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Professional Services Review—Report for 2018-19


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Professional Services Review

Annual Report 2018-19

Professional Services Review

Annual Report 2018-19

Professional Services Review

Annual Report 2018-19

Professional Services Review

© Commonwealth of Australia 2019

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Unless otherwise noted, copyright (and any other intellectual property rights, if any) in this publication is owned by the Commonwealth of Australia.

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With the exception of the Coat of Arms and all photos and graphics, this publication is licensed under a Creative Commons Attribution 4.0 International Licence. The licence is a standard form license agreement that allows the copy, distribution, transmission and adaptation of this publication provided it is attributed to this publication. Full licence terms are available on the Creative Commons website (www.creativecommons.org/licenses/by/3.0/au/legalcode).

ISSN 1327-6514 (Print)

ISSN 2209-8380 (Online)

Copies of this report can be obtained from:

Professional Services Review PO Box 74 Fyshwick ACT 2609

Telephone: 02 6120 9100 Facsimile: 02 6120 9199

Internet: www.psr.gov.au

Online versions of the annual report are available on the PSR website (www.psr.gov.au/publications-and-resources/annual-reports)

Further information can be obtained from:

Executive Officer Professional Services Review Telephone: 02 6120 9100 Facsimile: 02 6120 9199

iii

Letter of transmittal

The Hon. Greg Hunt MP Minister for Health Parliament House Canberra ACT 2600

Dear Minister

I am pleased to present to you the annual report of the Professional Services Review Agency for the year ended 30 June 2019.

The report has been prepared for the purposes of section 46 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), which requires that I prepare and provide an annual report to you for presentation to the Parliament.

The report includes the agency’s audited financial statements as required under section 43(4) of the PGPA Act.

As required by section 10 of the Public Governance, Performance and Accountability Rule 2014, I certify that:

+ the agency has prepared fraud risk assessments and fraud control plans

+ the agency has in place appropriate fraud prevention, detection, investigation and reporting mechanisms that meet its specific needs

+ I have taken all reasonable measures to appropriately deal with fraud relating to the agency.

Yours sincerely

Professor Julie Quinlivan Director of Professional Services Review

30 September 2019

v CONTENTS

Contents

Letter of transmittal iii

Director’s introduction 1

Professional Services Review in 2018-19 2

Conclusion 5

1. Agency overview 6

The Professional Services Review Scheme 6

About the Professional Services Review Agency 6

Our stakeholders 6

Agency and scheme objectives 6

Agency outcome 7

PSR Agency delivery of outcome 7

The future 8

2. Performance statement 9

Entity purpose 9

Protecting against inappropriate health care practice 9

Maintaining professional support for PSR 10

Professional Services Review Agency performance 10

New referrals from the Chief Executive Medicare 10

Cases in which no further action was taken 11

Negotiated agreements 12

PSR Panel and peer review Committees 12

The Determining Authority 13

Re-referrals 13

Referrals to medical boards and other authorities 13

Judicial review 13

Performance against Portfolio Budget Statements 2018-19 14

Performance criteria 14

Quantitative deliverables 14

Qualitative deliverables 14

vi PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Director’s Comments 16

Practitioners referred to PSR in 2018-19 17

Legal issues 17

Pharmaceutical referrals 18

MBS Chronic Disease Management items 18

Consultation items 19

Urgent after hours 19

Sleep studies 20

Skin medicine 20

Employer or corporate referrals 21

Random samples of records 21

Summary 21

3. Management and accountability 22

Structure and organisation 22

Corporate governance and business planning 22

Portfolio shared services arrangements 24

Executive management team 24

Identifying and managing risk 24

Fraud control 26

External scrutiny 26

Audit and Risk Committee 26

Ethical standards 27

Management of human resources 27

Australian Public Service staff 28

Enterprise agreement and Australian Workplace Agreements 29

Non-salary benefits 29

Performance Pay 29

Key Management Personnel 30

Senior Executive Remuneration 32

Other Highly Paid Staff 32

Holders of full-time and part-time public office 32

Training and development 33

Work health and safety 33

Disability reporting mechanisms 33

Accommodation 34

vii CONTENTS

4. Financial performance 35

Purchasing 35

Asset management 35

Consultants 36

Australian National Audit Office access clauses 36

Exempt contracts 36

Procurement initiatives to support small business 37

Advertising and market research 37

Grants programs 37

Ecologically sustainable development and environmental performance 37 Publications 37

Appendices Appendix 1 Professional Services Review’s resource statement and outcome summary 2018-19 38 Appendix 2 Financial statements 39

Appendix 3 Freedom of information statement 79

Contact officer 79

Appendix 4 Statutory Appointments 80

Glossary 85

List of requirements 87

Index 93

1 DIRECTOR’S INTRODUCTION

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.

2 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

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

Year

Treasury

Appropriation $

Ordered recoveries following PSR Committees $

Ordered recoveries from Director s. 92 agreements $

Total ordered recoveries $

2018-19 6,946,000 2,784,522 26,411,681 29,196,203

2017-18 5,518,000 4,656,988 16,188,558 20,845,546

2016-17 5,131,000 1,940,685 8,466,884 10,407,569

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.

3 DIRECTOR’S INTRODUCTION

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.

The 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

4 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

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.

5 DIRECTOR’S INTRODUCTION

Conclusion 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

6 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

1. Agency overview

The Professional Services Review Scheme The high quality and integrity of Australia’s health system is recognised internationally. Preventing inappropriate practice is crucial to maintaining this high quality and integrity and in retaining the confidence of the Australian public in the practitioners working within the health system. Financial loss to the community as a result of inappropriate practice is also minimised.

About the Professional Services Review Agency PSR operates as an independent agency within the Australian Government’s Health portfolio, and reports directly to the Minister for Health. Together, the Director and staff form a statutory agency under the Public Service Act 1999.

To help guide its performance, PSR has defined its own values and behaviours, which are underpinned by the Australian Public Service (APS) Values. PSR’s values and behaviours of being fair, transparent and professional address the unique aspects of its business and environment, and guide PSR in performing its role.

Our stakeholders During 2018-19, PSR continued to work closely with key stakeholders to improve its operations. PSR stakeholders include the Department of Health, the AMA and other relevant professional organisations. During 2018-19, PSR engaged with a broad range of stakeholders to provide information on the activities and outcomes of the PSR Scheme. Over the twelve month period, PSR met with its stakeholders on 40 occasions.

Agency and scheme objectives The role and functions of PSR are set out in Part VAA of the Health Insurance Act 1973 (the Act), which establishes the PSR Scheme. Section 79A of the Act states that:

7 AGENCY OVERVIEW

The object of this Part is to protect the integrity of the Commonwealth Medicare benefits, dental benefits and pharmaceutical benefits programs and, in doing so:

(a) pr otect patients and the community in general from the risks associated with inappropriate practice; and

(b) pr otect the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice.

Section 81 of the Act includes a definition of ‘ practitioner’, which, together with the Health Insurance (Professional Services Review—Allied Health and Others) Determination 2012, lists the categories of medical, midwifery, nurse practitioner and allied health practitioners that are subject to review under Part VAA of the Act.

Agency outcome Outcomes are the government’s intended results, benefits or consequences for the Australian community. The government requires agencies such as PSR to use outcomes as a basis for budgeting, measuring performance and reporting. Annual funding is appropriated on an outcomes basis.

The Australian Government, through PSR, aims to safeguard the public against the risks and costs of inappropriate practice by health practitioners. PSR works with government, medical and allied health care regulatory bodies, and professional organisations to protect the integrity of the Medicare benefits and the pharmaceutical benefits programs.

PSR OUTCOME: A reduction of the risks to patients and costs to the Australian Government of inappropriate practice, including through investigating health services claimed under the Medicare and Pharmaceutical Benefits schemes.

PSR Agency delivery of outcome The PSR Scheme safeguards the integrity of the Medicare benefits and pharmaceutical benefits programs from:

1. inappr opriate practice by ensuring that the Commonwealth-funded services delivered by practitioners are clinically relevant

2. the consequences of inappr opriate practice by ensuring that payments to claimants are made in accordance with the regulations for the Medicare benefits and pharmaceutical benefits programs.

8 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

The PSR Scheme has continued to evolve since its inception. Legislative amendments were made in 1997, 1999, 2002, 2006, 2012, and 2018 to strengthen the Professional Services Review process. Comprehensive reviews were conducted in 1999 and 2006 by government and key stakeholders. A Senate inquiry in 2011 also made recommendations to refine the administration of the scheme, and improve its effectiveness and transparency.

PSR has acted on the recommendations from these (and other) reviews. It continues to strengthen its governance processes and build its capacity to deliver a rigorous peer review scheme that affords procedural fairness to practitioners, and meets the outcome of protecting the integrity of the Medicare and Pharmaceutical Benefits schemes.

The future As the MBS becomes more complex and the range of health professions whose services attract Medicare benefits expands, PSR must maintain the organisational agility required to meet these changes and future challenges.

9 PERFORMANCE STATEMENT

2. Performance statement This performance statement is prepared in accordance with paragraph 39(1)(a) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) for the 2018-19 financial year and accurately presents PSR’s performance in accordance with subsection 39(2) of the PGPA Act.

Entity purpose PSR’s purpose is to protect the integrity of the Australian Government’s Medicare and pharmaceutical benefits programs, and to safeguard the Australian public from the cost and risk of inappropriate practice. In so doing, PSR is contributing to Outcome 4 of the Portfolio Budget Statements of the Australian Government’s Health Portfolio.

The PSR Scheme is funded to ensure that requests by the Chief Executive Medicare to investigate suspected cases of inappropriate practice are reviewed and, if necessary, examined by a Committee of the practitioner’s peers.

PSR’s program aims to protect against inappropriate practice and maintain professional support for PSR.

Protecting against inappropriate health care practice During the 2018-19 reporting period, PSR continued to:

+ investigate health care professionals

+ refer matters to Committees

+ progress PSR Committee hearings

+ determine sanctions for finalised Committee matters and consider ratification of negotiated agreements through PSR’s Determining Authority

+ refer behaviour that may be a threat to the life or health of patients, or that fails to meet professional standards, to the relevant bodies for appropriate action.

A summary of outcomes is provided in the ‘Professional Services Review Agency performance’ section of this report.

10 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Maintaining professional support for PSR During 2018-19, the Director of PSR engaged with a broad range of stakeholders in relation to the PSR Scheme. These stakeholders included:

+ Australian College of Physiotherapists

+ Australasian College of Dermatologists

+ Australia & New Zealand College of Anaesthetists

+ Royal Australasian College of Physicians

+ Royal Australasian College of Surgeons

+ Royal Australian & New Zealand College of Obstetricians & Gynaecologists

+ Royal Australian College of General Practitioners

+ Royal Australasian College of Dental Surgeons

+ Royal Australian & New Zealand College of Psychiatrists

+ Australian College of Midwives

+ Royal College of Pathologists of Australasia

+ Royal Australian & New Zealand College of Radiologists

+ Australian Medical Association

+ Skin Cancer College Australasia

+ Australasian Sleep Association

Professional Services Review Agency performance The following sets out PSR’s performance criteria and provides details of its results for activities undertaken during 2018-19. This included work on the 125 cases already on hand at the commencement of the reporting period, and the 101 cases that were received during 2018-19.

A total of 101 cases were brought to a conclusion and, at the end of the reporting period, 125 cases had not been finalised and were in various stages of completion.

New referrals from the Chief Executive Medicare The Chief Executive Medicare sent 101 requests in 2018-19. This figure is almost double the long term historical annual average caseload for the agency.

In 2018-19, PSR completed 101 cases. Of these, two were the subject of a decision by the PSR Director to take no further action, 90 were resolved by negotiated agreements that were subsequently ratified by the Determining Authority (thereby becoming effective), and eight resulted in final determinations by the Determining Authority that became effective during the reporting period. One case was closed as a proper Final Determination was not possible.

11 PERFORMANCE STATEMENT

No cases resulted in a finding by a PSR Committee of no inappropriate practice. During the reporting period, 19 cases were referred by the PSR Director to a Committee of peers. This too marks a significant increase on the historic annual average number of cases referred to Committee.

Table 2 compares PSR’s case statistics for 2018-19 with those of the previous reporting period.

Table 2: PSR’s case statistics, 2018-19 and 2017-18

Action 2018-19 2017-18

Requests received from Department of Health 101 109

Requests by Department of Health to review a practitioner with a previous effective determination for a second or subsequent time 3 10

No further action 2 1

Requests withdrawn or lapsed 0 0

Referrals from the PSR Director to new PSR Committees 19 19

Committees in progress (at 30 June) 31 23

Committee reports finalised 12 12

Reports finding inappropriate practice 12 12

Reports finding no inappropriate practice 0 0

Committee matters indefinitely suspended 0 3

Referrals to medical boards or AHPRA 15a 14

Referrals to Chief Executive Medicare for suspected fraud 2 1

Negotiated agreements ratified and effective 90 49

Final determinations made 9 14

Final determinations effective 8 17

Cases on hand at 30 Juneb 125 125

AHPRA = Australian Health Practitioner Regulation Agency; PSR = Professional Services Review

a 15 referrals were in respect of 11 practitioners.

b As PSR receives referrals from Chief Executive Medicare throughout the year, case data cannot be reconciled within a 12-month period.

Cases in which no further action was taken The Director can, after considering all the relevant material, decide to take no further action under s. 91 of the Act.

The Director took no further action in two of the 101 cases completed in 2018-19.

12 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Negotiated agreements Under s. 92 of the Act, the Director and the practitioner under review can enter into a negotiated agreement which must include acknowledgement by the practitioner that they have engaged in inappropriate practice, and include specified action such as a reprimand, repayment of some or all of the Medicare benefit received, and total or partial disqualification from participating in the MBS or PBS.

In 2018-19, 90 negotiated agreements became effective. Outcomes of these negotiated agreements included:

+ repayment orders totalling $26,411,681

+ partial disqualification in 62 cases and full disqualification in one case.

The practitioners concerned included general practitioners, other medical practitioners, midwives and specialists. Repayments ordered ranged from $10,000 to $995,286, with more than two-thirds of the agreements involving repayments of $200,000 and above.

PSR Panel and peer review Committees Under s. 93(1) of the Act, the Director may establish a PSR Committee and refer a person under review to the Committee for investigation. The Committee then determines whether the person has engaged in inappropriate practice in providing the services specified in the Director’s referral.

Members of peer review Committees are drawn from practitioners who are members of the PSR Panel (Appendix 4).

The PSR Panel comprises health professionals from a range of professions, specialities, backgrounds and practice locations: 9% practise in inner regional areas, and 5% practise in outer regional areas. Women comprise 43% of the PSR Panel.

During 2018-19, the Director established 19 PSR Committees. Of the 19 practitioners referred to a PSR Committee, eight were general practitioners, two were specialists, six were other medical practitioners and the remaining three were a midwife, chiropractor and a dentist.

At the end of the reporting period, all of the PSR Committees established in 2018-19 were still in progress. Committee hearings were held for 21 cases during the 2018-19 financial year. Twelve Committee final reports had been completed and sent to the Determining Authority, and all contained findings of inappropriate practice.

13 PERFORMANCE STATEMENT

The Determining Authority During 2018-19, eight final determinations became effective. The directions made by the Determining Authority were:

+ reprimand in all cases and counselling in seven cases

+ partial disqualification from Medicare benefits in five cases, for between 6 and 36 months

+ repayment of Medicare benefits, ranging from $1,297.20 to $649,664.90 (totalling $2,784,521.71).

Re-referrals In 2018-19 the Chief Executive Medicare made three requests to PSR to review practitioners who had previously been referred to, and reviewed by the Director of PSR, and had an effective negotiated agreement or determination. At 30 June 2019, two of these cases were still under review and one had resulted in a negotiated agreement.

Referrals to medical boards and other authorities The Act requires the PSR Director to refer practitioners to appropriate bodies when a significant threat to the life or health of any other person is identified, or if the person under review has failed to comply with professional standards.

In 2018-19, the Director made 15 referrals of practitioners to AHPRA, medical boards or other bodies. This is consistent with the levels of referrals in the previous financial year.

Judicial review Practitioners involved in the PSR process can seek judicial review in the federal courts. Further detail relating to matters under judicial review can be found in the ‘Legal issues’ section of the Performance Statement.

One matter that had commenced in a previous year was determined in favour of PSR. Another matter that had commenced in 2017-18 was resolved by consent. A further matter that had commenced in the previous year had an interlocutory hearing and interlocutory judgment but had not had a substantive hearing during 2018-19. One further matter was commenced in the Federal Court in 2018-19 but was not heard during the year.

