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2019-2020-2021
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
MEDICAL AND MIDWIFE INDEMNITY LEGISLATION AMENDMENT
BILL 2021
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health and Aged Care, the
Hon Greg Hunt MP)
MEDICAL AND MIDWIFE INDEMNITY LEGISLATION AMENDMENT
BILL 2021
OUTLINE
Purpose of the Bill
The purpose of the Medical and Midwife Indemnity Legislation Amendment Bill 2021
(the Bill) is to ensure that claims made against all privately practising midwives are
eligible under the Commonwealth's medical and midwife indemnity schemes.
Objective of the Bill
The Bill implements a 2021-22 Budget measure allowing all privately practising
midwives to be eligible under the Commonwealth's medical and midwife indemnity
schemes if a medical indemnity claim is made.
Overview of the Bill
The Bill amends the Medical Indemnity Act 2002 to ensure that claims made against
midwives in private practice whose registration is not endorsed by the Nursing and
Midwifery Board of Australia to prescribe scheduled medicines (registered only
midwives) are eligible under the Allied Health High Cost Claims Scheme and the
Allied Health Exceptional Claims Scheme (Allied Health Schemes) where the claim
relates to incidents that occurred on or from 1 July 2020. Previously, claims against
some registered only midwives were not eligible for the Allied Health Schemes based
on whether the midwife could be expected to be covered by an employer's indemnity
arrangements.
These amendments ensure that the medical indemnity legislation reflects the
Commonwealth's policy that claims against all registered only midwives have
coverage under the Allied Health Schemes for claims made after the commencement
of those Schemes on 1 July 2020, creating parity of arrangements for all other
registered allied health professionals eligible under the Allied Health Schemes.
The Bill also amends the Midwife Professional Indemnity (Commonwealth
Contribution) Scheme Act 2010 to expand eligibility of the Midwife Professional
Indemnity Scheme and the Midwife Professional Indemnity Run-off Cover Scheme
(Midwife Schemes) to cover claims made against midwives in private practice whose
registration has been endorsed by the Nursing and Midwifery Board of Australia to
prescribe scheduled medicines (eligible midwives), irrespective of whether the
midwife is covered under a professional indemnity insurance policy as an employee
or in an independent capacity.
The Aboriginal Community Controlled Health Services requested Government
support for access to an insurance product for their employed midwives. This cohort
of midwives are unable to obtain indemnity insurance to extend their services to
intrapartum care under an indemnity insurer. The Department has worked closely with
a number of the Aboriginal Community Controlled Health Services and the provider
currently administering the Midwife Schemes, Medical Insurance Group Australia Pty
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Ltd, to support the development of an appropriate insurance product to cover these
health services and their midwifery services. This measure will open-up the Midwife
Professionals Indemnity Scheme to all endorsed midwives irrespective of their
employment status, and provide access to an insurance policy for this class of
midwives that includes intrapartum care (with the exception of homebirths).
The Department also provided advice to key stakeholders to outline the changes to be
made in the medical and midwife indemnity legislation and invited these stakeholders
to provide written feedback. The stakeholders contacted during this process included
the Australian College of Midwives and medical indemnity insurers including, Avant,
Berkshire Hathaway, Guild Insurance, Medical Indemnity Protection Society, MDA
National and Medical Insurance Group Australia Pty Ltd.
As a result of these amendments, the eligible insurer under the Midwife Professional
Indemnity (Commonwealth Contribution) Scheme Act 2010, currently Medical
Insurance Group Australia Pty Ltd, will be able to indemnify employed endorsed
midwives under the Midwife Schemes. This ensures that these midwives are covered
by an insurance policy that has capped premiums and eligibility to the Midwife
Professional Indemnity Run-off Cover Scheme.
Employed endorsed midwives currently not participating in the Midwife Schemes will
have the choice to stay under their current arrangements, and if an eligible claim was
made in these circumstances the Allied Health Schemes would respond. This
flexibility in arrangements supports midwives to work in a variety of different
arrangements, without their indemnity insurance being a barrier.
