Medical and Midwife Indemnity Legislation Amendment Act 2019 (105 of 2019)

Schedule 6   Allied health professionals

Medical Indemnity Act 2002

26   After Division 2B of Part 2

Insert:

Division 2C - Allied health high cost claim indemnity scheme

Subdivision A - Introduction

34ZY Guide to the allied health high cost claim indemnity provisions

(1) This Division provides that an allied health high cost claim indemnity may be paid to an eligible MDO or eligible insurer that pays, or is liable to pay, more than a particular amount (referred to as the allied health high cost claim threshold ) in relation to a claim against a person in relation to an incident that occurs in the course of, or in connection with, the practice by the person of an allied health profession.

(2) This Division also provides for the regulations and rules to deal with other matters relating to incidents covered by the allied health high cost claim indemnity scheme.

(3) The following table tells you where to find the provisions dealing with various issues:

34ZZ Eligible MDOs and eligible insurers

An MDO is an eligible MDO , or a medical indemnity insurer is an eligible insurer , if:

(a) it is specified in the rules; and

(b) it is party to contracts of insurance that provide medical indemnity cover for medical practitioners; and

(c) it is party to contracts of insurance that provide medical indemnity cover for persons who practise an allied health profession.

34ZZA Allied health high cost claim threshold

(1) The allied health high cost claim threshold is:

(a) $2 million; or

(b) such other amount as is specified in the rules.

(2) Rules that specify an amount for the purposes of paragraph (1)(b) that increases the allied health high cost claim threshold at the time the rules are registered on the Federal Register of Legislation must not commence earlier than 12 months after the day on which the rules are so registered.

Subdivision B - Allied health high cost claim indemnity

34ZZB Circumstances in which allied health high cost claim indemnity payable

Basic payability rule

(1) Subject to section 34ZZC, an allied health high cost claim indemnity is payable to an eligible MDO or eligible insurer under this section if:

(a) a claim is, or was, made against a person (the practitioner ); and

(b) the claim relates to:

(i) an incident that occurs or occurred; or

(ii) a series of related incidents that occur or occurred;

in the course of, or in connection with, the practice by the practitioner of an allied health profession; and

(c) if the allied health profession is midwifery:

(i) the incident occurs or occurred; or

(ii) all of the incidents in the series occur or occurred;

in the course of, or in connection with, practice of a kind in relation to which eligible midwives are ordinarily, or could reasonably be expected in the ordinary course of business to be, engaged as employees (and therefore indemnified from liability by their employer); and

(d) either:

(i) the incident occurs or occurred; or

(ii) one or more of the incidents in the series occurs or occurred;

in Australia or in an external Territory; and

(e) either:

(i) the incident occurs or occurred; or

(ii) all of the incidents in the series occur or occurred;

on or after 1 July 2020; and

(f) the MDO or insurer is first notified of:

(i) the incident; or

(ii) the claim; or

(iii) an eligible related claim;

on or before the date specified in the rules as the termination date for the allied health high cost claim indemnity scheme; and

(g) the MDO or insurer has a qualifying allied health payment in relation to the claim, or qualifying allied health payments in relation to:

(i) the claim; or

(ii) the claim and one or more eligible related claims; and

(h) the amount of the qualifying allied health payment, or the sum of the amounts of the qualifying allied health payments, exceeds what was the allied health high cost claim threshold at the earliest of the following times:

(i) when the MDO or insurer was first notified of the incident;

(ii) when the MDO or insurer was first notified of the claim;

(iii) when the MDO or insurer was first notified of an eligible related claim; and

(i) a high cost claim indemnity is not payable in relation to the claim; and

(j) any other requirements (however described) that are specified in the rules have been met.

(2) Any rules made for the purposes of subsection 11(3A) of the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 apply for the purposes of determining whether practice is of a kind mentioned in paragraph (1)(c).

(3) Rules made for the purposes of paragraph (1)(j) do not apply in relation to an incident if the claim relating to the incident was made before the rules in question commence.

Qualifying allied health payments

(4) The MDO or insurer has a qualifying allied health payment in relation to a claim if:

(a) the MDO or insurer:

(i) pays an amount in relation to the claim; or

(ii) is liable to pay an amount in relation to a payment or payments that someone makes, or is liable to make, in relation to the claim under a written agreement between the parties to the claim; or

(iii) is liable to pay an amount in relation to a payment or payments that someone makes, or is liable to make, in relation to the claim under a judgment or order of a court that is not stayed and is not subject to appeal; or

(iv) is a Chapter 5 body corporate and is liable to pay a provable amount in relation to the claim; and

(b) the MDO or insurer pays, or is liable to pay, the amount under an insurance contract or other indemnity arrangement between the MDO or insurer and the practitioner; and

(c) the MDO or insurer:

(i) pays, or becomes liable to pay, the amount in the ordinary course of the MDO's or the insurer's business; or

(ii) is a Chapter 5 body corporate and would be able to pay the amount in the ordinary course of the MDO's or the insurer's business if it were not a Chapter 5 body corporate.

(5) The date specified in the rules for the purposes of paragraph (1)(f) must be at least 12 months after the day on which the rules in question are registered on the Federal Register of Legislation.

Indemnity to be paid on trust if MDO or insurer under external administration

(6) If an allied health high cost claim indemnity is paid to an MDO or insurer that is a Chapter 5 body corporate, the indemnity is, to the extent to which it is attributable to an amount that the MDO or insurer is liable to pay to a person, paid on trust for the benefit of that person.

