House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Health, the Hon Greg Hunt MP)

OUTLINE

The Australian Government's Medical Indemnity and Midwife framework is designed to promote stability in the medical indemnity insurance industry, keep premiums affordable for privately practising medical practitioners, and ensure availability of affordable professional indemnity insurance for eligible midwives. Collectively, these schemes are known as the Indemnity Insurance Fund (IIF).

The Medical and Midwife Indemnity Legislation Amendment Bill 2019 (the Bill) gives effect to the Government's commitment in the 2018-19 Mid-Year Economic and Fiscal Outlook (MYEFO) to maintaining and improving the IIF, supporting the long-term stability and affordability of medical indemnity premiums for medical practitioners, while ensuring health care quality, patient safety and the sustainability of the overall medical system.

As announced in the 2018-19 MYEFO, the Australian Government agreed to work with industry and practitioner groups on implementing the recommendations arising from the 2018 Australian Government First Principles Review ^[1] (FPR) of the IIF to improve the Government's support for medical and health care professional indemnity arrangements. This includes improved administration, simplifying eligibility and claim requirements for the Midwife Professional Indemnity Scheme (MPIS) and for eligible practising health practitioners.

The Bill amends the Medical Indemnity Act 2002 , the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 and the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 to:

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simplify the current legislative structure underpinning the Government's support for medical indemnity insurance;

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repeal redundant legislation;

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remove the existing contract requirements for the Premium Support Scheme (PSS) and incorporate the necessary requirements in legislation;

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require all medical indemnity insurers to provide universal cover to medical practitioners;

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maintain support for high cost claims and exceptional claims made against allied health professionals and enable exceptional cost claims to be made, which is provided for in a separate scheme to medical practitioners;

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support high cost claims and exceptional cost claims made against private sector employee midwives not covered under the MPIS;

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clarify eligibility for the Run-off Cover Schemes (ROCS) and permit access for medical practitioners and eligible midwives retiring before the age of 65;

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cause an actuarial assessment to report on the stability and affordability of Australia's medical indemnity market, with the report to be laid before each House of Parliament; and

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streamline reporting obligations and improve the capacity for monitoring and information sharing.

The amendments reflect the Australian Government's commitment to contribute towards the availability of medical services in Australia by providing Commonwealth financial assistance to support affordable access by medical practitioners and allied health professionals (including eligible midwives) to arrangements that indemnify them for claims arising in relation to their practice of their medical and allied health professions.

The Bill contains important measures that will deliver a level playing field, by ensuring that all insurers accessing the medical indemnity schemes are subject to the same requirements including the obligation to provide indemnity cover to any medical practitioner who requires insurance in line with universal cover provisions.

The PSS is currently administered under contractual arrangements between the Commonwealth and four medical indemnity insurers. Universal cover arrangements enabling all eligible medical practitioners to access indemnity insurance are currently encompassed under the PSS. The Bill provides for PSS and universal cover obligations to be embedded in legislation. In this way, universal cover obligations will apply to all medical indemnity insurers, providing additional security to medical practitioners.

FINANCIAL IMPACT

The legislative changes have nil financial impact.