14 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Performance against Portfolio Budget Statements 2018-19

Performance criteria Table 3 outlines the quantitative key performance indicators specified for PSR in the Portfolio Budget Statements 2018-19:

Table 3: Protecting against inappropriate health care practice

Quantitative performance criteria 2018-19 Target 2018-19 Actual

Percentage of reviews by the Director of PSR finalised within 12 months 100% 100%

Total number of matters for review finalised a 50 101

Percentage of court cases where PSR’s application of the law upheld 100% 100%

a This figure includes no further actions under s. 91 of the Act, negotiated agreements under s. 92 of the Act, final determinations resulting from a Committee hearing and cases where it was impossible to come to a final outcome. The figure excludes cases that have lapsed under s. 94 of the Act and cases considered indefinitely in abeyance.

In 2019-20, PSR will maintain the deterrent effect of the PSR Scheme by continuing to refer cases of practitioners who may pose a threat to the life or health of any other person to regulatory bodies for further action. PSR will also refer to the major non-compliance unit in the Department of Health any practitioner where a serious compliance concern is generated.

Quantitative deliverables PSR continued to act on referrals from the Chief Executive Medicare during 2018-19, completing 101 matters.

Qualitative deliverables The qualitative key performance indicators specified in PSR’s Portfolio Budget Statements 2018-19 are shown in Tables 4 and 5.

Table 4: Protecting against inappropriate health care practice

Qualitative performance criteria 2018-19 Reference point or target

The Director will conduct reviews of practitioners referred by Chief Executive Medicare and in appropriate cases enter into agreements. The Director conducted reviews of practitioners referred by Chief Executive Medicare and in appropriate cases entered into agreements.

PSR Committees will be convened and will conduct hearings in a timely manner ensuring that practitioners being reviewed by their peers are afforded procedural fairness in each stage of the process.

PSR Committees were convened and hearings were conducted in a timely manner. PSR committees ensured that practitioners were afforded procedural fairness in each stage of the process.

The Determining Authority will ratify agreements and make appropriate determinations of sanctions. The Determining Authority ratified agreements and made appropriate determinations of sanctions.

15 PERFORMANCE STATEMENT

Table 5: Maintaining professional support for PSR

Qualitative performance criteria 2018-19 Reference point or target

Professional bodies are actively engaged in the process for appointments to the PSR Panel, and PSR receive the required number of nominees to ensure broad professional representation on the PSR Panel.

Professional bodies were actively engaged in the process for appointments to the PSR Panel, and PSR received an appropriate number of nominees to ensure broad professional representation on the PSR Panel.

As in other years, submissions made by practitioners reviewed by PSR indicate that a great majority made positive changes to their practice as a result of the review process. In most cases reviewed during 2018-19, inappropriate practice involved inadequate clinical notes, failure to comply with the particular requirements of the MBS items billed to Medicare, or prescribing concerns. Practitioners who were reviewed indicated frequently that they accepted the need to change their practices and were able to demonstrate practical measures undertaken to achieve the required improvements. This was the case for both practitioners who were referred to Committees under s. 93 of the Act and practitioners who entered into voluntary agreements under s. 92.

The AMA and other relevant organisations were consulted, as required by s. 84, 85 and 106ZPB of the Act, as part of the process of appointing the membership of the PSR Panel and the Determining Authority in 2018-19.

Performance criteria set out in the PSR Corporate Plan include:

+ timely management of cases for practitioners, who are the subject of a request to review from the Chief Executive Medicare

+ engagement with government, and relevant professional and regulatory bodies to ensure peer support and awareness

+ continuing engagement with stakeholders to ensure their understanding of PSR’s role and activities

+ reviewing PSR’s internal operations to ensure minimal burden to the health industry while ensuring the integrity of the Medicare system.

Throughout 2018-19, all cases were managed to ensure that deadlines required by the process set out in the legislation were met. The Case Management Unit within PSR met on a regular, weekly basis with the Director to review the status of all current cases, whether at the initial Director’s review stage of the process or at the Committee or Determining Authority stages.

The Director and the PSR executive team met regularly with the Provider Benefits Integrity Division in the Department of Health. These meetings enabled the Director to provide feedback and comments to the senior officials who advise the Minister for Health on Medicare issues, including inappropriate practice.

During 2018-19, PSR’s Case Management Unit added staff to ensure that it has the necessary capability to support the Director, Committees and the Determining Authority in delivering the PSR Scheme. Most case management staff members are legal officers, to enable a focus and emphasis on procedural fairness and compliance with statutory requirements in the delivery of the scheme.

16 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

PSR has sought to improve transparency in 2018-19 by publishing more details of case outcomes on its website and providing more detail of the agency’s activity in a regular newsletter to Panel members and other interested persons.

Director’s Comments Medicare, Australia’s universal, taxpayer-funded medical insurance system, was established in 1984. The scheme is administered and financed by the Australian Government. In 2018-19, Medicare paid subsidies of over $24.1 billion for 424.2 million medical services for the Australian population of over 25.2 million people.

Medicare operates on the basis of a ‘clinically relevant service’, defined in the legislation establishing the scheme as:

… a service rendered by a medical practitioner that is generally accepted in the medical profession as being necessary for the appropriate treatment of the patient to whom it is rendered.

PSR was established in 1994 and provides for peer review Committees to assess concerns of inappropriate practice in relation to billing under the MBS or prescribing under the PBS. The touchstone of PSR reviews is ‘inappropriate practice’, which is defined in s. 82 of the Health Insurance Act 1973 as conduct in connection with rendering or initiating services such that a Committee could reasonably conclude it would be unacceptable to the general body of the practitioner’s peers. This broad test is applied by expert Committees constituted with peers drawn from the same specialty or profession of a practitioner under review.

The Department of Health has initial responsibility for monitoring compliance of practitioners who provide services under Medicare and the Pharmaceutical Benefits Scheme. It undertakes a variety of compliance activities such as random audits, and also investigates suspected fraud. Department of Health staff evaluate unusual patterns of practice revealed by data analysis of Medicare payments. The kinds of practice that bring a practitioner to the attention of the Department include:

+ rendering a statistically abnormal volume of total and daily services

+ initiating a high volume of diagnostic imaging and pathology services

+ unusual prescribing habits or

+ other unusual practices.

Each year Health Department medical officers interview several hundred practitioners to gain further information about their practice as part of the Practitioner Review Program. A small proportion of these practitioners will be referred to the Director of PSR.

Once a matter has been referred to the Director of PSR, the Director decides whether she will commence a formal review. If a decision is made to conduct a formal review, the Director has the power to require referred practitioners to provide clinical records or other documents to facilitate that review.

17 PERFORMANCE STATEMENT

Practitioners referred to PSR in 2018-19 During 2018-19, the Agency received a higher number of referrals compared to historical averages. The Agency also finalised significantly more matters than in previous years.

There was considerable diversity in referrals. Referrals were received for general practitioners, other medical practitioners, medical specialists (in the fields of rehabilitation medicine, respiratory and sleep medicine, radiology, dermatology, endocrinology, oncology, internal medicine, haematology and psychiatry), nurse practitioners, optometrists and dentists.

Legal issues Practitioners involved in the PSR process can seek judicial review in the Federal Court.

In 2018-19 PSR successfully defended a Federal Court case that addressed the issue of urgent after hours services and of a prescribed pattern of services (Nithianantha v Commonwealth [2018] FCA 2063).

A requirement of MBS item 597 was that the practitioner had to be satisfied that the patient’s condition ‘requires urgent treatment’. Dr Nithianantha submitted that it was enough if, when he formed the opinion that urgent treatment was required, that opinion would have been acceptable to his peers ‘in the circumstances that existed and on the information available when the opinion was formed’, even if it turns out that the patient requires treatment for a different, non-urgent condition which is diagnosed during the consultation. The Court rejected that approach, and said that the term ‘requires’ in this context was not susceptible of meaning ‘might require’. The Court said that before the consultation, the practitioner can only form a view, having regard to the circumstances which have been conveyed to him or her by someone who may not be the patient. The best the practitioner can do at that point is form a view of what might be required at that time, not what is required. What is required can only be determined following consultation which can, if necessary, include examination. Since this matter was heard by the Court, the urgent after hours items were changed with the relevant phrase amended to ‘requires urgent assessment’, nevertheless, this still can be determined only following consultation with the patient and not before it.

In relation to the prescribed pattern of services (the so-called ‘80/20 rule’), Dr Nithianantha had put the case to the PSR Committee that there was an absence of other medical services for his patients in the remote rural town in which he practised, and that this constituted an exceptional circumstance. The Committee had rejected that case on the basis of oral evidence given by the practice manager of the only other general practice in that town. In court, Dr Nithianantha submitted that the Committee had failed to consider whether the services of the other practice were a readily and reasonably available alternative for Dr Nithianantha’s patients; that it could not make that inference from the practice manager’s evidence; and that it had failed to consider whether another medical practitioner was available on each of the 28 days on which he claimed exceptional circumstances. The Court rejected each of these submissions. The Court held that the Committee was correct in its view that once the evidence establishes that the practitioner had rendered 80 or more attendance services on 20 or more days in a 12 month period, there is a practical onus on the practitioner to establish that there was an absence of alternative medical

18 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

services for the practitioner’s patients on any of those days if that is the exception to the 80/20 rule relied on by the practitioner. The Committee was entitled to form the view on the evidence before it that Dr Nithianantha had not established such an absence of alternative services.

PSR also responded to three further legal challenges. In one matter PSR consented to the making of an order by the Federal Court revoking an amended section 93 referral, effectively reinstating the original section 93 referral to a PSR Committee. In another matter, a practitioner has sought to challenge both the Draft and Final Reports of a PSR Committee. In a third matter, an interlocutory judgment was delivered (Karmakar v Minister for Health [2019] FCA 868), granting the practitioner a further and final opportunity to amend the originating application to the Court before it would hear an application by the Minister and the Director of PSR for summary judgment in their favour and to have the matter struck out. In granting that further opportunity to Dr Karmakar to amend her application, the judge expressed doubts concerning the basis on which her application had been brought, saying that it ‘overwhelmingly required a particular reality check’.

Pharmaceutical referrals PSR received referrals relating to concerns over the prescribing of several practitioners. Prescribing referrals were in two main areas: Schedule 4 and 8 medications and antibiotics.

Concerns leading to a finding of inappropriate practice in relation to prescribing Schedule 4 and 8 medications were made when practitioners prescribed high volumes of multiple schedule 4 and 8 medications without checking for doctor shopping behaviours, exploring non-drug management options, seeking specialist or multidisciplinary help in management and/or ignoring addictive behaviours such as repeated lost prescriptions or consistently returning for repeat prescription early.

Concerns leading to a finding of inappropriate practice in relation to prescribing antibiotics were made when practitioners repeatedly prescribed second and third tier antibiotics such as amoxicillin and clavulanic acid and intravenous cephalosporins in primary care settings when there was no evidence of resistance to narrower spectrum medications such as penicillin or amoxicillin alone, without clavulanic acid, or there was no clinical indication for an intravenous antibiotic as patients were systemically well with simple conditions such as a urinary tract infection.

MBS Chronic Disease Management items Chronic Disease Management (CDM) items (721, 723, 732) continued to be another common reason for referral. In the past year concerns identified by PSR leading to a finding of inappropriate practice included:

+ no contemporaneous documentation to support billing the items

+ documentation that was an identical copy of prior billed items without significant change

+ concerns the patient was not present when items were billed

19 PERFORMANCE STATEMENT

+ concerns the patient did not have an eligible chronic disease or terminal illness

+ no evidence of patient consent

+ concerns the practitioner was not the usual care provider of the patient

+ concerns there was no evidence the patient was evaluated to develop individualised management goals

+ no evidence of two-way communication with teamcare members to address management goals or

+ concerns reviews were not clinically indicated and/or the patient was not present.

Consultation items Consultation items were another common reason for referral to PSR. Common concerns leading to a finding of inappropriate practice included:

+ no contemporaneous documentation to support billing the item

+ documentation that was an identical copy of prior pasted consultations without substantive change

+ concerns the patient was not present when items were billed

+ after-hours items that were not performed in an after-hours period

+ clinical content that was not sufficiently complex to justify billing consultations requiring 20, 40 or 60 minutes

+ poor medical records that would not enable another practitioner to rely on the record to safely assume patient management

+ concerns over a lack of clinical input due to a poor history, failure to examine key systems, misdiagnosis, excessive use of pathology or imaging without clinical indication and/or prescribing concerns

+ consultation items co-billed with procedural items without evidence of a separate consultation and

+ missing referrals requesting a consultation service in the case of specialists.

Urgent after hours PSR continued to resolve a number of matters related to urgent after hours consultations. High levels of inappropriate practice were identified in referred practitioners with adverse findings ranging from 30% to 100% with a mean of 70%. The main reason for findings of inappropriate practice related to a determination that the consultation did not relate to an urgent matter, the standard of clinical input fell below that expected of the general body of practitioners and concerns over prescribing. Urgent items were billed for patients with upper respiratory tract infections, viral gastroenteritis, medication reviews and chronic health conditions.

20 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Sleep studies PSR reviewed a small number of practitioners in relation to sleep studies. Concerns identified were that the sleep study was not clinically indicated, was not performed with an appropriate level of supervision, was not performed or scored appropriately and/or was not adequately reported. In regard to the concerns about poor reporting, it was observed that in some cases reports were ‘obstructive sleep apnoea’ centric and focussed on a need for CPAP, yet failed to mention other clinically important abnormalities apparent from patients data including the presence of chronic hypoxaemia and significant abnormalities of the cardiac ECG, brain EEG or limb movements.

In response to PSR reviews, the Director met with senior representatives of the profession. The response of the profession has been exemplary with considerable engagement by practitioners to address concerns and improve the quality of conduct and reporting of sleep studies. This has also been facilitated by the MBS Review that has added clarity to the item descriptor. The profession is to be commended for rapidly and positively responding to concerns.

The only outstanding area that the profession might like to consider is independence from companies that sell sleep equipment. PSR noted that some referred sleep physicians were employed or contracted by companies that were subsidiaries of larger corporations that sold sleep medicine equipment. In some reviewed cases sleep study reports were printed on the back of letters directing patients to these suppliers. Whilst this observation did not form the basis of any finding of inappropriate practice, the sleep medicine profession might like to reflect upon whether such associations are in the interest of the philosophy of medical independence.

Skin medicine PSR received a small number of referrals in relation to skin medicine item numbers. Referred practitioners were classified as belonging to the ‘Other Medical Practitioner’ or ‘Specialist General Practitioner’ classification rather than ‘Specialist Dermatologist’ category. Concerns identified were non contemporaneous records, concerns a billed service was not provided, concerns over identical pasted text across multiple entries in the same medical record and/or across multiple different patient records, concerns over consent, concerns over a lack of clinical input, concerns over poor or illegible recordkeeping, concerns over billing for cosmetic procedures and concerns over the use of the Medicare Safety Net.

In response to PSR reviews, the Director spoke at skin medicine conferences. Engagement by the profession was excellent and the concept of documenting consent in medical records and improving the quality of medical records has been embraced. The MBS Review has also added clarity to some item descriptors. The profession is to be commended for rapidly and positively responding to concerns.

21 PERFORMANCE STATEMENT

Employer or corporate referrals PSR is now better able to review employers of healthcare practitioners (including corporate healthcare entities) to ensure clinically relevant and appropriate behaviour occurs. PSR progressed a corporate matter in the year under review.

PSR evaluates whether the employer has engaged in inappropriate behaviour by reference to s. 82(2) of the Act which provides for a finding of inappropriate practice against the employer or ‘an officer of a body corporate’ who ‘knowingly, recklessly or negligently’ causes or permits a practitioner ‘to engage in conduct that constitutes inappropriate practice’.

Random samples of records PSR relies on securing a random sample of records from which it can extrapolate findings across a full year. In the past the random sample was identified by the Department of Human Services. However, this year this duty was transferred to the Department of Health. Unfortunately the preparation for the transfer disrupted data acquisition, resulting in significant delays. A process that previously took only two weeks took in excess of three months. Given Director’s stage reviews have a maximum statutory time frame of only 12 months, the delays resulted in consequential time limitations in other aspects of the Director’s reviews and caused disruption to workflow. PSR worked with the Department of Health and this issue has now been resolved.

PSR also sought advice from an Australian expert in statistical sampling to determine the optimal way to sample data to secure a random sample suitable for extrapolation in the case of an employer or corporate Committee where multiple practitioners might provide services. PSR agreed to adopt the advice in the expert report and Committees established to review corporate or employer cases will be able to utilise the recommended sampling methodology.

Summary In 2018-19, PSR has successfully managed an increasing workload and simultaneously achieved all qualitative key performance indicators.

