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2002-2003
THE
PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
MEDICAL
INDEMNITY AMENDMENT BILL 2003
MEDICAL
INDEMNITY (IBNR INDEMNITY) CONTRIBUTION AMENDMENT BILL
2003
EXPLANATORY
MEMORANDUM
(Circulated by authority of the Minister for Health and
Ageing,
the Honourable Tony Abbott MP)
MEDICAL INDEMNITY AMENDMENT BILL 2003 AND MEDICAL INDEMNITY (IBNR
INDEMNITY) CONTRIBUTION AMENDMENT BILL 2003
These Bills give effect to two new aspects of the Government’s
medical indemnity package. The package was announced during 2003 by the Prime
Minister and portfolio Ministers.
The Bills provide
for:
§ Changes to the Commonwealth’s
Incurred But Not Reported Liabilities (IBNR) Contribution arrangements including
reducing IBNR contributions to be paid for the 2003-04 financial year and part
of the 2004-05 financial year and associated amendments to administrative
arrangements to allowing for these changes;
and
§ Implementing administrative arrangements
to give effect to the Commonwealth’s Exceptional Claims Scheme.
This Part provides for amendments to the Medical Indemnity Act
2002 with respect to the administration of the medical indemnity
contributions. These amendments will provide for the proper administration of
medical indemnity contributions including those which have already been paid, or
are in the process of being paid, which may be affected by changes to the rate
of contribution for the medical indemnity contributions.
Part 2
– Transitional provisions etc.
This Part provides for
transitional provisions to be made with respect to amendments to the Medical
Indemnity Act 2002 which may save existing regulations, preserve the effect
of certain applications made by medical professionals under the Act and provide
that the Governor-General may be able to make transitional regulations.
This schedule introduces a new Division 2A to the Medical Indemnity
Act 2002 which provides for the arrangements to implement the Exceptional
Claims Scheme to assume liability for 100 per cent of any damages payable
against a practitioner that exceeds the practitioner’s contract
limit.
Division 2A provides for the Commonwealth to make payments
under this Scheme.
Subdivision A provides a guide to the exceptional
claims indemnity provisions.
Subdivision B provides for the Health Insurance
Commission to issue a qualifying claims certificate in relation to a
claim.
Subdivision C provides for when an exceptional claims indemnity is
payable.
Subdivision D provides for payments that would have reduced the
amount paid out under the contract of insurance.
Subdivision E provides for
an Exceptional Claims Protocol for making payments in relation to claims for
which a qualifying certificate has been issued.
Subdivision F provides for
miscellaneous matters related to the administration of the
Scheme.
MEDICAL INDEMNITY (IBNR INDEMNITY) CONTRIBUTION AMENDMENT BILL
2003
This Bill makes amendments to the Medical Indemnity (IBNR
Indemnity) Contribution Act 2002 which imposes the IBNR indemnity contribution
as a tax.
The Commonwealth will expense the assumption of Exceptional Claims Scheme
liabilities in the Additional Estimates outcome for 2003-04. The rate at which
this expense will be met as cash payments is unknown, as the timing of the
applications for and payments under the Scheme will be over a number of
years.
The Commonwealth will expense the cost of refunds of IBNR
contributions already paid in the Additional Estimates outcome for 2003-04 at
the cost of $2.7 million, as currently estimated.
The amendments to the
IBNR indemnity contribution will result in the Commonwealth collecting less
revenue under this measure.
NOTES ON CLAUSES
Clause 1 Short title
This
clause sets out the short title of the Bill.
This clause sets out the commencement arrangements for provisions of this
Act. Each provision of this Act specified in column 1 of the table commences,
or is taken to have commenced, in accordance with column 2 of the table. Any
other statement in column 2 has effect according to its terms.
Clause
3 Schedule(s)
This clause provides that each Act that is specified in
a Schedule to this Act is amended or repealed as set out in the applicable items
in the Schedule concerned, and any other item in a Schedule to this Act has
effect according to its terms.
Part 1 amends Part 3 of the Medical Indemnity Act 2002, which provides
for contributions towards the cost of providing indemnities.
Item
1 amends paragraph 52(2)(a) of the Act to provide that if the person dies in
or before that contribution year the person will be exempt from paying an IBNR
indemnity contribution.
Item 2 amends paragraph 52(2)(e) of the
Act to provide that a person who has had a lump sum payment refunded under
section 67 of the Act or under section 33 of the Financial Management and
Accountability Act 1997 then that person will not be able to be exempt from
paying an IBNR indemnity contribution.
Item 3 inserts a new
subsection (4A) into section 52 of the Act to provide for regulations made for
the purposes of section 52 may provide that a person is exempt from IBNR
indemnity contribution in circumstances that are similar to those specified in
subsection 52(2). This clause commences on Royal Assent.
Item 4
amends paragraph 59(2)(b) of the Act to provide that a person who has had a
lump sum payment refunded under section 67 of the Act or under section 33 of the
Financial Management and Accountability Act 1997 then that person will
not be able to be exempt from paying a UMP indemnity
contribution.
Item 5 inserts a new subsection (3A) into section 59
of the Act to provide for regulations made for the purposes of
subsection 59 may provide that a person is exempt from IBNR indemnity
contribution in circumstances that are similar to those specified in
subsection 59(2). This clause commences on Royal Assent.
Item
6 amends section 61 of the Act to insert after the words “a medical
indemnity contribution” the words “that a person is liable to
pay”. This item commences on Royal Assent.
Item 7 amends
paragraph (b) in the cell at table item 1, column headed “ becomes due and
payable on...” in section 61 of the Act to provide that the payment day
for an indemnity contribution may be on such later day as is specified in the
regulations as the payment day for the contribution year either generally for
all people or for the class of people that includes the person, as the case may
be. This item commences on Royal Assent.
Item 8 amends subsection
62(1) of the Act to insert before the words “under this section” the
words “for the person”. This item commences on Royal
Assent.
Item 9 amends subsection 62(3) of the Act to omit the
words “if the HIC” and substitute the words “(the current
application) if”.
Item 10 amends paragraph 62(3)(a) to
insert before the words “is satisfied” the words “the
HIC”.
Item 11 amends paragraph 62(3)(b) repealing the
current paragraph and substituting it with provisions which the HIC needs to
take into account when it is considering a person’s current application to
defer a medical indemnity contribution. The new subparagraph (b) will provide at
the time the HIC approves the current application either: (i) the HIC has not
approved an application by the person to defer the payment day for that kind of
medical indemnity contribution for an earlier contribution year under this
section; or (ii) each application by the person to defer the payment day for
that kind of medical indemnity contribution for an earlier contribution year
under this section that has been approved by the HIC has subsequently been
revoked or is in respect of a contribution from which the person is
exempt.
Item 12 amends subsection 62(4) of the Act to insert after
the words “the contribution” the words “that the person is
liable to pay”. This clause commences on Royal Assent.