Amendments made by this Bill will mean that claims against all privately practising
midwives will be eligible under the Commonwealth's medical and midwife indemnity
schemes if an eligible medical indemnity claim is made.
Financial Impact Statement
The impact on the fiscal balance over the four years from 2021-22 to 2024-25 is $0.9
million. This proposal will have no impact on the underlying cash balance over the
life of the forward estimates, that being the year range above.
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NOTES ON CLAUSES
Clause 1 - Short Title
Clause 1 provides that the Bill, when enacted, may be cited as the Medical and
Midwife Indemnity Legislation Amendment Act 2021 (the Act).
Clause 2 - Commencement
The table in this clause sets out the commencement dates for when the provisions of
the Act will commence as follows:
Sections 1 to 3 of the Act will commence the day the Act receives the Royal
Assent.
Schedule 1 of the Act will have a retrospective commencement of 1 July 2020.
Schedule 2 of the Act will commence on 1 July 2021.
Clause 3 - Schedules
This clause provides that each piece of legislation that is specified in a Schedule to the
Act is amended or repealed as set out in the applicable items in the Schedule
concerned, and any other item has effect according to its terms. This is a technical
provision which gives operational effect to the amendments contained in the
Schedules.
Schedule 1 amends the Medical Indemnity Act 2002 and also provides for transitional
arrangements in relation to the amendments to that Act, and Schedule 2 amends the
Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 and
provides application arrangements in relation to the amendments to that Act.
SCHEDULE 1 - AMENDMENTS COMMENCING ON 1 JULY 2020
Medical Indemnity Act 2002
Item 1 - Subsection 4(1)
This item inserts definitions of the terms 'midwife insurer' and 'midwife professional
indemnity cover' into subsection 4(1) of the Medical Indemnity Act 2002 to ensure
there is a clear division in eligibility between the Allied Health Schemes and the
Midwife Professional Indemnity Scheme.
A midwife insurer is an insurer that is an 'eligible insurer' within the meaning of the
Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010.
Midwife professional indemnity cover has the same meaning as in the Midwife
Professional Indemnity (Commonwealth Contribution) Scheme Act 2010.
Essentially, the Medical Indemnity Act 2002 will reference these new terms to ensure
that any claims against a privately practising midwife endorsed by the Nursing and
Midwifery Board of Australia to prescribe scheduled medicines (an eligible midwife)
and who maintains an insurance policy with the eligible insurer under the Midwife
Professional Indemnity Scheme, will not be eligible under the Allied Health Schemes.
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Item 2 - Paragraph 34ZZB(1)(c)
This item repeals the current paragraph 34ZZB(1)(c) of the Medical Indemnity Act
2002, and substitutes it with a new paragraph (c). Subsection 34ZZB(1) of the
Medical Indemnity Act 2002 sets out the basic payability rules for the Allied Health
High Cost Claims Scheme. Paragraph 34ZZB(1)(c) currently requires that if the allied
health profession in relation to which a claim against a practitioner is made is
midwifery, the incident that is the subject of the claim is in the course of practice of a
kind that eligible midwives could be expected to be engaged as employees and
therefore covered by their employers indemnity arrangements.
New paragraph 34ZZB(1)(c) provides that if the allied health profession is midwifery,
the practitioner is not an eligible midwife:
for whom a contract of insurance with a midwife insurer provides midwife
professional indemnity cover in relation to the claim; or
with a contract of insurance that covers the midwife for claims made against
them in respect of their practice, and where the eligible midwife is the only
person indemnified.
The latter cohort of midwife will continue to only have eligibility under the Midwife
Professional Indemnity Scheme. This ensures that all claims made against registered
only midwives dating back to 1 July 2020 will be eligible under the Allied Health
High Cost Claims Scheme.
Item 3 - Subsection 34ZZB(2)
This item repeals subsection 34ZZB(2) of the Medical Indemnity Act 2002 as it refers
to subsection 11(3A) of the Midwife Professional Indemnity (Commonwealth
Contribution) Scheme Act 2010, a provision that is now redundant given the
expansion in eligibility of the Midwife Professional Indemnity Scheme and will be
repealed as part of the changes made by item 4 of Schedule 2 to this Bill.