PSR now tackles a large number of matters across many professional areas. It is making efforts to increase its engagement with stakeholders. This engagement has demonstrated that the Australian healthcare community are committed to maintaining the principles of the Medicare and the Pharmaceutical Benefits Schemes and that the majority of practitioners act appropriately in billing and prescribing.

22 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

3. Management and accountability Structure and organisation The Director of PSR is an independent statutory officer appointed by the Minister for Health under s. 83 of the Act. PSR is a listed entity for the purposes of the PGPA Act, and the Director is prescribed as the agency’s chief executive (accountable authority).

Professor Julie Quinlivan commenced an appointment for three years as Director on 13 February 2017.

Corporate governance and business planning Overall accountability for PSR rests with the Director, who has primary authority and legal responsibility for the agency. The PSR Executive Officer, Mr Bruce Topperwien, reports to the Director. He is the senior APS officer responsible for the administrative management of the agency and also fulfils the role of General Counsel.

During 2018-19, there were no significant instances of non-compliance with the finance law.

In 2018-19, PSR further reviewed its Corporate Plan and progressed the staffing of positions following its organisational restructure. The review and restructure focused on the resources and capability of the Case Management Unit.

The PSR Corporate Plan 2018-19 identifies six goals, as shown in Table 6.

The PSR Corporate Plan is publicly available on the PSR website. During 2018-19, PSR used this Corporate Plan as the basis for its performance reporting framework.

Table 6: Six goals from the Professional Services Review Corporate Plan 2018-19

Key Performance Indicators

1 Number of s92 agreements entered into, exceed the number of cases referred to a committee

2 80% of Committees will finalise their investigations within 18 months of commencing investigation

3 The Director has made a decision under section 91, section 92 or section 93 within 12 months in all cases

4 The Determining Authority makes a decision on 100% of s92 agreements

5 In 80% of cases, the Determining Authority issues its final determination within 6 months of receiving a final report

6 PSR will consult with the relevant professional bodies on behalf of the Minister in respect of every appointment PSR = Professional Services Review

23 MANAGEMENT AND ACCOUNTABILITY

The agency’s current structure (Figure 1) was refined in 2018-19. This structure provides for:

+ a Case Management Unit, (managed by the Special Counsel), to deal with the increasing number of referrals from the Provider Benefits Integrity Division in the Department of Health and a resulting increase in the number of Committee hearings held

+ an integrated Corporate Support Unit that reports to the Chief Financial Officer, and is responsible for finance, human resources, security and property management, and IT and information management

+ a Business Manager, who supports the PSR Executive, and coordinates administrative support across the agency and manages communications, media and parliamentary functions

+ the Executive Officer who also fulfils the role of General Counsel.

As a result of the changes to the agency’s structure, the legal capacity within the Case Management Unit was increased. The Case Management Unit at the end of 2018-19 has two Legal 2 Principal Legal Officers, two Legal 1 Senior Legal Officers and four APS 6 legal/paralegal positions.

Document preparation and management for PSR Committee hearings and for reviews conducted by the Director is provided by an administrative team comprising four APS 4 administrative officers. This team is supported by senior records management staff.

Figure 1: Professional Services Review organisational chart, 2018-19

24 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Portfolio shared services arrangements Since PSR is a small agency, it is not realistic or financially viable for it to employ the number or range of staff required to provide all of the specialist services that the agency may need from time to time. The ability to access specialist advice and services from the Department of Health under the portfolio shared services arrangements has helped PSR to manage a range of infrastructure support functions cost-effectively.

PSR accesses human resources and payroll services as well as a range of advice services from the Department of Health in areas such as human resources, injury management, security and facilities management.

Executive management team The PSR executive management team is made up of the Director, the Executive Officer (who is also the General Counsel), the Special Counsel (who is also the manager of the Case Management Unit) and the Chief Financial Officer (who is also the manager of the Corporate Support Unit). The team has twice-monthly meetings, and meets as required at other times.

The executive management team is responsible for advising the Director on planning, budgeting, financial management, performance monitoring and corporate governance (including human resources), physical and IT security, and workplace health and safety.

Standing agenda items at executive management team meetings include:

+ reports from the Director, the Executive Officer, the Special Counsel, and the Chief Financial Officer

+ reports on risk management, internal audit, procurement and contracting, human resources, including leave liability and workplace health and safety

+ a report from the Information and Communications Technology (ICT) and Information Management Governance Committee.

In providing leadership for the agency, the executive management team promotes the core principles of good public sector governance, including accountability, transparency, integrity, efficiency and risk management.

Because PSR is a small agency, the executive management team undertakes a range of roles that might be performed by specialist committees in a larger organisation.

Identifying and managing risk In May 2018, PSR worked with consultants Noetic to conduct a risk assessment of its activities, covering both strategic and operational risks. PSR has invested significantly in the development of a robust risk management framework.

25 MANAGEMENT AND ACCOUNTABILITY

This investment has continued with the annual Risk Management Workshop and review of PSR’s Risk Management Plan.

The Risk Management Workshop involved all staff, the chair and members of PSR’s Audit and Risk Committee, and included a review of PSR’s Risk Management Plan. Outcomes from the workshop provided an opportunity for the agency to consider any risks or compliance issues in the context of developing PSR’s annual Internal Audit Plan.

The PSR Risk Management Plan summarises the strategic risk context and operational risk assessment for the agency. The plan also outlines key mitigation strategies to be implemented, and roles and responsibilities for monitoring and reviewing risks.

In addition, Noetic worked with PSR to review its approach to tracking and managing risks. The 2018-19 Risk Action Plan identifies and prioritises further opportunities for improvement in risk management, taking into account both the maturity of the agency’s risk management practices, and its capacity for developing and implementing further change.

The maturity assessment was undertaken by Noetic at a high level, drawing on its risk management knowledge, and experience in the private and Australian Government sectors. It was based on what would reasonably be expected of an organisation of PSR’s size, nature and complexity.

The findings from this annual review have provided input into the assessment of future improvement initiatives.

The improvement priorities identified include:

+ reviewing policy documents

+ streamlining risk monitoring and reporting

+ more effectively linking risk management and business planning

+ ensuring staff engagement

+ outsourcing risk management advice or related services where appropriate.

The risk assessment will also be used to prepare PSR’s annual Internal Audit Plan. The Internal Audit Plan includes provision for additional audits should circumstances change during the year. The preparation of the risk assessment is based on a methodology that recognises inherent risk and control effectiveness.

PSR reports on the Internal Audit Plan and provides regular updates on the status of audit recommendations to the PSR Audit and Risk Committee.

Although risk management and internal controls are overseen by the Audit and Risk Committee, primary responsibility for managing risk and internal controls rests with managers, who are required to ensure that risks are identified and managed within their units.

26 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Fraud control A fraud control workshop was held which involved all staff. The workshop provided an opportunity to raise awareness amongst staff and assisted in the review of the agency Fraud Control Plan (the Plan). The Plan was developed to ensure that PSR has effective systems and processes in place to manage its fraud risks. The Plan complies with the Commonwealth Fraud Control Framework under the PGPA Act, and is consistent with PSR’s Risk Management Plan and Accountable Authority Instructions.

Fraud control is a standing agenda item at PSR’s executive management team and Audit and Risk Committee meetings.

During 2018-19, there were no reported incidents of fraud.

External scrutiny During 2018-19, a complaint was lodged with the Australian Human Rights Commission (AHRC) concerning the fact that PSR sought to have females appointed to the PSR Panel in preference to males. The AHRC discontinued its investigation into the complaint following its acceptance that this was a special measure for the purpose of achieving substantive equality between men and women in the Panel’s membership, consistent with section 7D of the Sex Discrimination Act 1984.

Audit and Risk Committee The PSR Audit and Risk Committee is established by the PSR Director under s. 45(1) of the PGPA Act.

It provides independent advice on the agency’s governance arrangements, risk management framework, internal control and compliance framework, and financial statement responsibilities.

The PSR Audit and Risk Committee consists of an independent chair, an independent member, and the agency’s Executive Officer. In 2018-19, Ms Gayle Ginnane was the independent chair and Mr Paul Groenewegen was the independent member. Participating observers included representatives from the Australian National Audit Office and PwC, who are currently PSR’s internal auditors.

In 2018-19, the Audit and Risk Committee met on four occasions. In addition, the Chair reported regularly to the Director of PSR.

During the course of the year, the PSR Audit Plan included a range of audits that focused on governance, internal controls, and compliance. These included reviews of the agency’s case management activities, key controls, business continuity planning and a post-implementation review of the upgraded case management system.

27 MANAGEMENT AND ACCOUNTABILITY

Ethical standards PSR recognises its responsibilities as part of the APS. As a statutory agency, PSR is committed to the APS Values and the Code of Conduct outlined in the Public Service Act 1999. In addition, to help guide its performance, PSR has defined its own values and behaviours, which are underpinned by the APS Values. PSR’s values and behaviours—fair, transparent and professional—address the unique aspects of our business and environment, and guide us in how we conduct ourselves in performing our role.

To PSR, being fair means:

+ providing procedural fairness in the operation of the PSR Scheme

+ using a consistent approach to arrive at timely, justifiable decisions

+ delivering an effective and impartial PSR Scheme

+ explaining the process to stakeholders.

To PSR, being transparent means:

+ accurately informing practitioners of their rights and responsibilities

+ accurately informing practitioners of PSR’s powers, responsibilities and intentions

+ proactively sharing information about the scheme, our outcomes and our activities

+ providing defensible reasons for outcomes.

To PSR, being professional means:

+ complying with Commonwealth legislative requirements and expectations

+ being accountable for our actions and decisions

+ protecting the privacy and confidentiality of the information we receive, use and create

+ operating with integrity and honesty

+ treating all people with courtesy and respect

+ using time and resources effectively.

Management of human resources PSR staff are covered by PSR’s 2016-19 enterprise agreement, which came into effect in February 2017.

PSR ensures that all employees work in an environment that allows them to reach their full potential, and where they are treated fairly, equitably and with respect. These values are embedded in the agency’s Performance Development Scheme (PDS).

PSR is committed to developing and maintaining a culture that encourages and supports all employees in raising concerns about unacceptable behaviour, is free from bullying and harassment, and provides protection to employees who report instances of suspected breaches

28 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

of the Code of Conduct. Agency procedures for managing alleged breaches of the Code of Conduct set out how allegations will be managed; these procedures are available to all employees via the PSR intranet.

A staff satisfaction survey for 2018-19 indicated that 85% of staff felt valued in the workplace (23% strongly agreed; 62% agreed). Approximately 92% felt that PSR was a positive place to work, and overall enjoyed working for the organisation.

Australian Public Service staff Staff employed by PSR, with the exception of the PSR Director, are employed under the Public Service Act 1999.

At 30 June 2019, PSR employed 23 APS staff members. Although PSR is a small agency, it has a number of specialist Legal 2 positions because of its role as a regulatory agency. These positions are filled by senior lawyers with extensive administrative law experience. They have specific responsibility for managing PSR cases, and providing legal advice to the Director and PSR Committees.

Tables 7 and 8 provide details of staff numbers.

Table 7: PSR Australian Public Service staff at 30 June 2019

Classification Male Female

Ongoing employment Non-ongoing employment Full time Part time Total

SES Band 1 0 1 0 1 0 1

Legal/EL 2 1 3 4 0 4 0 4

EL 1 0 3 3 0 2 1 3

APS 6 3 4 7 0 5 2 7

APS 5 1 4 4 1 2 3 5

APS 4 1 2 3 0 3 0 3

Total 7 16 22 1 17 6 23

APS = Australian Public Service; EL = Executive Level; SES = Senior Executive Service

Table 8: PSR FTE at 30 June

Staff 30 June 2019 30 June 2018

Full Time Equivalent (FTE) 21.24 19.03

All staff employed by PSR at 30 June 2019 were based in the ACT. There were nine employees who did not speak English as their first language and 39% had parents who did not speak English as their first language. PSR had no employees who identified as Aboriginal or Torres Strait Islander, and one employee with an identified disability.

During 2018-19, PSR recruited five ongoing employees. Two ongoing employees left PSR through resignation.

29 MANAGEMENT AND ACCOUNTABILITY

Enterprise agreement and Australian Workplace Agreements At 30 June 2019, the pay and conditions of all APS employees, including those at the Executive Level, were governed by the PSR Enterprise Agreement 2016-19.

The pay and conditions of PSR’s Senior Executive Service (SES) officer were governed by an SES employment policy and contract. Table 9 lists PSR salary ranges for each classification.

Table 9: Current PSR salary ranges

Classification Minimum ($) Maximum ($)

APS 3 58,691 64,913

APS 4 66,364 71,246

APS 5 72,209 76,374

APS 6 79,988 93,966

Legal APS 6 81,776 90,235

EL 1 101,068 112,850

Legal EL 1 104,866 124,356

EL 2 113,221 140,016

Legal EL 2 136,001 146,921

APS = Australian Public Service; EL = Executive Level

Note: Salary ranges are from the PSR Enterprise Agreement 2016-19.

Non-salary benefits PSR provided non-salary benefits to attract and retain capable staff. In 2018-19, benefits included:

+ allowance for mobile phones for relevant personnel

+ home internet access to PSR’s ICT network

+ paid car parking for all employees

+ travel lounge membership for employees who travel more than six times a year.

Performance Pay During 2018-19, PSR awarded performance pay to Executive level employees who satisfied certain performance conditions specified by individual flexibility agreements.

Table 10 provides details of employees by classification, who received performance pay relating to the PDS cycle ending 30 June 2019. The total amount paid was $36,317.

30 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Table 10: Performance pay to PSR employees

Classification Employees Total Paid ($) Average ($) Minimum ($) Maximum ($)

SES Band 1/ Legal/EL 2 3 36,317 12,106 10,804 13,743

Key Management Personnel During the reporting period ending 30 June 2019, PSR had five executives who met the definition of key management personnel (KMP). Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of PSR, directly or indirectly, including any director (whether executive or otherwise) of PSR. PSR has determined the key management personnel to be those occupying the roles of Director, Executive Officer, Special Counsel, and the Chief Financial Officer. Their names and the length of term as KMP are summarised below:

Name Position title Term as KMP

Professor Julie Quinlivan Director PSR (Accountable Authority) Full year

Dr David Rankin1 Acting Director PSR Part year—appointed on 9.7.2018 and ceased on 20.7.2018

Bruce Topperwien Executive Officer and General Counsel Full year

Andrew Shelley Special Counsel Full year

Linnet Lee Chief Financial Officer Full year

1 The Acting Director was appointed during the period the Director was on leave.

In the notes to the financial statements for the period ending 30 June 2019, PSR disclosed the following KMP expenses:

Note 10: Key management personnel remuneration for the reporting period 2019

Short-term benefits $

Salary 828,999

Performance bonuses 36,317

Other2 42,926

Total short-term employee benefits 908,242

Post-employment benefits:

Superannuation 121,274

Total post-employment benefits 121,274

Other long-term benefits:

Annual leave 74,479

Long-service leave 31,400

Total other long-term benefits 105,879

Termination benefits -

Total 1,135,395

2 Includes Executive vehicle allowance, car parking and mobile allowance.

31 MANAGEMENT AND ACCOUNTABILITY

Note 10 above has been further disaggregated into the following detail: Table 11: KMP Remuneration

Short-term benefits

Post - emplo yment

benefits

Other long

- term benefits

Termination benefits

Total

remuneration

Name Position title Base salary Bonuses

Other

benefits and allowances

Superannuation contributions Long service leave

Other

long - term benefits

Professor Julie Quinlivan Director PSR (Accountable Authority)

4

328,232 - 4,643 34,049 8,177 28,899 - 404,000

Dr David Rankin Acting Director

PSR

3,4

8,392 - - 1,964 - - - 10,357

Bruce Topperwien Executive Officer and General Counsel

5

190,315 13,743 29,607 35,986 8,671 17,725 - 296,048

Andrew Shelley Special Counsel

6

157,623 11,770 4,338 25,738 5,098 13,913 - 218,480

Linnet Lee Chief Financial Officer

6

144,436 10,804 4,338 23,536 9,454 13,942 - 206,510

Total 828,999 36,317 42,926 121,274 31,400 74,479 - 1,135,395

3

T he Acting Director was appointed for part of the year during the period the Director was on leave. 4

R emunerated under the Remuneration Tribunal Determination for Full-Time Office Holders. 5

R emunerated under a section 24 agreement under the

Public Service Act 1999.

6

R emunerated under Individual Flexibility Arrangements (IFAs), which includes car parking, performance bonuses linked to annual performance ratings, and pay rises in line with the agency’s current Enterprise Agreement. IFAs are determined by the Director (accountable authority).

