Explanatory Statement
Issued by the Authority of the Minister for Health and Ageing
Medical Indemnity Act 2002
Premium Support (Medical Indemnity Provider) Scheme 2006
Background
On 23 October 2002, the Australian Government announced a new framework for medical indemnity. The purpose of this new framework was to address rising medical indemnity insurance premiums and ensure a viable and ongoing medical indemnity insurance market.
At that time, the Minister for Health and Ageing also announced that no doctor would receive less support under the new arrangements than they were already receiving under the former framework.
The Premium Support Scheme 2004 (the PSS) is part of that new framework. It replaced the current subsidy arrangements under the Medical Indemnity Subsidy Scheme 2003 (the MISS) and makes premiums more affordable for a wider range of medical practitioners.
However, some doctors who received MISS payments are not eligible under the PSS.
Section 43 of the Medical Indemnity Act 2002 (the Act) was amended in 2005 to refer to 'medical indemnity providers', rather than 'medical indemnity insurers' to allow for schemes to be made under section 43 of the Act in relation to medical indemnity providers that are not medical indemnity insurers as defined in the Act.
The Victorian Managed Insurance Authority (VMIA) established under the Victorian Managed Insurance Authority Act 1996 (Vic) is one such medical indemnity provider.
. This Scheme ensures that doctors insured by VMIA who would otherwise be eligible under the PSS are able to receive subsidies will not receive less support than previously under the PSS, thereby ensuring they are not worse off under the new PSS arrangements.
VMIA operates on a claims-incurred basis and offers a retail-style product, the Rural General Practitioners Insurance Program. This insurance is available to private doctors who have admitting rights in designated Victorian rural public hospitals.
Objective
Under the MISS eligibility guidelines, doctors insured with VMIA were able to obtain subsidies under the MISS. As a consequence of the Australian Government’s policy position that ‘no MISS participant would receive less support under the PSS’, a scheme to give these doctors eligibility is required.
VMIA is not a medical indemnity insurer as defined under section 12 of the Act, which means that it cannot receive subsidies on behalf of its eligible members under the PSS. Accordingly, establishment of a scheme parallel to the Premium Support Scheme 2004 is required.
The Premium Support (Medical Indemnity Provider) Scheme 2006 (the Scheme) specifically allows doctors covered by organisations (referred to as medical indemnity providers) that are not medical indemnity insurers (as defined) but provide medical indemnity cover to be eligible to receive subsidies through their organisation similar to other doctors. The Scheme will allow the Australian Government to enter into a contract with VMIA for the purpose of delivering eligible PSS payments to eligible VMIA doctors.
The Scheme will allow subsidies for medical indemnity cover from 1 July 2004 (the same date as under the PSS) to ensure that eligible doctors insured with VMIA are not disadvantaged.
The Scheme mirrors the PSS other than where provisions are not appropriate to VMIA or their doctors.
Consultation
VMIA and Medicare Australia have been consulted on several occasions on progress towards the development of the Scheme.
NOTES ON SECTIONS
Part 1 Preliminary
Section 1 – Name of Scheme
This section sets out the title of the Scheme, being the Premium Support Scheme (Medical Indemnity Provider) Scheme 2006.
Section 2 - Commencement
This section provides that the Scheme commences on the day after it is registered. However, the Scheme relates to payments for premiums made from 1 January 2004. This is permitted by item 21 of Schedule 3 of the Medical Indemnity Legislation Amendment Act 2005.
Section 3 – The Scheme
This section describes the purpose of the Scheme.
Section 4 – Definitions
This section explains that the general list of definitions for the Scheme is at Part 10.
The Scheme refers to a 'medical practitioner'. This term is defined to include only certain rural general practitioners who have a contract of insurance with VMIA and who have a MISS entitlement. A 'member with a MISS entitlement' is defined in section 12 of the Scheme.
Section 5 - Approved manner and timeframes
A key feature of the Scheme is that it applies only where the Commonwealth (represented by the Department of Health and Ageing and Medicare Australia) and the medical indemnity provider have entered into a services contract (the PSS contract) for the purposes of the Scheme.