34ZZC Aggregating amounts paid or payable by an MDO and insurer

(1) This section applies if:

(a) an eligible MDO pays, or is liable to pay, an amount in relation to a claim that relates to an incident or a series of incidents; and

(b) an eligible insurer also pays, or is also liable to pay, an amount (the insurer amount ) in relation to the same claim or in relation to an eligible related claim; and

(c) but for this section, an allied health high cost claim indemnity in respect of the insurer amount:

(i) would be payable to the insurer under subsection 34ZZB(1); or

(ii) would be payable to the insurer under that subsection if paragraph 34ZZB(1)(h) were omitted; and

(d) the insurer elects in writing to have this section apply to the insurer amount.

(2) For the purposes of this Division (other than this section):

(a) the MDO is taken:

(i) to have paid, or to be liable to pay, the insurer amount in relation to the claim or eligible related claim; and

(ii) to satisfy paragraphs 34ZZB(1)(g) and (4)(a) to (c) in relation to the insurer amount; and

(iii) to have been notified of the incident, claim or eligible related claim when the insurer was first notified of the incident, claim or eligible related claim; and

(b) an allied health high cost claim indemnity is not payable to the insurer in respect of the insurer amount.

34ZZD Exceptions

An allied health high cost claim indemnity is not payable to an MDO or insurer under section 34ZZB in relation to a payment the MDO or insurer makes, or is liable to make, in relation to a claim against a person if:

(a) the incident, or all the incidents, to which the claim relates occurred in the course of the provision of treatment to a public patient in a public hospital; or

(b) the claim is specified in the rules; or

(c) the claim relates to an incident specified in the rules.

34ZZE Payment partly related to treatment of public patient in public hospital

(1) This section applies if:

(a) an MDO or insurer makes, or is liable to make, a payment in relation to a claim against a person in relation to a series of related incidents; and

(b) some, but not all, of the incidents occurred in the course of the provision of treatment to a public patient in a public hospital.

(2) For the purposes of this Subdivision, the payment is to be disregarded to the extent to which it relates to, or is reasonably attributable to, the incident or incidents that occurred in the course of the provision of treatment to a public patient in a public hospital.

34ZZF Amount of allied health high cost claim indemnity

(1) The amount of an allied health high cost claim indemnity is:

(a) 50%; or

(b) such other percentage as is specified in the rules;

of the amount by which the amount of the MDO's or insurer's qualifying allied health payment, or the sum of the amounts of the MDO's or insurer's qualifying allied health payments, exceeds the allied health high cost claim threshold.

(2) Rules that specify for the purposes of paragraph (1)(b) a percentage that is less than the percentage in force at the time the rules are registered on the Federal Register of Legislation must not commence earlier than 12 months after the day on which the rules are so registered.

Subdivision C - Regulations may provide for payments

34ZZG Regulations may provide for payments in relation to allied health high cost claims

(1) The regulations may provide in relation to:

(a) making payments to eligible MDOs and eligible insurers of claim handling fees; and

(b) making payments on account of legal, administrative or other costs incurred by eligible MDOs and eligible insurers (whether on their own behalf or otherwise);

in respect of claims relating to incidents in relation to which an allied health high cost claim indemnity is payable (see section 34ZZB).

(2) Without limiting subsection (1), the regulations may:

(a) make provision for:

(i) the conditions that must be satisfied for an amount to be payable to an eligible MDO or eligible insurer; and

(ii) the amount that is payable; and

(iii) the conditions that must be complied with by an eligible MDO or eligible insurer to which an amount is paid; and

(iv) other matters related to the making of payments, and the recovery of overpayments; and

(b) provide that this Division applies with specified modifications in relation to a liability that relates to costs in relation to which an amount has been paid under regulations made for the purposes of this section; and

(c) make provision for making payments on account of legal, administrative or other costs incurred by eligible MDOs and eligible insurers (whether on their own behalf or otherwise), in respect of incidents notified to eligible MDOs and eligible insurers that could give rise to claims in relation to which an allied health high cost claim indemnity could be payable.

(3) Paragraph (2)(b) does not allow the regulations to modify a provision that creates an offence, or that imposes an obligation which, if contravened, constitutes an offence.

(4) It does not matter for the purposes of paragraph (2)(c) whether claims are subsequently made in relation to the incidents referred to in that paragraph.

34ZZH The Chief Executive Medicare may request information

(1) If the Chief Executive Medicare believes that a person is capable of giving information that is relevant to determining:

(a) whether an MDO or insurer is entitled to a payment under regulations made for the purposes of section 34ZZG; or

(b) the amount that is payable to an MDO or insurer under regulations made for the purposes of section 34ZZG;

the Chief Executive Medicare may request the person to give the Chief Executive Medicare the information.

Note: Failure to comply with the request is an offence (see section 45).

(2) Without limiting subsection (1), any of the following persons may be requested to give information under that subsection:

(a) an eligible MDO;

(b) an eligible insurer;

(c) a member or former member of an eligible MDO;

(d) a person who practises, or used to practise, an allied health profession;

(e) a person who is acting, or has acted, on behalf of a person covered by paragraph (d);

(f) a legal personal representative of a person covered by paragraph (c), (d) or (e).