32 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Senior Executive Remuneration PSR’s Senior Executive Service (SES) employee is remunerated under an individual agreement in accordance with section 24 of the Public Service Act 1999 (PS Act). The Director of PSR has authority to approve section 24 agreements, which are consistent with the Department of Health’s SES Performance and Remuneration Framework and practices for SES employees.

During the reporting period ended 30 June 2019, PSR had one SES employee who was also a KMP, and holds the position title of Executive Officer and General Counsel. Details of PSR’s SES remuneration are included above in table 10.

Other Highly Paid Staff During the reporting period ended 30 June 2019, PSR did not have any employees who met the threshold for other highly paid staff, where an individual’s total remuneration was $220,000 or more, and who was not a KMP or SES employee.

Holders of full-time and part-time public office The Director of PSR is a holder of full-time public office whose remuneration and allowances are set annually by the Remuneration Tribunal. PSR Panel and Determining Authority members are holders of part-time public office. The Remuneration Tribunal also sets their remuneration and allowances on an annual basis.

Panel members and deputy directors who are appointed to specific PSR Committees are paid in accordance with the Remuneration Tribunal rates and allowances.

Table 12 shows PSR Panel membership by practice location and gender.

Table 12: PSR Panel members at 30 June 2019

Location Male Female Total

Australian Capital Territory 6 3 9

New South Wales 21 18 39

Northern Territory 0 1 1

Queensland 10 4 14

South Australia 4 7 11

Tasmania 2 2 4

Victoria 18 9 27

Western Australia 4 5 9

Total 65 49 114

33 MANAGEMENT AND ACCOUNTABILITY

Training and development PSR employees, in consultation with their managers, identify their training and development needs through individual development plans made under the organisation’s Performance Development Scheme. As a result of this consultation, PSR employees accessed a range of learning and development opportunities during 2018-19, including external courses and workshops in areas including leadership and management, work health and safety, law, risk, and records management.

PSR allocates a portion of its annual departmental expenditure to training and development during the financial year.

Work health and safety PSR is committed to protecting the health, safety and welfare of its employees, contractors and visitors.

PSR undertook a number of health and safety initiatives in 2018-19, including:

+ workstation assessments for new employees

+ onsite influenza vaccinations for all employees

+ access to the employee assistance program for employees and their immediate families.

PSR’s work health and safety representative is responsible for monitoring workplace hazards. The work health and safety representative and human resources officer conduct workplace inspections and report their findings to the Health and Safety Committee for action. Employees can also raise any health and safety issues with the work health and safety representative.

Disability reporting mechanisms The Commonwealth Disability Strategy has been superseded by the National Disability Strategy 2010-2020, which sets out a 10-year national policy framework to:

+ improve the lives of people with disability

+ promote participation

+ create a more inclusive society.

A high-level two-yearly report will track progress against each of the six outcome areas of the strategy and present a picture of how people with disability are faring. The first of these reports is available on the website of the Australian Government Department of Social Services.

34 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Accommodation In 2017-18, PSR entered into a new lease of its premises at Brindabella Business Park for five years. As part of lease negotiations, PSR made modifications to the present accommodation space to better suit the needs of the organisation. The refit included:

+ a new meeting room to facilitate formal Committee hearings and meetings suitable for the Determining Authority, as well as all staff meetings and workshops

+ converting workstations into two new offices

+ reconfiguration of workstations to better position staff within teams

+ more office storage to improve management of physical case records.

While all of that work was successfully completed by 30 June 2018, a further minor refit was required in 2018-19 to accommodate a small increase in staff and consultants to manage the agency’s significantly increased workload. PSR is maximising the efficient use of its premises to good effect.

35 FINANCIAL PERFORMANCE

4. Financial performance

PSR’s departmental appropriation for 2018-19 was $7,008,000, which includes $62,000 for a departmental capital budget.

The agency’s 2018-19 departmental expenses were $7,315,316 (excluding GST).

A resource summary of PSR’s departmental expenses is provided at Appendix 1. Further information on PSR’s financial performance is available in the audited financial statements and accompanying notes at Appendix 2.

Purchasing In 2018-19, PSR sourced goods and services in accordance with the principles set out in the Commonwealth Procurement Rules.

The agency’s purchase of goods and services reflected the mandatory guidelines, focusing on:

+ value for money

+ encouraging competition

+ efficient, effective and ethical use of Australian Government resources

+ accountability and transparency

+ compliance with other Australian Government policies.

PSR has outsourced some air travel management services. As part of service delivery arrangements with the provider, PSR requires the ‘lowest practical fare’ when procuring air travel for all PSR employees and part-time office holders.

Asset management Management of physical assets is not a significant part of PSR’s business. A departmental capital budget has been developed to ensure that there are sufficient funds to replace assets, as required.

PSR maintains an asset register and conducts an annual asset stocktake, in accordance with accounting standards and better practice asset management.

36 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Consultants PSR engages consultants where it lacks specialist expertise, or when independent research, review or assessment is required. Consultants are typically engaged to:

+ investigate or diagnose a defined issue or problem

+ carry out defined reviews or evaluations or

+ provide independent advice, information or creative solutions to assist with the agency’s decision making.

Before engaging consultants, PSR takes into consideration the skills and resources required for the task, the skills available internally, and the cost-effectiveness of engaging external expertise. The decision to engage a consultant is made in accordance with the PGPA Act and related Rules, including the Commonwealth Procurement Rules. A consultant provides professional advice on subject matter in which they have expertise.

During 2018-19, PSR engaged 14 consultants under s. 90 of the Health Insurance Act 1973, with a total value of $355,976 (inclusive of GST), to assist with the performance of the functions, duties and powers of the Director. Four out of the 14 consultancy contracts were ongoing contracts (totalling $271,707 GST inclusive), for services provided by Dr D Brand, Dr A Di Dio, Dr R Sharma and Dr K Flegg. PSR uses peer review to assist in Director stage reviews and some clinicians are engaged under a consultancy for this purpose. The remaining 10 consultancies represent new contracts entered into during the financial year (totalling $84,269 GST inclusive).

In addition, PSR incurred further expenditure of $245,032 (inclusive of GST) in relation to three ongoing contracts, and one new contract for the provision of legal services from Clayton Utz, Sparke Helmore, Maddocks, and the Australian Government Solicitor.

PSR spent a cumulative amount of $172,348 (inclusive of GST) on three consultancies during 2018-19 to provide professional, independent and expert advice to PSR. Two out of the three were new contracts (totalling $158,790 GST inclusive), which included an agency functional review by Ernst and Young, in the amount of $150,000 (GST inclusive).

Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.

Australian National Audit Office access clauses During 2018-19, PSR had no contracts over the value of $100,000 (inclusive of GST) that did not provide for the Auditor-General to have access to the contractor’s premises.

Exempt contracts In 2018-19, PSR had no contracts over the value of $10,000 (inclusive of GST) that were exempt from being published on AusTender on the basis that to do so would disclose exempt matters under the Freedom of Information Act 1982.

37 FINANCIAL PERFORMANCE

Procurement initiatives to support small business PSR supports small business participation in the Australian Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.

PSR recognises the importance of ensuring that small businesses are paid on time.

The results of the survey of Australian Government payments to small business are available on the Treasury’s website.

PSR applies procurement practices that are consistent with the Commonwealth Procurement Rules and the Commonwealth Contracting Suite for low-risk procurements valued under $200,000 (inclusive of GST) that do not unfairly discriminate against small and medium enterprises. PSR recognises the importance of timely payments to small businesses, and ensures that key financial systems and processes are robust to facilitate these payments.

Advertising and market research During 2018-19, PSR undertook two advertising campaigns with Universal McCann for the recruitment of specialists to PSR’s panel. Total payments to Universal McCann were $6,854 (GST inclusive).

Grants programs PSR does not administer any grants programs.

Ecologically sustainable development and environmental performance Section 516A of the Environment Protection and Biodiversity Conservation Act 1999 requires that PSR reports its contribution to ecologically sustainable development.

PSR’s small size and specific role limit its opportunities to contribute to ecologically sustainable development. However, PSR endeavours to reduce its energy costs by installing energy efficient light bulbs and using sensor light technology. PSR also encourages ecologically sustainable practices, such as paper, plastic and aluminium recycling and has implemented systems and processes to encourage greater reliance on electronic records in preference to paper.

Publications PSR produced two publications in 2018-19:

+ Annual report 2017-18

+ Your Guide to the PSR Process.

38 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Appendix 1

Professional Services Review’s resource statement and outcome summary 2018-19 Table 13: Resource statement, 2018-19

Resource

Actual available

appropriations for 2018-19 ($’000)(a)

Payments made

in 2018-19 ($’000)(b)

Balance remaining ($’000)(a-b)

Ordinary Annual Servicesa Departmental appropriationb 6,432 7,323 -891

Other services Departmental non-operating - - -

Equity injections - - -

Previous year’s outputs - - -

Total other services - - -

Total resourcing and payments 6,432 7,323 -891

Note: All figures are GST exclusive.

a Appropriation Acts (No. 1) 2018-19.

b Includes an amount of $62,000 for the Departmental Capital Budget.

Table 14: Resource summary, Outcome 1a

Program 1.1: Safeguarding the Integrity of the Medicare Program and Pharmaceutical Benefits Scheme

[A]

Budget 2018-19 ($’000)

[B]

Actual expenses 2018-19 ($’000)

[A - B] Variation ($’000)

Departmental outputs 6,299 7,315 -1,016

Average staffing level (number) 23 23 0

a Out come 1 is a reduction of the risks to patients and costs to the Australian Government of inappropriate practice, including through investigating health services claimed under the Medicare and Pharmaceutical Benefits schemes.

39 APPENDIX 2: FINANCIAL STATEMENTS

Appendix 2

Financial statements Independent audit report

Statement by Accountable Authority and Chief Financial Officer

Statement of comprehensive income

Statement of financial position

Statement of changes in equity

Cash flow statement

Overview

Note 1: Expenses

Note 2: Income

Note 3: Financial assets

Note 4: Non-financial assets

Note 5: Payables

Note 6: Provisions

Note 7: Appropriations

Note 8: Cash flow reconciliation

Note 9: Employee provisions

Note 10: Key management personnel remuneration

Note 11: Related party disclosures

Note 12: Contingent assets and liabilities

Note 13: Financial instruments

Note 14: Fair value measurement

Note 15: Aggregate assets and liabilities

40 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

GPO Box 707 CANBERRA ACT 2601 19 National Circuit BARTON ACT Phone (02) 6203 7300 Fax (02) 6203 7777

INDEPENDENT AUDITOR’S REPORT

To the Minister for Health

Opinion

In my opinion, the financial statements of the Professional Services Review for the year ended 30 June 2019:

(a) comply with Australian Accounting Standards - Reduced Disclosure Requirements and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015; and

(b) present fairly the financial position of the Professional Services Review as at 30 June 2019 and its financial performance and cash flows for the year then ended.

The financial statements of the Professional Services Review, which I have audited, comprise the following statements as at 30 June 2019 and for the year then ended:

• Statement by the Accountable Authority and the Chief Financial Officer; • Statement of Comprehensive Income; • Statement of Financial Position; • Statement of Changes in Equity; • Cash Flow Statement; and • Notes to and forming part of the the financial statements.

Basis for Opinion

I conducted my audit in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Professional Services Review in accordance with the relevant ethical requirements for financial statement audits conducted by the Auditor-General and his delegates. These include the relevant independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) to the extent that they are not in conflict with the Auditor-General Act 1997. I have also fulfilled my other responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Accountable Authority’s Responsibility for the Financial Statements

As the Accountable Authority of the Professional Services Review, the Director is responsible under the Public Governance, Performance and Accountability Act 2013 for the preparation and fair presentation of annual financial statements that comply with Australian Accounting Standards - Reduced Disclosure Requirements and the rules made under that Act. The Director is also responsible for such internal

control as the Director determines is necessary to enable the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

41 APPENDIX 2: FINANCIAL STATEMENTS

In preparing the financial statements, the Director is responsible for assessing the Professional Services Review’s ability to continue as a going concern, taking into account whether the entity’s operations will cease as a result of an administrative restructure or for any other reason. The Director is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the assessment indicates that it is not appropriate.

Auditor’s Responsibilities for the Audit of the Financial Statements

My objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian National Audit Office Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with the Australian National Audit Office Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control; • evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by the Accountable Authority; • conclude on the appropriateness of the Accountable Authority’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related

to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the entity to cease to continue as a going concern; and • evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

Australian National Audit Office

Lorena Skipper A/g Executive Director

Delegate of the Auditor-General

Canberra 23 September 2019

42 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

43 APPENDIX 2: FINANCIAL STATEMENTS

STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2019

 2019  2018

Original 

Budget 2019

Notes $ $ $

NET COST OF SERVICES Expenses Employee benefits 1A 3,032,112  2,609,065  3,168,000 

Supplier expenses 1B 3,996,435  3,007,464  2,853,092 

Depreciation and amortisation 4A 268,003  183,433  276,000 

Finance costs 1C 1,908  1,776  1,908 

Impairment loss allowance on financial instruments  1D 7,000  7,000   â€

Losses from disposal of assets 1E 9,858  979   â€

Total expenses 7,315,316  5,809,717  6,299,000 

Own‐Source Income  Own‐source revenue Rendering of services 2A 45,000   â€  â€

Other revenue 2B 35,000  32,500  34,000 

Total own‐source revenue 80,000  32,500  34,000 

Gains Other gains 2C 3,183  20,858   â€

Total gains 3,183  20,858   â€

Total own‐source income 83,183  53,358  34,000 

Net cost of services  7,232,133  5,756,359  6,265,000 

Revenue from Government â€ departmental appropriations 2D 6,946,000  5,518,000  6,006,000  Surplus (Deficit) attributable to the Australian Government (286,133) (238,359) (259,000)

OTHER COMPREHENSIVE INCOME Items not subject to subsequent reclassification to net cost of services Changes in asset revaluation surplus 11,059  39,481   â€

Total other comprehensive income 11,059  39,481   â€

Total comprehensive income attributable to the Australian Government (275,074) (198,878) (259,000)

The above statement should be read in conjunction with the accompanying notes.

44 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2019

Budget Variances Commentary

Statement of Comprehensive Income

Impairment loss allowance on financial instruments was higher than budget by $7K and relates to the allowance for credit losses. A settlement in favour of PSR for a litigation case recognised in a prior year has been partially paid (68%). The remaining balance is overdue. At the time of budget, there was no indication of further impairment. PSR has assessed total impairment at 66% of the remaining balance based on repayment activity to date.

The year end deficit was mainly due to the increase in supplier expenses as discussed above.

During the year, PSR received authority to spend $940K in appropriation revenue under the Medicare Compliance Expansion of Data Matching Activities Measure.

At 30 June, PSR undertook a desktop valuation of its assets. At the time of budget, movements in asset carrying amounts from the desktop valuation could not be estimated, and was not likely to be significant. For some asset classes, the valuation resulted in fair value movements greater than 10% and increased the asset revaluation reserve by $11K.

Employee benefits were $136K (4%) lower than budget due to timing of recruitment. The budget also assumes positions are remunerated above the lowest pay point in the relevant salary band.

Supplier expenses were $1,143K (40%) higher than budget. The variance was due to an increase in the number of lists reviewed for cases referred to PSR during the year (2019: 945; 2018: 749) and an increase in the number of hearings & meeting days held (2019: 135; 2018: 67). 

Losses from disposal of assets were higher than budget by $10K. The variance was due to disposal of obsolete software.  These assets would not have been identified for disposal at the time of budget. 

An increase in other gains of $3K represents a Comcare refund for prior year premiums which could not be forecasted at the  time of budget. Adjustments are made to premiums at the end of the relevant financial year.

Rendering of services was $45K higher than budget, and represents a settlement in favour of PSR for a litigation case that was before the Federal Court. At the time of budget, the settlement could not be determined.