Item 4 - Paragraph 34ZZK(1)(c)
Subsection 34ZZB(1) of the Medical Indemnity Act 2002 sets out the criteria for
certifying a claim for the Allied Health Exceptional Claims Scheme. Paragraph
34ZZK(1)(c) currently requires that if the allied health profession in relation to which
a claim against a practitioner is made is made is midwifery, the incident that is the
subject of the claim is in the course of practice of a kind that eligible midwives could
be expected to be engaged as employees and therefore covered by their employers
indemnity arrangements.
Item 4 substitutes a new paragraph 34ZZK(1)(c) which provides that if the allied
health profession is midwifery, the practitioner must not be an eligible midwife:
for whom a contract of insurance with a midwife insurer provides midwife
professional indemnity cover in relation to the claim; or
with a contract of insurance that covers the midwife for claims made against
them in respect of their practice, and where the eligible midwife is the only
person indemnified.
The latter cohort of midwife will continue to only have eligibility under the Midwife
Professional Indemnity Scheme.
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The effect of this amendment will be that with effect from 1 July 2020 the Chief
Executive Medicare can certify that claims relating to private sector registered only
midwives, and eligible midwives who are insured under a group policy, are qualifying
claims for the Allied Health Exceptional Claims Scheme. From 1 July 2021,
amendments made by Schedule 2 to this Bill will mean that claims made against
eligible midwives insured under a group midwife professional indemnity cover policy
from the eligible insurer will also be excluded from coverage under the Allied Health
Schemes. Claims against this cohort will be eligible under the Midwife Professional
Indemnity Scheme.
This amendment will enable claims against all registered only midwives dating back
to 1 July 2010 to be eligible under the Allied Health High Cost Claims Scheme,
irrespective of whether their practice was of a kind that could be expected to be
covered by their employer's indemnity arrangements. It will also ensure that a claim
against an eligible midwife (endorsed) who has an insurance policy with the eligible
insurer offering midwife professional indemnity cover under the Midwife Professional
Indemnity Scheme will not be eligible under the Allied Health Exceptional Claims
Scheme.
Item 5 - Subsection 34ZZK(2)
This item repeals subsection 34ZZK(2) of the Medical Indemnity Act 2002 as it refers
to subsection 11(3A) of the Midwife Professional Indemnity (Commonwealth
Contribution) Scheme Act 2010, a provision that is now redundant given the
expansion in eligibility of the Midwife Professional Indemnity Scheme and will be
repealed as part of the changes made by item 4 of Schedule 2 to this Bill.
Item 6 - Subparagraph 34ZZR(2)(b)(ii)
This item repeals subparagraph 34ZZR(2)(b)(ii) of the Medical Indemnity Act 2002,
and substitutes it with a new subparagraph. New subparagraph 34ZZR(2)(b)(ii)
provides that amounts payable in relation to another claim under the same insurance
contract can only be aggregated to assess if a claims amount equals or exceeds the
applicable threshold under the Allied Health Exceptional Claims Scheme if they do
not relate to claims arising from the practice of an eligible midwife covered by a
contract with a midwife insurer, or an eligible midwife covered under an individual
policy indemnifying them for claims in respect of their practice.
In other words, claims arising from incidents relating to the practice of a person who
is either a registered only midwife or an endorsed midwife that does not have
midwife professional indemnity cover under the Midwife Professional Indemnity
Scheme, may be aggregated. However, in the case of endorsed midwives, claims can
only be aggregated if the eligible midwife is covered under a group insurance
contract.
Item 7 - Subsection 34ZZR(3)
This item repeals subsection 34ZZR(3) of the Medical Indemnity Act 2002 as it refers
to subsection 11(3A) of the Midwife Professional Indemnity (Commonwealth
Contribution) Scheme Act 2010, a provision that is now redundant given the
expansion in eligibility of the Midwife Professional Indemnity Scheme and will be
repealed as part of the changes made by item 4 of Schedule 2 to this Bill.