(3) Without limiting subsection (1), if the information sought by the Chief Executive Medicare is information relating to a matter in relation to which a person is required by section 39 to keep a record, the Chief Executive Medicare may request the person to give the information by giving the Chief Executive Medicare the record, or a copy of the record.

(4) The request:

(a) must be made in writing; and

(b) must state what information must be given to the Chief Executive Medicare; and

(c) may require the information to be verified by statutory declaration; and

(d) must specify a day on or before which the information must be given; and

(e) must contain a statement to the effect that a failure to comply with the request is an offence.

The day specified under paragraph (d) must be at least 28 days after the day on which the request was made.

Division 2D - Allied health exceptional claims indemnity scheme

Subdivision A - Introduction

34ZZI Guide to the allied health exceptional claims indemnity provisions

(1) This Division provides that an allied health exceptional claims indemnity may be paid in relation to a liability of a person if:

(a) the liability relates to a claim against the person in relation to an incident that occurs in the course of, or in connection with, the practice by the person of an allied health profession, being a claim that has been certified as a qualifying allied health claim; and

(b) the liability exceeds the amount payable under an insurance contract with an eligible insurer that has a contract limit satisfying the relevant allied health threshold.

(2) This Division also provides for the regulations and rules to deal with other matters relating to claims that have been certified as qualifying allied health claims.

(3) The following table tells you where to find the provisions dealing with various issues:

34ZZJ Interaction with allied health high cost claim indemnity scheme

For the purposes of the definition of practitioner's contract limit in subsection 4(1), and of paragraphs 34ZZR(1)(e) and (f), an amount that an insurer has paid or is liable to pay, or would have been liable to pay, under a contract of insurance is not to be reduced on account of an allied health high cost claim indemnity paid or payable, or that would have been payable, to the insurer.

Subdivision B - Certification of qualifying allied health claims

34ZZK When may the Chief Executive Medicare certify a claim as a qualifying allied health claim?

Criteria for certification

(1) The Chief Executive Medicare may issue a certificate stating that a claim is a qualifying allied health claim if the Chief Executive Medicare is satisfied that:

(a) the claim is a claim that is or was made against a person (the practitioner ); and

(b) the claim relates to:

(i) an incident that occurs or occurred; or

(ii) a series of related incidents that occur or occurred;

in the course of, or in connection with, the practice by the practitioner of an allied health profession; and

(c) if the allied health profession is midwifery:

(i) the incident occurs or occurred; or

(ii) all of the incidents in the series occur or occurred;

in the course of, or in connection with, practice of a kind in relation to which eligible midwives are ordinarily, or could reasonably be expected in the ordinary course of business to be, engaged as employees (and therefore indemnified from liability by their employer); and

(d) except in the circumstances specified in rules made for the purposes of this paragraph, either:

(i) the incident occurs or occurred; or

(ii) one or more of the incidents in the series occurs or occurred;

in Australia or an external Territory; and

(e) either:

(i) the incident occurs or occurred; or

(ii) all of the incidents in the series occur or occurred;

on or after 1 July 2020; and

(f) the incident did not occur, or the incidents did not all occur, in the course of the provision of treatment to a public patient in a public hospital; and

(g) there is a contract of insurance in relation to which the following requirements are satisfied:

(i) the contract provides medical indemnity cover for the practitioner in relation to the claim, or would, but for the practitioner's contract limit, provide such cover for the practitioner in relation to the claim;

(ii) the practitioner's contract limit equals or exceeds the relevant allied health threshold (see section 34ZZL);

(iii) the insurer is an eligible insurer;

(iv) the insurer entered into the contract in the ordinary course of the insurer's business; and

(h) if a termination date for the allied health exceptional claims indemnity scheme is set (see section 34ZZM), the incident, or one or more of the incidents, to which the claim relates occurred before the allied health termination date; and

(i) the claim is not a claim specified in rules made for the purposes of this paragraph; and

(j) the contract of insurance is not a contract specified in rules made for the purposes of this paragraph; and

(k) a person has applied for the certificate in accordance with section 34ZZN; and

(l) the Chief Executive Medicare could not issue a qualifying claim certificate in relation to the claim if an application for the certificate were made in accordance with section 34H.

Note 1: Paragraph (f) - for what happens if some, but not all, of the incidents in a series occur in the course of the provision of treatment to a public patient in a public hospital, see section 34ZZT.

Note 2: Paragraph (h) - for what happens if some, but not all, of the incidents in a series occur after the allied health termination date, see section 34ZZU.

(2) Any rules made for the purposes of subsection 11(3A) of the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 apply for the purposes of determining whether practice is of a kind mentioned in paragraph (1)(c).

When a certificate is in force

(3) The certificate comes into force when it is issued and remains in force until it is revoked.

Matters to be identified or specified in certificate

(4) The certificate must:

(a) identify:

(i) the practitioner; and

(ii) the claim; and

(iii) the contract of insurance in relation to which paragraph (1)(g) is satisfied; and

(b) specify the relevant allied health threshold.

The certificate may also contain other material.

AAT review of decision to refuse

(5) Applications may be made to the Administrative Appeals Tribunal for review of decisions of the Chief Executive Medicare to refuse to issue a qualifying allied health claim certificate.

Note: Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable.

