Articles and Case Studies

Professional Services Review

05 Oct 2015

Nerissa Ferrie

by Nerissa Ferrie

Concerned doctor in scrubbs

The Professional Services Review (PSR) Scheme, formerly known as the Medical Services Committee, was established by the Australian Government in 1994. The PSR provides practitioners with a chance to explain their practice to the PSR or a committee of peers if the Director of the PSR considers the practitioner may have engaged in “inappropriate practice”.

Inappropriate practice

Inappropriate practice is defined in the legislation as:

"… conduct by a practitioner in connection with rendering or initiating services that a practitioner’s peers could reasonably conclude was unacceptable to the general body of their profession.

The two elements of the definition relate to practice or conduct when providing or initiating Medicare services and/or conduct in prescribing or dispensing PBS medicines.

A practitioner will be deemed to have engaged in inappropriate practice if they provide 80 or more professional attendances on 20 or more days during a 12-month period, known as the 80/20 rule. A practitioner may still engage in inappropriate practice despite not breaching this rule.

A three-stage process

If the Department of Human Services (DHS) requests the Director of the PSR to undertake a review of a practitioner over a specified period, the practitioner reaches Stage 1 of the PSR process – Review by the Director.

The Director must conduct a review if, after considering the request from the DHS, the Director forms the view that the practitioner may have engaged in inappropriate practice. On reviewing the DHS data, the Director may ask the practitioner to provide medical records for consideration or request a meeting with the practitioner. Once the Director’s report is issued, the practitioner will be given an opportunity to make a submission.

The options open to the Director are to: 
  1. take no further action
  2. negotiate an Agreement under s92 of the Health Insurance Act 197
  3. refer the practitioner to a peer review committee.  

A Negotiated Agreement requires the practitioner to accept that he or she has engaged in inappropriate practice. The Director is not obliged to accept a Negotiated Agreement offered by the practitioner.

Stage 2 – Review by a Committee – begins if the Director believes the practitioner's conduct requires further investigation, if the practitioner declines to enter into a Negotiated Agreement, or if the PSR decides not to accept the practitioner's proposed Negotiated Agreement. A PSR Committee is established to determine whether the practitioner's conduct would be acceptable to the general body of the practitioner’s peers.

If the committee forms a preliminary view that the practitioner may have engaged in inappropriate practice based on the practitioner's records, the practitioner will be invited to attend a hearing. The practitioner can provide oral and written evidence at the hearing, and the Committee will produce a Draft Report once all evidence has been considered.

If no evidence of inappropriate practice is found, the matter will be closed. If the committee finds that inappropriate practice has occurred, the practitioner will have an opportunity to provide submissions on the findings in the Draft Report. Once the submission has been considered, the Committee will issue a Final Report to the practitioner and to the Determining Authority.

This brings us to Stage 3 – the Determining Authority – which has two main functions. This independent body will decide whether to ratify Negotiated Agreements reached between the Director and a practitioner, or determine the sanctions which should be applied if the Committee finds the practitioner has engaged in inappropriate practice.

The Determining Authority must impose one or more of the following sanctions:

  • a reprimand 
  • counselling partial disqualification from claiming a Medicare benefit for no more than three years 
  • 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 a
  • full disqualification from the PBS for no more than three years.

The practitioner will have an opportunity to make submissions on the recommended penalty before a Final Determination is made. A Final Determination brings the PSR process to an end, so any appeals must be made to the Federal Court or Federal Magistrates Court.

Investigations into your practice should not be ignored or taken lightly, as the penalties for practitioners who are found to have engaged in inappropriate practice can be significant. If you receive correspondence or a request for information from Medicare, the DHS or the PSR, you should seek advice from MDA National immediately.

You can access more information from the PSR website:

Nerissa Ferrie 
Medico-legal Adviser
MDA National


Regulation and Legislation, Anaesthesia, Dermatology, Emergency Medicine, General Practice, Intensive Care Medicine, Obstetrics and Gynaecology, Ophthalmology, Pathology, Practice Manager Or Owner, Psychiatry, Radiology, Sports Medicine, Surgery


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