This section provides that, where the Scheme requires something to be done in a manner and within a timeframe approved by the Medicare Australia CEO or the Secretary of the Department of Health and Ageing (such as making an application in a form or any other manner approved by the Medicare Australia CEO or the Secretary) and the PSS contract specifies the manner and timeframe for the doing of that thing, then the requirement in the PSS contract is taken to be the manner or the timeframe approved by the Medicare Australia CEO or the Secretary.
Section 6 - Premium period
The premium period will be specified in the contract for the medical indemnity provider and will be either a calendar year or financial year, depending on which is used by the provider.
This section makes it clear that the premium period includes a part of a premium period where the context of the provision permits this. For example, if a medical practitioner is eligible for a subsidy in one category for six months of the year and in another for the next six months, the subsidy is determined for each of those periods and the total subsidy for the whole premium period is the total of the two amounts.
Part 2 - PSS contract
Section 7 - The Commonwealth may enter into contracts
Subsection 7(1) provides that the Commonwealth may enter into a contract with a medical indemnity provider for the purposes of the Scheme.
Subsection 7(2) provides that if a contract is executed before this Scheme comes into operation, it is taken to have been entered into under subsection 7(1), but no payments can be made until this Scheme commences.
Subsection 7(3) makes it clear that the PSS contract can be amended by the parties.
Section 8 - Matters to be included in PSS contracts
This section requires certain matters to be included in the PSS contract, but references to those matters do not limit the matters that may be included in the PSS contract.
Section 9 - Inconsistent obligations
This section provides that if there is an inconsistency between the Act or the Scheme and an obligation under the PSS contract, the obligation under the PSS contract is not to be complied with. Such non-compliance does not affect any other rights or obligations under the PSS contract.
Section 10 - Accrued rights and obligations
This section makes it clear that any rights or obligations that have accrued when the PSS contract is in force continue when the contract is terminated or expires. This provision links with section 39, which deals with former medical indemnity providers and the obligation to reconcile amounts paid when the contract was in force.
Part 3 - Eligible medical practitioners
This Part sets out the terms for eligibility of a medical practitioner (as defined in Part 10) for a subsidy to be paid on the medical practitioner’s behalf to the medical practitioner’s contracted medical indemnity provider (defined in Part 10 to be VMIA) and the conditions with which the medical practitioner must comply to be eligible for a subsidy to be paid on his or her behalf.
Section 11 - Eligibility for subsidy to be paid on behalf of medical practitioners
This section provides that, subject to the other provisions of the Scheme, a medical practitioner who is an ‘eligible member’, as defined in section 12, and complies with the conditions in section 13 (if they are applicable to the member at the time an application for subsidy is made) is eligible for a subsidy to be paid on his or her behalf.
This section also makes clear that subsidies will not be paid directly to a medical practitioner where there is no PSS contract, except for accrued amounts, or where the contracted medical indemnity provider has not complied with the conditions under the Scheme or the PSS contract.
Subsection 11(3) deals with the situation where a medical practitioner changes medical indemnity provider or insurer in the premium period. If the first medical indemnity provider or insurer has been paid a subsidy on behalf of that medical practitioner for the premium period, the medical practitioner is not eligible for any other subsidy for that period until the medical practitioner has repaid the amount of the subsidy to the first medical indemnity provider or insurer and the first medical indemnity provider or insurer has repaid the amount of the subsidy to the Medicare Australia CEO.
Subsection 11(4) sets out that medical practitioners are not eligible for a payment of subsidy on their behalf in respect of a premium period, or any future premium period, in circumstances where they have failed to pay a UMP support payment within 2 months of the payment date (or such later date as approved under paragraph 13(2)(b)) or any deferred payment date.
Under the Scheme, a contracted medical indemnity provider may be required to repay an amount of a subsidy paid on behalf of a medical practitioner. Subsection 11(5) provides that the medical practitioner is not eligible for a subsidy at any time that the medical practitioner has not repaid to the contracted medical indemnity provider any amount that the contracted medical indemnity provider has repaid, or is required to repay, to the Medicare Australia CEO on behalf of that medical practitioner.
However, if the medical practitioner repays the amount, the medical practitioner is then eligible for a subsidy for the next premium period following the payment.