Chief Executive Medicare to give applicant copy of certificate

(6) If the Chief Executive Medicare decides to issue a qualifying allied health claim certificate, the Chief Executive Medicare must, within 28 days of making the decision, give the applicant a copy of the certificate. However, a failure to comply does not affect the validity of the decision.

34ZZL What is the relevant allied health threshold?

The relevant allied health threshold

(1) The relevant allied health threshold is $20 million, or such other amount as is specified in the rules as the threshold.

Threshold specified in rules only applies to contracts entered into after the rules commence

(2) A rule specifying an amount as the threshold (or changing the amount previously so specified) only applies in relation to contracts of insurance entered into after the rule commences.

When rules reducing the threshold commence

(3) A rule reducing the threshold (which could be the threshold originally applicable under subsection (1), or that threshold as already changed by rules) commences on the date specified in the rules, which must be the date on which the rules are registered on the Federal Register of Legislation or a later day.

When rules increasing the threshold commence

(4) A rule increasing the threshold (which could be the threshold originally applicable under subsection (1), or that threshold as already changed by rules), commences on the date specified in the rules, which must be at least 3 months after the date on which the rules are registered on the Federal Register of Legislation.

34ZZM Setting the allied health termination date

(1) The rules may set a termination date for the allied health exceptional claims indemnity scheme.

Note: The scheme does not cover incidents that occur after the allied health termination date (see paragraph 34ZZK(1)(h) and section 34ZZU).

(2) The termination date cannot be before the date on which the rules are registered on the Federal Register of Legislation.

34ZZN Application for a qualifying allied health claim certificate

(1) An application for the issue of a qualifying allied health claim certificate in relation to a claim may be made by the person against whom the claim is or was made, or by a person acting on that person's behalf.

(2) The application must:

(a) be made in writing using a form approved by the Chief Executive Medicare; and

(b) be accompanied by the documents and other information required by the form approved by the Chief Executive Medicare.

34ZZO Time by which an application must be decided

(1) Subject to subsections (2) and (3), the Chief Executive Medicare is to decide an application for the issue of a qualifying allied health claim certificate on or before the 21st day after the day on which the application is received by the Chief Executive Medicare.

(2) If the Chief Executive Medicare requests a person to give information under section 38 in relation to the application, the Chief Executive Medicare does not have to decide the application until the 21st day after the day on which the person gives the information to the Chief Executive Medicare.

(3) The Chief Executive Medicare may treat an application as having been withdrawn if:

(a) the Chief Executive Medicare requests the person who applied for the certificate to give information under section 38 in relation to the application; and

(b) the person does not give the information to the Chief Executive Medicare by the end of the day specified in the request.

(4) The Chief Executive Medicare must notify the person who applied for the certificate if the Chief Executive Medicare treats the application as having been withdrawn.

34ZZP Obligation to notify the Chief Executive Medicare if information is incorrect or incomplete

(1) If:

(a) a qualifying allied health claim certificate is in force in relation to a claim; and

(b) a person becomes aware that the information provided to the Chief Executive Medicare in connection with the application for the certificate was incorrect or incomplete, or is no longer correct or complete; and

(c) the person is:

(i) the person who applied for the certificate; or

(ii) another person who has applied for a payment of allied health exceptional claims indemnity, or for a payment under regulations made for the purposes of section 34ZZZD (allied health exceptional claims payments), in relation to the claim;

the person must notify the Chief Executive Medicare of the respect in which the information was incorrect or incomplete, or is no longer correct or complete.

Note: Failure to notify is an offence (see section 46).

(2) The notification must:

(a) be made in writing; and

(b) be given to the Chief Executive Medicare within 28 days after the person becomes aware as mentioned in subsection (1).

34ZZQ Revocation and variation of qualifying allied health claim certificates

Revocation

(1) The Chief Executive Medicare may revoke a qualifying allied health claim certificate if the Chief Executive Medicare is no longer satisfied as mentioned in subsection 34ZZK(1) in relation to the claim.

(2) To avoid doubt, in considering whether the Chief Executive Medicare is still satisfied as mentioned in subsection 34ZZK(1) in relation to the claim, the Chief Executive Medicare may have regard to matters that have occurred since the decision to issue the qualifying allied health claim certificate was made, including for example:

(a) the making of rules for the purpose of paragraph 34ZZK(1)(i) or (j); or

(b) changes to the terms and conditions of the contract of insurance identified in the certificate.

Variation

(3) If the Chief Executive Medicare is satisfied that a matter is not correctly identified or specified in a qualifying allied health claim certificate, the Chief Executive Medicare may vary the certificate so that it correctly identifies or specifies the matter.

Effect of revocation

(4) If:

(a) the Chief Executive Medicare revokes a qualifying allied health claim certificate; and

(b) an amount of allied health exceptional claims indemnity has already been paid in relation to the claim;

the amount is an amount overpaid to which section 41 applies.

Effect of variation

(5) If:

(a) the Chief Executive Medicare varies a qualifying allied health claim certificate; and

(b) an amount of allied health exceptional claims indemnity has already been paid in relation to the claim, and that amount exceeds the amount that would have been paid if the amount of indemnity had been determined having regard to the certificate as varied;

the amount of the excess is an amount overpaid to which section 41 applies.

AAT review of decision to revoke or vary

(6) Applications may be made to the Administrative Appeals Tribunal for review of decisions of the Chief Executive Medicare to revoke or vary a qualifying allied health claim certificate.