45 APPENDIX 2: FINANCIAL STATEMENTS

STATEMENT OF FINANCIAL POSITION as at 30 June 2019

 2019  2018

Original 

Budget 2019

Notes $ $ $

ASSETS Financial Assets Cash and cash equivalents 3A 78,925  79,764  79,000 

Trade and other receivables 3B 2,290,886  2,242,890  2,141,000 

Total financial assets 2,369,811  2,322,654  2,220,000 

Non‐Financial Assets Leasehold improvements 4A 375,300  493,551  333,000 

Plant and equipment 4A 346,963  344,643  426,000 

Intangibles 4A 425,500  368,481  283,000 

Other non‐financial assets 4B 51,709  44,898  47,000 

Total non‐financial assets 1,199,472  1,251,573  1,089,000 

Total assets 3,569,283  3,574,227  3,309,000 

LIABILITIES Payables Suppliers 5A 306,779  317,726  297,000 

Other payables 5B 119,635  135,942  86,000 

Total payables 426,414  453,668  383,000 

Provisions Employee provisions 9 789,514  555,030  685,000 

Provision for restoration obligations 6 96,300  95,400  100,000 

Total provisions 885,814  650,430  785,000 

Total liabilities 1,312,228  1,104,098  1,168,000 

Net assets 2,257,055  2,470,129  2,141,000 

EQUITY Contributed equity 1,708,497    1,646,497  1,708,000 

Reserves 842,532  831,473  792,000 

Retained surplus/(Accumulated deficit) (293,974) (7,841) (359,000)

Total equity 2,257,055  2,470,129  2,141,000 

The above statement should be read in conjunction with the accompanying notes.

46 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

STATEMENT OF FINANCIAL POSITION as at 30 June 2019

Budget Variances Commentary

Statement of Financial Position

Trade and other receivables were higher than budget by $150K (7%). The balance at year end represents $1.2K in appropriation receivables which is lower than the budget amount and consistent with an increase in supplier expenses, but also includes $940K in appropriation revenue, receivable from the Medicare Compliance Expansion of Data Matching Activities Measure. At the time of budget, additional funding from this measure had not been sought.

Leasehold improvements were higher than budget by $42K (13%). In 2017‐18, remaining work on the office fitout, carried over into the current year. Approximately $36K in additions were capitalised. At the time of budget, the value of these additions had not been determined. The budget represents the asset's carrying value less depreciation during the year, before additional work on the fitout was commissioned. 

Plant and equipment was lower than budget by $78K which represents the assets' accumulated depreciation, written back at year end. At 30 June, PSR undertook a desktop valuation of its assets. The valuation resulted in fair value movements greater than 10% and the carrying amounts were restated to fair value. At the time of budget, movements in asset carrying amounts from the desktop valuation could not be estimated, and was not likely to be significant.

Intangibles were higher than budget by $143k (50%). During the year, software was purchased to enhance the agency's ICT system capability and security. These costs were unknown at the time of budget. PSR also commissioned a refresh of its standard operating environment and further enhancements were made to PSR's case management system. The budget represents the asset's carrying value less amortisation during the year, before the refresh and additional enhancements to the case management system had been identified.

Other non‐financial assets which have increased by $5K (10%), represents a prepayment of additional software licences.

Other payables were higher than budget by $34K (39%) as the budget did not take into consideration performance bonuses at year end.

Employee provisions were higher than budget by $105K (15%). During the year, approximately $56K in leave balances were transferred in from new starters. The 10 year treasury bond rate at 30 June decreased from 2.5% to 1.3%, increasing the discount factor applied to long service leave, and the overall provision by approximately $39K. 

47 APPENDIX 2: FINANCIAL STATEMENTS

STATEMENT OF CHANGES IN EQUITY  for the period ended 30 June 2019

 2019  2018

Original 

Budget 2019

Notes $ $ $

CONTRIBUTED EQUITY Opening balance Balance carried forward from previous period 1,646,497  997,497  1,646,000 

Opening balance 1,646,497  997,497  1,646,000 

Transactions with owners Contributions by owners Departmental capital budget 62,000  649,000  62,000 

Total transactions with owners 62,000  649,000  62,000 

Closing balance as at 30 June 1,708,497  1,646,497  1,708,000 

RETAINED EARNINGS Opening balance Balance carried forward from previous period (7,841) 325,896  (100,000)

Opening balance (7,841) 325,896  (100,000)

Comprehensive income Surplus/(Deficit) for the period (286,133) (238,359) (259,000)

Total comprehensive income (286,133) (238,359) (259,000)

Transactions with owners Distributions to owners Returns of capital        Repeal of prior year appropriations1  â€ (95,378)  â€

Total transactions with owners  â€ (95,378)  â€

Closing balance as at 30 June (293,974) (7,841) (359,000)

ASSET REVALUATION RESERVE Opening balance Balance carried forward from previous period 831,473  791,992  792,000 

Opening balance 831,473  791,992  792,000 

Comprehensive income Other comprehensive income 11,059  39,481   â€

Total comprehensive income 11,059  39,481   â€

Closing balance as at 30 June 842,532  831,473  792,000 

48 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

STATEMENT OF CHANGES IN EQUITY (Continued) for the period ended 30 June 2019

 2019  2018

Original 

Budget 2019

Notes $ $ $

TOTAL EQUITY Balance carried forward from previous period 2,470,129  2,115,385  2,338,000 

Opening balance 2,470,129  2,115,385  2,338,000 

Comprehensive income Surplus (Deficit) for the period (286,133) (238,359) (259,000)

Other comprehensive income 11,059  39,481   â€

Total comprehensive income (275,074) (198,878) (259,000)

Transactions with owners Distributions to owners Returns of capital        Repeal of prior year appropriations1  â€ (95,378)  â€

Contributions by owners Departmental capital budget 62,000  649,000  62,000 

Total transactions with owners 62,000  553,622  62,000 

Closing balance as at 30 June 2,257,055  2,470,129  2,141,000 

The above statement should be read in conjunction with the accompanying notes.

1  Appropriation Act (No. 4) 2017‐18 repealed unspent Appropriation Acts from 1 July 2013 to 30 June 2014.

Budget Variances Commentary

Statement of Changes in Equity

Total comprehensive income has increased by approximately $16K (8%). The variance is represented by an increase of $27K in the agency's anticipated deficit, and an increase in the asset revaluation reserve, after an asset valuation was conducted on the agency's leasehold improvements and plant and equipment at 30 June 2019. 

49 APPENDIX 2: FINANCIAL STATEMENTS

 2019  2018

Original 

Budget 2019

Notes $ $ $

OPERATING ACTIVITIES Cash received Appropriations 7,060,408  5,820,571  5,667,000 

Sale of goods and rendering of services  48,183  20,858   â€

Net GST received 282,357  257,680  254,000 

Total cash received 7,390,948  6,099,109  5,921,000 

Cash used Employees 2,808,240  2,563,055  3,016,000 

Suppliers 4,273,153  3,081,483  2,815,000 

Section 74 receipts transferred to OPA  364,262  352,742   â€

Total cash used 7,445,655  5,997,280  5,831,000 

Net cash from/(used by) operating activities 8 (54,707) 101,829  90,000 

INVESTING ACTIVITIES Cash used Purchase of property, plant and equipment  72,903  541,930  132,000 

Purchase of intangibles  135,995  90,510  20,000 

Total cash used 208,898  632,440  152,000 

Net cash (used by) investing activities (208,898) (632,440) (152,000)

FINANCING ACTIVITIES Cash received Contributed equity â€ Departmental capital budget  262,766  509,863  62,000 

Total cash received 262,766  509,863  62,000 

Net cash from financing activities 262,766  509,863  62,000 

Net increase/(decrease) in cash held (839) (20,748)  â€

Cash and cash equivalents at the beginning of the reporting period  79,764  100,512  79,000  Cash and cash equivalents at the end of the reporting period 3A 78,925  79,764  79,000 

The above statement should be read in conjunction with the accompanying notes.

CASH FLOW STATEMENT  for the period ended 30 June 2019

50 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Budget Variances Commentary

Cash Flow Statement

Cash used for property, plant and equipment was lower than budget by $59K (45%), while cash used for intangibles was higher than budget by $116K. The budget assumes a higher balance for plant and equipment, and a lower balance for intangibles on the basis the rebuild of the agency's standard operating environment was hardware, not software. The overall cash used for non‐financial assets was $57K (37%) higher than budget due to timing of cash drawn for prior year asset additions. 

Cash received from financing activities represents actual cash drawn from the departmental capital budget for asset purchases. The budget was based on capital injections due to be received in 2018‐19, noting that PSR had cash reserves from prior years to fund capital items. 

The movement in cash received for sale of goods and rendering of services of $48K represents cash received from a settlement in favour of PSR for a litigation case, and a Comcare refund for prior year premiums, which could not be forecasted at the time of budget. 

Net GST received was $28K (11%) higher than budget which is consistent with an increase in supplier expenses.

Cash used for employees was lower than budget by $207K (7%). The budget assumes payments to employees are consistent with actual employee expenses from a prior year.

Cash used for suppliers was higher than budget which is consistent with an increase in supplier expenses.

Section 74 receipts were higher than budget, as the budget did not take into consideration GST refunds that would have been returned to consolidated revenue during the year.

Cash drawn from departmental appropriation was higher than budget which is consistent with an increase in supplier expenses.

CASH FLOW STATEMENT  for the period ended 30 June 2019

51 APPENDIX 2: FINANCIAL STATEMENTS

Overview

Objectives of the Professional Services Review Professional Services Review (PSR) is an Australian Government controlled entity. The objective of PSR is to investigate suspected cases of inappropriate practice by health practitioners on request from the Chief Executive Medicare.

PSR has one outcome: Outcome 1: A reduction of the risks to patients and costs to the Australian Government of inappropriate clinical practice, including through investigating health services claimed under the Medicare and Pharmaceutical Benefits Schemes.

The continued existence of the entity in its present form and with its present programs is dependent on Government policy and on continuing funding by Parliament for PSR administration and programs.

PSR activities contributing toward this outcome are classified as Departmental activities. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by PSR in its own right.

Basis of Preparation of the Financial Statements The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements have been prepared in accordance with: a) The Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and b) Australian Accounting Standards and Interpretations ‐ Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.   The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. 

The financial statements are presented in Australian dollars and values are rounded to the nearest dollar unless otherwise specified.

Certain comparative amounts have been reclassified or adjusted to comply with current year’s presentation. There are minor changes to Note 1.

52 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Overview

Adoption of New Australian Accounting Standard Requirements No accounting standard has been adopted earlier than the application date as stated in the standard. 

Future Australian Accounting Standard Requirements During the 2018‐19 financial year, accounting standards and interpretations were issued or amended by the Australian Accounting Standards Board which are effective for future reporting periods. However, none of these standards or interpretations are expected to have a material impact on PSR’s financial statements.

Accounting Judgements and Estimates PSR have made the following judgements that have the most significant impact on the amounts recorded in the financial statements:

‐ The fair value of leasehold improvements is taken to be the depreciated replacement cost as determined by an independent valuer. Make good was determined by taking into consideration the lease term, consumer price index, and the Australian Government Bond rate.

‐ The long service leave liability is calculated using the shorthand method developed by the Australian Government Actuary. This method is influenced by fluctuations in the Commonwealth Government 10 year Treasury Bond rate and PSR's estimated salary growth rates.

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities with the next accounting period.

53 APPENDIX 2: FINANCIAL STATEMENTS

Overview

Transactions with the Government as Owner

Taxation / Competitive Neutrality

Explanation of major budget variances

PSR is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Revenues, expenses and assets are recognised net of GST except: a) where the amount of GST incurred is not recoverable from the Australian Taxation Office; and b) for receivables and payables.

AASB 1055: Budgetary Reporting requires explanations of major variances between the original budget as presented in the 2018‐19 PBS. The variance commentary that appears in the face statements should be read in the context of the following:

1. The original budget was prepared before the 2018‐19 final outcome could be known. As a result, the opening balance of the Statement of Financial Position was estimated and in some cases, variances between the 2018‐19 outcome and budget estimates can be partly attributed to unanticipated movement in prior year figures.

2. PSR considers that major variances are those greater than 10% of the original estimate. Variances below this threshold are not included unless considered significant by their nature. Variances relating to cash flows are a result of factors detailed under expenses, own source income, assets or liabilities. Unless otherwise individually significant or unusual, no additional commentary has been included. 

Equity Injections  Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Events After the Reporting Period No events occurred after the balance date that would alter or influence PSR's financial statements and notes.

54 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 1: Expenses

 2019  2018

$ $

Note 1A: Employee Benefits Wages and salaries 2,319,688  2,014,617 

Superannuation Defined contribution plans 303,006  263,927 

Defined benefit plans 64,641  68,912 

Leave and other entitlements 344,777  261,609 

Separation and redundancies  â€  â€

Total employee benefits 3,032,112  2,609,065 

Accounting Policy

Note 1B: Suppliers Goods and services supplied or rendered Legal expenses 222,756  149,418 

Case related fees 923,629  637,784 

Other case related expenses 824,612  624,384 

Consultant fees 641,067  415,758 

Contractor expenses 372,996  133,171 

Telephone and internet 75,863  74,146 

Recruitment expenses 11,678  5,317 

Other expenses 430,487  453,645 

Total goods and services supplied or rendered 3,503,088  2,493,623 

Other suppliers Operating lease rentals 307,676  303,333 

Workers compensation expenses 185,671  210,508 

Total other suppliers 493,347  513,841 

Total suppliers 3,996,435  3,007,464 

Financial Performance This section analyses the financial performance of PSR for the year ended 2019

Accounting policies for employee related expenses are contained in Note 9.

PSR currently has an operating lease agreement which consists of the lease premises and car  parking at the Canberra Airport from the Capital Airport Group Pty Ltd. PSR entered into a five  year lease from 1 August 2017.

55 APPENDIX 2: FINANCIAL STATEMENTS

Note 1: Expenses

 2019   2018 

$ $

Commitments for minimum lease payments in relation to non‐cancellable operating leases are payable as follows: Within 1 year 365,678  354,642 

Between 1 to 5 years 747,893  1,128,812 

More than 5 years  â€  â€

Total operating lease commitments 1,113,571  1,483,454 

Accounting Policy

Note 1C: Finance Costs Unwinding of discount 1,908  1,776 

Total finance costs 1,908  1,776 

Accounting Policy

Note 1D: Impairment Loss Allowance on Financial Instruments Impairment on trade and other receivables 7,000  7,000 

Total impairment on financial instruments 7,000  7,000 

Note 1E: Losses on Disposal of Assets Dispose of property, plant and equipment  â€ 979 

Dispose of intangibles 9,858   â€

Total losses on disposal of assets 9,858  979 

Leasing commitments

Operating lease payments are expensed on a straight‐line basis which is representative of the 

pattern of benefits derived from the leased assets.

Borrowing Costs All borrowing costs are expensed as incurred.

Financial Performance This section analyses the financial performance of PSR for the year ended 2019

56 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 2: Income

2019 2018

Own-Source Revenue $ $

Note 2A: Rendering of Services Settlement from litigations 45,000 -

Total rendering of services 45,000 -

Accounting Policy

Note 2B: Other Revenue Resources received free of charge 35,000 32,500

Total other revenue 35,000 32,500

Accounting Policy

Financial Performance This section analyses the financial performance of PSR for the year ended 2019

Revenue Revenue from the sale of goods is recognised when: a) the risks and rewards of ownership have been transferred to the buyer; b) the entity retains no managerial involvement or effective control over the goods; c) the revenue and transaction costs incurred can be reliably measured; and d) it is probable that the economic benefits associated with the transaction will flow to the entity.

Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when: a) the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and b) the probable economic benefits associated with the transaction will flow to the entity.

Resources Received Free of Charge Resources received free of charge are recognised as gains when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.

Resources received free of charge are recorded as either revenue or gains depending on their nature.

57 APPENDIX 2: FINANCIAL STATEMENTS

Note 2: Income

2019 2018

$ $

Gains

Note 2C: Other Gains Insurance refunds received and other 3,183 20,858

Total other gains 3,183 20,858

Revenue from Government

Note 2D: Revenue from Government Appropriations Departmental appropriations 6,946,000 5,518,000

Total revenue from Government 6,946,000 5,518,000

Accounting Policy

Revenue from Government Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the entity gains control of the appropriation. Appropriations receivable are recognised at their nominal amounts.

Financial Performance This section analyses the financial performance of PSR for the year ended 2019

58 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 3: Financial Assets

 2019  2018

$ $

Note 3A: Cash and Cash Equivalents Cash on hand or on deposit 78,925  79,764 

Total cash and cash equivalents 78,925  79,764 

Accounting Policy

Note 3B: Trade and Other Receivables Good and services receivables Settlement from litigations and leave transfers 33,963  27,943 

Other 941,340  340 

Total goods and services receivables 975,303  28,283 

Appropriations receivable Existing programs 1,221,141  1,911,286 

Departmental capital budget 81,550  282,316 

Total appropriations receivable 1,302,691  2,193,602 

Other receivables GST receivable from the Australian Taxation Office 26,892  28,005 

Total other receivables 26,892  28,005 

Total trade and other receivables (gross) 2,304,886  2,249,890 

Less impairment loss allowance Goods and services (14,000) (7,000)

Total impairment loss allowance (14,000) (7,000)

Total trade and other receivables (net) 2,290,886  2,242,890 

Impairment of Financial Assets All assets were assessed for impairment at 30 June 2019. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

Financial Position This section analyses PSR's assets used to conduct its operations and the operating liabilities  incurred as a result

Cash Cash is recognised at its nominal amount. Cash and cash equivalents include cash on hand.