Subsection 11(6) provides that if a medical practitioner has received a payment under the MISS, the practitioner cannot receive a subsidy under the Scheme for the same period of insurance covered by the MISS payment, except as provided for in section 20. Section 20 provides for top-up payments to medical practitioners who have received a MISS payment if the payment under the Scheme would be higher than the amount already received under the MISS.
Section 12 - Eligible members
This section sets out the basis on which a medical practitioner may be an ‘eligible member’ and therefore entitled to a subsidy if the other provisions of the Scheme are complied with by the medical practitioner and the contracted medical indemnity provider.
A ‘member’ is defined as a medical practitioner who has a contract of insurance with VMIA. Only a member with a MISS entitlement for a premium period is able to be an 'eligible member'. Eligible members are entitled to a subsidy in one of the categories referred to below. The result is that all eligible members must be members with a MISS entitlement, but the different categories of eligibility affect the way their subsidy is calculated. Generally, an eligible member is entitled to the higher amount calculated under one of the categories.
There are three categories of eligible members:
(a) a member whose ‘gross indemnity costs’ for a premium period exceed 7.5% of the member’s actual income (determined under Part 4) or, where a calculation is being made of an advance subsidy under Part 5, 7.5% of the member’s estimated income;
(b) a procedural general practitioner practising in a rural area;
(c) a member with a MISS entitlement. This is a medical practitioner who received a subsidy under the MISS. The medical practitioner must be practising in the same speciality which qualified him or her for the MISS subsidy at that time. For medical practitioners on maternity leave or other leave for 12 months or less, they will continue to have a MISS entitlement if they resume practising in the same speciality within that 12 months.
Section 12A – Medical practice outside Australia
This section relates to medical practice outside Australia. Some medical practitioners who are registered as medical practitioners in Australia also practise overseas. In some circumstances these doctors have a contract of insurance with an Australian medical indemnity medical indemnity provider which provides medical indemnity cover for that overseas medical practice.
An object of the Act is to contribute towards the availability of medical services in Australia (see subsection 3(1)).
Amendments to the Act have allowed assistance to be provided for limited overseas medical practice, such as where the medical practitioner is to provide medical services to Australians on a sporting, cultural or official tour or for aid work. However, the Scheme in not intended to provide assistance to doctors who spend significant periods of time practising overseas.
Section 13 – Conditions for medical practitioners
Subsection 13(1) sets out the conditions with which a member must comply to be eligible for a subsidy to be paid on his or her behalf. These include that:
(a) the member agrees that the contracted medical indemnity provider is to receive payments, if any, under the Scheme on his or her behalf;
(b) the member provides information to the contracted medical indemnity provider or the Medicare Australia CEO as required;
(c) if the member has a liability to make a UMP support payment under the Act, which has not been deferred, the member has paid that amount not later than 2 months after the required payment day (or such later date as is approved under paragraph 13(2)(b));
(d) if the member has a liability to make a deferred UMP support payment under the Act, the member has paid that amount not later than 2 months after the deferred payment date;
(e) the member has paid to the contracted medical indemnity provider the premium less the amount of subsidy relating to that premium;
(f) the member has repaid to the contracted medical indemnity provider, on demand, the full amount of any subsidy that the contracted medical indemnity provider has been required to repay to the Medicare Australia CEO, on behalf of the member, in respect of any premium period;
(g) if the member’s contract of insurance requires the member to participate in a risk-management program, the member has done so or undertaken to do so and completes the program as required.
Subsection 13(2) makes the date specified for payment of the UMP support payment, for the purpose of paragraph 13(1)(c), two months after the payment date or a later date approved by the Medicare Australia CEO, but the Medicare Australia CEO can approve a later date only if satisfied that the late payment was due to circumstances beyond the doctor's control. The later date must not be later than 12 months after the relevant premium period if the relevant premium period is after the commencement of the Scheme. This takes account that VMIA doctors can receive payments backdated to 1 January 2004.
Subsection 13(3) provides that the Medicare Australia CEO may require the doctor to provide a statutory declaration setting out the reasons why the payment was not made by the date specified in paragraph 13(2)(a). Medicare Australia may be unable to be satisfied that the late payment was genuinely beyond the doctor's control if the doctor does not provide the statutory declaration.
