant.   

1) Solicitor: your legal team (through your indemnity or private) will commence the negotiation process with the DHS for a payment plan. All arrangements are individualised. Sometimes practitioners are able to offset percentage of their future Medicare billing towards the payback, or come to an agreement of paying back a certain amount every month.   
Generally, the DHS would like to see the debt settled within two years, but longer arrangements have been made. I think what they want to see is your active effort to pay back and usually they are quite amicable compared to other conventional creditors.  
A good solicitor will use lots of tables and analyse your situation carefully, listen and show empathy towards your situation – at a reasonable price. 

2) Accountant: this step is very important. Although by now you may have been tainted as a “rorter”, the reality is you probably have not even seen 30% of the amount that you have been convicted of billing inappropriately. 
Let’s say you are told to pay back $350,000 to Medicare. After paying service fees and tax, you would have had about $110,000 of this as gross income, give or take. But this is where your friendly accountant comes in. They will need to tax-adjust your income over the audit period and you should expect to get a tax refund back into your account, which will help towards your cash flow and the repayment of debt. I am not an accountant, so please make sure you speak to a professional who has experience in this type of money juggle.   

In conclusion, it is not the end of the world, your career or your life.  It’s one of those experiences that you would not wish upon your greatest enemy, but on the flipside it can make you a better clinician – certainly more risk-averse and appreciative of your access to public funds – and gives you some amazing insight into the regulatory aspects of being a medical practitioner in Australia.   

In fact, I personally have no regrets about going through these stages, followed by an entire court process and coming out with a loss or dismissal, because now I get to teach, support and advocate for my peers who are facing or may face similar scenarios.   

Dr Anchita Karmakar is the founder and CEO of AHPAS (Australian Health Professionals Advisory Service); a medicolegal liaison officer at Work Legal; and an ACRRM rural generalist independent pathway registrar with a special interest in population health.