Note: Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable.

Chief Executive Medicare to give applicant copy of varied certificate

(7) If the Chief Executive Medicare decides to vary a qualifying allied health claim certificate, the Chief Executive Medicare must, within 28 days of making the decision, give the applicant a copy of the varied certificate. However, a failure to comply does not affect the validity of the decision.

Subdivision C - Allied health exceptional claims indemnity

34ZZR When is an allied health exceptional claims indemnity payable?

Criteria for payment of indemnity

(1) The Chief Executive Medicare may decide that an allied health exceptional claims indemnity is payable in relation to a liability of a person (the practitioner ) if:

(a) a claim for compensation or damages (the current claim ) is, or was, made against the practitioner by another person; and

(b) a qualifying allied health claim certificate is in force in relation to the current claim; and

(c) the liability is a qualifying allied health liability of the practitioner in relation to the current claim (see section 34ZZS); and

(d) because of the practitioner's contract limit in relation to the contract of insurance identified in the qualifying allied health claim certificate, the contract does not cover, or does not fully cover, the liability; and

(e) the amount that, if the practitioner's contract limit had been high enough to cover the whole of the liability, the insurer would (subject to the other terms and conditions of the contract) have been liable to pay under the contract of insurance in relation to the liability exceeds the actual amount (if any) that the insurer has paid or is liable to pay under the contract in relation to the liability; and

(f) the aggregate of:

(i) the amount (if any) the insurer has paid, or is liable to pay, in relation to the liability under the contract of insurance; and

(ii) the other amounts (if any) that the insurer has already paid, or has already become liable to pay, under the contract in relation to the current claim; and

(iii) the amounts (if any) that the insurer has already paid, or has already become liable to pay, under the contract in relation to any other claim against the practitioner that relates to an incident, or series of related incidents, covered by subsection (2) (being other claims that were first notified to the insurer no later than the time the current claim was notified to the insurer);

equals or exceeds the relevant allied health threshold identified in the qualifying allied health claim certificate; and

(g) a person has applied for the indemnity in accordance with section 37A.

Note 1: For how paragraphs (e) and (f) apply:

(a) if there are deductibles - see section 8B; or

(b) if an allied health high cost claim indemnity is paid or payable - see section 34ZZJ; or

(c) if the insurer is a Chapter 5 body corporate - see subsection (6); or

(d) if the claim relates to a series of incidents some, but not all, of which occurred in the course of the provision of treatment to a public patient in a public hospital - see section 34ZZT; or

(e) if the claim relates to a series of incidents some, but not all, of which occurred after the allied health termination date - see section 34ZZU.

Note 2: For the purpose of subparagraphs (f)(i) and (ii), payments and liabilities to pay must meet the ordinary course of business requirement set out in subsection (5).

(2) For the purposes of subparagraph (1)(f)(iii), an incident or series of related incidents is covered by this subsection if the incident occurs or occurred, or the series of related incidents all occur or occur:

(a) on or after 1 July 2020; and

(b) in the course of, or in connection with:

(i) practice by the practitioner of an allied health profession other than midwifery; or

(ii) practice by the practitioner of midwifery, if the practice is of a kind in relation to which eligible midwives are ordinarily, or could reasonably be expected in the ordinary course of business to be, engaged as employees (and therefore indemnified from liability by their employer).

(3) Any rules made for the purposes of subsection 11(3A) of the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 apply for the purposes of determining whether practice is of a kind mentioned in subparagraph (2)(b)(ii).

Who the indemnity is payable to

(4) The indemnity is to be paid to the person who applies for it.

Note: For who can apply, see section 37A.

Ordinary course of business test for insurance payments

(5) An amount that an insurer has paid, or is liable to pay, under a contract of insurance does not count for the purpose of subparagraph (1)(f)(i) or (ii) unless it is an amount that the insurer paid, or is liable to pay, in the ordinary course of the insurer's business.

What if the insurer is a Chapter 5 body corporate?

(6) If an insurer is a Chapter 5 body corporate:

(a) a reference in paragraphs (1)(e) and (f) to an amount that the insurer is liable to pay under a contract of insurance is a reference to an amount that the insurer is liable to pay under the contract and that is a provable amount; and

(b) a reference in subsection (5) to an amount that an insurer is liable to pay in the ordinary course of the insurer's business is a reference to an amount that the insurer is liable to pay, and would be able to pay in the ordinary course of the insurer's business if it were not a Chapter 5 body corporate.

AAT review of decision to refuse, or to pay a particular amount of indemnity

(7) Applications may be made to the Administrative Appeals Tribunal for review of the following decisions of the Chief Executive Medicare:

(a) a decision to refuse an application for allied health exceptional claims indemnity;

(b) a decision to pay a particular amount of allied health exceptional claims indemnity.

Note: Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable.

34ZZS Qualifying allied health liabilities

A person (the practitioner ) has a qualifying allied health liability in relation to a claim made against the person if:

(a) one of the following applies:

(i) the liability is under a judgment or order of a court in relation to the claim, being a judgment or order that is not stayed and is not subject to appeal;

(ii) the liability is under a settlement of the claim that takes the form of a written agreement between the parties to the claim;

(iii) the liability is some other kind of liability of the practitioner (for example, a liability to legal costs) that relates to the claim; and

(b) the defence of the claim against the practitioner was conducted appropriately up to the time when:

(i) if the liability is under a judgment or order of a court - the date on which the judgment or order became a judgment or order that is not stayed and is not subject to appeal; or

(ii) if the liability is under a settlement of the claim - the date on which the settlement agreement was entered into; or

(iii) if the liability is some other kind of liability - the date on which the liability was incurred; and

(c) if the liability is under a settlement of the claim, or is under a consent order made by a court - a legal practitioner has given a statutory declaration certifying that the amount of the liability is reasonable.