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Item 8 - Transitional provision - eligible midwives
This item provides for transitional arrangements for eligible midwives (that is,
midwives who have been endorsed by the Nursing and Midwifery Board of Australia
to prescribe scheduled medicines) who have access under the Allied Health High Cost
Claims Scheme and the Allied Health Exceptional Claims Scheme.
Subitems 8(1) - 8(3) provide that despite the amendments made by Schedule 1 to
sections 34ZZB, 34ZZK and 34ZZR of the Medical Indemnity Act 2002, respectively,
an allied health high cost indemnity is payable to an eligible insurer or medical
defence organisation, the Chief Executive Medicare may issue a qualifying claim
certificate for the Allied Health Exceptional Claims Scheme, or amounts can be
aggregated for the purposes of assessing whether the Allied Health Exceptional
Claims Scheme threshold has been met, where:
a claim was made against an eligible midwife that relates to an incident that
occurred before 1 July 2021 (or series of related incidents, the first of which
occurred before 1 July 2021; and
the claim doesn't relate to treatment provided during a pregnancy that ends on
or after 1 July 2021 or, if it does, the eligible midwife isn't covered by
midwife professional indemnity cover offered by the midwife insurer on or
after 1 July 2021 in relation to the claim; and
if the amendments made by Schedule 1 had not been made, an allied health
high cost indemnity would have been payable under section 34ZZB, the Chief
Executive Medicare could have issued a qualifying certificate, or amounts
could have been aggregated for the purposes of meeting the Allied Health
Exceptional Claims threshold.
This ensures that insurers and medical defence organisations are not disadvantaged by
the retrospective commencement of Schedule 1 in relation to incidents that occurred
before 1 July 2021 or in relation to pregnancies that ended before 1 July 2021, or a
pregnancy that ends after 1 July 2021 where the midwife is covered by a contract with
the eligible midwife insurer that covers those incidents. In this latter case, Item 6 of
Schedule 2 ensures that the claim can be covered under the Midwife Professional
Indemnity Scheme.
SCHEDULE 2 - AMENDMENTS COMMENCING ON 1 JULY 2021
Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010
Item 1 - Subsection 5(1) (paragraphs (a) and (b) of the definition of midwife
professional indemnity cover)
This item repeals paragraphs (a) and (b) of definition of 'midwife professional
indemnity cover' within subsection 5(1) of the Midwife Professional Indemnity
(Commonwealth Contribution) Scheme Act 2010 and substitutes it with new
paragraphs (a) and (b) to specify that the insurance cover must be cover (other than
the midwife professional indemnity run-off cover) that an eligible insurer is required,
under an arrangement in force between the eligible insurer and the Commonwealth, to
provide, and that a person (in this case an eligible midwife) can hold midwife
professional indemnity cover whether they are identified by name or otherwise, as a
person to whom the insurance cover provided the contract extends.
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This broad wording of new paragraph (b) reflects the definition of 'medical indemnity
cover' within the Medical Indemnity Act 2002 and provides flexibility in different
types of contracts of insurance through not requiring individual employees to be
specified in the contract. This definition could support contracts of insurance that
broadly describe that all employees will be covered under a company's insurance
contract.
Item 2 - Subsection 5(1) (at the end of the definition of midwife professional
indemnity cover)
This item inserts a note to the definition of 'midwife professional indemnity cover'
within subsection 5(1) of the Midwife Professional Indemnity (Commonwealth
Contribution) Scheme Act 2010 informing readers that a single corporate policy may
cover multiple eligible midwives. This change is consequential to the amendments
made by item 1 of this Schedule.
Item 3 - Paragraph 11(3)(g)
This item repeals paragraph 11(3)(g) of the Midwife Professional Indemnity
(Commonwealth Contribution) Scheme Act 2010 to remove an eligibility limitation
within the common requirements for both Level 1 and Level 2 qualifying claims
certificates based on a midwife's employment arrangements. This item supports the
expansion of the Midwife Professional Indemnity Scheme and the Midwife
Professional Indemnity Run-off Cover Scheme to be accessible by all eligible
midwives, irrespective of their employment arrangements whether they could be
expected to be covered by an employer's indemnity arrangements.