Item
13 amends paragraph (b) of subsection 62(4) in the table of item 1 column
headed “becomes due and payable on ...” of the Act to provide that
the date for paying a deferred IBNR indemnity contribution can be such later day
as is specified in the regulations either generally for all people or for the
class of people that includes the person, as the case may be. This item
commences on Royal Assent.
Item 14 amends paragraph 62(5)(c) of
the Act to omit the words “subsection (7)” and then substitute
the words “whichever of subsections (7) and (8)
applies”.
Item 15 repeals the current subsection 62(7) of
the Act and substitutes it with a new subsection 7 and a new subsection 8. The
effect of these new provisions is to make due and payable immediately a deferred
payment of either a IBNR or a UMP indemnity contribution from and earlier
contribution year, where a person subsequently becomes exempt from paying either
contribution due to turning a certain age or dying.
Item 16 amends
paragraph 63(1)(b) of the Act to omit the words “$1,000 or more” and
substitute the words “more than $1,000”.
Item 17
amends subsection 64(1) of the Act to repeal the current subsection and
replace it with provisions which will allow a person to elect to pay a lump sum
payment to discharge an IBNR indemnity contribution for a contribution year that
starts on or after 1 July 2005 or which will allow a person to elect to pay a
lump sum payment to discharge a UMP indemnity contribution for a contribution
year that starts on or after 1 July 2003.
Item 18 amends
subsection 64(5) of the Act to insert the word “day” after
“for the person”. This item commences on Royal
Assent.
Item 19 amends subsection 67(1) of the Act to provide that
person who is entitled to a refund of an overpaid amount of a medical indemnity
contribution will not be able to receive one under this subsection if the amount
has been previously repaid to the person in accordance with an authorisation
under section 33 of the Financial Management and Accountability Act
1997.
Item 20 amends subsection 67(3) of the Act to provide
that where a person overpays a lump sum payable under section 64 the overpaid
amount must be refunded to the person unless the amount has been previously
repaid to the person in accordance with an authorisation under section 33
of the Financial Management and Accountability Act 1997.
Item
21 repeals the current section 72 of the Act and substitutes provisions
which require a person who is exempt from a medical contribution and who ceases
to be exempt from the contribution because: the person’s circumstances
change before the start of, or during, a contribution year; or the person fails
to satisfy a condition on which the exemption from the contribution depends must
notify the HIC of that change in circumstances or that failure, as the case may
be. The note to the amended subsection explains that failure to notify is an
offence (see section 74). This item commences on Royal
Assent.
Item 22 amends subsection 74(1) of the Act to omit the
words “change in circumstances” and substitute them with the word
“matter”. This item commences on Royal Assent.
Item 23
amends subsection 74(2) of the Act to omit the words “those
circumstances” and substitute the words “that matter”. This
item commences on Royal Assent.
Item 24 provides for saving existing regulations which were in
force immediately before the commencement of this item for the purposes of
paragraph (b) of table item 1 of section 61 of the Medical
Indemnity Act 2002; or paragraph (b) of table item 1 of subsection
62(4) of the Medical Indemnity Act 2002. They will have effect as if
they were made immediately after that time for the purposes of that paragraph of
that Act as substituted by item 7 or 13 of this Schedule, as the case
requires. This item commences on Royal Assent.
Item 25 provides
for transitional provisions for deferrals of payment for an IBNR indemnity
contribution. This item applies to an application under section 62
of the Medical Indemnity Act 2002 to defer the payment day for IBNR indemnity
contribution for the contribution year that started on 1 July 2003 that was
purportedly made before the commencement of this item; and would have
been valid but for the amendment made by item 1 of Schedule 1 to the
Medical Indemnity (IBNR Indemnity) Contribution Amendment Act 2003. This
item further provides for the HIC to deal with this application after
commencement as though it were valid, including notice provisions for
applications which may otherwise have been affected by amendments to the
original provisions of the Act.
Item 26 provides that the
Governor-General may make regulations prescribing matters of a
transitional nature (including prescribing any saving or application provisions)
arising out of the amendments made by this Schedule or the Medical Indemnity
(IBNR Indemnity) Contribution Amendment Act 2003. This item commences on
Royal Assent.
Definitions
Item (2) adds a definition of
exceptional claims indemnity.
Item (3) adds a definition of
Exceptional Claims Protocol.
Item (4) adds a definition of high
cost claim indemnity.
Item (5) adds a definition of IBNR
indemnity.
Item (6) repeals the current definition of indemnity
scheme payment and replaces it with a definition using the above terms in items
(4) and (5), and adds exceptional claims indemnity.
Item (7)
defines a late payment penalty in relation to an overpayment in the event of a
third party recovery received by a person after the exceptional claims indemnity
is paid.
Item (8) defines a legal practitioner as a person who is
enrolled as a barrister, a barrister and solicitor or a legal practitioner,
of:
(a) a federal court; or
(b) a court of a State or
Territory.
Item (9) inserts a definition of medical indemnity
cover and provides that a contract of insurance provides medical indemnity cover
for a person if:
(a) the person is specified or referred to in the contract,
whether by name or otherwise, as a person to whom the insurance cover provided
by the contract extends; and
(b) the insurance cover indemnifies the person
(subject to the terms and conditions of the contract) in relation to claims that
may be made against the person in relation to incidents that occur or occurred
in the course of, or in connection with, the practice by the person of a medical
profession.
The note explains that a single contract of insurance may
provide medical indemnity cover for more than one person.
A contract for
a corporate body would not be included in the definition.
Item (10)
is a technical amendment required because the general meaning of
‘payment’ in the Act will not apply to the exceptional claims
indemnity scheme provisions.
Item (11) defines qualifying
certificate as a certificate issued by the HIC under section 34E.
Item
(12) defines the term ‘subject to appeal’ and provides that a
judgment or order is subject to appeal until:
(a) any applicable time limits
for lodging an appeal (however described) against the judgment or order have
expired; and
(b) if there is such an appeal against the judgment or
order—the appeal (and any subsequent appeals) have been finally disposed
of.
Item (13) amends subsections 4(3) and (4) so that the general
meaning of ‘payment’ in the Act will not apply to the exceptional
claims indemnity scheme provisions.
Item (14) repeals the note
to subsection 30(2) which is redundant because ‘subject to
appeal’ is now defined in section 4.
Item (15) repeals
subsection 30(4) because ‘subject to appeal’ is now defined in
section 4.
Item (16) inserts a new Division 2A after current
Division 2 of Part 2.
This new division provides the framework for the
exceptional claims indemnity scheme. The new Division contains the following
new section numbers and titles.
Division 2A
Subdivision
A – Introduction
34A Guide to the exceptional claims
indemnity provisions
Subsection (1) provides that an
exceptional claims indemnity may be paid in relation to a liability of a person
if:
Paragraph (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 a medical profession, being a claim that has been
certified as a qualifying claim; and
Paragraph (b) the liability
exceeds the amount payable under an insurance contract that has a contract limit
satisfying the relevant threshold.
