Closed: 11 September 2017
The Department of Health is undertaking a First Principles Review of all of the Commonwealth funded schemes under the Indemnity Insurance Fund.
The RACGP sought your comments or feedback on the issues raised in this discussion paper, for the purpose of providing feedback to the Department of Health on the Review.
There are a number of consultation questions provided throughout the discussion paper regarding each of the schemes, however you are welcome to provide general feedback that relates to concerns or issues with the Indemnity Insurance Fund or any of the specific elements. In the discussion paper, the Department of Health has identified some of the key issues regarding the operation each of the schemes, and poses questions about whether they remain fit for purpose and how they can be improved.
Background
The Indemnity Insurance Fund comprises seven Commonwealth government assistance schemes. The four schemes that directly concern general practice, as well as the issues associated with them, have been outlined in brief below.
1. Premium Support Scheme (PSS)
Medical practitioners qualify for a premium subsidy under the PSS if they meet one of two criteria:
- their annual gross medical indemnity costs exceed 7.5% of their gross private medical income; or
- they are a procedural general practitioner (GP) practising in a rural or remote area.
DoH have identified the following challenges or issues with the PSS in the discussion paper:
- decreasing demand
- access to subsidy
- eligibility for subsidy and level of subsidy
- advance payments
- universal cover arrangements
2. High Cost Claims Scheme (HCCS)
The HCCS pays 50% of the cost of eligible claims over the threshold of $300,000. Claims are reimbursed by the Commonwealth to the medical indemnity insurer. The threshold increases from $300,000 to $500,000 for claims notified from 1 July 2018.
DoH have identified the following challenges or issues with the HCCS in the discussion paper:
- the scope of the scheme (i.e. who it applies to)
- the threshold above which the Commonwealth contributes
- the level of the Commonwealth’s contribution
- the costs that should be paid by the Commonwealth (as part of its contribution)
3. Exceptional Claims Scheme (ECS)
The ECS reimburses medical indemnity insurers for 100% of the cost of private practice claims that are above the limit of their medical indemnity insurance contract limit, typically $20 million.
DoH have identified the following challenges or issues with the ECS:
- whether or not it is required given that absence of claims made under the scheme.
4. Run-Off Cover Scheme (ROCS)
The ROCs reimburses medical indemnity insurers for 100% of the cost of claims for doctors who have ceased private practice because of retirement, disability, maternity leave, death, or if they stop working as a doctor in Australia. The ongoing costs of the scheme are met by the ROCS Support Payment, a levy on the premium income of medical indemnity insurers.
DoH have identified the following challenges or issues with the ROCS:
- the scheme is complex legislatively
- the scheme may be better managed by insurers rather than by Government
- as the scheme funds 100% of the costs of a claim, there are incentives for medical practitioners and insurers to submit a claim via ROCS when there is uncertainty about whether a person has ceased practice
- the scheme does not incentivise the settling of claims
- the scheme creates a significant administrative burden.