Accounting Policy    Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment loss allowance. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

59 APPENDIX 2: FINANCIAL STATEMENTS

Note 4: Non‐Financial Assets Note 4A:  Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles for 2019

Leasehold  improvements Plant &  equipment

Computer  software Total

$ $ $ $

As at 1 July 2018 Gross book value 493,551  409,560  707,386  1,610,497 

Accumulated depreciation, amortisation and impairment  â€ (64,917) (338,905) (403,822)

Net book value as at 1 July 2018 493,551  344,643  368,481  1,206,675 

Additions Purchase or internally developed 1,200  71,703  135,995  208,898 

Revaluations and impairments recognised in other comprehensive income   1,412  8,639   â€ 10,051 

Revaluations recognised in net cost of services  â€  â€  â€  â€

Reversal of revaluation previously recognised in other comprehensive income  â€  â€  â€  â€

Impairments recognised in net cost of services    â€  â€  â€  â€

Reversal of impairments recognised in net cost of services    â€  â€  â€  â€

Depreciation and amortisation (120,862) (78,023) (69,118) (268,003)

Disposals      Other (1) 1  (9,858) (9,858)

Net book value as at 30 June 2019 375,300  346,963  425,500  1,147,763 

Net book value as at 30 June 2019 represented by Gross book value 375,300  346,963  550,122  1,272,385 

Accumulated depreciation and impairment  â€  â€ (124,622) (124,622)

Net book value as at 30 June 2019 375,300  346,963  425,500  1,147,763 

Revaluations of non‐financial assets

Contractual commitments for the acquisition of property, plant, equipment and intangible assets

No contractual commitments were entered into for property, plant and equipment at 30 June 2019. (2017‐18: $147,096)

Financial Position This section analyses PSR's assets used to conduct its operations and the operating liabilities incurred as a result

During the year, PSR completed work on upgrading its ICT servers and Standard Operating Environment. No other property, plant and equipment, or intangible assets are expected to be sold or disposed of within the next 12 months.

All revaluations were conducted in accordance with the revaluation policy stated at Note 4. At 30 June 2019, an independent valuer, B&A Valuers, conducted a desktop valuation of PSR's leasehold improvements and property, plant & equipment.

The carrying amount for buildings of $375,300(2018: $493,551)and plant and equipment of $346,963(2018: $344,643)were included in the valuation figures above. No indicators of impairment were found for property, plant and equipment.

60 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 4: Non‐Financial Assets

Accounting Policy

Financial Position This section analyses PSR's assets used to conduct its operations and the operating liabilities  incurred as a result

Acquisition of Assets Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

Asset Recognition Threshold Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for individual purchases costing less than $1,000, which are expensed in the year of acquisition.    The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by PSR where there exists an obligation to restore the property to its original condition. These costs are included in the value of PSR’s leasehold improvements with a corresponding provision for the ‘make good’ recognised.

Revaluations Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets. 

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.    Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount. 

61 APPENDIX 2: FINANCIAL STATEMENTS

Note 4: Non‐Financial Assets

Accounting Policy

2019 2018

Leasehold improvements   Lease term   Lease term

Plant and equipment                                      

3 to 10  years    

3 to 10  years

Impairment All assets were assessed for impairment at 30 June 2019. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.    The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Intangibles PSR’s intangibles comprise of purchased and internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.    Software is amortised on a straight‐line basis over its anticipated useful life. The useful lives of PSR's software are 4 to 10 years (2018: 4 to 10 years).    All software assets were assessed for indications of impairment as at 30 June 2019.

Depreciation Depreciable property, plant and equipment assets are written‐off to their estimated residual values over their estimated useful lives to PSR using, in all cases, the straight‐line method of depreciation.  

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.    Depreciation rates applying to each class of depreciable asset are based on the following useful lives: 

Financial Position This section analyses PSR's assets used to conduct its operations and the operating liabilities  incurred as a result

62 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 4: Non‐Financial Assets

 2019   2018 

$ $

Note 4B:  Other Non‐Financial Assets Prepayments 51,709  44,898 

Total other non‐financial assets 51,709  44,898 

Financial Position This section analyses PSR's assets used to conduct its operations and the operating liabilities  incurred as a result

No indicators of impairment were found for other non‐financial assets.

63 APPENDIX 2: FINANCIAL STATEMENTS

Note 5: Payables

 2019  2018

$ $

Note 5A: Suppliers Trade creditors and accruals 292,829  308,998 

Operating lease rentals 13,950  8,728 

Total suppliers 306,779  317,726 

Settlement is made within 30 days.

Note 5B: Other Payables Wages and salaries 54,985  51,769 

Superannuation 2,983  2,506 

Lease incentive 61,667  81,667 

Total other payables 119,635  135,942 

Settlement is made within 30 days.

Financial Position This section analyses PSR's assets used to conduct its operations and the operating liabilities  incurred as a result

64 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 6: Provisions

 2019  2018

$ $

Note 6: Provision for restoration obligations Make good obligation 96,300  95,400 

Total provision for restoration obligations 96,300  95,400 

Provision for restoration $

Carrying amount 1 July 2018 95,400 

Additional provisions made  â€

Amounts used  â€

Amounts reversed (1,008)

Finance cost â€ unwinding discount 1,908 

Closing balance 2019 96,300 

Financial Position This section analyses PSR's assets used to conduct its operations and the operating liabilities  incurred as a result

PSR currently has an agreement for the leasing of premises which include provisions requiring PSR to restore the premises to its original condition at the conclusion of the lease. PSR has made a provision to reflect the present value of this obligation.

65 APPENDIX 2: FINANCIAL STATEMENTS

Note 7: Appropriations

7A: Annual Appropriations ('Recoverable GST exclusive')

Annual Appropriations for 2019

Annual  Appropriation

1

Adjustment to  appropriation

2

Total appropriation

Appropriation applied in  2019  (current and prior years) Variance

3

$ $ $ $ $

DEPARTMENTAL Ordinary annual services 6,946,000  86,149  7,032,149  (6,782,295) 249,854 

Capital Budget

4

62,000   â€ 62,000  (262,766) (200,766)

Total departmental 7,008,000  86,149  7,094,149  (7,045,061) 49,088 

Notes: Funding This section identifies PSR's funding structure

1. In 2018‐19, PSR received $6,006,000 under Appropriation Bill (No. 1) 2018‐19 and an additional $940,000 which is to be received under Appropriation Bill (No.1) 2019‐20.

2. Adjustment includes PGPA Act section 74 receipts.

3. Departmental appropriations were underspent by $249,854. The variance was due to the delayed announcement of the Medicare Compliance Expansion of Data Matching Activities Measure.

4. Departmental Capital Budgets are appropriated through Appropriation Acts (No.1). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts. Payments made on non‐financial assets include purchases of assets, and expenditure on assets which have been capitalised.

66 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 7: Appropriations

7A: Annual Appropriations ('Recoverable GST exclusive')

Annual Appropriations for 2018

Annual Appropriation

1

Adjustment to  appropriation

2

Total appropriation

Appropriation applied in  2018  (current and prior years) Variance

3

$ $ $ $ $

DEPARTMENTAL Ordinary annual services 5,518,000  99,309  5,617,309  (5,567,139) 50,170 

Capital Budget

4

649,000   â€ 649,000  (509,863) 139,137 

Total departmental 6,167,000  99,309  6,266,309  (6,077,002) 189,307 

Notes: Funding This section identifies PSR's funding structure

1. In 2017‐18, PSR received $476,000 under Appropriation Bill (No. 5) 2017‐18.

2. Adjustment includes PGPA Act section 74 receipts.

3. Departmental appropriations were underspent by $139,137. During the year, PSR's lessor contributed $100K as a lease incentive towards the office fitout.

4. Departmental Capital Budgets are appropriated through Appropriation Acts (No.1). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts. Payments made on non‐financial assets include purchases of assets, and expenditure on assets which have been capitalised.

67 APPENDIX 2: FINANCIAL STATEMENTS

Note 7: Appropriations

2019 2018

$ $

DEPARTMENTAL Appropriation Act (No. 1) 2018-19 1,283,140 -

Appropriation Act (No. 1) 2017-18 19,550 1,709,977

Appropriation Act (No. 5) 2017-18 - 476,000

Cash balance 78,925 79,764

Total 1,381,615 2,265,741

Funding This section identifies PSR's funding structure

7B: Unspent Annual Appropriations ('Recoverable GST exclusive')

Authority

The cash balance of $78,925 represents unspent departmental appropriation from Appropriation Act (No.1) 2018-19; (2018: $79,764 from Appropriation Act (No.1) and (No.5) 2017-18). Unspent departmental appropriation also includes a departmental capital budget of $81,550 (2018: $282,316).

68 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 8: Cash Flow Reconciliation

 2019  2018

$ $

Cash and cash equivalents as per: Cash flow statement 78,925  79,764 

Statement of financial position 78,925  79,764 

Discrepancy  â€  â€

Reconciliation of net cost of services to net cash from/ (used by) operating activities:

Net cost of services (7,232,133) (5,756,359)

Add revenue from Government 6,946,000  5,518,000 

Adjustments for non‐cash items Depreciation / amortisation 268,003  183,433 

Net write down of non‐financial assets 7,000  7,000 

Loss on disposal of assets 9,858  979 

Finance costs 1,908  1,776 

Changes in assets / liabilities (Increase) / decrease in net receivables (255,762) 7,225 

(Increase) / decrease in prepayments (6,811) 15,802 

Increase / (decrease) in employee provisions 234,484  1,197 

Increase / (decrease) in supplier payables (10,947) 29,868 

Increase / (decrease) in other payables (16,307) 92,908 

Net cash from/ (used by) operating activities (54,707) 101,829 

Funding This section identifies PSR's funding structure

Reconciliation of cash and cash equivalents as per Statement of Financial Position to Cash Flow Statement

69 APPENDIX 2: FINANCIAL STATEMENTS

Note 9: Employee Provisions

 2019  2018

$ $

Note 9:  Employee Provisions Leave 789,514  555,030 

Total employee provisions 789,514  555,030 

Accounting Policy

People and relationships This section describes a range of employment and post employment benefits provided to our  people and our relationships with other key people

Employee benefits Liabilities for ‘short‐term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits expected within twelve months of the end of the reporting period are measured at their nominal amounts.    The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.    Other long‐term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period. 

70 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 9: Employee Provisions

Accounting Policy Leave The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leaves is non‐vesting and the average sick leave taken in future years by employees of PSR is estimated to be less than the annual entitlement for sick leave.    The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including PSR employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.    The long term leave liability for long service leave is recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees as at 30 June 2019. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation. The other factors which have been considered in determining the long term leave liability for long service leave include salary growth, probability factors and on costs.

Separation and Redundancy Provision is made for separation and redundancy benefit payments. The entity recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation PSR's staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap).   The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme. 

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.    PSR makes employer contributions to the employees' superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. PSR accounts for the contributions as if they were contributions to defined contribution plans.   The liability for superannuation recognised as at 30 June represents outstanding contributions for the final fortnight of the year. 

People and relationships This section describes a range of employment and post employment benefits provided to our  people and our relationships with other key people

71 APPENDIX 2: FINANCIAL STATEMENTS

Note 10: Key Management Personnel Remuneration

 2019   2018 

$ $

Short‐term employee benefits 908,242  887,603 

Post‐employment benefits 121,274  116,959 

Other long‐term employee benefits 105,879  92,540 

Total key management personnel remuneration expenses 1 1,135,395  1,097,102 

The total number of key management personnel included in the above table represents 5 individuals (2018: 5 individuals). During the reporting period, 1 of the 5 individuals was on acting arrangements.

People and relationships This section describes a range of employment and post employment benefits provided to our people  and our relationships with other key people

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of PSR, directly or indirectly, including any director (whether executive or otherwise) of PSR. PSR has determined the key management personnel to be the Director, Executive Officer, Special Counsel, and the Chief Finance Officer. Key management personnel remuneration is reported in the table below:

1. The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the entity.

72 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

The following transactions with related parties occurred during the financial year: 

The entity transacts with other Australian Government controlled entities consistent with normal day‐to‐ day business operations provided under normal terms and conditions, including the payment of workers compensation and insurance premiums. These are not considered individually significant to warrant separate disclosure as related party transactions (2018: nil).

Refer to Note 9 Employee Provisions for details on superannuation arrangements with the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), and the PSS accumulation plan (PSSap).

Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the entity, it has been determined that there are no related party transactions to be separately disclosed (2018: nil). 

People and relationships This section describes a range of employment and post employment benefits provided to our people  and our relationships with other key people Note 11: Related Party Disclosures

PSR is an Australian Government controlled entity. Related parties to this entity are Key Management Personnel including the Portfolio Minister and Executive, and other Australian Government entities.

Related party relationships:

Transactions with related parties:

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.

73 APPENDIX 2: FINANCIAL STATEMENTS

Note 12: Contingent Assets and Liabilities

Quantifiable Contingencies

Unquantifiable Contingencies

Significant Remote Contingencies

Accounting Policy      Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

Managing uncertainties This section analyses how PSR manages financial risks within its operating environment

At 30 June 2019, PSR did not have any quantifiable contingencies (2018: nil).

PSR is currently involved in a litigation case before the Federal Court which may result in costs awarded in favour of PSR. PSR has been advised by its solicitors that the amount cannot be reliably estimated. No further disclosure has been made on the grounds that it can be expected to prejudice seriously the outcome of the litigation (2018: nil).

At 30 June 2019 PSR did not have any significant remote contingencies (2018: nil).

74 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 13: Financial Instruments

 2019  2018

$ $

Note 13A: Categories of Financial Instruments Financial Assets under AASB 139 Loans and receivables Cash and cash equivalents  â€ 79,764 

Trade and other receivables ‐ 21,283 

Total loans and receivables ‐ 101,047 

Total financial assets ‐ 101,047 

Financial Assets under AASB 9 Financial assets at amortised cost Cash and cash equivalents 78,925  ‐

Trade and other receivables 961,303  ‐

Total financial assets at amortised cost 1,040,228  ‐

Total financial assets 1,040,228  ‐

Financial Liabilities Financial liabilities measured at amortised cost Payables â€ Suppliers 306,779  317,726 

Total financial liabilities 306,779  317,726 

Managing uncertainties This section analyses how PSR manages financial risks within its operating environment

75 APPENDIX 2: FINANCIAL STATEMENTS

Note 13: Financial Instruments

Classification of financial assets on the date of initial application of AASB 9

AASB 139 

Original classification

AASB 9 

New classification

AASB 139  carrying amount at 30 June 2018

AASB 9 

carrying amount at 1 July 2018

$ $

Financial Assets Class Note

Cash and cash equivalents 3A Loans and receivables Amortised cost

79,764  79,764 

Trade and other receivables 3B Loans and receivables Amortised cost

21,283  21,283 

Total financial assets

101,047  101,047 

Reconciliation of carrying amounts of financial assets on the date of initial application of AASB 9

AASB 139  carrying amount at 30 June 2018 Reclassification Remeasurement

AASB 9 

carrying amount at 1 July 2018

Financial Assets at amortised cost

$ $ $ $

Loans and receivables Cash and cash equivalents

79,764   â€  â€ 79,764 

Trade and other receivables

21,283   â€  â€ 21,283 

Total Financial Assets at amortised cost

101,047   â€  â€ 101,047 

Managing uncertainties This section analyses how PSR manages financial risks within its operating environment

1. The carrying amount of cash and trade and other receivables under AASB 139 has not changed on transition to AASB 9.

76 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 13: Financial Instruments

Accounting Policy

Financial Liabilities PSR classifies its financial liabilities as financial liabilities at amortised cost. Financial liabilities are recognised and derecognised upon ‘trade date’.

Financial Liabilities at Amortised Cost Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis.     Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).     

Managing uncertainties This section analyses how PSR manages financial risks within its operating environment

Financial Assets at Amortised Cost Financial assets included in this category need to meet two criteria: 1. the financial asset is held in order to collect the contractual cash flows; and 2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount.

Amortised cost is determined using the effective interest method.

Effective Interest Method Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost.

Impairment of Financial Assets Financial assets are assessed for impairment at the end of each reporting period based on expected credit losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12‐month expected credit losses if risk has not increased. 

The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses.

A write‐off constitutes a derecognition event where the write‐off directly reduces the gross carrying amount of the financial asset.