Subsection (2) also provides
for the determination of an Exceptional Claims Protocol that can deal with other
matters relating to claims that have been certified as qualifying
claims.
Subsection (3) provides a table outlining where to find
the provisions dealing with various issues.
34B
Definitions
This section defines practitioner’s contract limit
qualifying liability, and termination date, for the purposes of Division
2A.
Practitioner’s contract limit, in relation to a person for whom
a contract of insurance provides medical indemnity cover, means the maximum
amount payable, in aggregate, by the insurer under the contract in relation to
claims against the person.
The notes explain that, if the contract
provides medical indemnity cover for more than one person, there must be a
separate contract limit for each of those persons, and refers to sections for
the treatment of deductibles and the high cost claim indemnity scheme.
Qualifying liability, in relation to a claim, has the meaning given by
section 34M.
Termination date means the date, if any, set by regulations
under section 34G.
Section 34C Treatment of
deductibles
This new section sets out that deductibles under a
contract of insurance that provides medical indemnity cover can be counted
towards the practitioner’s contract limit even if they are paid by the
practitioner rather than the insurer, if that is what the contract provides.
But these amounts are not counted in calculating the amount of the claim that
exceeds the contract limit that is payable by the Commonwealth, as they are
amounts that the practitioner has agreed to pay.
Subsection (1)
provides that this section applies if, under a contract of insurance that
provides medical indemnity cover for a person (the practitioner), the insurer is
entitled to count an amount (the deductible amount):
Paragraph (a)
incurred by the insurer in relation to a claim against the practitioner;
or
Paragraph (b) paid or payable by the practitioner or another
person in relation to a claim against the practitioner;
towards the
maximum amount payable, in aggregate, under the contract in relation to claims
against the practitioner, even though the insurer has not paid, and is not
liable to pay, the amount under the contract.
Subsection (2)
provides that for the purpose of the definition of practitioner’s
contract limit in section 34B, the maximum amount payable, in aggregate,
under the contract in relation to claims against the practitioner is as stated
in the contract, even though the insurer (because of the deductible amount) may
not actually be liable to pay the whole of that maximum
amount.
Subsection (3) provides that for the purpose of the
references in paragraphs 34L(1)(e) and (f) (two of the criteria for payment of
indemnity) to an amount that an insurer has paid or is liable to pay under a
contract of insurance, the deductible amount is to be counted as if it were an
amount that the insurer has paid or is liable to pay under the
contract.
Subsection (4) provides that, however, for the purpose
of the reference in paragraph 34L(1)(e) to an amount that an insurer would have
been liable to pay under a contract of insurance, the deductible amount is not
to be counted as if it were an amount that the insurer would have been liable to
pay under the contract.
34D Interaction with the High cost claim
indemnity scheme
A person may seek assistance from the Commonwealth
to pay a claim under both the Exceptional claims scheme and the High cost claim
scheme. This new section provides that for the purposes of the definition of
practitioner’s contract limit in section 34B, and of paragraphs
34L(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 a high cost claim indemnity paid or payable, or that would
have been payable, to the insurer.
This means that a practitioner’s
contract limit can been reached for the purposes of the exceptional claims
indemnity scheme even if the Commonwealth has contributed to the insurer’s
liability through payments under the high cost claim indemnity
scheme.
For example, if a practitioner’s contract limit is $20
million and the high cost claim indemnity threshold is set by regulation at
$500,000, the payments under the contract would be:
− insurer pays
first $500,000
− remainder up to the contract limit is $19.5
million
− insurer and Commonwealth both pay 50% of 19.5 million ($9.75
million)
− total paid under the contract is $20 million.
If the
contract limit is $25 million and high cost claim indemnity threshold is
$500,000, the payments under the contract would be:
− insurer pays
first $500,000
− remainder up to the contract limit is $24.5
million
− insurer and commonwealth both pay 50% of $24.5 million
($14.75 million)
− total paid under the contract is $25
million.
A person may be entitled to a payment from the Commonwealth where a
qualifying claims certificate has been issued prior to the final amount of the
claim being known.
Subsection (1) Provides that the HIC may issue
a certificate that a claim is a qualifying claim, if the HIC is satisfied that
the claim meets the qualifying criteria set out in the subsection. The
qualifying certificate must be in force for an exceptional claims indemnity to
be payable under section 34L. A qualifying certificate can be issued
if:
Paragraph (a) the claim is a claim for compensation of damages
that is or was made by a person against another person (the practitioner);
Paragraph (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 a medical profession; and
Paragraph (c)
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
Paragraph (d) the incident or all the incidents did
not occur in the course of treating a public patient in a public hospital; and
(The State and Territory Governments generally provide an indemnity in
respect of such incidents).
Paragraph (e) 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 threshold (see section 34F);
(iii) the insurer is a
general insurer, within the meaning of the Insurance Act 1973;
(iv) the
insurer entered into the contract in the ordinary course of the insurer’s
business; and
Paragraph (f) the insurer was first notified of
the claim, or of facts that might give
rise to the claim, on or after
1 January 2003; and
Paragraph (g) if a termination date for the exceptional claims
indemnity scheme is set (see section 34G), the incident, or one or more of the
incidents, to which the claim relates occurred before the termination date;
and
Paragraph (h) the claim is not a claim of a class specified in
regulations made for the purposes of this paragraph; and
Paragraph
(i) the contract of insurance is not a contract of a class specified in
regulations made for the purposes of this paragraph; and
Paragraph
(j) a person has applied for a certificate in accordance with section 34H.
A claim or part of a claim which is not covered by the contract will not
be a qualifying claim. A limit to the amount of claim which is covered by the
contract will limit the amount of the qualifying claim in the same way that it
is limited in the contract.
For example if there is a limit within the
contract of $1 million for a type of claim and the insurer has paid out $1
million for that type of claim, no further payments will be made under the
Exceptional Claims Scheme for that type of claim.
For example if the
contract limit has been reached and the next claim is for $2 million, and the
contract requires the practitioner to pay the first $50,000 of each claim, the
Scheme will pay the $2 million claim less the practitioner’s contribution
of $50,000.
Notes 1 and 2 outline that sections 34N and 34O deal
with some incidents in a series occurring in the course of public hospital
treatment, or after the termination date.
Subsection (2) provides
that the certificate comes into force when it is issued and remains in force
until it is revoked. These actions are undertaken by the Health Insurance
Commission.
Subsection (3) provides that the certificate
must:
Paragraph (a) identify:
(i) the practitioner;
and
(ii) the claim; and
(iii) the contract of insurance in relation to
which paragraph (1)(e) is satisfied; and
Paragraph
(b) specify the relevant threshold.
The certificate may also contain
other material.
