Medical Indemnity Amendment Regulations 2003 (No. 1) 2003 No. 250
Explanatory Statement
Statutory Rules 2003 No. 250
Medical Indemnity Amendment Regulations 2003 (No. 1)
On 23 October 2002, the Government announced a new framework for medical indemnity. The purpose of the framework was to address rising medical indemnity insurance premiums and ensure a viable and ongoing medical indemnity insurance market. The Incurred But Not Reported Liabilities (IBNR) Scheme (the IBNR Scheme) is one of the elements of the new framework.
Under the IBNR Scheme the Government is funding the incurred but not reported liabilities of those medical defence organisations that have not set aside sufficient money to cover these liabilities. The cost of that funding is to be recouped, over an extended period, through contributions by those persons who on 30 June 2000 were members of a medical defence organisation participating in the scheme.
To ensure affordability of the IBNR indemnity contribution, on 3 October 2003 the Government announced further exemptions for all doctors aged over 65 and doctors who die or become incapacitated before 65.
Subsection 79(1) of the Medical Indemnity Act 2002 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Subsection 52(4) of the Act allows regulations to provide that a person is exempt from an IBNR indemnity contribution in circumstances specified in the regulations.
Paragraph 61(1)(b) of the Act allows regulations to alter the date on which IBNR indemnity contributions become payable (the payment day), which is otherwise 1 November in the relevant contribution year.
The purpose of the Regulations is to give effect to the Government's announcement of 3 October 2003 by providing further exemptions for persons participating in the IBNR scheme under subsection 52(4) of the Act and by altering the payment day to 1 February 2004 for the 2003-04 contribution year. Moving the payment date is necessary in order to allow time for the passage of related amendments to the Act.
Details of the regulations are set out in the Attachment.
The Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.
The Regulations would be taken to have commenced on 15 August 2003, to ensure that the new exemptions apply from the date of the existing exemptions in the Medical Indemnity Regulations 2003. Subsection 48(2) of the Acts Interpretation Act 1901 provides that regulations made with retrospective effect have no effect if the rights of a person (other than the Commonwealth) would be disadvantaged, or liabilities would be imposed on such a person in respect of anything done or admitted to be done prior to commencement. As the Regulations would not disadvantage any members participating in the scheme they may be validly made with retrospective effect.
Details of the Medical Indemnity Amendment Regulations 2003 (No. 1)
Regulation 1 provides that the name of the regulations will be the Medical Indemnity Amendment Regulations 2003 (No. 1).
Regulation 2 provides for the regulations to commence on 15 August 2003.
Regulation 3 provides for these Regulations to amend the Medical Indemnity Regulations 2003.
Amendment [1] amends Regulation 8 in the Medical Indemnity Regulations 2003 to exempt from IBNR indemnity contributions all doctors and health professionals who turn 65 in a contribution year. To be eligible for this exemption the person must provide the Health Insurance Commission (HIC) with a statutory declaration or certified copy of a birth certificate 15 days before the payment date stating when the person turned, or will turn, 65.
Regulation 8A exempts members that would be participating in the IBNR Scheme, but have become disabled. To be eligible for this exemption a person must have a physical, intellectual, psychiatric or sensory impairment during the relevant contribution year. For a person to meet this exemption the person must have an impairment as assessed under the impairment tables in the Social Security Act 1991 (impairment must equal or exceed 20 points) and satisfy the HIC that they have a continuing inability to work in a medical profession because of the impairment.
Regulation 8B provides an exemption for persons who die on or after the imposition day. To prove this exemption a statutory declaration or copy of the death certificate must be provided to the HIC by the person's legal personal representative.
Regulation 8C moves the payment date for IBNR indemnity contributions to 1 February 2004 for the 2003-04 contribution year.