Section 13A
Medicare Australia is concerned that in some instances it has not been provided with accurate information on the membership status of doctors, with the result that a number of doctors (the affected members) have not been notified of their liability to pay a UMP support payment for previous premium periods. Under medical indemnity legislation the liability to pay a UMP support payment is imposed automatically.
The affected members therefore incurred a liability to pay UMP support payment under the legislation, but did not pay the UMP support payment within the statutory timeframe because they were not aware of their statutory liability. A failure to pay UMP support payment would have an effect under the Scheme because payment of subsidy under the Scheme is dependent on payment of UMP support payment in the timeframe set by the Scheme. That is, the effect of subsection 11(4) and paragraphs 13(1)(c) and (d) of the Scheme is that if members have not paid their UMP support payment for those premium periods within the specified timeframes, they therefore would not be eligible to receive a subsidy under the Scheme.
It would be unfair for these doctors to be affected for eligibility under the Scheme when they did not know about their liability.
Section 13A takes account of this and ensures that affected members are not unfairly disadvantaged.
This section provides that subsection 11(4) and paragraph 13(1)(c) of the Scheme – which set the timeframes for payment of UMP support payment in order to be eligible for subsidy – are taken never to have applied to an affected member on or before the new payment day that is prescribed by the regulations. This is intended to ensure that affected members are not ineligible for subsidy under the Scheme for premium periods in which they did not pay their UMP support payment because they were not aware of their liability.
This section also provides that if, for a premium period, an affected member would have been entitled to a subsidy or a higher amount of subsidy had the member's UMP support payment been included in the member's gross indemnity costs, the member is entitled to adjust his or her gross indemnity costs for the premium period and be paid subsidy accordingly.
This section also provides that after a new payment day is prescribed, subsection 11(4) and paragraphs 13(1)(c) and (d) of the Scheme will apply. This means that if the affected members do not pay their UMP support payment within two months of the new payment day, then their eligibility for subsidy ceases in the ordinary way.
To the extent that this provision has retrospective effect, the provision is beneficial, as no person (other than the Commonwealth) will be disadvantaged under the provision. The provision is beneficial, as some affected members may receive a higher premium as a result of the new provision, and it will cause some affected members who were not previously eligible for a subsidy under the Scheme to become eligible.
Part 4 - Calculating the amount of subsidy
This Part specifies the calculations for determining the amount of subsidy for each of the categories of eligible member specified in section 12, special provisions as to calculating the amount and also includes the basis for determining ‘gross indemnity costs’ and a medical practitioner’s ‘actual income’.
Section 14 - PSS Calculation
This section contains the formula for the calculation of subsidy for members who are eligible under paragraph 12(1)(a).
Section 15 - Rural Calculation
Subsection 15(1) contains the formula for calculating the subsidy payable to a procedural general practitioner practising in a rural area.
Subsection (2) provides for circumstances where a rural procedural general practitioner (RPGP) also undertakes non-therapeutic cosmetic services, while continuing to perform services as a RPGP. The practitioner is required to purchase additional cover for these services, usually resulting in a substantial increase in premium for the remainder of the premium period.
The policy position is that the Australian Government should not subsidise (through the Scheme) any additional amount of premium that is charged by medical indemnity providers solely to cover the additional risks posed by non-therapeutic cosmetic services. The intention is not to exclude from the Scheme procedural general practitioners who provide predominantly non-therapeutic cosmetic services, but who also provide some therapeutic cosmetic procedures. However, to the extent that part of a procedural general practitioner's premium is paid solely to cover the additional risks posed by non-therapeutic cosmetic services, that part of the premium must not be included in the practitioner's 'premium' for the purposes of the 'rural calculation' in subsection 15(1).
An example of such an increase is where non-procedural general practitioners undertake additional training to become a procedural general practitioner specialising in non-therapeutic cosmetic treatment. The medical indemnity provider responds to this increased risk profile by increasing the practitioner's premium. That additional amount of premium is excluded from PSS coverage.
For clarity, a note is included in section 15:
Note Subsection (2) applies only to rural practitioners who come within the definition of procedural general practitioner, which excludes a practitioner whose procedural general practice involves only non-therapeutic cosmetic procedures. Under subsection (2) above, if a rural procedural general practitioner is required to pay a higher premium because he or she is performing solely non-therapeutic cosmetic procedures, the additional amount of premium is not included in the rural calculation.