Subsection (4) provides that an application may be made to the
Administrative Appeals Tribunal for review of a decision of the HIC to refuse to
issue a qualifying claim certificate. The note explains that Section 27A of
the Administrative Appeals Tribunal Act 1975 requires notification of a
decision that is reviewable.
Subsection (5) provides that if the HIC decides to issue a
qualifying claim certificate, the HIC must, within 28 days of making its
decision, give the applicant a copy of the certificate. However, a failure to
comply does not affect the validity of the decision.
34F What is the
relevant threshold?
Subsection (1) Provides that for the
purposes of paragraph 34E(1)(e), the relevant threshold which the
practitioner’s contract limit must equal or exceed is:
Paragraph
(a) if the insurer was first notified of the claim, or of facts that might
give rise to the claim, on or after 1 January 2003 and before 1 July
2003—$15 million; or
Paragraph (b) if the insurer is or was
first notified of the claim, or of facts that might give rise to the claim, on
or after 1 July 2003—$20 million, or such other amount as is
specified in the regulations as the threshold.
Threshold specified in
regulations only applies to contracts entered into after the regulations take
effect
Subsection (2) provides that a regulation 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 regulation
takes effect.
When regulations reducing the threshold take
effect
Subsection (3) provides that a regulation reducing the
threshold (which could be the threshold originally applicable under
subsection (1), or that threshold as already changed by regulations) takes
effect on the date specified in the regulations, which must be the date on which
the regulations are notified in the Gazette or a later
day.
When regulations increasing the threshold take
effect
Subsection (4) provides that a regulation increasing
the threshold (which could be the threshold originally applicable under
subsection (1), or that threshold as already changed by regulations), takes
effect on the date specified in the regulations, which must be at least 3
calendar months after the date on which the regulations are notified in the
Gazette.
Powers to make regulations are required to allow the
threshold to reflect changing levels of contract limits provided for medical
indemnity insurance.
34G Setting a
termination date
Subsection (1) provides that the regulations
may set a termination date for the exceptional claims indemnity scheme. The note
indicates that the scheme does not cover incidents that occur after the
termination date.
A power to make regulations is required to allow a
termination date to be set for the scheme.
Subsection (2)
provides that the termination date cannot be earlier than 1 January 2006, and
cannot be before the date on which the regulations are notified in the
Gazette.
Where a claim relates to a series of incidents, the
treatment of the incidents is discussed in section
34O.
34H Application for a qualifying claim
certificate
Subsection (1) provides that an application for
the issue of a qualifying 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.
The person against whom the claim is made is
the medical practitioner or health practitioner.
Subsection (2)
provides that the application must:
Paragraph (a) be made in
writing using a form approved by the HIC; and
Paragraph (b) be
accompanied by the documents and other information required by the form approved
by the HIC.
34I Time by which an
application must be decided
Subsection (1) provides that,
subject to subsection (2), the HIC is to decide an application for the
issue of a qualifying claim certificate on or before the 21st day after the day
on which the application is received by the HIC.
Subsection (2)
provides that, if the HIC requests a person to give information under
section 38 in relation to the application, the HIC does not have to decide
the application until the 21st day after the day on which the person gives the
information to the HIC.
However, a failure to comply does not affect the
validity of the decision.
34J Obligation to
notify the HIC if information is incorrect or
incomplete
Subsection (1) provides that,
if:
Paragraph (a) a qualifying claim certificate is in force in
relation to a claim; and
Paragraph (b) a person becomes aware that
the information provided to the HIC in connection with the application for the
certificate was incorrect or incomplete, or is no longer correct or complete;
and
Paragraph (c) the person is:
(i) the person who applied for
the certificate; or
(ii) another person who has applied for a payment of
exceptional claims indemnity, or for a payment under the Exceptional Claims
Protocol, in relation to the claim;
the person must notify the HIC of the
respect in which the information was incorrect or incomplete, or is no longer
correct or complete.
The note explains that failure to notify is an offence
(see section 46).
Subsection (2) provides that the
notification must:
Paragraph (a) be made in writing;
and
Paragraph (b) be given to the HIC within 28 days after the
person becomes aware as mentioned in subsection (1).
Subsection (1) provides that the HIC may revoke a qualifying claim
certificate if the HIC is no longer satisfied as mentioned in subsection 34E(1)
in relation to the claim.
Subsection (2) provides that, to avoid
doubt, in considering whether it is still satisfied as mentioned in subsection
34E(1) in relation to the claim, the HIC may have regard to matters that have
occurred since the decision to issue the qualifying claim certificate was made,
including for example:
Paragraph (a) the making of regulations for
the purpose of paragraph 34E(1)(h) or (i); or
Paragraph (b)
changes to the terms and conditions of the contract of insurance identified
in the certificate.
Variation
Subsection (3)
provides that, if the HIC is satisfied that a matter is not correctly identified
or specified in a qualifying claim certificate, the HIC may vary the certificate
so that it correctly identifies or specifies the matter.
Effect of
revocation
Subsection (4) provides that,
if:
Paragraph (a) the HIC revokes a qualifying claim certificate;
and
Paragraph (b) an amount of 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
Subsection (5) provides that,
if:
Paragraph (a) the HIC varies a qualifying claim certificate;
and
Paragraph (b) an amount of 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.
Subsection (6) An application may be made to the Administrative
Appeals Tribunal for review of a decision of the HIC to revoke or vary a
qualifying claim certificate.
The note explains that Section 27A of the
Administrative Appeals Tribunal Act 1975 requires notification of a
decision that is reviewable.
Subsection (7) If the HIC decides to vary a qualifying claim
certificate, the HIC must, within 28 days of making its decision, give the
applicant a copy of the varied certificate. However, a failure to comply does
not affect the validity of the decision.
Criteria for payment of indemnity
Subsection (1)
provides that the HIC may determine that an exceptional claims indemnity is
payable in relation to a liability of a person (the practitioner)
if:
Paragraph (a) a claim for compensation or damages (the current
claim) is, or was, made against the practitioner by another person;
and
Paragraph (b) a qualifying claim certificate is in force in
relation to the current claim; and
Paragraph (c) the liability is
a qualifying liability of the practitioner in relation to the current claim (see
section 34M); and
Paragraph (d) because of the
practitioner’s contract limit in relation to the contract of insurance
identified in the qualifying claim certificate, the contract does not cover, or
does not fully cover, the liability; and
Paragraph (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
Paragraph (f) the aggregate of:
(i) 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) already
paid by the insurer under the contract in relation to the current claim;
and
(iii) the amounts (if any) already paid by the insurer under the contract
in relation to other claims against the practitioner;
equals or exceeds the
relevant threshold identified in the qualifying claim certificate;
and
Paragraph (g) a person has applied for the indemnity in
accordance with section 37A.
Notes 1-2 and 4-6 explain interactions with
other sections.
Note 3 explains that, 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 (3).
Subsection (2) provides that the indemnity is to be paid to the
person who applies for it.