Financial Assets With the implementation of AASB 9 Financial Instruments for the first time in 2019, PSR classifies its financial assets as financial assets measured at amortised cost. 

The classification depends on both the entity's business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date. 

Comparatives have not been restated on initial application.

77 APPENDIX 2: FINANCIAL STATEMENTS

Note 14: Fair Value Measurement

Accounting Policy

Note 14: Fair Value Measurements

2019 2018

$ $

Non-financial assets Leasehold improvements

375,300 493,551

Other property, plant and equipment

346,963 344,643

Total non-financial assets

722,263 838,194

Total fair value measurements of assets in the statement of financial position 722,263 838,194

1. No change in valuation technique occurred during the period

2. Recurring level 3 fair value measurements reconciliation - valuation proces

s

PSR procured valuation services from B&A Valuers and relied on valuation models provided by B&A Valuers. PSR tests the procedures of the valuation model at least once every 12 months. B&A Valuers has provided written assurance to PSR that the model developed is in compliance with AASB 13.

Managing uncertainties This section analyses how PSR manages financial risks within its operating environment

Fair Value Measurement

PSR deems transfers between levels of the fair value hierarchy to have occurred at the end of the reporting period.

Fair value measurements at the end

of the reporting period

78 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Note 15: Aggregate Assets and Liabilities

 2019  2018

$ $

Note 15:  Aggregate Assets and Liabilities Assets expected to be recovered in      No more than 12 months 2,422,487  2,368,363 

     More than 12 months 1,146,796  1,205,864 

Total assets 3,569,283  3,574,227 

Liabilities expected to be settled in

     No more than 12 months 545,632  523,124 

     More than 12 months 766,596  580,974 

Total liabilities 1,312,228  1,104,098 

Other information

79 APPENDIX 3: FREEDOM OF INFORMATION STATEMENT

Appendix 3

Freedom of information statement Agencies subject to the Freedom of Information Act 1982 (FOI Act) are required to publish information to the public as part of the Information Publication Scheme (IPS). This requirement is in Part II of the FOI Act and has replaced the former requirement to publish a section 8 statement in an annual report. Each agency must display, on its website, a plan showing what information it publishes in accordance with the IPS requirements.

Information on PSR’s IPS can be accessed via the PSR website.

Contact officer All freedom of information requests should be directed to:

Freedom of Information Officer Professional Services Review PO Box 74 Fyshwick ACT 2609

80 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Appendix 4

Statutory Appointments The PSR Agency is required to publish the details of statutory appointments made under the Act to enable the operation of the PSR Scheme. The roles described below are statutory appointments made by the Minister of Health. 

The following table of statutory appointments sets out a full list of current appointees, as at 30 June 2018, their dates of appointment and the roles to which they have been appointed.

Title First Name Last Name

Appointment commenced Appointment expires Type of Appointment

Prof Julie Quinlivan 13-Feb-17 13-Feb-20 Director, PSR

           

Ms Katerina Angelpoulos 22-May-18 29-May-20 Determining Authority

Dr Mark Arnold 12-Sep-18 29-May-22 Panel

Dr Michael Badham 25-Jan-19 29-May-22 Panel

Dr Michael Badham 25-Jan-19 29-May-20 Determining Authority

Dr Robert Bailey 25-Jan-19 29-May-22 Panel

Dr Annette Barratt 30-May-17 29-May-22 Panel—Deputy Director

Dr Richard Barry 19-Oct-17 29-May-22 Panel

A/Prof Kevin Bell 5-Oct-17 29-May-22 Panel

Dr Kerrie Bradbury 30-May-17 29-May-22 Panel

Dr Kathryn Brotchie 26-Mar-18 29-May-22 Panel

Dr Peter Cheung 30-May-17 29-May-22 Panel

Dr Eleanor Chew 26-Mar-18 29-May-22 Panel

Dr Weng Chin 1-Apr-19 31-Mar-24 Panel

Dr Yan Chow 1-Apr-19 31-Mar-24 Panel

Dr Helen Chriss 30-May-17 29-May-22 Panel

81 APPENDIX 4: STATUTORY APPOINTMENTS

Title First Name Last Name

Appointment commenced Appointment expires Type of Appointment

Dr Rachel Christmas 1-Apr-19 31-Mar-24 Panel

Dr Antonio Cocchiaro 30-May-17 29-May-22 Panel

Dr Debra Coleman 19-Oct-17 29-May-22 Panel

Prof Alan Cooper 30-May-17 29-May-22 Panel—Deputy Director

Dr Heather Coventry 12-Sep-18 29-May-22 Panel

Dr Marcela Cox 30-May-17 29-May-22 Panel—Deputy Director

Ms Dianne Crellin 15-Nov-17 29-May-22 Panel

Dr Marjorie Cross 30-May-17 29-May-22 Panel

Dr Nicholas Demediuk 30-May-17 29-May-22 Panel—Deputy Director

Dr Antonio Di Dio 30-May-17 29-May-22 Panel—Deputy Director

Dr Antonio Di Dio 22-May-18 29-May-20 Determining Authority

Dr Thomas Douch 30-May-17 29-May-22 Panel

Ms Jane Duffy 30-May-17 29-May-22 Panel

Dr Stephen John Dunn 30-May-17 29-May-22 Panel

Ms Marijke Eastaugh 8-Oct-18 29-May-22 Panel

Dr Pathma Edge 25-Jan-19 29-May-22 Panel

Ms Esther Euripidou 30-May-17 29-May-22 Panel

Dr Tim Flanagan 30-May-17 29-May-22 Panel—Deputy Director

Dr Karen Flegg 30-May-17 29-May-22 Panel—Deputy Director

Dr Karen Flegg 22-May-18 29-May-20 Determining Authority Chair

Dr Howard Galloway 5-Oct-17 29-May-22 Panel

Dr Stuart Game 30-May-17 29-May-22 Panel

Dr Alison Garvin 25-Jan-19 29-May-22 Panel

Prof John Gibson 12-Sep-18 29-May-22 Panel

Prof Gerard Francis Gill 30-May-17 29-May-22 Panel

Dr Nicole Goh 25-Jan-19 29-May-22 Panel

A/Prof John Grigg 19-Oct-17 29-May-22 Panel

Prof Ronald Grunstein 13-Dec-16 12-Dec-21 Panel

A/Prof John Gullotta 30-May-17 29-May-22 Panel

Dr Kerry Harris 30-May-17 29-May-22 Panel

A/Prof Charlotte Hespe 30-May-17 29-May-22 Panel

Prof Peter Hewett 1-Apr-19 31-Mar-24 Panel

82 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Title First Name Last Name

Appointment commenced Appointment expires Type of Appointment

Dr Alan Hodgson 30-May-17 29-May-22 Panel

Dr Charles Howse 12-Sep-18 29-May-22 Panel—Deputy Director

Dr Michael Hurley 30-May-17 29-May-22 Panel—Deputy Director

Dr Cathy Hutton 12-Sep-18 29-May-22 Panel

A/Prof Aniello Iannuzzi 22-May-18 29-May-20 Determining Authority

Dr Gerard Ingham 30-May-17 29-May-22 Panel—Deputy Director

A/Prof Rajeev Jyoti 5-Oct-17 29-May-22 Panel

Dr Kathleen Keating 30-May-17 31-Aug-19 Panel—Deputy Director

Dr Glynn Kelly 30-May-17 29-May-22 Panel

Dr Jennifer Helen Kendrick 30-May-17 29-May-22 Panel

Mr John Kilmartin 17-May-18 29-May-20 Determining Authority

Dr Heather Knox 30-May-17 29-May-22 Panel

Dr Vicki Kotsirilos 30-May-17 29-May-22 Panel

Dr Alan Leeb 30-May-17 29-May-22 Panel

Dr Peter Lorenz 30-May-17 29-May-22 Panel

Dr Caroline Luke 25-Jan-19 29-May-22 Panel

Dr Peter Lynch 30-May-17 29-May-22 Panel—Deputy Director

Mr Stuart Macfarlane 30-May-17 29-May-22 Panel

Mr Stuart Macfarlane 30-May-17 29-May-20 Determining Authority

Dr Ross Mackay 30-May-17 31-Aug-20 Panel

Dr Gavin Mackie 5-Oct-17 29-May-22 Panel

Dr Peter Maguire 15-Aug-17 22-May-22 Panel

Dr Linda Mann 30-May-17 29-May-22 Panel

Ms Donna Mansell 24-Jul-18 29-May-22 Panel—Deputy Director

Dr Mona Marabani 1-Apr-19 31-Mar-24 Panel

Dr Geoff Markov 30-May-17 29-May-22 Panel—Deputy Director

Ms Susan McDonald 30-May-17 29-May-22 Panel

Ms Susan McDonald 30-May-17 29-May-20 Determining Authority

Dr Mark McEwan 25-Jan-19 29-May-22 Panel

Dr Rod McMahon 30-May-17 29-May-22 Panel—Deputy Director

Dr Suzanne Miau 26-Mar-18 29-May-22 Panel

Dr Wayne Minter 25-Jan-19 29-May-22 Panel—Deputy Director

83 APPENDIX 4: STATUTORY APPOINTMENTS

Title First Name Last Name

Appointment commenced Appointment expires Type of Appointment

Dr Rakesh Mohindra 30-May-17 29-May-22 Panel

Ms Suzanne Morey 15-Nov-17 29-May-22 Panel—Deputy Director

Dr Greg Morris 30-May-17 29-May-22 Panel—Deputy Director

Dr Brian Morton 30-May-17 29-May-22 Panel—Deputy Director

Mr Paul Murdoch 22-May-18 29-May-20 Determining Authority

Dr Robyn Napier 30-May-17 29-May-22 Panel—Deputy Director

Prof Matthew Naughton 13-Dec-16 12-Dec-21 Panel

Dr Harry Nespolon 30-May-17 29-May-22 Panel

Dr Mark Overton 12-Sep-18 29-May-22 Panel—Deputy Director

Dr Emma Palfreyman 25-Jan-19 29-May-22 Panel

Ms Melissa Pearce 24-Jul-18 29-May-22 Panel—Deputy Director

Dr Russell Pearson 30-May-17 29-May-22 Panel

A/Prof Neil Peppitt 30-May-17 29-May-22 Panel

A/Prof Neil Peppitt 30-May-17 29-May-20 Determining Authority

A/Prof Christopher Perry 19-Oct-17 29-May-22 Panel

Dr Angela Pierce 29-Nov-18 29-May-22 Panel

Dr Susanna Proudman 1-Apr-19 31-Mar-24 Panel

Dr Catherine Reid 25-Jun-18 29-May-22 Panel—Deputy Director

Dr David Rivett 30-May-17 29-May-22 Panel—Deputy Director

Dr Shaun Rudd 30-May-17 29-May-22 Panel

Dr William Ryman 30-May-17 29-May-22 Panel

Dr Leon Shapero 30-May-17 29-May-22 Panel—Deputy Director

A/Prof Rashmi Sharma 30-May-17 29-May-22 Panel—Deputy Director

Dr Katherine Smartt 30-May-17 29-May-22 Panel

Dr David Smith 28-Jun-18 29-May-20 Determining Authority

Dr Thomas Snow 5-Oct-17 29-May-22 Panel

Mr David Southgate 30-May-17 29-May-22 Panel—Deputy Director

Dr Ben Steinberg 30-May-17 29-May-22 Panel

Dr Margaret Stellingwerff 30-May-17 29-May-22 Panel

Prof Stephen Stuckey 5-Oct-17 29-May-22 Panel

Dr Marietta Taylor 29-Nov-18 29-May-22 Panel

Prof John Thompson 1-Apr-19 31-Mar-24 Panel—Deputy Director

84 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Title First Name Last Name

Appointment commenced Appointment expires Type of Appointment

Prof Kenneth Thomson 5-Oct-17 29-May-22 Panel

Dr Neil Vallance 19-Oct-17 29-May-22 Panel

Dr Nedra Vanden Driesen 19-Oct-17 29-May-22 Panel

A/Prof Francis Varghese 23-Nov-16 22-Nov-21 Panel

Dr Martine Walker 30-May-17 29-May-22 Panel—Deputy Director

Dr Ingrid Wangel 30-May-17 29-May-22 Panel

Ms Cheryl White 15-Nov-17 29-May-22 Panel

Dr Richard Widmer 1-Apr-19 31-Mar-24 Panel

Dr Morgan Windsor 30-May-17 29-May-22 Panel—Deputy Director

Dr Felicity Wivell 30-May-17 29-May-22 Panel—Deputy Director

Dr Carolyn Wright 02-May-19 31-Mar-24 Panel

Dr Daniel Xu 30-May-17 29-May-22 Panel

A/Prof Brendon Yee 19-Oct-17 29-May-22 Panel

Dr Guan Yeo 30-May-17 29-May-22 Panel

85 GLOSSARY

Glossary

The Act means the Health Insurance Act 1973.

AHPRA means the Australian Health Practitioner Regulation Agency.

AMA means the Australian Medical Association.

APS means the Australian Public Service.

CDM means Chronic Disease Management.

Committee means a Professional Services Review Committee comprising at least three practitioners appointed under s. 93 of the Act.

Committee member means a member of a PSR Committee, who must be a current PSR Panel member.

Deputy Director means a deputy director of PSR appointed under s. 85 of the Act who serves as the chair of a Committee.

Determining Authority means the independent statutory body established under s. 106Q of the Act.

Director means the Director of PSR appointed under s. 83 of the Act.

Draft determination means the draft document detailing what action is proposed to be taken in a case, as required by s. 106T of the Act.

Draft report means the preliminary findings of a Committee following a hearing, as required by s. 106KD of the Act.

Final determination means the final document detailing what action will be taken in a case, as required by s. 106TA of the Act.

GP means general practitioner.

Inappropriate practice is defined under s. 82 of the Act as conduct in connection with rendering or initiating services that a Committee of the practitioner’s peers could reasonably conclude was unacceptable to the general body of their profession.

IT means information technology.

MBS means the Medicare Benefits Schedule.

Medicare means the Medicare program administered by the Department of Human Services.

Medicare services means services provided by a practitioner that generated a Medicare benefit.

Minister means the Australian Government Minister for Health.

Negotiated agreement means a written agreement made under s. 92 of the Act.

86 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Panel means the Professional Services Review Panel established under subsection 84(1) of the Act, members of which are available for appointment to a Committee.

Panel member means a practitioner appointed under subsection 84(2) of the Act.

PBS means the Pharmaceutical Benefits Scheme.

Peers means the members of the PSR Panel who are appointed to represent the general body of their profession.

PGPA Act means the Public Governance, Performance and Accountability Act 2013.

Practitioner means a health professional who can access the Medicare and Pharmaceutical Benefits schemes, and includes a:

+ medical practitioner

+ dental practitioner

+ optometrist

+ midwife

+ nurse practitioner

+ chiropractor

+ physiotherapist

+ podiatrist

+ osteopath.

PSR means Professional Services Review.

Ratify means to authorise or approve. This term is used when the Determining Authority is deciding whether an agreement with the Director will come into effect.

Sanction means a direction from a range of directions specified in s. 106U of the Act.

87 LIST OF REQUIREMENTS

List of requirements

PGPA Rule Reference Part of Report Description Requirement

Page Number

17AD(g) Letter of transmittal

17AI Letter of transmittal A copy of the letter of transmittal signed and dated by accountable authority on date final text approved, with statement that the report has been prepared in accordance with section 46 of the Act and any enabling legislation that specifies additional requirements in relation to the annual report.

Mandatory iii

17AD(h) Aids to access

17AJ(a) Table of Contents Table of contents. Mandatory v-vii

17AJ(b) Index Alphabetical index. Mandatory 93-96

17AJ(c) Gloassary Glossary of abbreviations and acronyms. Mandatory 85-86

17AJ(d) List of requirements List of requirements. Mandatory 87-92

17AJ(e) Publication information Details of contact officer. Mandatory iii

17AJ(f) Publication information Entity’s website address. Mandatory ii

17AJ(g) Publication information Electronic address of report. Mandatory ii

17AD(a) Review by accountable authority

17AD(a) Director’s introduction A review by the accountable authority of the entity. Mandatory 9-12

17AD(b) Overview of the entity

17AE(1)(a)(i) Agency overview A description of the role and functions of the entity. Mandatory 6-8

17AE(1)(a)(ii) Structure and organisation A description of the organisational structure of the entity. Mandatory 23-24

17AE(1)(a)(iii) Agency and scheme objectives A description of the outcomes and programmes administered by the entity.

Mandatory 7-8

17AE(1)(a)(iv) Entity purpose A description of the purposes of the entity as included in corporate plan. Mandatory 22-23

17AE(1)(aa)(i) Key Management Personnel Name of the accountable authority or each member of the accountable authority.