Overview
The Medical Indemnity Amendment Regulations 2003 (No. 1) were enacted to give effect to the Australian Government's announcement on 3 October 2003, which aimed to address the rising medical indemnity insurance premiums and ensure a viable medical indemnity insurance market. This was achieved through the Incurred But Not Reported Liabilities (IBNR) Scheme, where the Government funds the liabilities of medical defence organisations that have not set aside sufficient money to cover these liabilities. The regulations further extended the exemptions for doctors aged over 65 and those who die or become incapacitated before 65 to ensure affordability of the IBNR indemnity contribution. These regulations were made under the authority of the Medical Indemnity Act 2002, which was enacted by the Australian Parliament. The policy objective of these regulations is to provide further exemptions for persons participating in the IBNR scheme and to alter the payment date for IBNR indemnity contributions to 1 February 2004 for the 2003-04 contribution year, to allow time for the passage of related amendments to the Act.
Scope and Application
The Medical Indemnity Amendment Regulations 2003 (No. 1) provides a framework for implementing further exemptions and a modified payment schedule under the IBNR Scheme, which is part of the broader medical indemnity insurance market in Australia. The Act applies to individuals who were members of a medical defence organisation participating in the IBNR scheme as of 30 June 2000, specifically targeting those who were previously subject to IBNR indemnity contributions. The regulations aim to exempt certain individuals from these contributions, including those who turn 65, become disabled, or pass away, while also adjusting the payment date for contributions to 1 February 2004 for the 2003-04 contribution year. The geographic reach of these regulations is national, applying across Australia as they are part of the federal legislative framework. Exemptions are subject to specific conditions, such as providing appropriate documentation to the Health Insurance Commission. The Regulations can be extended or restricted through subordinate instruments, as authorised by the Medical Indemnity Act 2002.
Key Provisions
The Medical Indemnity Amendment Regulations 2003 (No. 1) (the Regulations) implement specific provisions of the Medical Indemnity Act 2002 (the Act) to address rising medical indemnity insurance premiums. The key sections include Regulation 8, which exempts certain individuals from Incurred But Not Reported (IBNR) indemnity contributions, and Regulation 8C, which alters the payment date for such contributions. Regulation 8 provides exemptions for doctors and health professionals who turn 65 in the contribution year, those who become disabled during the year, and those who die on or after the imposition day. These exemptions require eligible individuals to provide specific documentation to the Health Insurance Commission (HIC) to substantiate their claims (Section 8). Regulation 8A specifies that to be eligible for the disability exemption, a person must have an impairment assessed under the impairment tables in the Social Security Act 1991 that equals or exceeds 20 points and must satisfy the HIC that they have a continuing inability to work in a medical profession due to their impairment. Regulation 8B requires proof of death through a statutory declaration or death certificate, which must be submitted to the HIC by the person's legal personal representative.
The Regulations impose specific obligations on the parties involved. Doctors and health professionals who turn 65 during the contribution year, those who become disabled, or those who die on or after the imposition date must provide the HIC with the necessary documentation within the specified timeframes to avail of the exemptions. The HIC is responsible for assessing the provided documentation and determining eligibility for the exemptions. Additionally, all individuals who were members of a medical defence organisation participating in the IBNR scheme on 30 June 2000 must contribute to IBNR indemnity unless they meet the exemption criteria outlined in the Regulations. The payment date for IBNR indemnity contributions is now moved to 1 February 2004 for the 2003-04 contribution year as per Regulation 8C.
Breach of the obligations set out in the Regulations may result in civil or administrative consequences. For instance, if an individual fails to provide the required documentation to the HIC within the specified timeframe, they may not be eligible for the exemptions and will be required to contribute to IBNR indemnity as per the original schedule. The Act does not specify any criminal penalties for breach of the Regulations. However, the failure to comply with the documentation requirements or other obligations could lead to disputes or administrative actions taken by the HIC. The Regulations ensure that the new exemptions apply from the same date as the existing exemptions to maintain fairness and consistency within the IBNR scheme.