The note points out that, for who can apply, see
section 37A.
Subsection (3) provides that an amount that an insurer has paid,
or is liable to pay, under the contract 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.
Subsection (4) provides that if an insurer is an
externally-administered body corporate:
Paragraph (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
Paragraph (b) a reference in subsection (3) 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 an externally-administered body corporate.
AAT review of
decision to refuse, or to pay a particular amount of
indemnity
Subsection (5) provides that an application may be
made to the Administrative Appeals Tribunal for review of a decision of the HIC
to refuse an application for exceptional claims indemnity, or to pay a
particular amount of exceptional claims indemnity.
The note explains that
Section 27A of the Administrative Appeals Tribunal Act 1975 requires
notification of a decision that is
reviewable.
34M Qualifying
liabilities
Subsection (1) provides that a person (the
practitioner) has a qualifying liability in relation to a claim made
against the person if:
Paragraph (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
Paragraph (b) the defence of the claim against the
practitioner was conducted appropriately (see subsection (2)) 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
Paragraph (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.
Subsection (2) provides that, for the purposes of
paragraph (1)(b), the defence of the claim is conducted appropriately if,
and only if:
Paragraph (a) to the extent it is conducted on the
practitioner’s behalf by an insurer, or by a legal practitioner engaged by
the insurer—the defence is conducted to a standard that is consistent with
the insurer’s usual standard for the conduct of the defence of claims;
and
Paragraph (b) to the extent it is conducted by the
practitioner, or by a legal practitioner engaged by the practitioner—the
defence is conducted prudently.
Subsection (3) provides that, in
this section: defence of the claim includes any settlement negotiations on
behalf of the practitioner.
This new section provides that, if:
Paragraph (a) a claim
against a person relates to a series of incidents; and
Paragraph(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 34L(1)(e) and subparagraphs 34L(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.
This new section provides that, if:
Paragraph (a) a claim against a person relates to a series of
incidents; and
Paragraph (b) some, but not all, of the incidents occurred after the
termination date;
then, for the purposes of applying paragraph 34L(1)(e)
and subparagraphs 34L(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 termination date.
This new section provides that the amount of exceptional claims indemnity
that is payable in relation to a particular qualifying liability is the amount
of the excess referred to in paragraph 34L(1)(e).
The note explains that
it is only liabilities that exceed the practitioner’s contract limit that
will be covered by an exceptional claims indemnity (even if the relevant
threshold is less than that limit).
Subsection (1) provides that this new section applies if an
exceptional claims indemnity is paid to a person (the recipient) in relation to
a liability of a person (the practitioner).
The note explains that the
recipient will either be the practitioner himself or herself, or a person acting
on behalf of the practitioner.
Subsection (2) provides that the HIC 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.
Subsection (3) provides that 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.
Subsection (4) provides that if the amount of the indemnity is
greater than the undischarged amount of the liability identified in the payment
notice, the recipient must:
Paragraph (a) apply so much of the indemnity as equals the
undischarged amount of the liability towards the discharge of the liability;
and
Paragraph(b) if the recipient is not the practitioner—deal with
the balance of the indemnity in accordance with the directions of the
practitioner.
This subsection applies to the situation where the
indemnity payment may include costs in excess of the amount owed to the
plaintiff, such as legal costs that are not already paid under the Exceptional
Claims Protocol.
Subsection(5) provides that the recipient must comply with
whichever of subsections (3) and (4) applies:
Paragraph(a) by
the time specified in a written direction (whether contained in the payment
notice or otherwise) given to the recipient by the HIC;
or
Paragraph(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 HIC may vary a notice under paragraph (a)
to specify a different time.
Subsection (6) provides that 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.
Subsection (7) provides that the debt may be
recovered:
Paragraph (a) by action by the HIC against the
recipient in a court of competent jurisdiction; or
Paragraph (b)
under section 42.
Subsection (8) provides that if the
amount of the indemnity is recoverable, or has been recovered, under
subsection (7), no amount is recoverable under section 34T or
section 41 in relation to the same payment of exceptional claims
indemnity.
Subsection (1) provides that this new section applies if, in
relation to an exceptional claims indemnity that has been paid, there is an
amount overpaid as described in subsection 34T(2) or 42(2).
Subsection
(2) provides that the liable person, in relation to the amount overpaid,
is:
Paragraph (a) if the indemnity has not been dealt with
in accordance with whichever of subsections 34Q(3) and (4) applies—the
recipient referred to in subsection 34Q(1); or
Paragraph (b) if
the indemnity has been dealt with in accordance with whichever of those
subsections applies—the practitioner referred to in subsection 34Q(1).
The note explains that the recipient and the practitioner will be the
same person if the indemnity was paid to the practitioner.
Subsection
(3) provides that if:
Paragraph (a) the recipient and the
practitioner referred to in subsection 34Q(1) are not the same person;
and
Paragraph (b) when the overpayment is recovered as a debt, the
liable person is the recipient;
the fact the recipient may later deal
with the remainder of the indemnity in accordance with subsection 34Q(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
Subsection (1) provides that if:
Paragraph (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
Paragraph (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
Paragraph (c) the
other amount was not taken into account in working out the amount of the
insurance payment; and
Paragraph (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 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.
Subsection (2) provides that this section does
not apply to any of the following:
Paragraph (a) an amount paid to
an insurer by another insurer under a right of contribution;
Paragraph
(b) a payment of high cost claim indemnity;
Paragraph (c) an
amount of a kind specified in the regulations for the purposes of this
paragraph.
Subsection (1) provides that this new section applies
if:
Paragraph (a) an amount (the actual indemnity amount) of
exceptional claims indemnity has been paid in relation to a qualifying liability
that relates to a claim made against a person (the practitioner);
and
Paragraph (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
Paragraph (c) the
other amount was not taken into account in calculating the actual indemnity
amount; and
Paragraph (d) if the other amount had been so taken
into account, a lesser amount (the reduced indemnity amount, which could be
zero) of exceptional claims indemnity would have been paid in relation to the
liability.
Subsection (2) provides that the amount overpaid is the
amount by which the actual indemnity amount exceeds the reduced indemnity
amount.
Subsection (3) provides that if the HIC has given the
liable person (see subsection 34R(2)) a notice under section 34V(1) in
relation to the actual overpaid, the amount is a debt owed to the Commonwealth
by the liable person.
Note 1 explains that, if the indemnity is or was
not dealt with in accordance with whichever of subsections 34Q(3) and (4)
applies by the time required by subsection 34Q(5), the whole amount of the
indemnity is a debt owed by the recipient, and no amount is recoverable under
this section (see subsections 34Q(6) to (8)).
Note 2 explains that
if:
(a) the recipient and the practitioner referred to in subsection 34Q(1)
are not the same person; and
(b) the practitioner becomes the liable
person;
(c) then (subject to subsection 34R(3)), the recipient ceases to be
the liable person, and the amount overpaid must instead be recovered from the
practitioner.