Note: For paragraph (b), see the definitions of defence and conducted appropriately in subsection 4(1).

34ZZT Treatment of a claim that partly relates to a public patient in a public hospital

If:

(a) a claim against a person relates to a series of incidents; and

(b) some, but not all, of the incidents occurred in the course of the provision of treatment to a public patient in a public hospital;

then, for the purposes of applying paragraph 34ZZR(1)(e) and subparagraphs 34ZZR(1)(f)(i) and (ii) in relation to the claim, an amount that an insurer has paid or is liable to pay, or would have been liable to pay, in relation to the claim, is to be reduced by the extent (if any) to which the amount relates or would relate to, or is or would be reasonably attributable to, the incident or incidents that occurred in the course of the provision of treatment to a public patient in a public hospital.

34ZZU Treatment of a claim that relates to a series of incidents some of which occurred after the allied health termination date

If:

(a) a claim against a person relates to a series of incidents; and

(b) some, but not all, of the incidents occurred after the allied health termination date;

then, for the purposes of applying paragraph 34ZZR(1)(e) and subparagraphs 34ZZR(1)(f)(i) and (ii) in relation to the claim, an amount that an insurer has paid or is liable to pay, or would have been liable to pay, in relation to the claim, is to be reduced by the extent (if any) to which the amount relates or would relate to, or is or would be reasonably attributable to, the incident or incidents that occurred after the allied health termination date.

34ZZV The amount of allied health exceptional claims indemnity that is payable

The amount of allied health exceptional claims indemnity that is payable in relation to a particular qualifying allied health liability is the amount of the excess referred to in paragraph 34ZZR(1)(e).

Note: It is only liabilities that exceed the practitioner's contract limit that will be covered by an allied health exceptional claims indemnity (even if the relevant allied health threshold is less than that limit).

34ZZW How allied health exceptional claims indemnity is to be applied

(1) This section applies if an allied health exceptional claims indemnity is paid to a person (the recipient ) in relation to a liability of a person (the practitioner ).

Note: The recipient will either be the practitioner, or a person acting on behalf of the practitioner.

Chief Executive Medicare to give recipient of payment a notice identifying the liability to be discharged

(2) The Chief Executive Medicare must give the recipient a written notice (the payment notice ) identifying the liability in relation to which the indemnity is paid, and advising the recipient how this section requires the indemnity to be dealt with.

Recipient's obligation if the amount of the indemnity equals or is less than the liability

(3) If the amount of the indemnity equals or is less than the undischarged amount of the liability identified in the payment notice, the recipient must apply the whole of the indemnity towards the discharge of the liability.

Recipient's obligation if the amount of the indemnity exceeds the liability

(4) If the amount of the indemnity is greater than the undischarged amount of the liability identified in the payment notice, the recipient must:

(a) apply so much of the indemnity as equals the undischarged amount of the liability towards the discharge of the liability; and

(b) if the recipient is not the practitioner - deal with the balance of the indemnity in accordance with the directions of the practitioner.

Time by which recipient must comply with obligation

(5) The recipient must comply with whichever of subsections (3) and (4) applies:

(a) by the time specified in a written direction (whether contained in the payment notice or otherwise) given to the recipient by the Chief Executive Medicare; or

(b) if no such direction is given to the recipient - as soon as practicable after the indemnity is received by the recipient.

To avoid doubt, the Chief Executive Medicare may vary a direction under paragraph (a) to specify a different time.

Debt to Commonwealth if recipient does not comply with obligation on time

(6) If the recipient does not comply with whichever of subsections (3) and (4) applies by the time required by subsection (5), the amount of the indemnity is a debt due to the Commonwealth.

(7) The debt may be recovered:

(a) by action by the Chief Executive Medicare against the recipient in a court of competent jurisdiction; or

(b) under section 42.

(8) If the amount of the indemnity is recoverable, or has been recovered, as mentioned in subsection (7), no amount is recoverable under section 34ZZZ or section 41 in relation to the same payment of allied health exceptional claims indemnity.

34ZZX Who is liable to repay an overpayment of allied health exceptional claims indemnity?

(1) This section applies if, in relation to an allied health exceptional claims indemnity that has been paid, there is an amount overpaid as described in subsection 34ZZZ(2) or 41(2).

(2) The liable person , in relation to the amount overpaid, is:

(a) if the indemnity has not yet been dealt with in accordance with whichever of subsections 34ZZW(3) and (4) applies - the recipient referred to in subsection 34ZZW(1); or

(b) if the indemnity has been dealt with in accordance with whichever of those subsections applies - the practitioner referred to in subsection 34ZZW(1).

Note: The recipient and the practitioner will be the same person if the indemnity was paid to the practitioner.