Mandatory 30

17AE(1)(aa)(ii) Key management personnel Position title of the accountable authority or each member of the accountable authority.

Mandatory 30

17AE(1)(aa)(iii) Key management personnel Period as the accountable authority or member of the accountable authority within the reporting period.

Mandatory 30

88 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

PGPA Rule Reference Part of Report Description Requirement

Page Number

17AE(1)(b) Management and accountability An outline of the structure of the portfolio of the entity. Portfolio departments—

mandatory

24

17AE(2) N/A Where the outcomes and programs administered by

the entity differ from any Portfolio Budget Statement, Portfolio Additional Estimates Statement or other portfolio estimates statement that was prepared for the entity for the period, include details of variation and reasons for change.

If applicable, mandatory

N/A

17AD(c) Report on the Performance of the entity

Annual performance Statements

17AD(c)(i); 16F Performance statement Annual performance statement in accordance with paragraph 39(1)(b) of the Act and section 16F of the Rule.

Mandatory 9-21

17AD(c)(ii) Report on Financial Performance

17AF(1)(a) Financial performance A discussion and analysis of the entity’s financial performance. Mandatory 35-37

17AF(1)(b) Appendix 1 A table summarising the total resources and total payments of the entity. Mandatory 38

17AF(2) N/A If there may be significant changes in the financial

results during or after the previous or current reporting period, information on those changes, including: the cause of any operating loss of the entity; how the entity has responded to the loss and the actions that have been taken in relation to the loss; and any matter or circumstances that it can reasonably be anticipated will have a significant impact on the entity’s future operation or financial results.

If applicable, mandatory

N/A

17AD(d) Management and Accountability

Corporate Governance

17AG(2)(a) Identifying and managing risk/Fraud control Information on compliance with section 10 (fraud systems).

Mandatory 26

17AG(2)(b)(i) Letter of transmittal A certification by accountable authority that fraud risk assessments and fraud control plans have been prepared. Mandatory iii

17AG(2)(b)(ii) Letter of transmittal A certification by accountable authority that appropriate mechanisms for preventing, detecting incidents of, investigating or otherwise dealing with, and recording or reporting fraud that meet the specific needs of the entity are in place.

Mandatory iii

17AG(2)(b)(iii) Letter of transmittal A certification by accountable authority that all reasonable measures have been taken to deal appropriately with fraud relating to the entity.

Mandatory iii

17AG(2)(c) Corporate governance and business planning An outline of structures and processes in place for the entity to implement principles and objectives of

corporate governance.

Mandatory 22-25

89 LIST OF REQUIREMENTS

PGPA Rule Reference Part of Report Description Requirement

Page Number

17AG(2)(d)-(e) N/A A statement of significant issues reported to Minister under paragraph 19(1)(e) of the Act that relates to non-c ompliance with Finance law and action taken to remedy non-c ompliance.

If applicable, mandatory N/A

N/A

External Scrutiny

17AG(3) External scrutiny Information on the most significant developments in external scrutiny and the entity’s response to the scrutiny. Mandatory 26

17AG(3)(a) N/A Information on judicial decisions and decisions

of administrative tribunals and by the Australian Information Commissioner that may have a significant effect on the operations of the entity.

If applicable, mandatory N/A

N/A

17AG(3)(b) N/A Information on any reports on operations of the entity

by the Auditor-General (other than report under section 43 of the Act), a Parliamentary Committee, or the Commonwealth Ombudsman.

If applicable, mandatory N/A

N/A

17AG(3)(c) N/A Information on any capability reviews on the entity that

were released during the period.

If applicable, mandatory N/A

N/A

Management of Human Resources

17AG(4)(a) Management of human resources An assessment of the entity’s effectiveness in managing and developing employees to achieve entity objectives.

Mandatory 27-28

17AG(4)(aa) Australian Public Service staff Statistics on the entity’s employees on an ongoing and non-ongoing basis , including the following:

(a) statistics on full-time employees; (b) statistics on part-time employees; (c) statistics on gender; (d) statistics on staff location.

Mandatory 28

17AG(4)(b) Australian Public Service staff Statistics on the entity’s APS employees on an ongoing and non-ongoing basis; including the follo wing:

- Statistics on staffing classification level; - Statistics on full-time employees; - Statistics on part-time employees; - Statistics on gender; - Statistics on staff location; - Statistics on employees who identify as Indigenous.

Mandatory 28

17AG(4)(c) Enterprise agreement and Australian Workplace Agreements

Information on any enterprise agreements, individual flexibility arrangements, Australian workplace agreements, common law contracts and determinations under subsection 24(1) of the Public Service Act 1999.

Mandatory 29

17AG(4)(c)(i) Key Management Personnel Information on the number of SES and non-SES employees covered by agreements etc identified in

paragraph 17AG(4)(c).

Mandatory 32

17AG(4)(c)(ii) Table 9: Current PSR salary ranges The salary ranges available for APS employees by classification level.

Mandatory 29

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Page Number

17AG(4)(c)(iii) Non-salary benefits A description of non-salary benefits provided to employees. Mandatory 29

17AG(4)(d)(i) Performance Pay Information on the number of employees at each classification level who received performance pay. If applicable, mandatory

29-30

17AG(4)(d)(ii) Table 10: Performance pay to PSR employees Information on aggregate amounts of performance pay at each classification level.

If applicable, mandatory

30

17AG(4)(d)(iii) Table 10: Performance pay to PSR employees Information on the average amount of performance payment, and range of such payments, at each

classification level.

If applicable, mandatory

30

17AG(4)(d)(iv) Table 10: Performance pay to PSR employees Information on aggregate amount of performance payments.

If applicable, mandatory

30

Assets Management

17AG(5) Asset management An assessment of effectiveness of assets management where asset management is a significant part of the entity’s activities.

If applicable, mandatory

35

Purchasing

17AG(6) Purchasing An assessment of entity performance against the

Commonwealth Procurement Rules.

Mandatory 35

Consultants

17AG(7)(a) Consultants A summary statement detailing the number of new contracts engaging consultants entered into during the period; the total actual expenditure on all new consultancy contracts entered into during the period (inclusive of GST); the number of ongoing consultancy contracts that were entered into during a previous reporting period; and the total actual expenditure in the reporting year on the ongoing consultancy contracts (inclusive of GST).

Mandatory 36

17AG(7)(b) Consultants A statement that “During [reporting period], [specified number] new consultancy contracts were entered into involving total actual expenditure of $[specified million]. In addition, [specified number] ongoing consultancy contracts were active during the period, involving total actual expenditure of $[specified million]”.

Mandatory 36

17AG(7)(c) Consultants A summary of the policies and procedures for

selecting and engaging consultants and the main categories of purposes for which consultants were selected and engaged.

Mandatory 36

17AG(7)(d) Consultants A statement that “Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.”

Mandatory 36

91 LIST OF REQUIREMENTS

PGPA Rule Reference Part of Report Description Requirement

Page Number

Australian National Audit Office Access Clauses

17AG(8) Australian National Audit Office access clauses If an entity entered into a contract with a value of more than $100 000 (inclusive of GST) and the contract did

not provide the Auditor-General with access to the contractor’s premises, the report must include the name of the contractor, purpose and value of the contract, and the reason why a clause allowing access was not included in the contract.

If applicable, mandatory

36

Exempt contracts

17AG(9) Exempt contracts If an entity entered into a contract or there is a standing offer with a value greater than $10 000 (inclusive of GST) which has been exempted from being published in AusTender because it would disclose exempt matters under the FOI Act, the annual report must include a statement that the contract or standing offer has been exempted, and the value of the contract or standing offer, to the extent that doing so does not disclose the exempt matters.

If applicable, mandatory

36

Small business

17AG(10)(a) Procurement initiatives to support small business A statement that “[Name of entity] supports small business participation in the Commonwealth

Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.”

Mandatory 37

17AG(10)(b) Procurement initiatives to support small business An outline of the ways in which the procurement practices of the entity support small and medium

enterprises.

Mandatory 37

17AG(10)(c) Procurement initiatives to support small business If the entity is considered by the Department administered by the Finance Minister as material

in nature—a statement that “[Name of entity] recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website.”

If applicable, mandatory

37

Financial Statements

17AD(e) Appendix 2: Financial

Statements

Inclusion of the annual financial statements in accordance with subsection 43(4) of the Act. Mandatory 39-78

Executive Remuneration

17AD(da) Senior Executive

Remuneration

Information about executive remuneration in accordance with Subdivision C of Division 3A of Part 2-3 of the Rule. Mandatory 32

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PGPA Rule Reference Part of Report Description Requirement

Page Number

17AD(f ) Other Mandatory Information

17AH(1)(a)(i) Advertising and marketing research If the entity conducted advertising campaigns, a statement that “During [reporting period], the [name of

entity] conducted the following advertising campaigns: [name of advertising campaigns undertaken]. Further information on those advertising campaigns is available at [address of entity’s website] and in the reports on Australian Government advertising prepared by the Department of Finance. Those reports are available on the Department of Finance’s website.”

If applicable, mandatory

37

17AH(1)(a)(ii) Advertising and marketing research If the entity did not conduct advertising campaigns, a statement to that effect.

If applicable, mandatory

37

17AH(1)(b) N/A A statement that “Information on grants awarded by

[name of entity] during [reporting period] is available at [address of entity’s website].”

If applicable, mandatory N/A

N/A

17AH(1)(c) Disability reporting mechanisms Outline of mechanisms of disability reporting, including reference to website for further information.

Mandatory 33

17AH(1)(d) Appendix 3: Freedom of Information Statement Website reference to where the entity’s Information Publication Scheme statement pursuant to Part II of

FOI Act can be found.

Mandatory 79

17AH(1)(e) N/A Correction of material errors in previous annual report. If applicable,

mandatory N/A

N/A

17AH(2) Publications Information required by other legislation. Mandatory 37

93 INDEX

Index

A Accountability See management and accountability administrative issues, 4, 23 advertising and market research, 37 antibiotics, 3, 18 Audit and Risk Committee, 25, 26 Australian Health Practitioner Regulation Agency (AHPRA), 1 Australian Human Rights Commission (AHRC), 26 Australian Medical Association (AMA)

consultation, 1, 15 stakeholder, 3, 6 Australian Public Service (APS) Code of Conduct, 27

staff employed, 28 values, 6, 27 Australian Public Service Employee Census 2019, performance of PSR, 4 Australian Workplace Agreements, 27 Australia’s health system, 6

B Brand, B, 36 Brindabella Business Park, 34 Business Manager, 23

C case management unit legal capacity, 23 organisational structure, 24

review meetings with Director, 15 staff, 15, 23 cases completed, 10

negotiated agreements, 12 outcomes, 15-16 statistics, 11 Chief Executive, Medicare, 9, 10

Chief Financial Officer, 23, 30, 42. see also Lee, Linnet chronic disease management items (CDM), 18-19 clinical records, random sampling, 1, 21 Comcare, 4 Commonwealth Disability Strategy, 33 Commonwealth Procurement Rules, 36 consultants, 36 corporate governance, 22-25 corporate plan 2018-19, 15, 22-23 corporate referrals, 2 Corporate Support Unit, 23

D Department of Health monitoring compliance, 3, 14, 16 Practitioner Review Program, 16

Provider Benefits Integrity division, 15, 23 random sample of records, 21 stakeholder, 6 Department of Human Services, 21 Determining Authority final determinations, 9, 13 members, 32 ratification of negotiated agreements, 9 Di Dio, A, 36 Director, 13, 16, 22, 32, 42 introduction, 1 professional review 2018-19, 2-5 transmittal letter, iii. See also Quinlivan, Julie disability reporting, 33 disqualification, 1, 12, 13

E ecologically sustainable development, 37 employees. See staff engagement framework, 3. See also stakeholders enterprise agreement 2016-19, 27

94 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

Environment Protection and Biodiversity Conservation Act 1999, 37 Ernst and Young, 3-4 ethical standards, 27 executive management team, 24 Executive officer, 23, 30 external reviews, 3-4

F Federal Courts, 4, 13, 17-18 financial performance, 35-37 advertising and market research, 37

asset management, 35 consultants, 36 outcome summary, 38 purchasing, 35 resource statement, 38 financial statements, 42-78 Flegg, K, 36 fraud, 1, 2, 26 Freedom of Information Act 1982, 36, 79 Freedom of Information statement, 79

G gender, female representation in PSR panel, 3, 26 General Counsel, 30. See also Executive officer; Topperworth Bruce governance processes, 8

H Health Insurance Act 1973, 6-7, 36 Health Insurance (Professional Services Review—Allied health and others) determination 2012, 7

human resources management, 27-28. See also staff

I inappropriate health care practice patterns of practice, 16 protection against, 9

Qualitative protective criteria, 14-15 Quantitative protection criteria, 14 types of practice, 16 types of practitioners investigated, 12 urgent after hour consultations, 19 inappropriate practice, definition, 16 Independent Auditor’s report, 40-41

J judicial review, 13. See also Federal Court; legal issues

K Karmakar v Minister of Health, 18 key management personnel (KMP), 30-31.See also executive management team

key performance indicators (KPI), 22

L leadership, 24 Lee, Linnet, 30 legal issues, 17-18 legal/para legal positions, 23

M management and accountability corporate governance and business planning, 22-23 fraud control, 26

human resources, 27-28 organisational structure, 23-24 risk, 24-25 structure and organisation, 22 Medicare

Establishment of, 16 maintaining principles of, 21 protect integrity of, 7-9 service defined, 16 Medicare benefits, repayments, 1, 12, 13 Minister of Health, 1, 6, 15, 22

N National Disability Strategy 2010-20, 33 negotiated agreements, 9 Nithiananth v Commonwealth 2018, 17-18 Noetic consultants, 24-25

O organisational restructure, 22 organisational structure, 23 overview of Agency, 6-8

95 INDEX

P patient safety, 2 peer review, process of, 1 performance against portfolio budget statements, 14-21

performance criteria, 14-15 Performance development Scheme (PDS), 27, 33 performance statement, 9-13 Pharmaceutical Benefits Scheme,

protect the integrity of, 7-8, 9 planning business, 22-25

corporate plan, 19 fraud control plan, 26 internal audit plan, 25 risk action plan, 25 portfolio shared services arrangements, 24 Pracitioner Review Program, 16 practitioner, definition of, 7 principle legal officers, 23 professional standards, non-compliance, 2 professional support for, 10, 15 PSR

accommodation, 34 aim of, 9 and legal challenges, 17-18 newsletter, 3 organisational structure, 23 professional support for, 10, 15 publications, 37 role and functions of, 6-7, 27 structure of, 6 values and behaviours, 6, 27 website, 3 PSR Advisory Committee (PSRAC), 3 PSR Committees

findings of, 3 number of committees established, 12 performance of, 12 role of, 1 PSR panel

appointment, 1 gender and diversity in, 3 membership of, 3, 12, 32

PSR scheme establishment, 6-7 legislative amendments, 8 outcomes, delivery of, 7 professional support, 10, 15 Senate inquiry 2011, 8

Public Governance, Performance and Accountability Act 2013, iii, 9, 36, 42 Public Service Act 1999, 6, 27, 32 Public service review, 4

Q Quinlivan, Julie, 22, 30

R Rankin, David, 30 recoveries ordered, 2 referrals

to AHPRA and other Boards, 13 from Chief Executive Medicare, 9-10 chronic disease management (CDM) items, 19 consultation items, 19 diversity in, 17 employer, 21 pharmaceutical, 18 received in 2018/19, 17 re-referrals, 13 skin medicine items, 20 remuneration, 31-32. See also salary ranges; performance pay Remuneration Tribunal, 32 risk management, 4, 24-25

S sampling methodology, 21 sanctions, 1, 9 schedule 4 and 8 medication, overprescribing, 3, 18 Senior Executive Service (SES), 32 senior legal officers, 23 Sharma, R, 36 Shelley, Andrew, 30 sleep studies, 20 small business, procurement initiatives, 37 Special Counsel, 30. See also Shelley, Andrew

96 PROFESSIONAL SERVICES REVIEW ANNUAL REPORT 2018-19

staff

Australian Public Service (APS), 28 case management unit, 23 diversity in, 28 executive management team, 24 health and welfare of, 4 non-salary benefits, 29 Performance development Scheme (PDS), 27, 33 performance pay, 29-30 salary ranges, 29 training and development, 33 work load, 2-4 stakeholders, 3, 6, 10, 15, 21 statutory appointments, 80-84

T Topperwien, Bruce, 22, 30 transmittal letter, iii

U Universal McCann, 37

W work health and safety, 33

www.psr.gov.au