Subsection (4) provides that the amount overpaid may
be recovered:
Paragraph (a) by action by the HIC against the
liable person in a court of competent jurisdiction; or
Paragraph (b)
under section 42.
Subsection (5) provides that this new
section does not apply to any of the following:
Paragraph (a) an
amount paid to an insurer by another insurer under a right of
contribution;
Paragraph (b) a payment of high cost claim
indemnity;
Paragraph (c) an amount of a kind specified in
the regulations for the purposes of this paragraph.
Subsection (1) provides that if:
Paragraph (a) an
amount of exceptional claims indemnity has been paid in relation to a qualifying
liability that relates to a claim made against a person (the practitioner); and
Paragraph (b) the person (the applicant) who applied for the
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
Paragraph (c) because of the payment of the other
amount, there is an amount overpaid as described in subsection
34T(2);
the applicant must notify the HIC that the other amount has been
paid.
The note provides that failure to notify is an offence (see
section 46).
Subsection (2) provides that the notification
must:
Paragraph (a) be in writing; and
Paragraph
(b) be given to the HIC within 28 days after the applicant becomes aware
that the other amount has been paid.
Subsection (1) provides that if:
Paragraph (a) an
amount of exceptional claims indemnity has been paid in relation to a qualifying
liability that relates to a claim made against a person (the practitioner);
and
Paragraph (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
Paragraph (c) because of the payment of the other amount,
there is an amount overpaid as described in subsection 34T(2);
the
HIC may give the liable person (see subsection 34R(2)) a written notice
that specifies:
Paragraph (d) the amount overpaid, and that it is
a debt owed to the Commonwealth under subsection 34T(3); and
Paragraph
(e) the day before which the amount must be paid to the Commonwealth;
and
Paragraph (f) the effect of section 34W.
The day
specified under paragraph (e) must be at least 28 days after the day on
which the notice is given.
Subsection (2) provides that the debt
becomes due and payable on the day specified under
paragraph (1)(e).
34W Penalty imposed
if an amount is repaid late
Subsection (1) provides that
if:
Paragraph (a) a person owes a debt to the Commonwealth under
subsection 34T(3); and
Paragraph (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.
Subsection (2)
provides that the late payment penalty is calculated:
Paragraph (a)
at the rate specified in the regulations for the purposes of this paragraph;
and
Paragraph (b) on the unpaid amount; and
Paragraph
(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.
A regulation
is required to set a rate at which late payment penalty is
calculated.
Subsection (3) provides that the HIC may remit the
whole or a part of an amount of late payment penalty if the HIC considers that
there are good reasons for doing so.
Subsection (4) provides that
an application may be made to the Administrative Appeals Tribunal for review of
a decision of the HIC not to remit, or to remit only part of, an amount of late
payment penalty.
The note explains that section 27A of the
Administrative Appeals Tribunal Act 1975 requires notification of a
decision that is reviewable.
Subsection (5) provides that
if:
Paragraph (a) the recipient and the practitioner referred to
in subsection 34Q(1) are not the same person; and
Paragraph (b)
the practitioner becomes the liable person; and
Paragraph (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 34T(3), except that the period
referred to in paragraph (2)(c) ends when the practitioner becomes the
liable person.
A power for the Minister to determine a protocol is required so that the
HIC can pay ongoing costs for managing and defending the claim and the Minister
can set out the conditions for those payments.
Subsection (1)
provides that the Minister may, by writing, determine a protocol (the
Exceptional Claims Protocol) for making payments to insurers of claim handling
fees, and payments on account of legal, administrative or other costs incurred
by insurers (whether on their own behalf or otherwise), in respect of claims in
relation to which qualifying claim certificates have been
issued.
Subsection (2) provides that without limiting
subsection (1), the Exceptional Claims Protocol may:
Paragraph
(a) make provision for:
(i) the conditions that must be satisfied for an
amount to be payable to an insurer; and
(ii) the amount that is payable;
and
(iii) the conditions which must be complied with by an insurer to which
an amount is paid; and
(iv) other matters related to the making of payments,
and the recovery of overpayments; and
Paragraph (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 the
Protocol.
Subsection (3) provides that paragraph (2)(b) does
not allow the Protocol to modify a provision that creates an offence, or that
imposes an obligation which, if contravened, constitutes an
offence.
Subsection (4) provides that the Exceptional Claims
Protocol may also provide for other matters of a kind specified in regulations
made for the purposes of this subsection.
The power to make a regulation
is required to enable the Protocol to respond to changes in types of insurance
products and claims that may be provided to practitioners as these changes
arise.
Subsection (5) provides that the instrument determining the
Exceptional Claims Protocol, and any instruments amending or revoking the
Protocol, are disallowable instruments for the purposes of section 46A of
the Acts Interpretation Act
1901.
34Y HIC may request
information
Subsection (1) provides that if the HIC
believes that a person is capable of giving information that is relevant to
determining:
Paragraph (a) whether an insurer is entitled to a
payment under the Exceptional Claims Protocol; or
Paragraph (b)
the amount that is payable to an insurer under the Exceptional Claims
Protocol;
the HIC may request the person to give the HIC the
information.
The note explains that failure to comply with the request is
an offence (see section 45).
Subsection (2) provides that
without limiting subsection (1), any of the following persons may be
requested to given information under that subsection:
Paragraph
(a) an MDO;
Paragraph (b) an insurer;
Paragraph (c)
a member, or former member of an MDO;
Paragraph (d) a person
who practices, or used to practice, a medical profession;
Paragraph
(e) a person who is acting, or has acted, on behalf of a person covered by
paragraph (d);
Paragraph (f) a legal personal representative
of a person covered by paragraph (c), (d) or (e).
Subsection
(3) provides that without limiting subsection (1), if the information
sought by the HIC is information relating to a matter in relation to which a
person is required by section 39 to keep a record, the HIC may request the
person to give the information by giving the HIC the record, or a copy of the
record.
Subsection (4) provides that the
request:
Paragraph (a) must be made in writing;
and
Paragraph (b) must state what information must be given to the
HIC; and
Paragraph (c) may require the information to be verified
by statutory declaration; and
Paragraph (d) must specify a day on
or before which the information must be given; and
Paragraph (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.
This section is not intended to override
legal professional privilege.
Subsection (1) provides that the regulations may provide that this
Division applies with specified modifications in relation
to:
Paragraph (a) a specified class of claims;
or
Paragraph (b) a specified class of contracts of insurance;
or
Paragraph (c) a specified class of situations in which a
liability is, whether wholly or partly, covered by more than one contract of
insurance.
The note clarifies the capacity for regulations to exclude
classes of claims and refers to paragraphs 34E(1)(h) and (i).
Subsection (2) provides that 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.
The power for
these regulations to be made is required to allow the Exceptional Claims Scheme
to reflect the rapidly changing market for medical indemnity insurance.