Section 16
The Scheme is modelled on the PSS, but this provision is deleted as it is not applicable for VMIA doctors. However, the numbering is retained to allow section numbering to be consistent with the PSS for administrative convenience.
Section 17 - MISS Calculation
This section provides that for members with a MISS entitlement (i.e. those who received, or who had applied for and were found to be eligible to receive, a payment under the MISS at the time of its repeal from 30 June 2004), the amount of subsidy is to be calculated in accordance with the ‘MISS methodology’ contained in the Schedule to the Scheme.
The ‘MISS methodology’ is based on the calculations in the MISS (excluding IBNR payments as no medical practitioners were required to make these payments). The intent is that a medical practitioner with a MISS entitlement should not receive less assistance under the Scheme if they are still practising in the same speciality that entitled them to a payment under the MISS.
Section 18 - Amount of subsidy
This section sets out the amount of subsidy for each category, but this is subject to the other provisions of the Scheme.
A medical practitioner may be eligible in more than one category at the same time. If so, subsection 18(3) provides that the amount for that medical practitioner is the higher of the amounts calculated for each of the categories applying to the medical practitioner at the same time.
However, to be eligible, and remain eligible for the period, for a subsidy under the PSS calculation or rural calculation the medical practitioner must provide information on their ‘estimated income’ and ‘actual income’ to their medical indemnity provider in a specified timeframe. If a member with a MISS entitlement who would be entitled to a higher subsidy under one of the other categories does not provide this information as required, the member will be eligible only for the lesser amount under the MISS calculation (see section 22).
Subsection 18(4) makes it clear that an eligible member can receive a subsidy only in respect of one category at any one time during the premium period if they come within more than one of the categories of eligible member.
Subsection 18(5) makes it clear that if a member is paid a subsidy under this Scheme, then they are not eligible for a subsidy under the PSS in respect of the same premium period.
Section 19 - Calculation where change of circumstances in premium period
This section deals with changes in a medical practitioner’s circumstances during the premium period. If there are changes, the amount of subsidy must be recalculated for that period in accordance with Part 5 or Part 6.
If a medical practitioner changes categories during the premium period so that a different amount of subsidy is payable for parts of the premium period, then the amount of subsidy for the whole premium period is the sum of the amounts for each of the categories applying at the different times in the premium period. This ensures that the medical practitioner is not underpaid subsidy, or overpaid subsidy that must be repaid at a later date, in relation to any part of the premium period.
Section 20 - Calculation where a member has received a subsidy under the MISS
The Scheme provides for payments in respect of premiums for medical indemnity insurance from 1 January 2004. Some medical practitioners may receive a payment under the MISS, but also be eligible for an additional (top-up) payment under the PSS because the PSS may in some circumstances provide a higher level of subsidy than the MISS.
This section ensures that such medical practitioners do not receive double payments in respect of the same premium for the same period. However, if the calculation for the medical practitioner under the PSS is greater than the calculation under the MISS, then the medical practitioner is eligible for a top-up payment equivalent to the difference. This delivers on the Government's undertaking that no medical practitioner would receive less support under the PSS than the MISS.
Section 21 – Calculation for period 1 January to 30 June 2004
A contracted medical indemnity provider may operate on a financial year basis so that their contracts of insurance for the first premium period of the PSS will cover the financial year 2003-04. This section provides a simple means of calculating the subsidy payable for the period 1 January to 30 June 2004 by halving the estimated or actual income and the gross indemnity costs for the 12-month period of the financial year in accordance with the PSS contract.
Section 22 – Calculation for members with a MISS entitlement where actual income not provided
This section provides that, if a member with a MISS entitlement does not provide their contracted medical indemnity provider with information on their estimated income or actual income, the amount of subsidy payable is the amount payable under the MISS calculation only, even if they would be entitled to a higher amount under one of the other PSS calculations. This section is also necessary because the PSS calculation requires an estimate of income, and details of actual income, in order to determine whether the 7.5% threshold has been reached and, if so, the amount of subsidy payable under the PSS calculation in respect of that medical practitioner.
See the comments above dealing with subsection 18(3).
Section 23
The Scheme is modelled on the PSS, but this provision is deleted as it is not applicable for VMIA doctors. However, the numbering is retained to allow section numbering to be consistent with the PSS for administrative convenience.
