EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Medical Indemnity (Prudential Supervision and Product Standards) Act 2003
Determination made under paragraph 26D(2)(b)(iii)
Medical Indemnity (Prudential Supervision and Product Standards – Notice of Provision of Run-Off Cover) Determination 2007
1 The Determination to which this explanatory statement relates
This explanatory statement relates to the Determination made under paragraph 26D(2)(b)(iii) of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 (the Act) which commences on the day after it is registered.
2 Purpose of the Determination
The purpose of the Determination is to set out other matters to be provided to Medicare Australia in a written notice by insurers, in addition to the information required in paragraph 26D(2)(b)(i) and (ii) of the Act.
3 Background
The Run-off Cover Scheme (ROCS) was developed to address concerns about the ability of doctors to pay for run-off cover when they ceased practice and no longer earned an income.
The ROCS covers claims for medical indemnity made by eligible practitioners for incidents in their medical practice that occurred while they had medical indemnity cover and which were covered by their last medical indemnity cover.
Insurers are required to provide cover under the ROCS (under sections 26A and 26C of the Act) to doctors who meet the eligibility criteria of the scheme (as set out in sub-section 34ZB(2) of the Medical Indemnity Act 2002).
Information gathered under this instrument will be used by the Australian Government in the management of this scheme and in the annual preparation of the reports on this scheme which the minister is required to table in Parliament under section 34ZW of the Medical Indemnity Act 2002.
Medicare Australia has developed a ROCS Data Transmission Format (DTF) document. This document describes all of the required ROCS data to be transmitted from the insurers to Medicare Australia. It contains instructions and technical information in order for the data to be accepted through the Medicare Australia gateway to their database. The purpose of the Determination is not to replace the DTF nor is it intended to provide the same level of detail as the DTF. The Determination simply defines in broad terms the information to be provided.
4 Consultation
In developing this Determination the medical indemnity industry, the Australian Government Actuary and Medicare Australia have been extensively consulted.
5 Information to be provided under the Determination
Sub-section 26D(2) of the Act requires insurers to give Medicare Australia a written notice stating the name of the doctor to whom they have provided cover under the ROCS; and the date on which this cover took effect.
This Determination describes a range of other matters which should also be provided to Medicare Australia by insurers in these written notices including:
- which of the eligibility criteria the doctor met (under sub-section 34ZB(2) of the Medical Indemnity Act 2002)
- general information about the doctor;
- the level of medical indemnity cover provided; and
- information about the doctor’s last three periods of insurance (before the insurer provided cover under sub-sections 26A(1)or 26C(1) of the Act).
6 Timing for the provision of information to Medicare Australia
Insurers should provide information to Medicare Australia within the notification period of 61 days starting on the day after the day on which the insurer provides cover to a doctor under sub-sections 26A(1) or 26C(1) of the Act.
The same insurer may provide cover to the same doctor under sub-sections 26A(1) or 26C(1) of the Act on more than one occasion in respect to different medical practice periods.
7 Details of Determination
Section 1 – Name of Determination
This section provides that the title of the Determination is the Medical Indemnity (Prudential Supervision and Product Standards – Notice of Provision of Run-Off Cover) Determination 2007.
Section 2 – Commencement
This section provides that the Determination will commence on the day after it is registered.
Section 3 – Definitions
This section establishes the definitions of words and expressions that are used within the Determination. Where a word or expression is common to the Determination and the Act, it has the same definition as given in the Act.
The definition of “written notice” has been defined to mean “electronic data transfer”. The intention is that data will be sent to Medicare Australia electronically as specified in the Data Transmission Format document
Section 4 – Notification of matters in relation to eligible practitioners
This section sets out the other matters that insurers should state in the written notice to be provided to Medicare Australia in addition to those listed in s 26D(2)(i) and (ii) of the Act.
Overview
The Medical Indemnity (Prudential Supervision and Product Standards – Notice of Provision of Run-Off Cover) Determination 2007 was enacted to provide further clarity and detail to the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003, specifically addressing the requirements for insurers to notify Medicare Australia about the provision of run-off cover to eligible practitioners. This legislation was introduced to address the gap in managing the financial risks associated with medical indemnity claims when doctors cease practice, ensuring that there is adequate cover for past incidents. The determination was made under the authority of the Minister for Health and Ageing, with the policy objective of enhancing the management and transparency of the Run-off Cover Scheme. The scheme itself was developed to safeguard the interests of both practitioners and patients by providing necessary cover when doctors no longer earn an income from their medical practice. Insurers are mandated to provide specific information to Medicare Australia, which will be used for the administration of the scheme and the preparation of annual reports as required by the Medical Indemnity Act 2002.
Scope and Application
The Medical Indemnity (Prudential Supervision and Product Standards – Notice of Provision of Run-Off Cover) Determination 2007 applies to insurers who provide run-off cover under the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003. Specifically, it mandates that these insurers must furnish Medicare Australia with certain specified information in a written notice, in addition to the details required under the Act. The information includes the name of the practitioner to whom the cover has been provided, the date the cover commenced, which eligibility criteria the practitioner met, general information about the practitioner, the level of medical indemnity cover provided, and information about the practitioner’s last three periods of insurance. The Determination is applicable across Australia and is intended to facilitate the management of the Run-off Cover Scheme by the Australian Government. The scheme is designed to ensure that eligible practitioners, particularly those who have ceased practice, are able to secure medical indemnity cover for incidents that occurred during their practice period. Insurers are required to submit this information within 61 days of providing the cover, and the data is expected to be transmitted electronically as per the ROCS Data Transmission Format document developed by Medicare Australia.
Key Provisions
The Medical Indemnity (Prudential Supervision and Product Standards – Notice of Provision of Run-Off Cover) Determination 2007 (the Determination) under section 26D(2)(b)(iii) of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 (the Act) outlines additional information insurers must provide to Medicare Australia regarding eligible practitioners under the Run-off Cover Scheme (ROCS). This Determination supplements the information required under sections 26D(2)(i) and (ii) of the Act. Specifically, insurers must include details such as which eligibility criteria the doctor met, general information about the doctor, the level of medical indemnity cover provided, and information about the doctor's last three periods of insurance (sections 4 and 5). Insurers are mandated to submit this information to Medicare Australia within 61 days of providing cover under sections 26A(1) or 26C(1) of the Act (section 6).
The Act imposes several obligations on insurers to ensure the effective administration of the ROCS. Primarily, insurers must provide a written notice to Medicare Australia within the stipulated 61-day period, detailing the specified information about the insured practitioners and their coverage. This includes identifying the eligibility criteria met by the practitioner, providing general practitioner information, detailing the level of indemnity cover, and including details of the practitioner's previous three insurance periods (section 4). Additionally, the Determination mandates that this notice should be in the form of an electronic data transfer, as outlined in the ROCS Data Transmission Format document (section 3). Failure to comply with these obligations could potentially undermine the management and oversight of the ROCS by Medicare Australia.
The Determination does not explicitly state penalties or consequences for non-compliance with the provisions. However, given the statutory context of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 and the Medical Indemnity Act 2002, non-compliance with obligations to provide timely and accurate information could lead to enforcement actions. These might include administrative penalties, legal proceedings, or other regulatory measures aimed at ensuring compliance with the Act's requirements. The precise nature and extent of penalties would depend on the specific provisions of the overarching legislation and the discretion of the relevant authorities in enforcing the Act.