The regulations will allow the Scheme to respond to the industry’s
provision of new types of insurance products to cover new types of claims, and
to respond to contracts and claims that are affected in an unintentional manner
by the legislation.
Subsection (3) provides that 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:
Paragraph (a) to count the liability as a
qualifying liability (even though subparagraph 34M(1)(a)(i) may not be satisfied
in relation to the order); and
Paragraph (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
Paragraph (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.
The power for
these regulations is required to allow a payment where the practitioner is
required to make payments in advance of finalisation of the entire claim.
Subsection (4) provides that 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.
Item 17
Subsection 35(1)
This item adds the exceptional claims indemnity
scheme to the provision outlining the coverage of Division 3 of Part
2.
Item 18 Subsection 35(2) (table)
This item repeals the
table indicating where to find provisions on various issues and substitutes a
new table.
Item 19 Subsection 36(1)
This item limits
subsection 36(1) to applications for IBNR or high cost claim indemnity.
The note indicates that the heading is altered by omitting
“indemnity scheme payment” and substituting “IBNR indemnity or
high cost claim indemnity”.
Item 20 Subsection
37(1)
This item limits subsection 37(1) to payment dates for IBNR or
high cost claim indemnity.
The note indicates that the heading to
section 37 is altered by omitting “indemnity scheme payment”
and substituting “IBNR indemnity or high cost claim
indemnity”.
Item 21 Subsection 37(1)
This item omits
“the payment”, then substitutes “the
indemnity”.
Item 22 Paragraph 37(2)(a)
This item
limits paragraph 37(2)(a) to applications for IBNR or high cost claim indemnity.
Item 23 Paragraph 37(2)(c)
This item omits “the
payment”, then substitutes “the indemnity”.
Item 24
Paragraph 37(2)(d)
This item limits paragraph 37(2)(d) to IBNR or
high cost claim indemnity.
Item 25 Subsection 37(2)
This
item limits the closing words of subsection 37(2) to IBNR or high cost claim
indemnity.
Item 26 After section 37
This item inserts
new provisions in Subdivision B of Division 3 of Part 2.
Subsection (1) provides that an application for an exceptional
claims indemnity in relation to a qualifying liability that relates 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.
Subsection (2) provides that
the application must:
Paragraph (a) be made in writing using a
form approved by the HIC; and
Paragraph (b) be accompanied by the
documents and other information required by the form approved by the
HIC.
Subsection (3) provides that subject to subsections (4)
and (5), the application cannot be made more than 28 days
after:
Paragraph (a) if the liability is under a judgment or order
of a court—the date on which the judgment or order became or becomes a
judgment or order that is not stayed and is not subject to appeal;
or
Paragraph (b) if the liability is under a settlement of the
claim—the date on which the settlement agreement was entered into;
or
Paragraph (c) if the liability is some other kind of
liability—the date on which the liability was
incurred.
Subsection (4) provides that if the date that would
otherwise be applicable under subsection (3) is before the
commencement of Division 2A, the application can be made after that date
but cannot be made more than 28 days after the commencement of that
Division.
Subsection (5) provides that the HIC may accept a late
application if the HIC considers that there are good reasons for doing
so.
Subsection (6) provides that an application may be made to the
Administrative Appeals Tribunal for review of a decision of the HIC not to
accept a late application.
The note explains that section 27A of
the Administrative Appeals Tribunal Act 1975 requires notification of a
decision that is reviewable.
Time by which application must be decided
Subsection
(1) provides that subject to subsections (2) and (3), the HIC is to
decide an application for an exceptional claims indemnity on or before the end
of the 21st day after the day on which the application is received by the
HIC.
Subsection (2) provides that if the HIC requests a person to
give information under section38 in relation to an application for an
exceptional claims indemnity, the HIC does not have to decide the application
until the 21st day after the day on which the person gives the information to
the HIC.
Subsection (3) provides that if the HIC has received, but
not yet decided:
Paragraph (a) an application for the issue of a
qualifying claim certificate in relation to a claim; and
Paragraph
(b) an application for an exceptional claims indemnity in relation to the
same claim;
the HIC does not have to decide the application for payment
of an exceptional claims indemnity until the HIC has decided the application for
the issue of a qualifying claim certificate.
Subsection (4) provides that if the HIC decides to grant an
application for an exceptional claims indemnity, the HIC must pay the indemnity
to the applicant as soon as practicable after making that decision.
Where
practical the HIC will pay an exceptional claims indemnity on the date that the
practitioner is required to discharge their liability.
Item 27
Paragraphs 38(1)(a) and (b)
This item omits “to an MDO or
insurer” from paragraphs 38(1)(a) and (b) so that they apply to payments
to anyone.
Item 28 After paragraph 38(1)(b)
This item
inserts new paragraphs in subsection 38(1) so that the HIC may request
information if it reasonably believes that a person is capable of giving
information that is relevant to determining:
Paragraph (c) whether
a qualifying claim certificate should be issued, varied or revoked;
or
Paragraph (d) the Commonwealth’s possible future
liability to make indemnity scheme payments, or a particular kind of indemnity
scheme payment;
Item 29 After paragraph 38(2)(c)
This item
inserts new paragraphs in subsection 38(2) to make it clear that the people who
may be requested to give information include:
Paragraph (ca) a
person who practices, or used to practice, a medical
profession;
Paragraph (cb) a person who is acting, or has acted,
on behalf of a person covered by paragraph (ca).
This section is not intended to override legal professional
privilege.
Item 30 Paragraph 38(2)(d)
This item is
consequential on the amendments made by item 29.
Item 31 Subsection
38(3)
This item repeals subsection 38(3), then substitutes new
provisions:
Subsection (3) provides that without limiting
subsection (1), if the information sought by the HIC is information
relating to a matter in relation to which a person is required by
section 39 or 40 to keep a record, the HIC may request the person to give
the information by giving the HIC the record, or a copy of the
record.
Subsection (3A) provides that without limiting
paragraph (1)(d), the HIC may request an MDO or insurer to give information
under that paragraph on a periodic basis.
Item 32 Subsection
39(1)
This item repeals subsection 39(1) (including the
subsection heading and the note) and replaces it with a new provision.
Subsection (1) provides that a person who applies for an indemnity
scheme payment, or a payment under the Exceptional Claims Protocol, must keep
records relevant to the following matters:
Paragraph (a) the
payability of the payment;
Paragraph (b) the amount of the
payment payable;
Paragraph (c) any amount paid to the person that
results in a person being liable to pay an amount under section 24 or
34T;
Paragraph (d) any other matter determined by the
HIC.
The note explains that failure to keep the records is an offence
(see section 47). The note for the subsection indicates that the heading
is replaced.
