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Director's introduction

The Professional Services Review Agency (PSR) was established in 1994. The part of the Health Insurance Act 1973 that establishes the PSR Scheme defines the basic purpose of the scheme as protecting ‘patients and the community in general from the risks associated with inappropriate practice’ and protecting ‘the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice’.

PSR achieves its purpose through the process of peer review. Committees of peers are established to review the billing and prescribing practices of referred practitioners. The Director appoints the practitioners who will provide peer review in a particular Committee from the PSR Panel. The PSR Panel is a multidisciplinary group of clinicians who have been appointed by the Minister for Health following a rigorous appointment process that involves formal application, interview, social media check and consultation with relevant professional bodies including the Australian Medical Association (AMA).

Legislation empowers PSR to require practitioners to provide a random sample of clinical records. Records are confidentially reviewed by a peer consultant, the Director, and if necessary, a Committee of peers, who determine whether practice was inappropriate. Under the PSR Scheme, substantial sanctions can be imposed on practitioners who are found to have engaged in inappropriate practice. These sanctions include repayment of Medicare benefits and disqualification from all or part of the Medicare or Pharmaceutical Benefits Scheme for up to three or five years.

If concerns regarding the health, conduct or performance of a practitioner become apparent during PSR investigations, legislation empowers the Director to refer such practitioners to relevant professional boards, and state and territory health complaints bodies, through the Australian Health Practitioner Regulation Agency (AHPRA). If concerns about major non-compliance or fraud emerge, the Director will also refer these matters on to the appropriate authority.

Professional Services Review in 2018–19

Increased recoveries

The highlight of the 2018-19 year was a further increase in recoveries ordered. In 2018-19, PSR ordered recoveries of $29,196,203 against a historical annual average of $5,000,000. The increase in recoveries since 2015 has occurred as a result of an increase in workload in terms of both numbers of referrals and reviewed items per referral. It has also arisen as a result of specialist reviews, from whom higher recoveries are typically ordered.

Table 1 summarises recoveries ordered in recent years from s. 92 agreements made between the Director of PSR and practitioners under review and through Determinations following PSR Committees.

Table 1: Treasury appropriation and PSR recoveries ordered


Treasury Appropriation

Ordered recoveries

following PSR Committees


Ordered recoveries from
Director s. 92 agreements

Total ordered
















Increased workload and appropriation

PSR staff numbers and budget have been static for several years despite a significant increase in workload. This was recognised by the government and an increase in appropriation was made.

Increased focus on patient safety and fraud

PSR continued to focus on patient safety. Overall, six practitioners were referred to a regulatory body for possible patient safety concerns and nine were referred for concerns over major non-compliance with professional standards.

Corporate and employer referrals

PSR progressed a Director’s stage review in relation to a corporation and the matter is ongoing. Corporate or employer referrals are complex as there are additional requirements to be met that are not present in review of an individual practitioner.

Engagement with stakeholders and the professions

In 2018-19 PSR developed and implemented an engagement framework. I spoke at several medical, compliance and medical indemnity conferences. Regular stakeholder meetings were held with Department of Health compliance staff, the Australian Medical Association (AMA), private hospitals, insurance groups and medical colleges. The policy on naming practitioners was reviewed and stakeholders were invited to make submissions. The PSR website was updated. A regular quarterly newsletter was published. The PSR Advisory Committee (PSRAC) remains an important means of consultation which draws its membership from the Department of Health, the AMA and PSR. This group met during the year to discuss issues.

Work also commenced to outline PSR Committee findings on commonly reviewed item numbers. A former senior legal advisor of PSR was contracted to summarise the reasons for findings of inappropriate practice made by PSR Committees in recent years. These summaries will be serially uploaded onto the PSR website over the next two years and will be a resource for the professions.

Antibiotics and schedule 4 and 8 medications

PSR has reviewed a number of practitioners in relation to their use of second and third tier antibiotics without evidence of actual or suspected resistance to narrower or lower tier antibiotics. The rate of resistance to antibiotics in Australia continues to increase without the advent of major new classes of antibiotics likely to enter the marketplace. The PSR plays an important role in regulating appropriate antibiotic prescribing by clinicians.

PSR also reviewed a number of practitioners over prescribing of schedule 4 and 8 medications. Committees have found prescribing to be inappropriate when practitioners fail to document adequate clinical input into decision making and fail to consider alternative non-pharmacological management strategies and fail to develop an overall plan to manage prescribing in vulnerable patients.

Recruitment of PSR Panel Members

As a result of referrals in new clinical areas, additional members were recruited to the PSR Panel. A survey was performed to assess the gender and diversity of PSR Panel members. The results indicated the Panel is now more diverse with 43% female membership, 27% born overseas and 73% born in Australia, 65% having experience working in rural areas and 68% having experience working in outer metropolitan regions.

External PSR and Public Sector Reviews

To ensure streamlining of PSR processes as agency workload increased, we commissioned an external review by Ernst and Young. The comprehensive review involved 360 degree consultations, including surveys of legal representatives of practitioners under review. The final report documented positive agency culture, leadership, procedures and efficiency. No major changes were recommended. However, a number of process matters were identified to further streamline corporate and case management pathways. The Management Committee elected to implement all recommendations. The implementation plan is 80% complete and will be fully operationalised by December 2019.

PSR also considered all the recommendations arising from the Public Service Review. The Management Committee agreed to implement relevant recommendations. Each month progress on implementation was reviewed. The Agency completed the implementation program in June 2019.

In mid-2019, the Australian Public Service Commission released the Australian Public Service Employee Census 2019 which was open for participation from 6 May to 7 June. Below is a snapshot of how PSR performed in comparison with the 97 surveyed entities:

On the topic of workplace culture, ‘I receive the respect I deserve from my colleagues at work’ was asked. PSR’s response was 100% positive which was 24% higher than the result from the APS overall and 18% higher than the result from other micro sized agencies.

On the topic of workplace conditions, ‘I am satisfied with the stability and security of my current job’ was asked. PSR’s response was 100% positive which was 27% higher than the result from the APS overall and 18% higher than the result from other micro sized agencies.

On the topic of risk management, ‘When things go wrong, my agency uses this as an opportunity to learn’ was asked. PSR’s response was 100% positive which was 54% higher than the result from the APS overall and 31% higher than the result from other micro sized agencies.

PSR ranked 5th out of the 97 entities for engagement, 12th out of 97 for innovation and 13th out of 97 for wellbeing.

Administrative issues within PSR

Another key outcome in 2018-19 was a continued commitment to employee health and welfare. No new worker’s compensation claims were lodged for the second successive year and all outstanding Comcare cases were closed. As a result of these actions, Comcare premiums fell to a historic low. To encourage ongoing employee health and welfare, management provided funding to all employees for health and welfare activities as a special initiative, and also conducted mental health training and WH&S workshops.

Other important administrative issues resolved in the year were:

  • appointment of a Chief Security Officer
  • staff training on privacy issues
  • upgrading of information technology and security in the office
  • moved Committees onto GovTEAMS for additional security
  • modified DA funding arrangements to more appropriately reflect the increased workload
  • won a Federal Court challenge
  • responded to one new and two ongoing Federal Court challenges.


As Director, I would like to acknowledge the professionalism and commitment of all PSR staff. I would also like to acknowledge the PSR Panel members. Without the dedication of these practitioners, PSR could not function.

Finally, I would also like to acknowledge the cooperation and professionalism of the officers of the Department of Health and Australian Medical Association with whom PSR liaises on a regular basis.

Professor Julie Quinlivan
Director of Professional Services Review