Section 24 - Gross indemnity costs
‘Gross indemnity costs’ are used as the basis of the calculation of the amount of subsidy for medical practitioners under the PSS calculation and the special category calculation.
Gross indemnity costs include:
(a) the premium;
(b) UMP support payment (if any) required to be paid under the Act; and
(c) for a member other than a procedural general practitioner in a rural area, 50% of any risk surcharge (as defined) charged to the member, but the risk surcharge used for this calculation must not to exceed the risk surcharge cap – ie, the amount of the premium.
Subsection 24(1) makes it clear that some costs, such as GST and stamp duty, are not to be included for the calculation of gross indemnity costs.
In addition, the gross indemnity costs cannot take account of any insurance premiums for a medical practice (whether operated by a partnership or company) where the insurance policy primarily covers the actions of employees of the medical practice and not the actions of a medical practitioner.
Subsection 24(2) makes it clear that if the amount of gross indemnity costs changes, the amount of subsidy must be recalculated.
Section 25 - Actual income
This section provides for the matters that are taken into account in determining a medical practitioner’s ‘actual income’ for the purposes of the PSS calculation.
Part 5 - Advance subsidy
The purpose of the Scheme is to ensure that eligible members who received a subsidy under MISS in 2002 and 2003 do not receive less support under the PSS.
To do this, the subsidies under the PSS are paid on behalf of medical practitioners to their medical indemnity provider. The medical indemnity provider will supply the member with an invoice setting out matters such as the amount of the gross indemnity costs on which GST is payable by a member and the premium less the amount of the subsidy to be paid by the Medicare Australia CEO.
The medical practitioner is to pay to the medical indemnity provider the premium less the amount of the subsidy. Once this is paid, the Medicare Australia CEO will pay to the medical indemnity provider the amount of the subsidy. As this amount is paid at a time when not all relevant information is known (eg, the medical practitioner’s actual income may not be known until after the premium period or the medical practitioner may have failed to comply with a condition at some time during the premium period), the amount of advance subsidy may have to be adjusted during and after the premium period.
A reconciliation based on relevant information will be done under Part 6.
Section 26 – Application for advance subsidy
A medical indemnity provider can apply to the Medicare Australia CEO to be paid an advance subsidy to assist a member (a medical practitioner insured with the medical indemnity provider) with purchasing his or her medical indemnity insurance. The subsidies apply for premium periods (as defined), or parts of premium periods, beginning on 1 January 2004.
The application can be made at any time in the premium period or up to two months after the end of the premium period.
If an application has been made under section 32, an application for an advance subsidy cannot be made under this section in respect of the same member for the same period.
The application must be in a form or other manner approved by the Medicare Australia CEO. This provision links with section 5, so that if the PSS contract sets out how something is to be done, then that requirement in the contract is taken to be approved by the Medicare Australia CEO.
Under arrangements agreed with the medical indemnity provider and set out in the PSS contract, the applications may be by way of data-flows from the medical indemnity providers to Medicare Australia with readjustments made as circumstances change.
Section 27 – Payment of advance subsidy
This section sets out when a payment of an advance subsidy must be made. The payment must be made in the manner as specified in the PSS contract.
Subsection 27(2) provides that, if a medical indemnity provider calculates that a member is not eligible for an advance subsidy (and therefore does not make an application to Medicare Australia in respect of that member), that calculation is deemed to be a decision of Medicare Australia that no subsidy is payable under this Part. A medical practitioner can apply for an internal review of the deemed decision and, if still dissatisfied, the Administrative Appeals Tribunal (but the amount of premium is not reviewable) – see section 47 for review of decisions.
Section 28 – Adjustments of advance subsidy
This section provides for recalculations of amounts of subsidy paid if the medical practitioner’s circumstances change or if the subsidy was incorrectly paid. The recalculation may result in Medicare Australia having to pay an additional advance subsidy to the medical indemnity provider on behalf of the eligible member, or the medical indemnity provider having to repay an amount to the Medicare Australia CEO.
Subsection 28(4) provides that if an adjustment is to be made in the medical practitioner’s favour, then the amount to be paid is also a subsidy payable under the PSS.