Item 4 - Subsections 11(3A) and (3B)
This item repeals subsections 11(3A) and (3B) of the Midwife Professional Indemnity
(Commonwealth Contribution) Scheme Act 2010 as a consequence of the repeal of
paragraph 11(3)(g) of the Midwife Professional Indemnity (Commonwealth
Contribution) Act 2010. Subsection 11(3A) enabled rules to be made that specified
one or more classes of practice that are excluded from the restriction that prevented
eligible midwives from being eligible under the Midwife Professional Indemnity
Scheme and the Midwife Professional Indemnity Run-off Cover Scheme, if the
midwife's practice was of a kind that could be expected to be covered under their
employer's insurance contract.
Subsection 11(3B) provided that the retrospective application of legislative
instruments would not apply to rules made under subsection 11(3A), however as this
subsection will be repealed, this provision is now redundant.
Item 5 - Subsection 31(5) to (7)
Subsections 31(5) to (7) of the Midwife Professional Indemnity (Commonwealth
Contribution) Scheme Act 2010 currently deal with the meaning of the term 'private
practice as a midwife'. This item repeals subsections 31(5) to (7) and substitutes a
new subsection 31(5) that redefines the term, without eligibility limitations based on
midwife's employment arrangements.
New subsection 31(5) provides that private practice as a midwife means practice as an
eligible midwife other than practice that is the treatment of public patients in a public
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hospital, practice for which the midwife is indemnified by various government
emanations, including State or Territory authorities or a local governing body, or
practice conducted outside Australia and the external Territories.
As is currently the case, rules made under the Midwife Professional Indemnity
(Commonwealth Contribution) Scheme Act 2010 can also specify kinds of practice
that are not private practice as an eligible midwife.
Item 6 - Application provision
This item inserts an application provision to clarify that the amendments to the
Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010
made by Schedule 2 to this Bill will only apply to claims that relate to an incident that
occurs on or after 1 July 2021 or an incident that occurred before 1 July 2021 in the
course of providing treatment to a patient during a pregnancy where the pregnancy
ends on after 1 July 2021.
The latter enables claims arising from incidents that occurred before 1 July 2021 in
the course of providing treatment to a patient that ends on or after 1 July 2021,
provided by a midwife who was previously eligible under the Allied Health Schemes,
but has now entered into a contract of insurance for Midwife Professional Indemnity
Cover with the eligible insurer, to be eligible under the Midwife Professional
Indemnity Scheme.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
MEDICAL AND MIDWIFE INDEMNITY LEGISLATION AMENDMENT
BILL 2021
This Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview of the Bill
The purpose of the Medical and Midwife Indemnity Legislation Amendment Bill 2021
(the Bill) is to ensure that claims made against all privately practising midwives are
eligible under the Commonwealth's medical and midwife indemnity schemes.
The Bill amends the Medical Indemnity Act 2002 to ensure that claims against all
midwives in private practice whose registration is not endorsed by the Nursing and
Midwifery Board of Australia to prescribe scheduled medicines (registered only
midwives) are eligible under the Allied Health High Cost Claims Scheme and the
Allied Health Exceptional Claims Scheme (Allied Health Schemes) where thethe
claim relates to incidents that occurred on or from 1 July 2020. Previously, claims
against some registered only midwives were not eligible for the Allied Health
Schemes based on whether the midwife could be expected to be covered by an
employer's indemnity arrangements.
These amendments ensure that the medical indemnity legislation reflects the
Commonwealth's policy that claims against all registered only midwives have
coverage under the Allied Health Schemes for claims made after the commencement
of those Schemes on 1 July 2020, creating parity of arrangements with all other
registered allied health professionals eligible under the Allied Health Schemes.
The Bill also amends the Midwife Professional Indemnity (Commonwealth
Contribution) Scheme Act 2010 to expand eligibility of the Midwife Professional
Indemnity Scheme and the Midwife Professional Indemnity Run-off Cover Scheme
(Midwife Schemes) to cover claims made against midwives in private practice whose
registration has been endorsed by the Nursing and Midwifery Board of Australia to
prescribe scheduled medicines (eligible midwives), irrespective of whether the
midwife is covered under a professional indemnity insurance policy as an employee
or in an independent capacity.
