Medical Indemnity Reforms
BY ASSOCIATE PROFESSOR JULIAN RAIT OAM, CHAIR, AMA COUNCIL FOR PRIVATE SPECIALIST PRACTICE
At the height of the indemnity crisis in the 2002, many practitioners faced uncertainty about the future of their practice, with some thinking about leaving the profession all together.
The AMA played a pivotal role in stabilising the industry by bringing the profession together, and working with Government, to design schemes that were more equitable and affordable for practitioners.
However, these protections looked to be under attack when the Abbott Government’s national commission of audit indicated the need to review these schemes in early 2014. Subsequently, the Government cut these in schemes by $36 million in the 2016 Mid-Year Economic and Fiscal Outlook (MYEFO). Around the same time the Government also announced a full review of the schemes – which could have led to further funding cuts and increasing uncertainty for the entire medical profession.
Following extensive lobbying by the AMA, the reviews into the Medical Indemnity Schemes have been focused on maintaining stability, the importance of affordable indemnity insurance and affordable health care, and the precarious international experience of indemnity insurance.
From an AMA perspective the schemes have been a resounding public policy success and we have advocated strongly that they should be retained largely as they are.
In December for MYEFO 2018‑19, the Government announced that they were accepting 17 of the 19 recommendations from the Review and maintaining funding at the 2016 levels.
The announcement from Government sees:
- No cuts to the Premium Support Scheme.
- No cuts to the High Cost Claims Scheme.
- Retention of the Run Off Cover scheme.
- A level playing field for Universal Cover arrangements.
The AMA has long been a champion of a secure medical indemnity industry – this is what has given certainty and protected doctors and patients alike for the past 16 years.
Accordingly, the AMA has welcomed this announcement, given that it provides the necessary stability for medical indemnity insurance into the future and allows doctors to continue to practice securely. The only savings arising from this Review will come from removing access to these schemes by non-medical practitioners (such as pharmacists) – a move strongly supported by the AMA.
There are a range of changes to the schemes arising from this review which include:
- The streamlining of administrative processes to modernise the schemes and make them more efficient.
- The maximum risk surcharge for medical practitioners will be limited to three times the premium amount – a positive outcome as a significant increase would have had a detrimental impact.
- The amended legislation will mandate a dispute body for universal coverage to come under the Financial Ombudsman Service, the details of this body will be prescribed in the rules and will mandate that medical practitioners will be on the review panels.
However, as with most Government announcements the real devil is in the detail of the proposed legislative and regulatory changes that will enable the reforms to take place. The AMA continues to work co-operatively with the Commonwealth to ensure that these reforms are limited to this announcement and that they will deliver continuing certainty for the medical indemnity insurance industry.
The Government is still proposing to introduce the required legislative changes to progress these reforms early in 2019 and is planning a meeting in March to discuss the draft amendments. This process will take eight separate pieces of legislation consolidating them into one single Act.
Published: 14 Mar 2019