Subsection 28(5) provides flexibility to the Medicare Australia CEO to determine when adjustments for subsidy can be made.
Section 29 - Reconciling amounts paid
This section requires that where an advance subsidy has been paid, the medical indemnity provider must make an application under Part 6 for a final determination by the Medicare Australia CEO of the calculation of the amount of subsidy relating to the relevant premium period for the eligible medical practitioner, taking account relevant information, including, where applicable, actual income, received by the member in the relevant period for which a subsidy was received.
Subsection 29(1) requires members (other than members with a MISS entitlement – see subsection 29(2)), within 12 months after the end of the premium period, to provide to the contracted medical indemnity provider a statutory declaration specifying their actual income for the premium period for which they received a subsidy.
Subsection 29(2) provides that where a member with a MISS entitlement does not provide the required statutory declaration, section 22 applies to that member in calculating the determination of the final subsidy – that is, they are entitled to the MISS calculation only, even if they would receive more under one of the other categories.
Subsection 29(3) ensures that where an advance subsidy has been paid to a contracted medical indemnity provider, the contracted medical indemnity provider must make an application under section 31 for a final determination, so that the Medicare Australia CEO can determine that the amount of advance subsidy paid was the correct amount and make any adjustments where necessary.
Section 30 - Failure to make application or provide information
If the contracted medical indemnity provider does not make an application under Part 6 for a final determination of an advance subsidy, as required by section 31, the amount of the advance subsidy is taken to have been incorrectly paid. This will be the case in circumstances where the contracted medical indemnity provider cannot make an application because the member has failed to provide the statutory declaration required under subsection 29(1).
Section 30 provides that any amount of subsidy incorrectly paid is recoverable by the Medicare Australia CEO as a debt due to the Commonwealth by the medical indemnity provider and that the member must pay the provider the full premium amount for that premium period (that is, including the amount of subsidy that otherwise would have been payable).
Part 6 - Final determination of subsidy
Section 31 – Application where advance subsidy paid
This section provides that, where an advance subsidy has been paid, an application for a final determination must be made to the Medicare Australia CEO.
If an application has not been made, or cannot be made under this section because the member has failed to provide a statutory declaration, the amount of the subsidy must be repaid in accordance with section 30.
Section 32 – Application where advance subsidy not paid
Where a contracted medical indemnity provider has not made an application for the payment of an advance subsidy, it can apply to the Medicare Australia CEO for a payment of subsidy under this section. This will be the case for the VMIA doctors for premium periods before the commencement of this Scheme.
An application for subsidy under this section can be made only where the member has provided a statutory declaration in relation to the member’s actual income for the premium period, but has not provided information on estimate income. This does not include a member with a MISS entitlement who has not provided this information. In that case, the member would not be entitled to any higher subsidy under one of the other categories of eligible members.
If a member with a MISS entitlement does not provide a statutory declaration for the purposes of an application under this section, then section 22 applies to that member when calculating the determination of final subsidy.
The section also sets out the timeframes for making an application.
Section 33 - Form of application
The application must be in a form or other manner approved by the Medicare Australia CEO. This provision links with section 5, so that if the PSS contract sets out how something is to be done, then that requirement in the contract is taken to be approved by the Medicare Australia CEO.
The application must include a statement that the amount of subsidy calculated by the medical indemnity provider was calculated in accordance with this scheme and any other document or information required by the PSS contract.
Section 34 - Determination where advance subsidy paid
On receipt of an application by the medical indemnity provider, the Medicare Australia CEO must determine the amount of subsidy, if any, that the medical indemnity provider is, or was, entitled to receive on behalf of the member for the premium period to which the advance subsidy relates.
If Medicare Australia has determined that a greater amount should have been paid, the difference between what was paid and what is determined must be paid to the medical indemnity provider as a subsidy under the PSS.
Section 35 – Repayment of advance subsidy
If the Medicare Australia CEO has determined that a lesser amount was payable, or no subsidy was payable (which may be the case, for example, if the medical practitioner or the medical indemnity provider has not complied with the conditions for payment), then the amount of overpayment is a debt due to the Commonwealth by the provider recoverable by the Medicare Australia CEO.