(3) If:

(a) the recipient and the practitioner referred to in subsection 34ZZW(1) are not the same person; and

(b) when the overpayment is recovered as a debt, the liable person is the recipient;

the fact that the recipient may later deal with the remainder of the indemnity in accordance with subsection 34ZZW(3) or (4) does not mean that the overpayment should instead have been recovered from the practitioner.

Subdivision D - Payments that would have reduced the amount paid out under the contract of insurance

34ZZY Amounts paid before payment of allied health exceptional claims indemnity

(1) If:

(a) an amount (the insurance payment ) has been paid under a contract of insurance that provides medical indemnity cover for a person (the practitioner ) in relation to a liability of the practitioner; and

(b) another amount (not being an amount referred to in subsection (2)) has been paid to the practitioner, the insurer or another person in relation to the incident or incidents to which the liability relates; and

(c) the other amount was not taken into account in working out the amount of the insurance payment; and

(d) if the other amount had been taken into account in working out the amount of the insurance payment, a lesser amount would have been paid under the contract of insurance in relation to the liability;

then, for the purpose of calculating the amount of allied health exceptional claims indemnity (if any) that is payable in relation to a liability of the practitioner, the lesser amount is taken to have been the amount of the insurance payment.

(2) This section does not apply to any of the following:

(a) an amount paid to an insurer by another insurer under a right of contribution;

(b) a payment of allied health high cost claim indemnity;

(c) an amount of a kind specified in the rules for the purposes of this paragraph.

34ZZZ Amounts paid after payment of allied health exceptional claims indemnity

(1) This section applies if:

(a) an amount (the actual indemnity amount ) of allied health exceptional claims indemnity has been paid in relation to a qualifying allied health liability that relates to a claim made against a person (the practitioner ); and

(b) another amount (not being an amount referred to in subsection (5)) is paid to the practitioner, an insurer or another person in relation to the incident or incidents to which the claim relates, or in relation to one or more other incidents; and

(c) the other amount was not taken into account in calculating the actual indemnity amount; and

(d) if the other amount had been so taken into account, a lesser amount (the reduced indemnity amount , which could be zero) of allied health exceptional claims indemnity would have been paid in relation to the liability.

(2) The amount overpaid is the amount by which the actual indemnity amount exceeds the reduced indemnity amount.

(3) If the Chief Executive Medicare has given the liable person (see subsection 34ZZX(2)) a notice under subsection 34ZZZB(1) in relation to the amount overpaid, the amount is a debt owed to the Commonwealth by the liable person.

Note 1: If the indemnity is or was not dealt with in accordance with whichever of subsections 34ZZW(3) and (4) applies by the time required by subsection 34ZZW(5), the whole amount of the indemnity is a debt owed by the recipient, and no amount is recoverable under this section (see subsections 34ZZW(6) to (8)).

Note 2: If:

(a) the recipient and the practitioner referred to in subsection 34ZZW(1) are not the same person; and

(b) the practitioner becomes the liable person;

then (subject to subsection 34ZZX(3)), the recipient ceases to be the liable person, and the amount overpaid must instead be recovered from the practitioner.

(4) The amount overpaid may be recovered:

(a) by action by the Chief Executive Medicare against the liable person in a court of competent jurisdiction; or

(b) under section 42.

(5) This section does not apply to any of the following:

(a) an amount paid to an insurer by another insurer under a right of contribution;

(b) a payment of allied health high cost claim indemnity;

(c) an amount of a kind specified in the rules for the purposes of this paragraph.

34ZZZA Obligation to notify the Chief Executive Medicare that amount has been paid

(1) If:

(a) an amount of allied health exceptional claims indemnity has been paid in relation to a qualifying allied health liability that relates to a claim made against a person (the practitioner ); and

(b) the person (the applicant ) who applied for the allied health exceptional claims indemnity becomes aware that another amount has been paid to the practitioner, an insurer or another person in relation to the incident or incidents to which the claim relates, or in relation to one or more other incidents; and

(c) because of the payment of the other amount, there is an amount overpaid as described in subsection 34ZZZ(2);

the applicant must notify the Chief Executive Medicare that the other amount has been paid.

Note: Failure to notify is an offence (see section 46).

(2) The notification must:

(a) be in writing; and

(b) be given to the Chief Executive Medicare within 28 days after the applicant becomes aware that the other amount has been paid.

34ZZZB The Chief Executive Medicare to notify of amount of debt due

(1) If:

(a) an amount of allied health exceptional claims indemnity has been paid in relation to a qualifying allied health liability that relates to a claim made against a person (the practitioner ); and

(b) another amount is paid to the practitioner, an insurer or another person in relation to the incident or incidents to which the claim relates, or in relation to one or more other incidents; and

(c) because of the payment of the other amount, there is an amount overpaid as described in subsection 34ZZZ(2);

the Chief Executive Medicare may give the liable person (see subsection 34ZZX(2)) a written notice that specifies:

(d) the amount overpaid, and that it is a debt owed to the Commonwealth under subsection 34ZZZ(3); and

(e) the day before which the amount must be paid to the Commonwealth; and

(f) the effect of section 34ZZZC.

The day specified under paragraph (e) must be at least 28 days after the day on which the notice is given.

(2) The debt becomes due and payable on the day specified under paragraph (1)(e).

34ZZZC Penalty imposed if an amount is repaid late

(1) If:

(a) a person owes a debt to the Commonwealth under subsection 34ZZZ(3); and

(b) the debt remains wholly or partly unpaid after it becomes due and payable;

the person is liable to pay a late payment penalty under this section.