The Aboriginal Community Controlled Health Services have requested Government
support for access to an insurance product for their employed midwives. This cohort
of midwives are unable to obtain indemnity insurance to extend their services to
intrapartum care under an indemnity insurer. The Department has worked closely
with a number of the Aboriginal Community Controlled Health Services and the
provider currently administering the Midwife Schems, Medical Insurance Group
Australia Pty Ltd, to support the development of an appropriate insurance product to
cover these health services and their midwifery services. This measure will open-up
9
the Midwife Professionals Indemnity Scheme to all endorsed midwives irrespective of
their employment status, and provide access to an insurance policy for this class of
midwives that includes intrapartum care (with the exception of homebirths).
The Department also provided advice to key stakeholders to outline the changes to be
made in the medical and midwife indemnity legislation and invited these stakeholders
to provide written feedback. The stakeholders contacted during this process included
the Australian College of Midwives and medical indemnity insurers including, Avant,
Berkshire Hathaway, Guild Insurance, Medical Indemnity Protection Society, MDA
National and Medical Insurance Group Australia Pty Ltd.
As a result of these amendments, the eligible insurer under the Midwife Professional
Indemnity (Commonwealth Contribution) Scheme Act 2010, currently Medical
Insurance Group Australia Pty Ltd, will be able to indemnify employed endorsed
midwives under the Midwife Schemes. This ensures that these midwives are covered
by an insurance policy that has capped premiums and eligibility to the Midwife
Professional Indemnity Run-off Cover Scheme.
Employed eligible midwives currently not participating in the Midwife Schemes will
have the choice to stay under their current arrangements, and if an eligible claim was
made in these circumstances the Allied Health Schemes would respond. This
flexibility in arrangements supports midwives to work in a variety of different
arrangements, without their indemnity insurance being a barrier.
Amendments made by this Bill will mean that claims against all privately practising
midwives will be eligible under the Commonwealth's medical and midwife indemnity
schemes if an eligible medical indemnity claim is made.
Human rights implications
This Bill promotes the following articles of the International Covenant on Economic,
Social and Cultural Rights (ICESCR):
The Right to Health - Article 12 of the International Covenant on Economic Social
and Cultural Rights (the ICESCR). The Bill engages the right to health as contained in
article 12 of the ICESCR. Article 12(1) recognises the 'right of everyone to the
enjoyment of the highest attainable standard of physical and mental health'. Article
12(2)(d) provides for " steps to be taken by the States Parties to the present Covenant
to achieve the full realization of this right shall include those necessary for the
creation of conditions which would assure to all medical service and medical attention
in the event of sickness."
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This Bill is designed to ensure that claims against all privately practicing midwives
have eligibility under the Commonwealth's medical and midwife indemnity schemes.
With Commonwealth subsidy, medical indemnity insurers are encouraged to invest in
insurance arrangements for private sector midwives. Otherwise, it is likely there
would be little interest to invest in this market given the perceived risk associated with
indemnifying midwifery in Australia.
Currently, there is only one substantial insurer indemnifying midwives, contracted by
the Commonwealth to administer the Midwife Professional indemnity Scheme.
Without indemnity insurance, private sector midwives would be unable to practice or
alternatively be unable to afford their own liability if a medical indemnity claim was
made, financially disadvantaging the midwife and by extension, the patient seeking
financial remedy and being unable to do so if the midwife is bankrupt. This will
enable midwives to practice and support patients to access compensation if warranted.
Transitional arrangements have been included to ensure that, despite the retrospective
commencement of Schedule 1 to the Bill of 1 July 2020, insurers and medical defence
organisations will remain eligible for Commonwealth support under the Allied Health
Schemes in respect of claims against practitioners they insure where they would have
been eligible had the amendments in that Schedule not been made.
In summary, the amendments in this Bill do not derogate a person's right to health,
and to the extent that they support a midwife's ability to practice or support a patient's
access to compensation, they are intended to promote access to health services.
Conclusion
The Bill is compatible with human rights, and in particular, supports the right to
health.
The Hon Greg Hunt MP, Minister for Health and Aged Care
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