Section 36 – Determination where no advance subsidy paid
This section provides that, where an application is made on behalf of an eligible member under section 32 (i.e. where no application for an advance subsidy has been made), then the Medicare Australia CEO must determine the amount of subsidy payable, but only if the contracted medical indemnity provider has complied with the PSS and the Medicare Australia CEO has no reason to believe at the time of receiving the application that the information provided is false or inaccurate.
A calculation by a contracted medical indemnity provider that a member is not eligible for a subsidy under this section is deemed to be a decision by the Medicare Australia CEO that the member is not an eligible member. The member may seek an internal review of that deemed decision and, if still aggrieved, a review by the Administrative Appeals Tribunal (see section 47 on review of decisions).
Section 37 – Time for making payments of subsidy
This section provides that the Medicare Australia CEO must make a payment of subsidy in the manner and within the timeframe set out in the PSS contract or otherwise as soon as practicable after making a determination.
Section 38 - Incorrect payments
This section provides that where the Medicare Australia CEO becomes aware that a subsidy or part thereof was incorrectly paid, it is recoverable by the Medicare Australia CEO as a debt due to the Commonwealth by the medical indemnity provider.
Section 39 - Former contractors
This section deals with the situation where a PSS contract has been terminated or has expired. It provides that the PSS, other than two provisions, continues to apply so that the medical indemnity provider is obliged to comply with Part 6 to reconcile advance subsidies already paid on behalf of medical practitioners. It links with section 10 dealing with accrued rights and obligations under the contract.
The two provisions that cease to apply are section 26 – making an application for an advance payment – and section 32 – making an application for a subsidy where no advance subsidy has been paid in respect of the same member for the same period.
Part 7 – Conditions for the contractor
This Part sets out the conditions with which a medical indemnity provider must comply to be eligible to receive subsidies on behalf of eligible members. If the medical indemnity provider does not comply, no subsidy is payable, but the Medicare Australia CEO would take immediate action to ensure that subsidies become payable to the eligible member as soon as possible.
Part 8 – Administration fee
The PSS may provide for fees to be paid to contracted medical indemnity providers to help them meet the cost of administering the PSS. The subsidy is called an ‘administration fee’.
This Part sets out eligibility, how applications are to be made and the basis for calculating the amount of the subsidy for the administration fee.
Matters to be taken into account are set out in this Part. These include that, if the PSS contract sets out an estimated amount of the administration fee, an authorised officer of the Department must have regard to that amount when determining the administration fee.
Part 9 – Miscellaneous
Section 47– Review of decisions
Certain decisions are subject to internal review, and then, if the person affected by the decision is still aggrieved, by the Administrative Appeals Tribunal.
However, the premium charged to the medical practitioner by the medical indemnity provider is not reviewable. This is because the premium charged is a commercial matter between the medical indemnity provider and the member and it must be determined in accordance with the conditions in the PSS contract, subject to applicable laws.
Section 48– Information obtained by the Medicare Australia CEO
This section makes it clear that the Medicare Australia CEO or the Department, in making decisions under the Scheme, can have regard to any relevant information.
Section 49– Disclosure of information
Subsection 49(1) authorises the Medicare Australia CEO, the Department and contactors to disclose information for the purposes of administering, reviewing and assessing the operation of the Scheme.
Subsection 49(2) makes it clear that medical indemnity providers must provide information, including personal information, to the Medicare Australia CEO and the Department for the purposes of the Scheme.
Section 50 – Offsetting debts
This section provides that any debts due to the Commonwealth from the medical indemnity providers are recoverable by the Medicare Australia CEO on behalf of the Commonwealth and that the Medicare Australia CEO may offset debts against amounts owing to medical indemnity providers under this Scheme.
Section 51 – Repayment of subsidy by a medical practitioner
This section makes it clear that if a medical indemnity provider is required to repay an amount to the Medicare Australia CEO for a subsidy paid to the provider on behalf of the member, then the member must repay that amount to the provider. This provision links with section 11(5) which provides that a member is not eligible for a subsidy under the PSS at any time that it has an outstanding debt to the provider in relation to an amount that the provider is required to repay to the Medicare Australia CEO.
Part 10 – General list of definitions
This Part sets out the general definitions in the Scheme.
Schedule – MISS methodology
The Schedule sets out the methodology for calculating the MISS calculation referred to in section 17.