Item 33 Saving provision—determinations under
paragraph 39(1)(d)
This item provides that a determination in force
under paragraph 39(1)(d) of the Medical Indemnity Act 2002 as in force
before the commencement of item 32 of this Schedule has effect after that
commencement as if it were made under paragraph 39(1)(d) of that Act as amended
by that item.
Item 34 After subsection 39(1)
This item inserts a new subsection 39(1A).
Subsection (1A) provides that a person who applies for the issue
of a qualifying claim certificate in relation to a claim must keep records that
are relevant to the following:
Paragraph (a) matters related to
whether the criteria specified in subsection 34E(1) are satisfied in relation to
the claim;
Paragraph (b) any other matter determined by the HIC.
The note explains that failure to keep the records is an offence (see
section 47).
Item 35 Paragraph 39(2)(b)
This item repeals the paragraph 39(2)(b), then substitutes a new
provision.
Paragraph (b) whichever of the following days
applies:
(i) if the record is required to be kept because the person applied
for an IBNR indemnity or a high cost claim indemnity—the day on which this
Act commenced;
(ii) if the record is required to be kept because the person
applied for an exceptional claims indemnity or a qualifying claim
certificate—the day on which Division 2A commenced;
(iii) if the
record is required to be kept because the person applied for a payment under the
Exceptional Claims Protocol—the day on which the Protocol took
effect.
Item 36 Subsection 39(3)
This item is consequential
on the amendment made by item 31.
Item 37 Subsection
41(1)
This item amends subsection 41(1) so that it applies to
overpayments made to anyone, not just to an MDO or insurer.
Item 38
Paragraphs 41(1)(a) and (b)
This item amends paragraphs 41(1)(a) and
(b) so they apply to anyone, not just to an MDO or insurer.
Item 39
Subsection 41(3)
This item repeals subsection 41(3), then substitutes a new
provision.
Subsection (3) provides that the amount overpaid is a
debt due to the Commonwealth by the liable person. For this purpose the liable
person is:
Paragraph (a) if the indemnity scheme payment was an
IBNR indemnity or a high cost claim indemnity—the MDO or insurer to which
the payment was made; or
Paragraph (b) if the indemnity scheme
payment was an exceptional claims indemnity—the person who is the liable
person under subsection 34R(2).
The notes explain that:
Paragraph (b)—if the exceptional claims indemnity is or was not
dealt with in accordance with whichever of subsections 34Q(3) and (4) applies by
the time required by subsection 34Q(5), the whole amount of the indemnity is a
debt owed by the recipient, and no amount is recoverable under this section (see
subsections 34Q(6) to (8)).
Note 2: Paragraph (b)—if:
(a) the recipient and the practitioner referred to in subsection 34QA(1) are
not the same person; and
(b) the practitioner becomes the liable person;
(c) then (subject to subsection 34QB(3)), the recipient ceases to be the
liable person, and the amount overpaid must instead be recovered from the
practitioner.
Items 40 and 41 Paragraphs 41(4)(a) and
(b)
This item amends paragraphs 41(4)(a) and (b) so they refer to the
liable person rather than an MDO or insurer.
Item 42 Subsection
42(1)
This item amends subsection 42(1) so that it refers to the
liable person rather than an MDO or insurer.
Item 43 Subsection
42(1)
This item amends subsection 42(1) so that it extends to debts
under subsection 34QA(6)and 34S(3).
Item 44 Subsections 42(2), (3),
(8), (9), (10) and (11)
This item amends subsections 42(2), (3), (8),
(9), (10) and (11) so they refer to the liable person rather than an MDO or
insurer.
Item 45 After paragraph
45(1)(b)
Inserts:
Subsection (3A)
If:
Paragraph (a) the repayment or overpayment debt relates to
an exceptional claims indemnity; and
Paragraph (b) the recipient
and the practitioner referred to in subsection 34Q(1) are not the same person;
and
Paragraph (c) the practitioner becomes the liable person;
and
Paragraph (d) the direction was given to the recipient;
the
direction ceases to have effect when the practitioner becomes the liable
person.
This item amends the list of provisions in subsection 45(1) under
which a request for information may be given to include a reference to
subsection 34X(1). Under subsection 45(2) it is an offence to fail to comply
with a request for information under one of the listed
provisions.
Item 46 Subsections 42(8), (9), (10) and
(11)
This item omits “the MDO or insurer” (wherever
occurring), then substitutes “the liable person”.
Item 47
After paragraph 45(1)(b)
This item inserts:
(ba) subsection
34Y(1); or
Item 48 Subsection 46(1)
This item amends
subsection 46(1) so it extends to sections 34J and 34T. Failing to notify the
HIC within the period specified in a provision mentioned in s 46(1) is an
offence under subsection 46(2).
Item 49 At the end of subsection
46(3)
This item adds a new sentence at the end of subsection 46(3)
providing that strict liability does not apply to the physical element described
in paragraph 34J(1)(b) or 34T(1)(b).
Item 50 After paragraph
48(b)
This item amends section 48 so that the Consolidated Revenue
Fund is appropriated for the purposes of paying:
Paragraph (ba)
exceptional claims indemnities; and
Paragraph (bb) amounts payable
under the Exceptional Claims Protocol.
MEDICAL INDEMNITY (IBNR
INDEMNITY) CONTRIBUTION AMENDMENT BILL 2003
NOTES ON
CLAUSES
This clause sets out the short title of the Bill.
This clause provides that the Bill will be taken to commence on 1 July
2003.
Clause 3 Schedule(s)
This clause specifies that each
Act that is specified in a Schedule to this Act is amended or repealed as set
out in the applicable items in the Schedule concerned, and any other item in a
Schedule to this Act has effect according to its terms.
Schedule 1
– Medical Indemnity (IBNR Indemnity) Contribution Act
2002
Item 1 repeals subsection 5(3) of the Act and substitutes
new provisions with respect to the imposition day. The imposition day for a
contribution year for a participating MDO is for the contribution year that
starts on 1 July 2003: 1 March 2004; or such other day as is specified
in the regulations as the imposition day for the contribution year; and for a
later contribution year: 1 August in the contribution year; or such other
day as is specified in the regulations as the imposition day for the
contribution year.
Item 2 inserts two new subsections (1A) and
(1B) before subsection 6(1) of the Act which provide for the amount of the IBNR
contribution to be changed. The amount of the IBNR indemnity contribution
imposed on a participating member of a participating MDO for the contribution
year for the MDO that starts on 1 July 2003 is the lesser of: the
applicable percentage of the member’s annual subscription for the base
year; and $1,000.
The amount of the IBNR indemnity contribution imposed
on a participating member of a participating MDO for the contribution year for
the MDO that starts on 1 July 2004 is the amount worked out by adding: half
of the applicable percentage of the member’s annual subscription for the
base year; and the lesser of: $500; and half of the applicable percentage of the
member’s annual subscription for the base year.
Item 3
amends subsection 6(1) by after the words “the MDO” inserting
“that starts on or after 1 July 2005”.