As part of MIGA’s advocacy and active participation in the medical indemnity industry, we recently made a Submission to the Department of Health (the Department) in response to the First Principles Review (FPR) of the Indemnity Insurance Fund (IIF).
The FPR provides an excellent opportunity to review the ongoing need for the IIF and to ensure that the policy objectives continue to be appropriate notwithstanding changes in market conditions in recent years.
Since their introduction in the early 2000’s to address the medical indemnity insurance crisis, in MIGA’s view, the Schemes that comprise the IIF have been critical in maintaining a stable and secure medical indemnity market, ensuring access by medical practitioners to affordable indemnity cover and the delivery of affordable health care for the community. They have served the profession and the community well.
MIGA has made a submission strongly supporting the continuation of these schemes. Key components of MIGA’s submission are as follows:
Should the IIF continue?
MIGA’s position is that the continuation of the IIF is critical to supporting the ongoing availability of affordable and secure indemnity insurance, to maintain stability in the medical indemnity industry and to ensure access to affordable health care for the community.
High Cost Claims Scheme (HCCS)
What is it?
The HCCS reimburses medical indemnity insurers 50% of the costs of claims over $300,000 up to the limit of the practitioner’s cover, for claims notified on or after 1 January 2004. From 1 July 2018, the threshold increases from $300,000 to $500,000.
We support the continuation of the HCCS in its current form as an effective mechanism to reduce the financial impact of large claims – without it, premiums would increase.
It plays a critical role in maintaining affordability of insurance. It should be maintained at the new threshold of $500k and access to it should be restricted to MIIs that are bound by the terms of the Services Contract with the Federal Government.
Exceptional Claims Scheme (ECS)
What is it?
The ECS provides indemnity to doctors for 100% of the cost of private practice claims that are above the limit of their medical indemnity contracts of insurance ($20m), so that doctors are not personally liable for very high claims. The scheme is fully funded by the Government and doctors are not required to make a contribution.
We support the continuation of the ECS in its current form as it provides certainty to the medical profession in relation to large claims and assists with affordability of indemnity insurance.
Run-Off Cover Scheme (ROCS)
What is it?
ROCS provides run-off cover for doctors who have permanently ceased private practice (in addition to covering doctors on maternity leave, those who have permanently left the country etc). It provides cover for incidents that might have occurred prior to going into ROCS. The costs of ROCS are met by a ROCS support payment by doctors.
We support the continuation of ROCS in its current form as it brings stability and certainty to medical practitioners as to their position in retirement, given their insurance cover is claims made.
In its absence, access to run off cover would be less certain and the cost might be prohibitive.
Premium Support Scheme (PSS)
What is it?
The PSS assists eligible doctors to meet the costs of their medical indemnity insurance where their gross medical indemnity cost exceeds an agreed percentage of their gross private medical income.
We support the continuation of the PSS in its current form as an important mechanism to ensure medical practitioners have access to affordable medical indemnity insurance.
Universal Cover as a principle
What is it?
All MDO owned medical indemnity insurers are required under a Services Contract with the Federal Government to cover all doctors in their nominated State(s) as an insurer of last resort. It is intended to ensure that all doctors have access to insurance so they can meet their regulatory requirements and that Medical Indemnity Insurers (MIIs) do not become quasi regulators of who can and cannot practice.
Not all MIIs have a Service Contract with the Federal Government and therefore they are not bound by the Universal Cover and other obligations within it, but they can access the benefits of the IIF.
In an environment of significant ongoing support for the industry and profession, Universal Cover is important as it gives certainty to medical practitioners, protection for the community and removes concerns that MIIs might be quasi regulators.
It should only continue as a requirement if the current scope and level of Commonwealth support to the medical profession continues via the HCCS, PSS, ROCS and ECS.
All insurers of medical indemnity for individual medical practitioners must have an insurer of last resort obligation and be bound by all aspects of the Universal Cover requirements, to ensure a fair and level playing field amongst MIIs.
Insurers must be able to more effectively underwrite and assess their risks within reasonable parameters.
MIGA is actively involved in the review process, with the aim of representing our members’ interests and the broader profession fairly and constructively. With such a significant review underway with the potential for widespread change for the profession, we see it as critical that MIGA has, and maintains, a strong voice. Medical indemnity is a significant cost and plays an important role in your day to day practice and we are passionate about maintaining a secure, affordable and sustainable system.
We will continue to keep you informed about the progression of the Review via our Bulletins and website.