(2) The late payment penalty is calculated:

(a) at the rate specified in the rules for the purposes of this paragraph; and

(b) on the unpaid amount; and

(c) for the period:

(i) starting when the amount becomes due and payable; and

(ii) ending when the amount, and the penalty payable under this section in relation to the amount, have been paid in full.

(3) The Chief Executive Medicare may remit the whole or a part of an amount of late payment penalty if the Chief Executive Medicare considers that there are good reasons for doing so.

(4) Applications may be made to the Administrative Appeals Tribunal for review of decisions of the Chief Executive Medicare not to remit, or to remit only part of, an amount of late payment penalty.

Note: Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable.

(5) If:

(a) the recipient and the practitioner referred to in subsection 34ZZW(1) are not the same person; and

(b) the practitioner becomes the liable person; and

(c) the recipient has or had a liability under this section to pay late payment penalty;

the recipient's liability to the late payment penalty is not affected by the fact that the recipient is no longer the person who owes the debt to the Commonwealth under subsection 34ZZZ(3), except that the period referred to in paragraph (2)(c) of this section ends when the practitioner becomes the liable person.

Subdivision E - Regulations may provide for payments

34ZZZD Regulations may provide for payments in relation to allied health exceptional claims

(1) The regulations may provide in relation to making payments to eligible insurers of claim handling fees, and payments on account of legal, administrative or other costs incurred by eligible insurers (whether on their own behalf or otherwise), in respect of claims in relation to which qualifying allied health claim certificates have been issued.

(2) Without limiting subsection (1), the regulations may:

(a) make provision for:

(i) the conditions that must be satisfied for an amount to be payable to an eligible insurer; and

(ii) the amount that is payable; and

(iii) the conditions that must be complied with by an eligible insurer to which an amount is paid; and

(iv) other matters related to the making of payments, and the recovery of overpayments; and

(b) provide that this Division applies with specified modifications in relation to a liability that relates to costs in relation to which an amount has been paid under regulations made for the purposes of this section; and

(c) make provision for making payments on account of legal, administrative or other costs incurred by eligible insurers (whether on their own behalf or otherwise), in respect of incidents notified to eligible insurers that could give rise to claims in relation to which an allied health exceptional claims indemnity could be payable.

(3) Paragraph (2)(b) does not allow the regulations to modify a provision that creates an offence, or that imposes an obligation which, if contravened, constitutes an offence.

(4) It does not matter for the purposes of paragraph (2)(c) whether claims are subsequently made in relation to the incidents referred to in that paragraph.

34ZZZE The Chief Executive Medicare may request information

(1) If the Chief Executive Medicare believes that a person is capable of giving information that is relevant to determining:

(a) whether an insurer is entitled to a payment under regulations made for the purposes of section 34ZZZD; or

(b) the amount that is payable to an insurer under regulations made for the purposes of section 34ZZZD;

the Chief Executive Medicare may request the person to give the Chief Executive Medicare the information.

Note: Failure to comply with the request is an offence (see section 45).

(2) Without limiting subsection (1), any of the following persons may be requested to give information under that subsection:

(a) an MDO;

(b) an eligible insurer;

(c) a member or former member of an MDO;

(d) a person who practises, or used to practise, an allied health profession;

(e) a person who is acting, or has acted, on behalf of a person covered by paragraph (d);

(f) a legal personal representative of a person covered by paragraph (c), (d) or (e).

(3) Without limiting subsection (1), if the information sought by the Chief Executive Medicare is information relating to a matter in relation to which a person is required by section 39 to keep a record, the Chief Executive Medicare may request the person to give the information by giving the Chief Executive Medicare the record, or a copy of the record.

(4) The request:

(a) must be made in writing; and

(b) must state what information must be given to the Chief Executive Medicare; and

(c) may require the information to be verified by statutory declaration; and

(d) must specify a day on or before which the information must be given; and

(e) must contain a statement to the effect that a failure to comply with the request is an offence.

The day specified under paragraph (d) must be at least 28 days after the day on which the request was made.

Subdivision F - Miscellaneous

34ZZZF Modifications and exclusions

(1) The regulations may provide that this Division applies with specified modifications in relation to:

(a) a specified class of claims; or

(b) a specified class of contracts of insurance; or

(c) a specified class of situations in which a liability is, whether wholly or partly, covered by more than one contract of insurance.

Note: For the capacity for rules to exclude claims and contracts of insurance, see paragraphs 34ZZK(1)(i) and (j).

(2) The regulations may provide that this Division does not apply, or applies with specified modifications, in relation to a specified class of liabilities or payments.

(3) Without limiting subsection (2), the regulations may specify modifications regarding how this Division applies in relation to a liability under an order of a court requiring an amount to be paid pending the outcome of an appeal, including modifications:

(a) to count the liability as a qualifying allied health liability (even though subparagraph 34ZZS(a)(i) may not be satisfied in relation to the order); and

(b) to deal with what happens if, as a result of the appeal or another appeal, the amount paid later becomes wholly or partly repayable; and

(c) to deal with what happens if the amount paid is later applied towards a liability that is confirmed as a result of the appeal or another appeal.

(4) This section does not allow the regulations to modify a provision that creates an offence, or that imposes an obligation which, if contravened, constitutes an offence.